House of Representatives
24 August 1965

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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Prime Minister · KooyongPrime Minister · LP

Mr. Speaker, when informing the House on Tuesday last of the appointment of Lord Casey as GovernorGeneral of Australia, I stated that I hoped soon to be able to announce the date on which he would be installed in this office. I am now able to inform the House that arrangements have been made for the swearing-in to take place in the Senate chamber at 1 1 .30 a.m. on Wednesday, 22nd September, and for the Government to give a reception to His Excellency and Lady Casey afterwards in Parliament House.

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Mr. JESS presented a petition from certain electors of the Commonwealth praying that the Commonwealth Government (1) instruct its representative at the United Nations to condemn the French Government’s proposal to test nuclear weapons in the Pacific, (2) again protest directly to the French Government with a view to cancellation of the tests and (3) use all appropriate means at its disposal to obtain an extension to the treaty to cover underground tests.

Petition received.

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– I ask the Prime Minister whether his attention has been called to a dope sheet marked “Copyright -publication prohibited “ which is issued from Canberra each week to people prepared to pay a lot of money for very little information, and the issue of which of 19th August last contains the following extract -

An intense security investigation is under way at the direction of the Prime Minister following the leakage of information that Australia was to send more troops to Vietnam.

Cabinet made the decision to send the troops at about 5 p.m. on Tuesday of this week. Official coded cables informing the Governments of the United States, New Zealand and South Vietnam were immediately despatched. Early next morning an Australian correspondent in Vietnam cabled back almost complete details of the statement Sir Robert Menzies was to have made to Parliament on Thursday. Because of this, Sir Robert decided to make the statement to Parliament as soon as question time had concluded on Wednesday. Sir Robert is worried because this latest leakage is similar to a leakage of information about the decision to send the First Battalion to Vietnam.

I ask the right honorable gentleman what truth, if any, there is in this statement? If there is any truth in it, will he investigate the investigators? Will he tell the House what steps he proposes to take to see that Australia’s security is not affected by stories of this sort published by people who ordinarily do not have, and probably never have had, any access to confidential information?

Sir ROBERT MENZIES__ Mr. Speaker, my attention was drawn to this document about half an hour ago. I can assure the honorable gentleman that I do not make a practice of reading it. If I want some fiction I can go to the Library and get it. As for a security investigation, of course this is purely an invention. Naturally, I do not like statements being made from some other place about matters which have been up to that moment regarded as confidential, but I have long since given up guessing how they occur. As to the idea of setting on foot an elaborate security investigation to find out - oh no, I would not waste public money.

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– I wish to ask the Prime Minister a question. Is there any reply to the requests by the Premiers of New South Wales and Queensland for financial assistance for relief in the tragic drought? Is it not usual for the whole of the financial resources of the Commonwealth Government and the Reserve Bank of Australia, and the inner reserves of the financial institutions of Australia to be used in such a desperate situation to avert disaster for hundreds of farmers before it is too late? Is the Government of New South Wales being forced to use what normally would be described as trust funds to assist? Is it a fact that this drought will eventually affect Commonwealth and State Government revenues and that export losses in

New South Wales alone are even now estimated at more than £100 million?


– Communications have been received from the two State Premiers concerned and the matter, insofar as it relates to the Northern Territory, has been brought before us also by my colleague the Minister for Territories. I hope to be in a position to have a statement on this matter made in the House this week. As a matter of courtesy, of course, it is necessary to communicate the statement in advance to the Premiers concerned.

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– My question is addressed to the Minister for National Development. Has he received the report of the committee appointed to investigate transport costs in northern Australia? If the report has been received, what recommendations are contained in it? If it has not yet come to hand, when does he expect it?

Minister for National Development · FARRER, NEW SOUTH WALES · LP

– I understand that this report has just been received by my Department. I have not yet had an opportunity to look at it. After I have examined it, it will, of course, go to the Government to be looked at.

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– My question is directed to the Prime Minister. Are there any special procedures of the House which should be invoked following the announcement of the engagement of one of our most eligible bachelor members? Will this matter be debated in the House?

Mr SPEAKER (Hon Sir John McLeay:

– Order! I direct the honorable member’s attention to the fact that the Prime Minister is not responsible for this matter.


– Will the right honorable gentleman speak sternly to the Minister for Labour and National Service and point out to him that the House and, indeed, the country expect him to meet this challenge?

Sir Robert Menzies:

– This matter is not in my bailiwick.

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– I direct my question to the Prime Minister. Has he heard reports that Tunku Abdul Rahman, in broadcasts, has stated that any future effort that may be made to secede from the Federation of Malaysia will, if necessary, be dealt with by force? Does this mean that the Australian armed forces in Malaysia could be involved in such a situation? If this is the case, is not this in contradiction of the stated reasons why our armed forces are at present stationed in Malaysia?

Sir Robert Menzies:

– The Minister for External Affairs will answer the question.

Minister for External Affairs · CURTIN, WESTERN AUSTRALIA · LP

– As the Australian Government sees it, relations between the Federation of Malaysia and its constituent part, Sabah, are internal and domestic matters. The Australian Government has not made any statement bearing on that matter. Our attitude to the defence of Malaysia is as was stated to the House by the Prime Minister immediately after the separation of Malaysia and Singapore took place.

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– My question is directed to the Minister for Trade and Industry. Has the Minister information as to whether any of the overseas shipping lines plan to introduce seatainer traffic for the Australian trade?

Mr. McEWEN__ The development of containers for cargo and sea traffic is occurring around the world and is being practised on the Australian coast. All I know is that certain of the overseas shipping lines - perhaps all of them, for all I know - have been studying this matter, but to what conclusive results I do not know. To the extent that it may hold out a prospect of lower freights for Australian exporters we will be very interested and will watch carefully any proposals that eventuate.

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– I ask the Minister for External Affairs a question. Has the Government in any way informed Sabah and Sarawak that Australia could not or would not defend them if they left the Malaysian Federation? Is he aware of any moves for a new assessment of the attitudes of the people of the Borneo .States now that there is no longer so comprehensive a political and economic basis for the Federation which they agreed to join two years ago?


– I have seen in the Press, both reported from London and from the local Press, some statements to the general effect of the honorable member’s question. Those statements are without any foundation whatsoever. The position of the Government is that it has renewed its commitment to Malaysia in words that were carefully chosen by the Prime Minister in a public statement and in the words which were included in the statement on foreign affairs which I made to the House. We would undoubtedly find it much easier if combined defence arrangements were made as envisaged in the separation agreement between Singapore and Malaysia, but beyond those statements we have made no expression of the Australian Government’s view. I am sure that the honorable gentleman would not wish me to deal with some hypothetical situation which has not yet arisen.

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– My question is addressed to the Minister for Primary Industry. With a view to assisting honorable members who wish to discuss the proposed reserve price scheme for wool marketing to do so objectively and with as much information as possible, will he table in the House the report of the Wool Marketing Committee of the Australian Wool Board, which is said to have been the basis of the Board’s recommendation to the Australian Wool Industry Conference that such a scheme should be adopted?

Minister for Primary Industry · FISHER, QUEENSLAND · CP

– Last week I introduced a bill which, if carried by the Houses of Parliament, will provide for a ballot among wool growers to decide whether they are to have a reserve price plan. I included in my second reading speech the particulars of the plan that the Government had agreed upon with the industry. I believe that those particulars cover the information so far as the Government is concerned and present a factual statement for honorable members to debate. Anything else that I can say can bc dealt with in the debate.

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– Will the Minister for Health introduce legislation to compel doctors seeking increases in their fees to apply to the Conciliation and Arbitration Commission in the same manner as do trade unions so that they will get the same hearing and allow the Commission to determine whether any increases are warranted?

Minister for Health · DARLING DOWNS, QUEENSLAND · LP

– The Commonwealth has no constitutional authority to deal with the matter that has been raised. Therefore, the answer is: “ No “.

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– I direct a question to the Minister for Trade and Industry. Can the Minister assure the House that there will be no serious injury to the pea and bean industries by the inclusion of these items in Schedule A, the duty free section, of the proposed free trade agreement with New Zealand?

Minister for Trade and Industry · MURRAY, VICTORIA · CP

– I can assure the honorable member and the industry that there will be no serious injury to this important industry, lt is an important industry. The provisions that are made are that there shall be no change in the duty arrangements for one year and thereafter there shall be progressively a phasing out of the present quite small duty over the next eight years. So the existing duty will not disappear for nine years. We took steps to consult with those people, both on the processing side and on the growing side of the Australian industry, who were able to give information. So that honorable members may see this matter in perspective, I point out that, under the existing arrangements with New Zealand, for T think seven or eight years there has been a sliding scale of duties and no duty is payable where the product is exported at a price above a certain level. In order to illustrate the degree of competition, I mention that 4,300.000 lb. of peas and beans were imported from New Zealand in the two years ended June 1964 and only £14,000 of duty has been paid on those peas and beans. There has been no disruption of the Australian industry in those circumstances.

POLIOMYELITIS VACCINES. Mr. NICHOLLS-My question is directed to the Minister for Health. I understand that the Department of Health recently changed its long standing attitude to the

Sabin oral vaccine, which has now been included with the Salk vaccine for public usage. As both vaccines have been available for many years, can the Minister tell the House what prompted his Department to alter its previous attitude to the Sabin vaccine?


– There has been no change in policy in relation to the practice of supplying anti-poliomyelitis vaccines through my Department. The issue of the Sabin oral vaccine was conducted, first of all, on a trial basis in Tasmania. The tests there, over the 12 months of last year and the subsequent period in this year, turned out to be quite successful. Following those tests, which were conducted by the State Department of Health in Tasmania, we have now offered the other States supplies of Sabin oral vaccine, if they desire them. But the vaccine will be supplied at the request of the States themselves. There has been no change in policy. We expect that in the future some other States may combine the use of the Sabin oral vaccine with the use of the Salk vaccine, either wholly or in part.

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– I direct a question to the Minister for Trade and Industry. I refer to reports that officials are going to Russia and some other Eastern European countries for trade discussions. Will those officials endeavour to establish a continuing basis for sales of wheat to those countries which have become important importers of wheat, and also endeavour to stabilise the purchase of Australian wool?


– A small delegation of four officials will go to Russia and also to Poland and Czechoslovakia in the near future in response to invitations from the Government of Russia, extending back over quite a period, for Australia to conduct discussions in order to explore whether there is scope for a trade treaty between the two countries on the basis of what is known as a most favoured nation treaty; that is, a treaty under which each country party to the agreement treats the other party on terms not less favourable than other countries. There is an important need for such an examination because - the honorable member as a former member of the Australian Wheat Board knows this - European Com munist countries are quite important buyers of Australian wheat and sometimes of other grain and are very important buyers of Australian wool. In the Russian Administration there is a rule which says that purchases by government agencies - of course, all purchases by Communist countries are by government agencies - shall be conducted on the basis of giving preference to a country with which Russia has a trade agreement or a trade treaty. At present many countries have trade treaties with Russia. The United Kingdom, France, Canada, New Zealand, India and Japan all have trade treaties with the Soviet and all, according to the rules, therefore enjoy a preference over Australia in the procurement of goods purchased by Russia. This establishes that it is worth while to conduct exploratory studies as to whether there is a satisfactory basis for a trade arrangement. This mission is for exploratory purposes only and in due course we will see what comes of it.

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– I address a question to the Minister for Trade and Industry. I refer to a recent and unconfirmed report of a proposed 10 year plan for the decentralisation of 1,000,000 people to country areas, said to be under consideration by the Department of Trade and Industry. As no confirmation or denial has been issued, and as the Department of National Development would seem to have jurisdiction over such matters - and, further, as this report has given a ray of hope to country communities in Australia - I ask the Minister whether the report is true and whether such a plan is under consideration. If so, when will details of the plan be available to the House?


– May I observe, in the first place, that life is too short to deny everything not based strictly on fact that appears in the Press. I read this Press report. I was surprised to read it. I asked the officers of my Department whether they knew of any basis for it. Neither I nor any officer of my Department knows of such a 10 year plan. Of course, as is known - and as the Prime Minister has stated - by agreement with the State Premiers the Commonwealth Government is studying the whole issue of decentralisation, as are the State Governments. In due course there will be discussions between the Commonwealth and State Governments. In preparation for that, all Commonwealth Departments which can contribute to the thinking on this issue are doing so. The Department of Trade and Industry is, of course, included.

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– Can the Minister for External Affairs say whether it is a fact that the architect for the projected Australian Embassy in Brasilia is not an Australian? If so, will the Minister review the decision on this matter?


– The position regarding the new Australian Embassy in Brasilia, the Federal Capital of Brazil, is that in 1960 investigations were commenced regarding the building of an embassy and advantage was taken of the presence of a distinguished Australian architect in Brazil at the time to examine the best way of carrying out this work. The architect, who is well known in the Australian architectural profession, reported that having regard to several local factors and the type of work to be done it would be more advantageous to have a local architect than an Australian architect. Some preliminary drawing up of specifications and requirements has been done, but the project still has to go before the overseas building committee. In general, it is my personal view that as far as possible we should use Australian architects, and I will have a look at this particular project to see whether an Australian architect could suitably be used.

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– In his Budget speech the Treasurer announced that the tax on petroleum products would be increased by threepence a gallon, which would yield an additional £25 million per annum. I ask him: What justification is there for retaining in Consolidated Revenue the yield from this tax increase, instead of passing it on to State and local government authorities for the construction of roads and so, in some small way, relieving some of the hardship imposed on ratepayers who have been heavily rated in recent years? Or is this another example of socking the already overtaxed motorist, who is at present contributing more than £250 million annually to Federal and State revenues? Finally, will the increase accelerate the already serious inflationary spiral in prices by increasing freights and bus, taxi and air fares?


– The honorable gentleman should be aware, because legislation to this effect was passed by the House, that there is currently in operation an agreement under which the Commonwealth pays to the States over a five year period an extra 50 per cent, of the amounts previously obtained by the States from the Commonwealth for their road construction programmes. This is in addition, of course, to the very substantial sums which the State Governments themselves provide for these purposes. The Commonwealth Government has made it clear for very many years that not all of the moneys collected by way of excise on petrol are to go to road construction, just as amounts collected as excise on tobacco or beer do not go in any particular direction. Those amounts are part of the general revenues of the Commonwealth. It is a matter of judgment by the Government as to how much of the national resources, at a time when so much is required to be done in this country, should be diverted to road construction. The honorable gentleman makes a point that everything seems to be loaded on to the motorist. It is one of the achievements of this Government that during its period of office almost every Australian family has come to possess a motor car. If my recollection is correct, there is a motor car for about every three persons in the country - men, women and children. So although it is said that we are taxing the motorist what we are doing, in effect, is taxing the general body of Australian taxpayers. If revenues must be obtained the alternative is to obtain them either by direct taxation which, if it becomes too onerous, is depressing to incentive, or to spread the taxes in various forms. If we were to secure through direct taxation all of the revenues currently raised by means of excise there would have to be an increase of 100 per cent, in the rates of personal income tax.

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Sir Wilfrid Kent Hughes:

– In view of an earlier question asked by the Deputy Leader of the Opposition, will the Minister for External Affairs take steps to inform the honorable gentleman of the damage he has already done by interfering and taking sides in the internal politics of Malaysia and Singapore - a course of action which he would rightly resent on the part of a visitor to this country? Will the Minister inform him that it would be better if outsiders assisted in helping the Malaysian States and Singapore to work together, instead of trying to drive them apart?


– In case the Deputy Leader of the Opposition did not hear the question I will take pleasure in conveying it to him.

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– Will the Prime Minister say whether the cost of constructing a standard gauge railway between Kalgoorlie and Kwinana is now expected to be about £14 million higher than the original 1961 estimate of about £41 million? Were the Commonwealth Government and the Western Australian Government jointly responsible for the original estimate? If not, who was responsible? If the Commonwealth was in any way responsible for the original estimate, will the Prime Minister say whether a thorough investigation was made into all aspects of the project so that a proper estimate of costs could be made? If so, will the right honorable gentleman inform the House why there should be such a wide difference between the 1961 estimate and the estimate of 1965?


– I am sure that the honorable member does not expect me to carry these figures in my mind. I do know that the latest estimate we saw gave us a great surprise because it represented a very large increase on what we were originally told would be the cost of the work. There may be a variety of reasons for that. All I can say is that the matter is now under discussion between the Western Australian Government and this Government.

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– I ask the Treasurer: What effect has lower bank liquidity had in the drought areas of the eastern and northern parts of Australia? Did the sharp fall in liquidity during July, involving an increase of some £21 million in advances, result in some curtailment of finance for primary producers who, because of drought conditions, needed funds to enable them to carry on? Can the Treasurer indicate the extent of additional funds actually made available during recent months in the form of bank advances to primary producers who are suffering from the disability of drought conditions?


– This matter has been kept under very close observation and indeed there has been a good deal of discussion between the Treasury and the Reserve Bank and, in turn, between the Reserve Bank and the trading banks on the possible needs of those affected by drought. The indications for most of the period have been that there has not been significant pressure on the banks for finance for drought affected persons. As the honorable gentleman, with his familiarity with rural conditions, will appreciate, sometimes in the early stages of drought the need for financial assistance does not arise, because parts of flocks and herds are sold in order to reduce the demand on the limited amount of fodder that is available. It is during the restocking period that the big demand for finance is made. The Reserve Bank has made clear to the trading banks that, insofar as there exists a general request that their advances do not exceed £9 million a week, any increase in drought finance should not result in a reduction of the total amount. In other words, drought finance is to be regarded as clear of any limiting request. The indication so far is that there has not been a shortage of finance for this purpose. If the honorable gentleman is able to bring instances to my notice or point to any area where this has not been working out, I shall be glad to follow it up with the banking authorities concerned.

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– I direct my question to the Minister for Trade and Industry. Has the Minister, when discussing the problems of the inflow of private overseas investment, publicly said that “ we are selling a bit of our heritage every year”? If he has made such a statement, when will he, as Deputy Prime Minister, press for Government action to protect established Australian industries from takeover by overseas interests?


– The quotation is not strictly accurate. It is getting a bit frayed around the edges. It is a few years old now and has been repeated many times in this House. In answer to a question last week, I told a colleague of the honorable member that I had, in statements outside the House, spoken in terms very similar to those I had used in a debate in this House. I can give the honorable member the date of the debate if he likes to have it.

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– 1 ask the Treasurer a question concerning allegations by a Dr. Barry Christophers in the Medical Journal of Australia for the 21st August 1965 that a breach of the Census and Statistics Act had been committed in that details of a birth to a young unmarried mother had been improperly divulged to the Victorian Police. Can the Treasurer tell the House whether any inquiries have been made into this charge and, if so, whether they have disclosed any breach of the Act?


– I saw the reference to this matter in the Press and was naturally concerned, because it was so inconsistent with my experience of the way in which the Bureau of Census and Statistics conducts itself. Even before I could make inquiries myself into the matter I found that the Commonwealth Statistician had reported to me regarding it. It is quite clear from the information supplied to me that there has been no breach of the secrecy provision of the census and statistics legislation. There is a registry of births under State legislation which is referred to in the report that I have here as the birth registration authority. It would appear that there was some confusion in the letter by Dr. Christophers relating to the procedure of the Victorian Government Statist, operating in his capacity as the State registration authority under the State Act. That procedure was erroneously described as contravening the secrecy provision of the Census and Statistics Act of the Commonwealth. I have a full report on this matter which I can make available to the House if desired, but in short I can say that it confirms that so far as our Commonwealth authority is concerned there has been no breach of the appropriate secrecy provision.

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– My question is directed to the Minister for National Development. What progress, if any, has been made in formulating a national energy plan for Australia? Because of the importance of this subject to our national economy and development, will the Minister make an early statement outlining the Government’s intentions? Will he tell the House what measure of protection is to be given to our indigenous fuels and whether agreement has been reached on the use and distribution of natural gas?


– There is a lot of woolly thinking on a so-called policy for “a national energy plan. For one thing, the Commonwealth Government does not have the constitutional right to force upon the States a plan of the ways in which they should use their own fuel. However, the Department of National Development is studying this matter. We have a fuels branch which is making a study of all aspects of fuel and we are also obtaining advice from Sir Harold Raggatt, who recently retired as Secretary of the Department, on various aspects of fuel utilisation. So far as coal is concerned, I cannot see any reason why the coat industry should require assistance and protection when at the present moment we are unable to obtain sufficient coal to meet all our commitments. We are exporting more than 5,000,000 tons of coal annually. Recently I was approached by someone to sec if I could obtain some coal for export, but I was unable to do so.

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– I ask the Treasurer: Is it a fact that he has received from the Association of Superannuation and Provident Funds of Australia a request for certain amendments to the income tax legislation to preserve the interests of the traditional superannuation funds? Will he give an assurance that every effort will be made to incorporate these requests in the amending income tax legislation to be dealt with later in this Budget session?


– I have had representations from various sources relating to this legislation. This body of requests has been carefully studied by the Commissioner of Taxation, officers of the Treasury and the committee of Cabinet which dealt with these matters before the earlier legislation was introduced. I cannot give a policy statement ofl the cuff, but the honorable gentleman can be assured that every consideration has been given to what has been put to us. I believe that the “Public Information Bulletin” which the Commissioner has issued has removed a good deal of the uncertainty which formerly existed. There is a wider recognition, now, of the fact that the only satisfactory way in which some of the aspects of the legislation can be dealt with justly is by leaving a wide, flexible discretion in the possession of the Commissioner. As to the particular points raised by the honorable member, I know that we have been trying to meet objections raised, and I should be able to give the honorable gentleman a more precise reply when I study the question.

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– I preface a question addressed to the Minister for Health by reminding the Minister that last week the Treasurer announced that the means test which had previously been applied to the issue of medical entitlement cards would be removed for all social service and service pensioners. The Minister will also remember that he has received deputations from the Totally and Permanently Disabled Soldiers’ Association requesting the issue of medical entitlement cards to the wives of totally and permanently incapacitated pensioners. In view of the fact that this matter was not specifically mentioned in the Budget proposals, will the Minister say whether the means test will be removed for the issue of medical entitlement cards to the wives of totally and permanently incapacitated exservicemen? If the means test is not to be removed in this instance, will the Minister say why this decision will not apply to this very deserving section of the community?


– I released a Press statement last week supplementing the Budget Speech of the Treasurer and setting out full details regarding the change in the pensioner medical service. The group of people concerned would include the wives of T.P.I, war pensioners. If they are in receipt of a social services or service pension they would be specifically included.

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– I address a question to the Minister for Health. I have drawn the attention of the Minister to the fact that some Victorian towns and districts with populations of from 2,000 to 4,000 are without a doctor. Does the Minister know that local committees are actively. engaged in an endeavour to fill these essential posts? Is this problem widespread throughout Australia? Can the Minister offer any general information and advice which would help the States and, of course, also assist the local hospital committees to which I have referred?


– I recognise that there is an overall shortage of medical practitioners in country areas throughout all States in Australia. The extent of the shortage I have no means of checking because there are no statistics available in relation to it. I think, however, that the honorable member will recognise that this is not a matter which primarily concerns the Commonwealth Government. It more properly concerns the State Governments, except in the case of the Commonwealth Territories. But I can, perhaps, offer some advice. Already I know that a number of local authorities, hospital boards and hospital committees, where such a situation has arisen, have been in the practice of writing to the “ Medical Journal of Australia “ which is published in Sydney. In some cases, they have also written to the “ British Medical Journal” in London. These particular journals contact in some way most of the medical practitioners in their respective countries. Additionally, facilities are available through the agents-general in the United Kingdom. Again, our own Commonwealth health officers at Australia House in London would be prepared to assist in providing information either from or to medical practitioners in the United Kingdom of whom a number are already coming to Australia. In some cases where arrangements for medical officers are made through Australia House, we provide some facilities through my colleague the Minister for Immigration for the granting of assisted passages. I think that if the bodies concerned accept some advice along those lines they r”.1” he able to overcome some of their problems.

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– I present the following paper -

Audit Act- Finance - Report of the AuditorGeneral for year 1964-65, accompanied by the Treasurer’s Statement of Receipts and Expenditure.

Ordered to be printed.

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Ministerial Statement

Minister for Territories · McPherson · CP

– by leave - I present the following paper -

Papua and New Guinea Act- Public Service (Papua and New Guinea) Ordinance 1965, together with Statement of Reasons for withholding Assent to the Ordinance. and I ask for leave to make a short statement in connection therewith.


– There being no objection, leave is granted.


– The Papua and New Guinea Act requires that where assent to an ordinance is withheld, the ordinance and a statement of the reasons for withholding assent shall be laid before each House of the Parliament. I wish to inform the House of the considerations leading to the withholding of assent to the Public Service (Papua and New Guinea) Ordinance 1965. While the Government cannot accept the Ordinance, it believes that some of the aims of the members of the House of Assembly who prepared the Bill may be able to be met in a different form.

Under the Papua and New Guinea Act there are some ordinances of the House of Assembly to which the Administrator can assent and others which the Administrator must reserve for the Governor-General’s pleasure. Bills which Parliament has required to be reserved for the Governor-General’s pleasure include those relating to the Territory Public Service.

The House should know that this Ordinance was originally introduced in a form which would transfer powers to the Administrator in Council; there was no question of a board. This proposal would have placed the control of the Public Service in the hands of the Administrator in Council - and the Administrator’s Council has a substantial elected majority - and evoked strong opposition from local as well as overseas officers. To meet this opposition the Bill was amended at the last moment to the form of the present Ordinance and passed all stages in the House on the day it was introduced. It is therefore understandable that the Ordinance is not satisfactory administratively, in that there are unresolved inconsistencies between this Ordinance and the principal Ordinance which it amends. From the standpoint of administration it would be a most unusual and obviously cumbersome arrangement to have provision for a Public Service Board, which on matters of policy is subject to direction by the Minister for Territories, and also for a public Service Commissioner and Associate Commissioners.

Most important, however, is the principle involved. Constitutionally, Papua and New Guinea is at a stage of transition. The House of Assembly has been established, and we look to it to take an increasing part in Territory affairs. Australia is the administering authority. As such, it is responsible for the executive government of the Territory. The Public Service is one of the chief instruments of discharging that responsibility. The Australian Government must, therefore, as long as it has that responsibility retain clear and effective control of the structure of the Public Service. Matters such as the creation of departments, levels of salaries and allowances, and recruitment from outside the Public Service are not only directly associated with the effectiveness of administration of the Territory, but also have budgetary implications, with which the Australian Government must be concerned, since about two thirds of the Territory’s annual expenditure is financed by Australian grant. It will be clear from this that the decision to advise His Excellency to withhold assent to the Ordinance was not taken without serious consideration.

I may now say that the Government has taken note of the dissatisfaction with present arrangements expressed by elected members of the House of Assembly when the Ordinance was passed. The Government is ready to consider changes in the existing arrangements with the object of providing opportunity for Territory opinion to be taken into account when significant decisions are being taken on the Territory Public Service. Such changes, however, should be worked out in such a way as to pay regard to the various interests involved. Opportunity must be provided for the opinions of the Territory representatives to be expressed. So must the proper interest of the overseas public servants and of the local public servants. The arrangements should be effective administratively. They should clearly define where the authority lies. They should take account of the responsibility of the Australian Government.

As a first step towards arriving at arrangements which best meet these requirements, I am proposing that the subject should be examined by a committee, consisting of two elected members of the Administrator’s Council, an officer of the Department of Territories, and an officer of the Administration. The report of the committee will go to me and to the Administrator’s Council. If necessary, it can be discussed between the non-official members of the Administrator’s Council and myself. The committee will be requested to examine the present arrangements for the Territory Public Service and report on what changes, if any, by way of the establishment of a board or otherwise, should be made, consequent upon the constitutional and other changes that have occurred in the Territory. The committee will be asked to pay particular attention to ways and means of accelerating advancement of local officers to positions of responsibility in the Service.

The action that has been taken and the action proposed to be taken stem from the Government’s wish to establish arrangements for the Territory Public Service which will best meet the various interests involved and which will maintain the high standards of loyalty and efficiency in the Service which have been of such great value to the Territory in the past, and which are so much needed to meet the present and future challenges.

I present the following papers -

Public Service (Papua and New Guinea) Ordinance 1965 - Withholding of Assent - Ministerial Statement - and move -

That the House take note of the papers.

Debate (on motion by Mr. Whitlam) adjourned.

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HigginsTreasurer · LP

– by leave - Mr. Speaker, I wish to make a statement relating to the business of the House and arising out of some comment made by the Leader of the Opposition (Mr. Calwell) at the end of the discussion on Thursday night. I say that the statement relates to the business of the House because I have in mind a suggested course of action following the complaint that the honorable gentleman made that there was no opportunity for a vote to be taken on his amendment to the motion that the House take note of the statement on foreign affairs by the Minister for External Affairs (Mr. Hasluck).

I gather that the Leader of the Opposition made a somewhat heated allegation that there had been some breach of an agreement that had been made with me. I made no agreement regarding a vote. In fact, no such issue was raised by me with my colleague, the Minister for External Affairs, who certainly would be consulted regarding a vote on his own motion; nor was the issue raised with the Government and no decision was made by the Government on the matter.

Mr Calwell:

– That does not prove that there was no agreement.


– I say there was no agreement and I am not going to have on the record, unchallenged, a statement that I committed a breach of an undertaking given to the Opposition. I come now to the point of substance. We have no desire to avoid a vote on the amendment which the honorable gentleman proposed, and 1 am willing to bring the item of business forward so that a vote can be taken on the amendment while leaving on the notice paper the general motion proposed by the Minister for External Affairs in case the House desires to resume the discussion later in the sittings.

Leader of the Opposition · Melbourne

– by leave - Mr. Speaker, I rang the Leader of the House (Mr. Harold Holt) and told him I thought the position of the country was such that the proceedings of the House of Representatives should be broadcast during all of the first week and that the Senate should be asked not to insist on its rights. My purpose was that the foreign affairs statement and the ensuing debate on the Wednesday night should be broadcast and that if necessary an adjournment should be sought until the next day when proceedings would again be on the air. The Leader of the House suggested to me that if the Minister for External Affairs (Mr. Hasluck) made his statement on the Wednesday night the Opposition should be prepared to continue the debate immediately and with that I agreed. I said - and this is my recollection of the conversation - that the debate should go until the Thursday night, at which time we should have a vote; we wanted a vote. I said last Thursday that there had been a breach of an agreement. I believe there was such a breach. I said that to the Minister for External Affairs who seemed a little befuddled by the turn of events about which he knew nothing.

Mr Harold Holt:

– Of course he knew nothing about it.


– If he knew nothing it was because the right honorable gentleman did not tell him. I asked for a vote then because we wanted a vote on the Opposition’s amendment.

Mr Harold Holt:

– You may have a vote.


– Very well. This is a rather belated recognition of the fact that there was early agreement that we should have a vote. If the Government wants to leave the notice paper as it is in relation to the motion that the House take note of the papers, that is the Government’s responsibility. But, as things are developing, I expect that the Minister for External Affairs will very soon make another statement on new developments such as the breaking away of Sabah, possibly, and the question of whether Australian troops will be involved one way or the other. We are watching this position all the time. We wanted to register our disagreement with the Government’s policy by a vote on our amendment. If the Leader of the House will bring the matter on now, let us have a vote. We are ready for it at any time.

Mr McEwen:

– Do you want the matter brought on now?


– Yes. Why not now? Why not have a vote, now?

Mr. HAROLD HOLT (HigginsTreasurer). - by leave - My colleague, the Deputy Prime Minister (Mr. McEwen), though he has a second reading speech to deliver, has very graciously enabled us to interpose this item of business, but he does not want to be indefinitely delayed. I propose that the matter be put to the House now, if we can do that, and that we have a vote on it. However, I would welcome an indication by the Leader of the Opposition (Mr. Calwell) of some more regular procedure that would enable me to know just what the Opposition is prepared to agree to in relation to this sort of business. What I have been told in recent months and, indeed, over recent years is that no agreement can be reached on business such as this. If the honorable gentleman will only give authority to his deputy to conclude firm arrangements in these matters, the business of the House will be facilitated. I have here a letter that the Leader of the Opposition wrote to me on this matter, and I shall put the record sraight. On 19th July, he wrote to me in these terms -

My dear Treasurer,

In the absence of Mr. Whitlam overseas, I write to suggest that during the first week of the Budget session consideration might be given to the possibilities of having a statement on Foreign Affairs in the House of Representatives the night after the Budget, which should be broadcast, and a reply on Thursday afternoon, which should also be on the air. I feel that this debate should then be adjourned until after the Budget debate concludes.

I rest my case.

Mr. CALWELL (Melbourne- Leader of the Opposition). - by leave - I spoke to the Leader of the House (Mr. Harold Holt) on the telephone subsequent to the writing of the letter that he has mentioned, and we then arranged that a vote would be taken. I suggest to the right honorable gentleman that, instead of keeping notices on the business paper for long periods, we follow the procedure of the House of Commons. In cases such as this, let us have a two-day debate and let the amendment, if any, and the motion be voted on. The matter would then be finished until another situation of the same sort arose. We on this side of the chamber do not want to clutter up the business paper and we do not want this issue to be in suspense. That is our attitude.

Motion (by Mr. Harold Holt) agreed to -

That Orders of the Day Nos. 1 to 14, Government Business, be postponed until a later hour this day.

page 332


Ministerial Statement

Debate resumed from 19th August (vide page 314), on the motion by Mr. Hasluck -

That the House take note of the following papers - Foreign Affairs - Ministerial Statement, 18th August 1965. Department of External Affairs Information Handbook No. 1 of 1965 - Studies on Vietnam.

Upon which Mr. Calwell had moved by way of amendment -

That all words after “That” be omitted with a view to inserting the following words in place thereof: - “this House regrets statements made by the Prime Minister which disclose his Government’s desire to seek a solution to the conflict in Vietnam by military means alone. The House urges the Government to strive for a cease fire now, to be policed by a United Nations peacekeeping force, and for a conference of all parties directly involved, including representatives of both the Government in Saigon and the Viet Cong, to seek a settlement which will end the agony of the Vietnamese people, and establish their right to choose their own Government “.

Question put -

That the words proposed to be omitted (Mr. Calwell’s amendment) stand part of the question.

The House divided. (Mr. Speaker-

AYES: 63


Majority 17



Question so resolved in the affirmative. Amendment negatived.

Debate (on motion by Mr. Bury) adjourned.

page 332


Bill presented by Mr. McEwen, and read a first time.

Second Reading

Minister for Trade and Industry · Murray · CP

– 1 move-

That the Bill be now read a second time. This is the first of two Bills which the Government is bringing forward to make provision in Australia’s customs and tariff legislation for tariff preferences in favour of less developed countries. Honorable members will recall that, in May last, I informed the House of the Government’s decision to provide for the admission of selected products from less developed countries at preferential rates of duty. I also explained that the creation of new preferences would normally be contrary to the General Agreement on Tariffs and Trade and that, in order to introduce the preferences, the Government would be seeking a waiver - or dispensation - from the relevant provisions of that agreement.

Australia’s application for a waiver is now before the contracting parties to G.A.T.T. The Government wishes to be in a position to bring the preferences into operation as soon as the waiver is granted.

It therefore requests the Parliament to pass the necessary legislation. Because Australia’s freedom to operate the preferences depends on the granting of the waiver, clause 2 of the Bill proposes that the date of operation of the Act be fixed by proclamation.

In my statement to the House during the last session I set out in some detail both the nature of the Government’s proposal and its background. Broadly, the proposal envisages preferential reductions in duties on specified manufactured products from the less developed countries. The products have been selected from lists nominated to G.A.T.T. by the less developed countries themselves. The list of less developed countries for preference purposes will be determined after consultation in G.A.T.T. Certain countries will be excluded from the preferences on some of the selected products because they are already competitive in those products at existing rates of duty. Imports at the preferential rates will be limited by tariff quotas as a safeguard against disruption of the Australian market. I will now deal with the Government’s proposal in the terms of the Bill.

Clause 8 inserts in the Second Schedule of the Customs Tariff the proposed preferential rates of duty and the tariff classifications of the products on which less developed countries will receive preferences. Except that one item has been deleted following consultations with India, the products and the rates are identical with those which were set out in the schedule which I tabled in the House on 19th May. However, clause 7 of the Bill re-numbers some of the relevant tariff classifications. A revised schedule is being circulated to honorable members. The products referred to in clause 8 have been selected after careful examination of the lists of products which the less developed countries have themselves nominated to G.A.T.T. as being of special export interest to them. The selection from those lists has been made on the basis that preferential reductions in the duties on imports from less developed countries should not result in the removal of protection required by Australian industry.

As it always does, the Government has kept very firmly in mind Australia’s continuing need to be able to use the tariff to protect its industries and foster its own development. In this regard Australia’s situation is quite different from that of the highly industrialised countries of the northern hemisphere. Australia’s industrial development is comparatively recent and still incomplete. Many of the older countries, on the other hand, have long established large scale industries covering the whole spectrum of production. Their secondary industries have for yeaTs been competitive exporters to world markets. But Australian industries are only now starting to develop exports of manufactured products. Indeed, Australia faces many of the same problems as do less developed countries in establishing secondary industries and developing exports of manufactured products in the face of the often strenuous competition from established exporters in the mature industrial countries.

The system of preferential tariffs proposed in this Bill recognises that Australia cannot act in ways that would frustrate its own development or negate well tried tariff policy. This does not mean that Australia cannot or need not take tariff action to help the less developed countries. On the contrary, we simply cannot ignore the fact that almost all the younger countries are much less fortunately placed than Australia. We cannot ignore their need for both industrial development and a considerable expansion in both the volume and the range of their exports if they are to achieve economic and social progress.

The difficulties associated with the production of industrial products in less developed countries inevitably affect costs in the industries concerned. In many cases, the result is that such industries are not competitive in international markets. As a result, the duties which Australian industries need for protection against competition from less developed countries can often be lower than the protective duties already established in the Australian tariff on the basis of competition from the highly industrialised countries. Moreover, the less developed countries would derive little advantage from duty reductions which applied equally to imports from all countries. It would be the industrialised countries that would benefit most from duty reductions on that basis. The Government therefore sees both a need and an opportunity for duty reductions on a preferential basis. There is need on the part of the less developed countries, and opportunity for Australia to do something to meet that need without damage to its basic policy of reasonable protection for economic and efficient Australian industry.

The preferential duties proposed in the Bill are therefore intended to help less developed countries compete more effectively for a share of Australia’s import trade. As I have indicated, it is not the Government’s intention to undermine the tariff protection needed by economic and efficient Australian industries. The new rates will therefore be subject to the normal processes of tariff revision, for example, by Tariff Board inquiry, if imports develop to the point where *hey seriously affect the position of Australian industry. As an additional safeguard for Australian industry, it is proposed to place quotas on the volume of imports at the proposed preferential rates. This will also prevent the preferences having any undue impact on the trade of third countries. The quotas proposed for the tariff classifications specified in Clause 8 are shown in the schedule which is being distributed to honorable members. Provisions necessary for the administration of the quotas are contained in Clause 5.

The countries and territories which will be treated as less developed countries for preference purposes are not specified in the Bill. Honorable members will recall my earlier explanation, that the Government believes this to be a matter for international consideration, and that the list for purposes of this legislation would be determined after the question had been considered in G.A.T.T. Clause 4 of the Bill therefore provides for the countries to be determined by the Minister and the list to be published in the Commonwealth “ Gazette “. Clause 4 also makes provision for the exclusion from particular preferences of individual less developed countries which are already competitive suppliers of the relevant products to the Australian market.

As honorable members are aware, the less developed countries have been pressing for some time for international action to give them preferential treatment for their exports of manufactured and semi-manufactured products. In this, they have had the active support of the Australian Government. I myself have argued the case for tariff preferences for less developed countries at a meeting of Commonwealth Trade Ministers as long ago as May 1963, in London. I argued it again at a ministerial meeting of G.A.T.T. and also at the United Nations Conference on Trade and Development. This question of preferences has, in fact, been the subject of a whole series of international meetings over the last two years. There is now a wide measure of acceptance of the general case for such preferences. However, a few of the more highly industrialised countries are still firmly opposed. Whilst these countries maintain their opposition, the negotiations for international agreement on a general system of preferences for less developed countries are virtually deadlocked.

Australia’s initiative in applying for a G.A.T.T. waiver to cover the introduction of new preferences has demonstrated our willingness and ability to give practical assistance to the trade of less developed countries. But, equally important, it has pointed to the possibility of using the existing provisions of G.A.T.T. to cover the introduction of preferences for the benefit of less developed countries. This, in itself, may well contribute to breaking the present impasse in international negotiations on the issue of preferences. Irrespective of whether or not this proves to be the case, the Government’s initiative has been warmly received by most of the less developed countries. In fact, when Australia’s application for a waiver was first introduced in G.A.T.T., there was a whole series of supporting statements from spokesmen for less developed countries.

Mr. Manubhai Shah, India’s Minister of Commerce, has hailed our action as “ a bold and imaginative move “ on which Australia was to be congratulated. He has also called for all other less developed countries to support Australia’s application for a G.A.T.T. waiver. Similarly, Mr. Kaissouni, Deputy Prime Minister for Economic and Financial Affairs in the United Arab Republic and President of the United Nations Conference on Trade and Development, has expressed appreciation of Australia’s move. And Mr. Cornelio Balmaceda, Philippines Secretary of Commerce and Industry and a vice-president of the United

Nations Conference on Trade and Development, is reported to have hailed the decision, saying that Australia had given the lead to the industrialised countries. The Government derives considerable satisfaction from these expressions of support.

There are, of course, some aspects of Australia’s proposals on which more information is being sought by other G.A.T.T. members. And on some points, questions of principle have been raised. Some countries, for example, have suggested that all the preferences should apply equally to all less developed countries; that is, that we should not exclude even a competitive less developed country from individual preferences. Others would like us to give preferences on a longer list of products and to set bigger quotas or no quotas at all. Then again, there are countries not included in our initial list of preference countries who want to be added to the list.

It is, of course, inevitable that a novel and far reaching proposal like the one the Government has put forward will give rise to a number of questions of this kind and that some aspects of the proposal should be misunderstood at the outset. It is inevitable that some countries would want us to do more or to do it differently and that others would want us to do less. I have already mentioned that some of the affluent countries would prefer that we did not give preferences at all. Naturally, we are expected to discuss and explain our proposal internationally. We are, in fact, doing this already, both in G.A.T.T. and in bilateral discussions. Such discussion is, of course, the only way to resolve the issues that have been raised and to remove any misconceptions about our proposals.

Quite frankly, we agree that there are additional countries which should be treated as less developed countries for purposes of the preferences. We agree also that Australia might be able to give preferences on additional items or make adjustments to some quotas. But first priority must be given to getting the principle established. We would only make this more difficult if we allowed ourselves to be sidetracked into arguments about particular products, the size of quotas or the eligibility of individual countries. This question whether individual countries should get preferences is, in any event, a matter for international consideration.

The questions of principle cannot, of course, be put to one side, but must be settled during the discussions on our waiver application. On these, we must convince other countries by the strength of our argument. We must, for instance, get it accepted that Australia’s economic situation is not on all fours with the situation of the mature industrial countries. We must get it accepted that we cannot reduce tariffs without regard to the situation of our own industries and our own need for development. We must show that just as there are differences between the affluent and the poorer countries, so there are differences between the less developed countries themselves; that just as less developed countries would derive little benefit from tariff reductions that were also available to the industrialised countries, so some less developed countries would derive little benefit from preferences on products in which their more advanced fellows were already competitive unless the latter were excluded.

The principal reason why these issues have not yet been cleared up is that G.A.T.T. has been preoccupied with such things as the Kennedy Round and has not yet considered Australia’s proposal in detail. Its members have, however, established a working party which is charged with doing this. This working party will hold its first substantive meeting in Geneva towards the middle of next month. This meeting will afford our representatives an opportunity to explain our proposal in greater detail. The Government is confident that this will result in greater understanding and acceptance of the proposal. Many countries have hailed the Australian proposal as a bold and imaginative initiative to deal with an urgent problem. The proposal is urgent. It will enable Australia to increase its practical help to the trade of less developed countries, thus assisting their development and the achievement of higher living standards for their people. It will do this without impeding our own development. I commend the Bill to honorable members.

Debate (on motion by Dr. 3. F. Cairns) adjourned.

page 336

CUSTOMS BILL (No. 2) 1965

Bill presented by Mr. McEwen, and read a first time.

Second Reading

Minister for Trade and Industry · Murray · CP

– I move -

That the Bill be now read a second time.

This Bill is complementary to the Customs Tariff Bill which has just been introduced. It is a machinery measure which sets out the conditions to determine the eligibility of goods from less developed countries for entry at the preferential rates proposed in the Customs Tariff Bill. Although some consequential rewording has been necessary in the existing provisions for determining the origin of goods from other preference countries, the Bill makes no substantive change in those provisions.

Broadly, the Bill provides that imports from less developed countries will, subject to the provisions of the Customs Tariff Bill, qualify for entry at the preferential rates if 50 per cent, or more of the labour and material cost of the imported product has been incurred in less developed countries and if the last processing before export has taken place in the exporting less developed country. In addition, the imported product must normally be shipped direct from the exporting less developed country to Australia. Alternatively the goods may be transhipped en route but, in this event, entry at preferential rates will be dependent upon the Collector of Customs being satisfied that Australia was the intended destination of the goods when they were exported from the less developed country in which they were produced. These provisions are designed to avoid making it unduly difficult for goods from less developed countries to qualify for preference, whilst providing safeguards against abuse of the proposed preferences. I commend the Bill to honorable members.

Debate (on motion by Dr. J. F. Cairns) adjourned.

page 336


Second Reading

Debate resumed from 17th August (vide page 134), on motion by Mr. Bury -

That the Bill be now read a second time.


.- This is the last Bill to be enacted under the Commonwealth and State Housing Agreement of 1961. It is designed to authorise payment of loan funds to the States. One might have thought that the Minister for Housing (Mr. Bury) when delivering his second reading speech might have taken advantage of the occasion to indicate the shortcomings of the Commonwealth and State Housing Agreement, particularly as this is the year when a new agreement is to be negotiated. There have, indeed, been many shortcomings. This was a good opportunity to analyse the success or the failure of a very important enactment which, after all, is responsible for providing homes for the lower income section of the community through the State housing authorities. Also, of course, it is the means by which the substantial flow of building society funds is derived, so that it affects large numbers of people other than those who are in the low income group.

There is nothing new about this Bill. One could say that it lacks imagination. There is nothing new about the principles it embraces or the amount of money it .makes available. One can say that it is “ old hat “ in every sense. It provides a total of £51 million of which New South Wales is to get £17.75 million, Victoria £13.65 million, Queensland £3.3 million, South Australia £9.5 million, Western Australia £3.6 million and Tasmania £3.2 million. This is not all the money that the States would like to be loaned to them for housing - not by any means. It is that part of the total allocation for works and housing that they have decided to devote to housing purposes. They could do with a lot more.

Of course, it is also important to emphasise that the Commonwealth is giving the States nothing at all - rather it is lending them the money. Often there is some misapprehension about this. The State housing authorities are like local government bodies throughout Australia which derive nothing in the way of direct allocations from the Commonwealth Government, although occasionally they obtain the authority to borrow. There is one significant fact about this particular Bill: Less money is being allocated this financial year for State housing authority purposes than was allocated last year - in fact, the deficiency is £350.000. I suppose honorable members, and the Australian community, might wonder what the reason is for this, in view of the persisting housing shortage throughout Australia.

The House would like to know from the Minister, or from honorable members who may follow in this debate, what the estimated output of houses will be as a result of this allocation. To what extent will the housing shortage be eliminated, or is it going to be permitted to persist as it has done since this Government has been in office? 1 believe that if the Minister had been brutally frank in introducing this Bill he would have said: “This Bill means less money for State housing authorities than they received last year. As a result, it will mean less money, not only to provide houses for the low income groups, but for building societies, since building societies are a substantial beneficiary of the Commonwealth and State Housing Agreement. The Bill will mean fewer houses for low income families who seek homes from the housing authorities and fewer houses for those people with higher incomes who seek to build a house according to their own tastes. Since the application rate has not diminished this Bill will result in a greater number of outstanding applications at this time next year than there are at present. In my opinion, this presents a disgraceful prospect. Not even is the status quo to be maintained. Instead, fewer houses will be built in the face of rising demand. I will deal with this matter of rising demand later.

Today, figures, have been made available by the Commonwealth Statistician, Mr. Archer. The average cost of each home built in Australia rose by £300 in the year ended 31st July last. One wonders if the people who are supposed to benefit from the homes savings grant scheme are in fact deriving any benefit today, with costs being allowed to surge upwards in this way. I have here the October issue of the newsletter published by the Housing Industry Research Committee. The Committee refers to land prices. If we dissect the housing industry into its various phases we may readily see the steady upward movement in costs. Dealing with land prices the Committee states -

Land prices in outer Melbourne fringe areas increased by about £80 or S.9 per cent, over the twelve months to June 1964.

This represents an increase of 38.2 per cent since June 1960.

Similar figures are available to show the movement in land prices in other States. These are symbolic of what is happening to the price of land. First, the Commonwealth Statistician has indicated what is happening to building costs. Then the Housing Industry Research Committee has indicated what is happening to land costs. Then there is the White Paper, “National Income and Expenditure 1964-65 “. Nobody would doubt the authenticity of the White Paper because it was circulated by the Treasurer (Mr. Harold Holt) in association with the 1965-66 Budget. My colleague, the honorable member for Melbourne Ports (Mr. Crean) has directed my attention to the statement in the White Paper about building statistics. It reads -

Analysis of building statistics for the first three quarters of the year and of other relevant data suggests that prices applicable to expenditure on dwellings and other buildings may have increased by nearly 4 per cent, in 1964-65 compared with just under 2 per cent, in 1963-64.

There we have undeniable evidence that less money is being made available to the State housing authorities and that costs are rising. I will shortly say something about rising demand.

The output of houses has already declined. Who but this Government can take the responsibility for this situation? Referring to private building, the Commonwealth Statistician has stated that in the July quarter this year private building was 4 per cent, below the rate which prevailed in the three months ended July 1964. So in the last quarter the output of private building declined 4 per cent, compared with the same quarter of last year. Nobody would dare dispute the authenticity of that figure. Now I move to government and semi-government housing, about which the Commonwealth Statistician has said -

The rate of approvals for new Government and semi-Government houses and fiats during the three months was 24 per cent, below that for the same months of the previous year.

Despite all this, the Bill provides £350,000 less for the States than they received last year.

The current Commonwealth and State Housing Agreement is the third of a series.

It has now almost expired. The first Agreement was negotiated in 1945 by the Chifley Government. That Agreement was that Government’s way of projecting the Commonwealth into this important realm of social activity because, constitutionally, the Commonwealth has very little power in the matter of housing. I will deal with this aspect more extensively later. A further Agreement was negotiated in 1956 and another five-year Agreement was negotiated in 1961. The current Agreement expires this year and a new one is to be negotiated. I do not wish to reflect on the competence of the Minister for Housing (Mr. Bury), because he is a competent Minister, but no Minister would be able to do justice to a new housing agreement unless it were preceded by a full scale inquiry. The complexities of housing in this country are such that it is time we had a full inquiry. There have been many anomalies and omissions associated with housing. We should overhaul the whole business. The last Commonwealth inspired large scale inquiry into housing was made 22 years ago. About eight years ago Sir William Spooner, who was then Minister for National Development, caused a survey to be made into housing, but it was not by any means a comprehensive inquiry.

Mr Barnard:

– The information then obtained was incorrect in any event.


– Yes. Events have proved that the survey was a farce. It was not even undertaken, as far as I can establish, by experts. In March 1963 the State ministers responsible for housing, representing all shades of political opinion, met and pleaded with the Commonwealth to undertake the kind of inquiry that I am now advocating. But the Minister failed to indicate in his second reading speech that an inquiry will be held pending the negotiation of a new agreement. The Minister has let us down very badly. In September 1963, during the debate on the Loan (Housing) Bill, the Opposition moved that an inquiry be held, but Government supporters actually voted against the Opposition’s proposal. It appears that the Government and its supporters will not face up to this problem of housing. The Vernon Committee was appointed in October 1962. It met in February 1963. The Government has had hie Committee’s report for nine months. Apparently the report has been pigeon-holed or relegated to the political limbo. I understand that the report deals in some vague but not comprehensive way with housing. However, we are not to have even the benefit of that report. There is no indication that we will have the benefit of it before the new agreement is negotiated. So Parliament and the people are still in the dark about the housing needs of the Australian community.

An inquiry of the kind I advocate would help, not only the States, but also the Commonwealth in discharging its traditional role in housing. Honorable members know that section 51 of the Constitution does not refer to housing, but the Commonwealth does have specific powers and obligations in certain aspects of housing. For example, through the War Service Homes Division, about 237,000 ex-servicemen have been assisted up to the end of June 1964. But there are problems here that could benefit from an inquiry. The Commonwealth can provide houses for migrants and for the recipients of social service pensions. However, it is playing an inadequate role in this regard. The Commonwealth can provide houses for serving members of the forces but it has to a considerable degree relegated even this responsibility to the States. The people who live in Commonwealth Territoriesthe Northern Territory and the Australian Capital Territory - look to the Commonwealth to answer their housing problems but, in considerable measure, they have looked in vain. The Commonwealth is not satisfactorily discharging any of its obligations. Many ex-servicemen, migrants, pensioners, servicemen and residents of the Australian Capital Territory or the Northern Territory are inadequately housed today. Let me indicate what I think an inquiry into housing should investigate. It would be necessary, first, to have a good look at the housing shortage and the backlog of houses. I would not be surprised if it were shown that about 250,000 houses were desperately needed at present. However, we should ascertain the number that is required. We know that about 60,000 applications for houses have been lodged with the various Housing Commissions around Australia, but many other people have not applied because they know that the waiting period now is four and a half or five and a half years.

My colleague, the honorable member for Cunningham (Mr. Connor), who represents in large measure the City of Greater Wollongong, though I have the privilege of representing a part of it, knows of the serious housing problem in that area. The Minister is well aware of it, too, because he met a delegation on 16th July 1964 which dealt with the Wollongong housing problem. I ascertained from the report submilted to him that, although only 2,711 applications for houses in the Wollongong area have not been met by the Housing Commission, it was estimated that 15,740 people in (he area needed houses. This is probably typical of Australia at large. Of the people needing houses, 290 were in camping areas, 1,650 in temporary dwellings, such as garages and workshops, 12,500 in overcrowded or substandard dwellings and 1,300 in migrant hostels. So, the number of applications lodged with the Housing Commission for houses in the Wollongong area in no way reflects the real housing crisis in that great city. This same situation can be found ali around Australia.

More than 6,000 ex-servicemen are still involved in a waiting period of 17 to 20 months for finance to purchase a war service home. This is 20 years after the end of the war. Many ex-servicemen have been forced to borrow money for a short term at interest of 10 per cent, and often as high as 12 per cent. This is a running sore and is being allowed to persist because of the Government’s indifference. A committee of inquiry could well examine this situation. We know that at October 1964 nearly 16,000 migrants were occupying inadequate hostel accommodation around Australia. The Commonwealth can exercise its responsibility for migrants, but it has relegated this in a sense to Commonwealth Hostels Ltd. But 16,000 people are living in these establishments, which in a way resemble the old refugee camps. These people do not have a private bathroom, toilet, dining area or cooking arrangements. Most of them have very little money left after they have paid the prescribed rate for board. They have very little money to enable them to get out of this trough of inadequtae housing and very little to give to a bank or other lending authority as a deposit. This situation should be examined more thoroughly, because it is impeding our immigration programme. There is no reason why any person coming to this country should be given the inferior accommodation that is provided now.

Then there are applicants to the Star Bowkett societies, the banks and the insurance societies. How many people have submitted applications to the 2,861 building societies that operate throughout Australia? These are all apparent and obvious matters for inquiry. We should also try to estimate accurately the housing demand for the future. Many people have had a look at this problem. Dr. Hall of the Australian National University is amongst those who have considered the position. The birthrate has increased and the marriage rate is now increasing. I understand that this year the marriage rate will be 10,000 more than it was eight years ago. It is now running at 84,000 marriages a year. This is one of the problems that have been referred to by such people as Sir Warren McDonald, the Chairman of the Commonwealth Banking Corporation. The Government has no excuse, because it has been told that the postwar birthrate will be reflected in an increased marriage rate, which will be reflected in a larger demand for houses in the period from 1965 to 1970. Many people have warned the Government of this. In ten years of making speeches about housing in this chamber, I have rarely missed an opportunity to tell the Government that this crisis will arise in the period from 1965 to 1970. As recently as last night the Statistician dramatically told us what is happening.

Sir Warren McDonald some time ago said

During the 1960’s an expansion in demand for housing appears certain, especially in the second half of the decade when the current surge of young workers will reach marriageable age. Past trends in home ownership indicate that the bulk of these young people will want their own home.

Dr. Hall, who is a senior fellow of economics at the Australian National University, in his book “ The Housing Demand: A Second Look “, said that the demand would rise from 102,000 in 1962-63 to 131,000 a year in 1967-70. Docs the Government intend to take these predictions seriously? If the Government intends to continue discounting them, it should start an inquiry of its own. It is no solace to the young people of this country to be left without a house because of the Government’s failure to examine the situation properly.

I want to make a few suggestions. Some of them come from Dr. Hall and other people and they are designed to improve the availability of houses. The Minister, when speaking on this measure or at some other appropriate time, should tell us about the current research into housing. He should tell us the extent to which costs and other similar factors will be affected by research. The Building Research Division of the Commonwealth Scientific and Industrial Research Organisation is obviously doing something worthwhile, but it is impossible to find out much about its work from the Estimates. Does it receive adequate funds? Is it engaged in the most beneficial projects? We believe that greater encouragement should be given to research. It would be absurd for us to disregard the apparent need for intensified private research into housing by project builders and the manufacturers of building materials. In many parts of the world, these people are encouraged, by the grant of subsidies and taxation remissions, to undertake research into building.

We would also like to see some initiative taken by the Commonwealth to establish a Commonwealth building code. My colleague, the Deputy Leader of the Opposition (Mr. Whitlam), has often mentioned the need for such a code. We believe that the Commonwealth should seek to obtain agreement amongst the States on a Commonwealth building code. Local government building regulations vary from area to area. The Commonwealth could give financial assistance to the States and local government authorities that implement the code and use it in slum clearance and homes for the aged. Everybody must pay transfer fees and stamp duties on real estate transactions. This causes considerable delay and these imposts could well be eliminated. The cost could be calculated and some additional grant could be made by the Commonwealth to the States under section 96 of the Constitution. This would speed up the transfers and, as Dr. Hall said, a smaller proportion of the stock of houses would be unoccupied at any time. He predicted that if the number of unoccupied houses were reduced by 5 per cent, 30,000 additional houses would be available for use. These are just a few of the matters that could be examined very quickly.

Another matter that should be examined by a committee of inquiry is the building force. We should determine our requirements for 1968, 1970 or 1975. Does anybody know what building force we would need then? Of course, this requirement is not treated any differently from the way other requirements are treated. We do not know how many doctors, architects, physicists, chemists or scientist we will need in 1970 or 1980. The Minister said the building force had gone up over the last 12 months from 66,000 to 75,600. I do not dispute his figures in any way. It has been contended in many quarters that the building force is fully occupied, yet we find that insufficient houses are being built at the present time. The Minister took the responsibility for this in August 1964 when he said -

It is abortive to punch more money into housing.

I do not know whether this was because of the inadequacy of our building force, but it is poor consolation for our young people if not enough builders are available and if home building costs rise as a result of the shortage of builders, carpenters, plumbers, electricians and plasterers.

After about 16 years in office - far too long from my standpoint - this Government must take the blame. If it has the good fortune to stay in office for another ten years we will still be suffering from a shortage of builders. The intake of carpenters and bricklayers should not be left to the whim of private enterprise. What has this to do with our need five or ten years hence? I think it should be possible to initiate an agreement with the States to facilitate an arrangement whereby young men could be recruited by a public building trades apprenticeship authority. This should be done having regard to Australia’s need for the future. Having apprenticed these young men to such an authority they could be deployed around the various facets of the building industry so that they would get a wide range of experience and become competent tradesmen for the future. Why are not these matters receiving some advocacy, support or initiation from the sleepy members opposite who for 16 years have failed to do anything worthwhile about them?

There are many other issues at which a committee of inquiry would look. The availability and cost of land are obviously two of them. The bona fides of builders is another. Surely Parliament has the right to protect the community from fly by night builders. We read day after day of cases of young couples who have saved a reasonable deposit on a home only to find that some builder has made a mess of things. Protection ought easily to be arranged because obviously there should be some Commonwealth involvement in a matter such as this. No one State on its own can do the things that are necessary to cope with these situations. The registration of builders is another matter which should receive the attention and consideration of a committee such as I have suggested. There is a need for uniformity of building codes, in reference to such matters as home design and building techniques. We should be looking at high density housing, town planning, community needs and environmental needs. It is not just a case of building a house with four walls, scantling timber and fibrous plaster, or whatever it is that is used for the internal linings. In building a home we should envisage the total concept. We should consider the reasonable access of the occupants to their employment, community facilities, access to sewerage, water and electricity facilities and things of that kind. I am afraid that in many of the capital and large provincial cities of Australia there is evidence of lack of proper planning and deployment of such facilities.

There are many matters about which I wanted to speak today. One of them - and I shall probably have to finish on this one - is interest rates. I believe that interest rates have gone beserk in this country. We knight people today who have succeeded in this sphere - usurers and the like whom we would have shot in former times. The country has gone interest happy. If a person can successfully exploit the community in the field of housing he is likely to receive aggrandisement from, and approval of, this Government. Even the interest rates applicable to public housing authorities are far too high. I know that the War Service Homes Division has done well enough charging 3$ per cent, interest since 1918. I understand that the profit the Division has made from the income it has received is in the vicinity of £60 million. In Victoria we lend money to somebody over 40 years at 4i per cent. If that person borrows £4,000 from the housing commission he finishes up repaying £8,640 over 40 years. If he borrows £4,000 over 45 years at 4i per cent, interest he has to pay £17 6s. 8d. a month and his interest repayment amounts to £5,360 making a total repayment of £9,630 on a loan of £4,000. Is this what this Government stands for? The figures I have just quoted are based on the second best interest rates available to any section of the community requiring home finance at the present time. How about the apparent need to regulate the racketeers who are operating almost unfettered in the sphere of housing?


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


.- The Loan (Housing) Bill 1965 provides for the borrowing of £51 million for housing in the Commonwealth of Australia. We have just listened to the honorable member for Hughes (Mr. L. R. Johnson) who would tend to suggest that a job of work was not being done in this very important field. I want to say right away that the provision made for housing by this Government during its term of office has been to the order of one million homes for one million Australian families. That is a record unequalled in similar circumstances in any country. We can be justly proud of what we have accomplished in Australia. This Bill will carry on for a further year the agreement between the Commonwealth and the States for the financing specifically of the housing authorities of the States and also makes provision for the allocation of loan funds to building societies. It makes a sizable contribution to the provision of about 100,000 homes which will be built in the coming year.

When we look at the figures and consider what has been done during the last five years we must realise that the accomplishment is really worthwhile indeed. Undoubtedly there has been a lag in New South Wales. I think it is fair comment to say that the work accomplished in many of the other States has set a very good example of what can be done if the problem of housing is tackled in a businesslike fashion. We have had, of course, a change of government in New South Wales and we can look forward to some practical action in that State to deal with the unfortunate lag that the figures reveal. The number of people on the waiting list for a housing commission home in New South Wales at the end of June last was still more than 35,200. In Victoria, the number is down to 13,700; in Queensland, to 4,900; in Western Australia, to 6,500; and in Tasmania it is a little more than 2,000. Yet in New South Wales the number on the waiting list is 35,200. This large waiting list came about during the regime of a government holding the same beliefs as the honorable member for Hughes who has just told us so many tragic stories about the record of housing in Australia. If he bad made his speech to the Labour Party it might have served some useful purpose.

It would be a pity if, when dealing with this measure, we did not recognise the way in which agreement is reached between the States and the Commonwealth as to the amount of funds which will be used specifically for housing under the agreement that provides for this Commonwealth arrangement of special loan finance. A sum of £51 million is, in fact, the amount agreed upon between the Commonwealth and the States. In fact, it is the decision of the States that they shall take this amount of money from the loan funds. When we look at the percentage that this represents of overall loan funds we find that it is a very healthy percentage indeed, running to the order of 17.3 per cent. This is a very good figure when we think of the relationship of housing to other vital needs such as the provision of schools, hospitals, roads and other essential services.

This amount of £51 million should not be considered as the total amount of the Commonwealth’s contribution towards housing as a project, or towards housing as a requirement, because there are other sources from which funds flow. Notable among these, of course, is the new grants scheme introduced by this Government in 1964 which provided £6 million for the last financial year. No doubt an even greater figure will be provided in the current year. This is a straight out grant of £250 to each applicant towards the provision of housing of young people who meet the conditions of the scheme. Therefore, any suggestion that the Commonwealth has been neglectful in housing certainly cannot stand the test of practical analysis.

If we look, too, at the standard of housing in Australia, we find that it is comparable to what’ is accomplished today by wealthier nations and that it is certainly well ahead of many other nations with larger populations and of greater economic strength. Mention has been made of the fact that this is the last year of this particular provision, and the last one before a further review of the scheme is made. There are, of course, many reasons why we should look at this measure and consider what improvements might be effected for the year following the current year provided for by the Bill.

One of the things that 1 particularly want to raise is the need for a greater content for rural housing. In New South Wales, the provision of homes for rural dwellers has been a great problem in the past. This problem is not related solely to countrycities and country towns; it is related to the provision of dwellings on rural properties.

Mr Nixon:

– Not only in New South Wales.


– My friend the honorable member for Gippsland (Mr. Nixon) says: “Not only in New South Wales”. We must look at the overall position. T think it is fair to say that, in the rural bracket, this is a problem that is Australia wide. Let me deal, first, with the existing arrangement. There has been a very great lag in housing in the country towns of New South Wales. Last week, the Minister for Housing in that State, a country Minister who is doing a great job of work in bringing up to date and overhauling housing in New South Wales, decided to increase by five per cent, the allotment of houses for country towns and country cities. This will surely be a big contribution towards decentralisation. It will surely be the kind of contribution that is a forward move in development for this country of ours. 1 referred earlier to the fact that this direct provision of loan funds is not the only thing that is done to make possible the development of housing and the develop; ment of places in which to live for good Australian families. Let me deal, first, with the matter of homes for rural dwellers - those who live outside the town or city boundaries. Up to this point of time there has been no specific contribution for this field, yet we have spent something like £1,000 million through Government instrumentalities in the last 15 or 16 years on overall housing. I hope that when we review the arrangements at the end of the current year we will be in a position to see some new approach to the problem of rural housing because, today, if young people want to move into country areas or to settle on a. country property, their first thought is: How can we find a suitable place in which to live?

This devolves, first of all, upon ability to raise practically the whole of the capital required to build a home. The present processes of financing rural properties - farms and the like - are such that one cannot obtain long term finance specifically for home building. There is not any provision for the kind of terms that are available to those who live in the towns and cities. If we are to see an expansion of the rural sector of our community, if we are to see the building up of the economy of our rural sector, then it is time that we included in our overall scheme for housing the provision of at least some funds for the purpose of financing homes on rural properties with long terms of repayment similar to those available in the cities and, of course, with similar concessional rates of interest.

A little while ago, the honorable member for Hughes (Mr. L. R. Johnson) suggested that there were not special provisions for financing housing. He overlooked completely the concessional interest rate. He overlooked the fact that this £51 million is being made available at something less than 4 per cent, interest. Then there are other concessions which the Commonwealth makes with relation to this particular provision. For instance, it shares with the State the rebate on rents arrangement. There are many concessions indeed to which he did not refer. I believe that the system which we have developed is a very useful one and one which can do a very good job of work if it is extended in accordance with our financial ability and if, in the years ahead, the overall total amount can be increased to an amount beyond that which we are allotting today.

It is only a comparatively few years ago that the content to be allocated to cooperative societies was increased specifically by the provisions of this legislation. That was a very good thing. Something like 30 per cent, of the £51 million which we are allocating under this legislation will be directly available to building societies, friendly societies and similar organisations. This will enable private enterprise to play a greater part in home building. It will get away from the difficulties which are encountered if the total housing requirements are looked after solely by government instrumentalities.

The honorable member for Hughes urged that there should be an Australia wide arrangement to correct the anomalies of standards. That could well be true, but “ standards “ should be interpreted as meaning standards relating to health, hygiene, the provision of sewerage and that sort of thing. I hope that it is never interpreted as relating to standards concerning size, shape and design, for that indeed would be a retrograde step. Perhaps this may have been in the previous speaker’s mind. I certainly hope it was not.

The honorable member for Hughes also spoke of the problem of transfers. He referred to the fact that something like 5 per cent, of houses are unoccupied while people are transferring from one place to another. He suggested there were ways of overcoming this problem. Perhaps private enterprise will devise a way of improving the present position. I certainly hope it is not done through some government agency. I certainly hope that we shall never consider a situation in which an overall authority deals with applications for transfer of occupancy of homes. Other countries have attempted this, and it has been a dismal failure. Of course, the socialist countries practise it. There, all of the homes are owned by the Government. If a person wants to change from one town to another or one district to another he is not even allowed to put an advertisement in the newspaper saying that he wants to make the move. If he wishes to move, he has to find some friend in another district or town and then, if it suits that friend to transfer, he must submit an application to the government authority, and it may be two years or more before some government official will agree that he may change his place of residence. If the honorable member for Hughes is advocating that sort of procedure, I certainly hope that we in Australia do not ever have to experience it.

Mr Duthie:

– What country is the honorable member talking about?


– If you want me to mention a particular one I could refer you to Russia. Have a look at the process in that country. What happens there is exactly what I have described. There are many other countries in which this system is followed, and they are well known to the honorable member.

Reference was made to the building industry and to the labour content of building costs. A suggestion was made that we should recruit workers for the building industry. I hope that we never see this country dominated by government control in this field. I say that for a very good reason. In 1961, for the purpose of dealing with certain financial difficulties in connection with our trade balances and the state of the economy generally, certain restrictions were imposed in connection with financial arrangements. We are all well aware of what happened on that occasion. Then, of course, we were able gradually to overcome our difficulties and to progress to a stage at which more finance was available. This was an entirely correct procedure. That is obvious from the fact that the Government has been able to provide more and more employment. We have been able to draw upon essential materials produced by the timber industry, the steel industry and the other industries which contribute items for home building, such as the electrical industry and various industries producing drain pipes and other articles used in home construction. We have been able to gear up these industries because we have managed the economy in a practical way. We have been able to make a useful approach to the economic requirements of the country by means of procedures exactly similar to those provided for in this legislation in connection with housing finance, and by means of other arrangements in Commonwealth-State relations similar to those provided in this legislation. This is the way to do the best job for Australian development, and the proof of this statement can be readily seen at the present time.

At the end of last week I had the opportunity of conferring with representatives of the timber industries in my electorate on the north coast of New South Wales. Everywhere I went I saw the same picture. Mills were turning out record outputs because there is a record demand. There is full employment with more workers required than ever before. It was a picture of progress and of satisfaction on all sides. 1 called on one mill proprietor and said: “ What are your problems?” This was at a place called Bostobrick near Dorrigo. The mill proprietor said: “ I have not a single problem. There is nothing I can complain about, things are going so well.” This is really significant. We have a situation in which there is full employment and a satisfactory demand to maintain that full employment, while at the same time the building industry is receiving materials of a high standard - materials which will do the best job for people for whom buildings are being constructed, whether in the private sector or in the Government sector. Undoubtedly this provides ample evidence of the success of the work of this Government in the provision of finance and in devising ways and means of meeting Australia’s housing requirements.

There was reference to the continuing demand for homes and to the waiting list for Housing Commission homes in New South Wales. Of course, it is well known that there is a wide range of demand for homes, going beyond the the figure cited in this connection. There is also the problem of replacing old homes, of clearing slum areas and of providing homes in newly developing areas where industries have been established. All of these demands are signs of progress. We should not deplore the existence of the demand; all we can do is to recognise it as the best sign of a healthy economy, although of course we want to see fewer people waiting for homes.

I referred earlier to the rural sector of our community and the problem of providing housing in that sector. Here we are unable to find precise statistics because there has been no way of obtaining figures showing the need for new homes in the rural sector. Between the present time and the time when the Commonwealth and State housing agreement is discussed with a view to renewal next year, it could be worthwhile to have some kind of survey carried out. This should be a practical survey involving the distribution of questionnaires through local government authorities so that we could find out what our housing requirements are beyond the requirements in towns and cities. In this way we might get some precise evidence of the requirements for the next five years. If there is a task worth tackling in connection with the forthcoming review of the agreement, certainly it is this one. I hope the Government will give the matter full consideration, in cooperation with the States and local authorities.

This debate is something of an annual affair. We have a Loan (Housing) Bill before us each year, and it gives us an opportunity to review what has been done. Far from uttering criticism I want to repeat that I believe the record of this Government discloses that its approach has been a sound one. There are other sectors of the community for which the Government makes a contribution under this agreement. I refer to Service personnel in certain areas and persons engaged by the Government itself. The provision of homes for these people is a matter of great importance. If we want satisfactory performance of duty from members of our armed Services we must see that their families are housed and housed well. The contribution by this Government in this direction in the last four or five years has amounted to something like £10 million or £11 million. This has been money well spent, because here again we have set a standard that has been equalled practically nowhere else in the world. We should be proud of this.

We sometimes hear the criticism that finance for this purpose is taken out of the total allocation. I agree that it would be very nice for all concerned if we could say: “ We will not spend money from this allocation on the provision of these homes, but we will get the money somewhere else.” I fear, however, that it is simply a question of how far the funds of the Commonwealth will stretch in any one direction. If we consider the Government’s contribution towards housing by comparing it with the contribution the Government is making in other developmental fields, then the proportion given for housing is seen to be pretty sound. If we compare the contribution towards housing with those made for education, for health and for other services directly touching community welfare, then we can regard the housing contribution as a worthwhile one indeed. If we were to reduce our contributions towards education and health in order to increase the total amount for housing, I feel it would be a retrograde step. We must keep all these categories of expenditure in reasonable balance, and this is undoubtedly the basis of the decision reached by the Commonwealth and State Ministers when they confer each year on this matter of housing. Of course, it is one of the main factors which influence the Treasury in its recommendation for the overall housing provision.

In concluding with a general reference to housing, I want to comment on something said by one of the earlier speakers in this debate concerning the slight fall in the number of homes built in, I think, the July period in particular. This is related to expenditure in other directions. There has been an increase in the building field in the erection of schools, office buildings and that sort of thing. I do not think the figure reflects any general fall in housing. I believe that when the year comes to an end, the figures will run pretty much as they have run over a long period of time. I think there will be a gradual increase in the total number of houses provided in the Commonwealth. There is some emphasis today on the provision in cities of flats as against homes. This could relate to cost factors, but again, if it is a good thing for city people to have flats, then it is not our province as a Government to make any differentiation between the provision of finance for this purpose and the provision for what might be termed straight out homes. If people choose to live in other than a conventional type of home, if they wish to live in a flat or one of the modern buildings which go up many storeys high, that is their affair. It should be recognised that all this is a contribution to housing families, to development and to progress.

Therefore, this Bill, providing as it does for certain categories contributing towards the overall requirement but not the total requirement, is one which .is worthwhile and in the interests of the specific kind of housing for which it caters. It fits in very well with the general economic capacity of the country, with the demands that have to be met, and it provides a very useful piece of progress in Australia.


.- Mr. Deputy Speaker, at the commencement of his address the honorable member for Cowper (Mr. Robinson) quoted certain figures relating to the building industry in New South Wales. He used these figures to indicate that the previous New South Wales Government, a Labour Government, had - in the words of the honorable member - neglected the building industry in that State. I assert that the honorable member for Cowper is sufficiently skilled in debate in this House to know that if he wants to quote a certain set of figures to prove his own case it is quite possible for him to do so. But he neglected to look at the full figures available to this Parliament.

I propose to quote from an answer given by the Minister for Housing (Mr. Bury) to a question asked by the honorable member for Hughes (Mr. L. R. Johnson) concerning the number of applications for homes received by State housing authorities. I refer first of all to the State mentioned by the honorable member for Cowper, New South Wales, where, as he indicated, there had been previously a Labour government. The figures supplied by the Minister for Housing show that in 1964 the number of applications for homes received by the New South Wales Housing Commission was 16,688. In 1951-52 - I select that year because one would assume from what has been said by the honorable member for Cowper that in the intervening years there has been a distinct improvement in the number of homes constructed in the Commonwealth - there were 13,835 applications. Therefore, the number of applications has increased.

Let us have a look at the figures for another State, Victoria, where, if J understand the position correctly, there has been a government of the same complexion as that which the honorable member for Cowper now supports - a Liberal Government - for some considerable period. In 1964 there were 8,422 outstanding applications to the housing authority in Victoria.

In 1951-52 there were 7,395 outstanding applications. How does the honorable member for Cowper explain the tremendous increase in the number of outstanding applications in Victoria where there has been a Liberal Government for the whole of this period?

I turn now to the State of South Australia and find that the number has increased from 5,330 outstanding applications in 1951-52 to 9,784 in 1964. In that State, as every honorable member knows, a Liberal Government was in power for 27 years. That government was changed in 1964 and South Australia now has a Labour Government. So, Mr. Speaker, I have quoted these figures to indicate that if one follows the pattern of argument of the honorable member for Cowper it is quite easy to use figures to show that a certain situation exists in one State as compared with another. In this instance, the honorable member wanted to indicate that because there had been a Labour Government in New South Wales there was a record number of outstanding applications in that State. The plain fact is that throughout Australia, where Liberal Governments have been in power in the States, the same situation applies. Indeed, if we consider the number of outstanding applications for housing in proportion to the population generally, the figures for some other States show a far worse position than that in New South Wales.

The honorable member for Cowper referred to assistance for rural home building throughout Australia. No doubt he speaks with some authority on this subject. I believe that every honorable member of this Parliament would concede that people who live in rural areas and in the small towns such as those to which he referred are entitled to the same consideration as city dwellers who are assisted by the State housing authorities and private housing finance institutions. I merely make the point - since the matter has been raised by the honorable member for Cowper - that the Government which he now supports has been in office for 15 years. If the situation to which the honorable member devoted most of his speech has been allowed to develop, it is time the Government he supports had a look at this question and tackled whatever problem exists.

I do not want to deal with everything referred to by the honorable member for Cowper, but I think he very conveniently overlooked the major problems of the bousing situation in this country. He neglected to refer to interest rates except to mention the rate which will be paid by the States for the money they will receive under the terms of the Bill now before us. He did not concern himself with the question of the interest rates now being charged by the private institutions that are lending money to people who wish to build privately. These interest rates were discussed earlier in this debate by the honorable member for Hughes. Nor did the honorable member refer to the great shortage of houses that exists in this country at present.

It is all very well for honorable members to rise in their places in this House and suggest that this Government has been responsible for the construction of 1,000,000 additional homes since it took over the treasury bench. But the fact remains that one must measure the increase in the number of homes built against the increase that has taken place in the population. Secondly, one must take into account the number of dwellings built for people who already own one home. This brings up the question of holiday homes, for example. I believe that if one carefully examined the situation it would be found that a great many Australians have been able to build more than one home and far too many people are still inadequately housed in garages and other unsuitable accommodation. This matter was mentioned in the last census report submitted to the Parliament.

As has already been pointed out, Mr. Speaker, this measure provides for £51,000,000 to be made available to the States by the Commonwealth this financial year under the Commonwealth and State Housing Agreement. This is £350,000 less than the sum provided last financial year. The Minister for Housing, in his second reading speech, intimated that this was the figure agreed on by the State Housing Ministers. No doubt the Minister spoke with authority when he made that statement, but one finds it difficult to understand that the State Ministers would be prepared to accept £350,000 less this financial year in view of the increase in the number of applications for assistance from the various State housing authorities. In view of this increase, surely the Minister finds it difficult to suggest to the Parliament that less money should be provided in 1965-66 than was made available in 1964-65.

I consider that there was a very serious omission from the Minister’s second reading speech. He neglected to supply to honorable members any of the statistics that have been referred to by various speakers in this debate. The Minister’s speech on this occasion was almost an all time record. It occupied fewer than three columns of “ Hansard “. In past debates on Loan (Housing) Bills - such bills were formerly introduced by the Treasurer - honorable members grew accustomed to dealing with measures that usually proved to be almost the shortest put before the Parliament during the Budget session. However, one would expect, now that the Government has a full time Minister for Housing, that more information would be made available to honorable members. On this occasion, once again, the responsible Minister has neglected to supply us with statistics that the Government should make available to the Parliament.

As I have already mentioned, this measure provides for the allocation to the States this financial year, to meet their housing needs, of a total of £51 million, which is £350,000 less than the sum provided last financial year. Surely honorable members are entitled to a clear explanation of the way in which this money will be spent. What are the housing needs of the States? As the honorable member for Hughes pointed out earlier in this debate, the Parliament has received no report on the important question of housing since a former senator, Sir William Spooner, when Minister for National Development, submitted a report to the Parliament. That was back in 1957. I claim that the Parliament needs information about housing needs throughout the Commonwealth, and particularly about the backlog in the number of houses needed. The present Minister for Housing has not attempted, in any of his second reading speeches on the housing measures that he has presented in this House, to supply to honorable members any information relative to the needs of the Australian population in this important matter. The State Governments, on the other hand, each year submit to their respective Parliaments reports concerning the allocation of money they receive from the Commonwealth under the terms of measures such as this. The State Governments report to the State Parliaments on the number of homes constructed with funds provided by the Commonwealth. But the Federal Government has never attempted to make similar information available to the Commonwealth Parliament.

In 1945 the Commonwealth moved into the field of housing and accepted responsibility for dealing with this great social problem. One would expect, as it is now twenty years since the Commonwealth’s intrusion into this field, that it would be possible for the present Government at least to provide honorable members with some figures relating to the number of homes constructed, the backlog that now exists and ways in which current housing problems in all the States might be dealt with. Less than two years ago the State Ministers suggested that a move be made to hold a national inquiry into the housing needs of the Australian people. So far as I am aware, the Minister for Housing has made no move to give effect to that recommendation. I believe that he is reluctant to examine the situation.

Practically all the problems associated with the building industry in this country have been overcome. I consider that there have been developed types of homes that are suited to climatic conditions in the various States. We can be very proud of the way in which the building industry generally, including not only those who are actively engaged in construction but also architects and engineers, has applied itself to the problems of home construction throughout Australia. Although practically all the problems associated with the building industry have been overcome, there has been great reluctance by the present Government to institute a proper national inquiry that would enable us to ascertain exactly the housing needs in each State. We on this side of the chamber believe that the allocation to the States in the current financial year under the terms of this measure will be inadequate. We have said on other occasions that allocations of Commonwealth funds for housing have been inadequate. Yet the Government has reduced by £350,000 the allocation to be made this financial year.

The only statistics that 1 have been able to obtain from the Commonwealth Statistician’s office imply that 112,500 homes were completed in 1964-65. One would concede, Mr. Speaker, that this was a distinct improvement on the Government’s record in other years. Earlier, I mentioned the report on housing presented by Sir William Spooner in 1957. From memory, I think that he intimated in that report that 77,000 homes would have to be built annually over the next five years. That is to say, if 77,000 homes were being constructed each year, by 1962 the backlog would have been overtaken. This calculation was based on an assumed increase in the net population of 1 per cent, from immigration. Sir William Spooner went on to say that by 1970 it would be necessary to construct 79,000 homes each year, but he was completely wrong in his assumption. More up to date information made available to this Parliament, not by the Minister or his Department, but by Dr. Hall of the Australian National University, showed that by 1970, not 79,000 but 131,000 homes would have to be built each year in Australia. In other words, it would be necessary to build 20,000 more homes than were constructed during the last year referred to by the former Minister for National Development. No one has disputed Dr. Hall’s statement that by the end of 1970 it will be necessary to build 130,000 homes each year in Australia. The Minister for Housing has never disputed that figure and, in the absence of any report or statistical evidence from his Department to the contrary, one must accept that Dr. Hall’s figures are reliable and accurate. In these circumstances, surely the Minister should make an effort to inform himself of the real position. Who was right, the former Minister for National Development who said that by the end of 1970 only 79,000 homes would be required each year, or Dr. Hall who said that by that time not 79,000 but more than 130,000 homes would be needed each year? The Minister has never disputed these figures.

The Opposition believes there is a great need for a national inquiry to satisfy not only members of this Parliament but also the general public of Australia’s housing needs. The figures mentioned by the former Minister for National Development and by Dr. Hall do not allow for slum clearance or the eradication of substandard dwellings to which I have referred already. In the last census presented to the Parliament there was evidence of people living in garages and in shared accommodation. A competent committee which had the opportunity to examine the housing situation in Australia should have the opportunity also to consider the real problem associated with housing needs. I refer to the lack of opportunity for those in the low income groups to secure suitable accommodation. Honorable members on this side of the chamber have referred to this problem year after year. Repeatedly we have pointed to the fact that there has been a great problem for the average wage earner to secure alternative accommodation because of the deposit or the margin of security required not only by the Government but also by approved lending institutions. The annual report of the Director of the War Service Homes Division confirms what I have said in this respect.

In recent years there has been a substantial increase in the average cost of a home in Australia. The 1963-64 annual report of the Director of the War Service Homes Division - that is the last report available - compares the average cost of a dwelling house and land each year since 1st July 1955. In New South Wales, in 1955-56 the average cost of a house and land was £3,483. By 1963-64 - the last financial year for which figures are available - the average cost had climbed to £5,053. The average cost of a home had climbed so much by 1963-64 that the average deposit required had increased by £1,570. On a house costing £5,053, the deposit required by the War Service Homes Division and most other lending institutions in Australia would be about £1,500. In South Australia, the average cost of a dwelling house and land has climbed from £3,448 in 1955-56 to £5.376 in 1963-64. In the Australian Capital Territory the increase has been even more substantial than that experienced in the corresponding period in the States. In 1955-56 the average cost of a house and land in the Australian Capital Territory was £4,225. By 1963-64 the average cost had risen to £7,388. Yet the Commonwealth is responsible for home construction in the Australian Capital Territory. Surely the Commonwealth has the authority under the Constitution to control in some measure the costs and prices in its own Territory. Nevertheless, in the period to which I have referred there has been a tremendous increase.

If a house costing £7,388 were bought through the War Service Homes Division an applicant who received the maximum advance of £3,500 would require a deposit of almost £4,000. I ask the Minister, as honorable members on this side of the House have already done, to explain why the Government requires a deposit of £4,000 on houses bought through the War Service Homes Division, an authority for which it has been responsible for so long. This afternoon, the honorable member for Hughes referred to the Commonwealth authority in the War Service Homes Division and mentioned that since 1951 the Division has applied a waiting period to applicants for housing. Why should these conditions apply almost 20 years after the end of the last war? Why should a person who is entitled to assistance under the War Service Homes Act be obliged to wait 18 months before finance is made available to him? I do not want to mention all the processes that are required by the War Service Homes Division because I believe that most honorable members are already aware that if one purchases a new home through the Division the Government does not apply a waiting period, but if one buys an existing home a waiting period is applied. These circumstances have forced successful applicants to raise a second mortgage. The Minister is fully aware of the circumstances that apply in this respect.

I have referred already to interest rates. One of the quarrels which Opposition members have with the Government is that applicants, not only through the War Service Homes Division but also through private lending institutions and through its instrumentality, the Commonwealth Banking Corporation, are forced to enter into second mortgages at exorbitant rates of interest. Let me cite the case of a young man who has saved enough to buy land on which he wants to erect a home to the value of £5,000. He can secure, through the War Services Homes Division or some other lending institution, £3,500 over 30 years at 5i or 51 per cent, interest. Therefore, he must secure at least £1,500 on second mortgage, perhaps at an interest rate of 7 per cent. That would be a very generous interest rate having regard to the second mortgage interest rates charged by the Commonwealth Banking Corporation and other lending institutions. In those circumstances the applicant would be obliged to meet repayments of at least £9 a week. Obviously, only people with incomes of £30 a week or more would be able to enter into such a commitment.

The great housing need in this country is for the Government to face up to the question of the margin of security that is required. We have pointed out time and time again that it is practically impossible for people in the low income groups to secure sufficient finance to enable them to erect a home. More and more young people are being forced to apply to the State housing authorities, because they are the only authorities that are able to make homes available on low deposits, at reasonable rates of interest and on terms and conditions that applicants are able to meet. Until this Government is prepared to face up to the question of the deposit gap, more and more people will be forced to apply to the State housing authorities and there will be more and more need for the type of assistance provided in this Bill. That is one of the reasons why we on this side of the House believe that the amount that is being made available under this legislation to the various State housing authorities for 1965-66 is inadequate. We believe that the Government has a real problem to face up to. As I have said already, it should make available not only to members of the Parliament but also to the general public an up to date report indicating the real housing needs in Australia. We believe that that is one of the responsibilities that the new Minister for Housing should face up to immediately.

Mr. WHITTORN (Balaclava) L5.32J.- lt is customary for the honorable member for

Bass (Mr. Barnard) to be reasonable in his approach to housing matters. Today’s debate has been no exception. However, he said one or two things on which I think I should comment. First, he used the phrase “ the Government’s intrusion into the field of housing in 1 945 “. I agree with his choice of words, because prior to 1945 the production and selling of houses was a matter for private enterprise. So he is quite right when he says that the Government has intruded into the field of housing since 1 945.

I wish to ask the Minister for Housing (Mr. Bury) to have regard, in the new agreement that will be arranged in 1966, to the fact that prior to 1945 the Commonwealth Government, in particular, had no interest in housing. We all know that the money that is allocated to the various States for housing is allocated at an interest rate 1 per cent, below that applicable to long term loans. In other words, a person who is buying a house for his family directly through a bank or an insurance company is buying not one home but two homes because he is also helping to buy a home through the various State housing authorities. Many young men who are buying their own homes have objected to the fact that they have to subsidise their neighbours or people in other districts as a result of the 1 per cent, reduction in the interest rate which is applicable to housing commission loans. We all realise that this does not represent a great amount, but it is a fact that because of government intrusion into housing many families not only are buying one home, on which they can just afford to make the payments, but also are helping to buy another home.

The honorable member for Bass mentioned that in 1964-65 the number of homes completed was 112,500. He said that was a distinct improvement on what had happened hitherto. I think his language was very tolerant, because never before has the production of housing units reached the 112,000 mark. There has been a miraculous improvement and a miraculous record of production. The country, through private enterprise and housing authorities, not only has built a record number of houses, but also has utilised a record number of skilled tradesmen in the process. All the reports that I have seen - from banking authorities, lending authorities and from a group of officers of the various State housing authorities - indicate to me that the only limiting factor on the building of homes in Australia is lack of labour. It is not lack of finance or materials; it is lack of trained building labour. Until that matter is rectified, it is highly improbable that Australia will lift its building peak above the 1 12,500 homes that were completed last year.

The honorable member for Bass and the honorable member for Hughes (Mr. L. R. Johnson) seem to regard Dr. Hall of the Australian National University as the one authority who knows a good deal about the prognostication of home building in Australia. I have not the figures that I had last time I spoke on this subject, but on that occasion I said that Dr. Hall had made three attempts to forecast the number of homes that would be required in Australia in the years ahead, and on each occasion he changed his previous forecast. Speaking from memory, his last forecast for 1964-65 was 104,000 homes. Yet we see in the statistics available to all honorable members that in that year 112,500 homes were produced. I ask Dr. Hall and the honorable members for Bass and Hughes: What would have happened to the 8,500 families - the difference between Dr. Hall’s figure of 104,000 and the number of houses produced, 112,500 - if those homes in which they are now living had not been built?

This idea of planning building and setting out the number of buildings that will be required in the years ahead is a fallacy. I do not know how far members of the Opposition would go in respect of this planning that they mention, because I recall the honorable member for Hughes saying: “ We do not know how many doctors we will need in 1968 or 1970; we do not know how many dentists we will need in those years “. He did not say how many nappies we would require. He might as well take it down even to nappies. What regard would Dr. Hall or the honorable member for Hughes pay to the fertility pill and some of the other things that have to be taken into account when planners sit around a table? Much as I like the honorable member for Hughes as a person, I find it really difficult to understand just how far he would go with the planning of these things.

It seems to me that in the Opposition there is a big brother movement which would say to the people: “You will do what we say you will do “. The people of Albany in Western Australia and Cairns in Queensland do not care what we think about their housing needs because they realise, as do members of the Government parties, that their local authorities have a good deal more knowledge of affairs in Albany and Cairns than we in this Parliament have. The local authorities have a good deal more knowledge of their local affairs than has any public servant in Canberra. In other words, I do not want centralisation of authority in Canberra. I do not want this growth of the big brother movement that I have mentioned. It is not good for the family man or his family; it is not good for the individual; and therefore it is not good for this Government.

The honorable member for Hughes also said that this Bill lacks imagination. Of course it does. This is an enabling Bill respecting the Commonwealth and State Housing Agreement which was negotiated by this Government in 1961 for five years. All this Bill does is to enable the Government to raise £51 million in the form of loans for disbursement to the various States.

The two honorable members from the other side who have spoken today have mentioned the fact that £350,000 less will be allocated to the States for housing this year. The matter was discussed at the last Loan Council meeting and at the Premiers’ Conference. It is significant that the granting of £350,000 less this year has resulted from the fact that the South Australian Government - a Labour government - told the Commonwealth it required £350,000 less for housing this year than last year. Perhaps there is an explanation for this, but it is a fact that it was a Labour government which asked for less money this year than last. The amount of £51 million requested by the various State Premiers - New South Wales £17,750,000; Victoria £13.65 million; Queensland £3.3 million South Australia £9.5 million; Western Australia £3.6 million and Tasmania £3.2 million - will be allocated by the Commonwealth. As the Minister for Housing said in his second reading speech, this money will be used to construct homes for families in the low or moderate income groups. This is a good thing.

When 1 initiated my remarks by saying that the Commonwealth Government should not intrude into the field of housing I meant in the physical sense. Young families on low or moderate incomes should have some means of deciding the type of home they need and where they would like it built. My objection to government intrusion in the housing field is that State governments set up housing commission areas and say to the families on low incomes who apply for homes: “ You shall live there, there or there”. I think young couples should be able to decide for themselves where they should live, provided it is commensurate with their way of life and with what they can afford.

As 1 have said, money is advanced to the States at concessional rates of interest. I have also said that the young man who gets a £250 homes savings grant from the Commonwealth Government and builds his own home does not want to pay a subsidy towards the building of a home for another family. He finds it difficult to understand why on the one hand he is building his own home yet on the other he is subsidising the building of a home for another family. Before the new Commonwealth and State Housing Agreement is negotiated I should like the Minister to pay regard to the fact that only 30 per cent, of the total of £51 million will be directed to the building societies who lend money to their clients. The remaining 70 per cent, will be used by the State housing authorities for building moderate priced homes for sale or moderate rental homes. I say this because looking at some of the statistics that have been shown to me I find that the various State housing commissions have constructed a total of 41,000 homes in the last four years from an expenditure of £132 million of the total of £200 million allocated by the Commonwealth to the States in that period. The building societies during the same period used approximately £68 million in helping finance 27,000 individual home builders. A quick calculation indicates that if all of the £200 million allocated to the States had been used by building societies and building co-operatives 81,000 families - and not 68,000 - could have been helped from this concessional loan money. I should like the Minister and his Department to have regard to what could be done by the building societies after June, of next year before finalising the next housing agreement. I am not suggesting at this moment that all the money should be used by the building societies, but I can see that an additional 13,000 families could have been helped if all the money had been used by the building societies over the last four years.

As I have said, 1 12,500 homes were constructed in the last financial year. This betters the record of 96,700 established the previous year. These figures must confound the planners and the critics, especially Dr. Hall whom I have mentioned. I have seen three assessments by Dr. Hall of what number of homes should have been constructed in the last four or five years, but I should like to see his figures for 1965-66 and for the years hence, because he has revised his figures at least twice and I am sure he will need to revise them as a result of the increased production last year.

Mention has been made of the fact that the banks are not lending sufficient money, that they are not doing this or that. Here again I believe this Government has taken a positive view. Two or three years ago it changed what was known as the 70/30 rule to what has become known as the 65/35 rule. In effect, this new rule means that savings banks and other banks can lend 5 per cent, more of their deposits for housing and other investment than they could lend prior to this regulation being initiated by the Government. In 1961-62 the savings banks allocated £58 million for housing, but as a result of the new move the amount had increased to £149 million in 1964-65. This is the type of government incentive that lending authorities, builders and the little men in this country need. They do not want further intrusion or more questionnaires as to where they live, why they live there, how many there are in the family and so on. Less intrusion by governments is needed, not more.

We find that where there is development in Australia it is where there is less government intrusion. I understand that another honorable member wishes to speak after I conclude, so all I add to what I have said is that this enabling legislation which the Minister has presented to the Parliament will prove most useful for the States in 1965-66.


.- I rise to outline to the House a particular problem which affects my constituency. As I have stated in this House on many occasions, I represent the major steel producing centre not only of Australia but of the southern hemisphere. It is the centre which at present is producing annually over £300 million worth of wealth for the national economy and as such it is an area whose housing needs can be neglected only at the peril of this nation. Recently there was an announcement by Australian Iron and Steel Pty. Ltd. and the Broken Hill Pty. Co. Ltd. of a major programme of expansion which will add over 1 million tons a year to the present output of 34 million tons. Where there are heavy industries on that scale there are associated problems, one of the major ones, of course, being the production of housing. Within my constituency, which is broadly the City of Greater Wollongong, the population increased from 63,000 in 1947 to 135,000 in 1961 and is more than 160,000 today. Expansion of that order has created housing problems which are unequalled in Australia. I repeat that our housing needs can be neglected only at the peril of this nation because no city or district can make a greater contribution to Australia’s export potential than the City of Greater Wollongong.

This being so, let us examine our present housing needs. The Housing Commission of New South Wales has built 6,000 homes in the area. Although that may seem to be a major contribution, we are further behind than ever. I say advisedly that in the 15 years that I have had the honour to represent the area I have never been sure whether I have been primarily a member of Parliament or a housing agent. This has been due to the special and desperate housing needs of my people. As the honorable member for Hughes (Mr. L. R. Johnson) said, we have 2,640 approved applicants on the books of the Housing Commission. It is true that 660 homes are under construction by the Commission, but a programme of industrial expansion of the order of £45 million, providing employment for an additional 2,000 men, will further increase the housing problem.

The Minister for Housing (Mr. Bury) commented that housing authority money is to be applied to the low income groups. In proportion to population, no area in Australia has a greater percentage of men on a sub-standard income which does not permit of their ever acquiring a home by savings from their ordinary earnings than has my constituency. According to the latest statistics, the average male income in New South Wales in the last quarter was £27 ls. a week. At best, the steel industry can offer migrants £22 a week. I have here a letter dated 5th June 1964, sent in circular form by the Broken Hill Pty. Co. Ltd. from its London office to intending migrants to Australia who would be capable of being employed in the steel industry. The letter states that the average wage would be £22 a week, including bonuses, shift allowances and week-end allowances. In hard truth the correct wage would be between £18 10s. and £19 a week. It has been stated in this House to the point of tedious repetition that with an income of that order, it is not possible to induce an orthodox lending institution to provide a housing loan on orthodox terms. If further proof is needed of our special requirements, I direct attention to the amount of female unemployment in the area. About 28 per cent, of the total female labour force of my constituency is unable to find work. If you need to pinpoint this matter further, within the quadrilateral immediately adjoining the steel industry, in the suburbs of Unanderra, Berkeley, Port Kembla and Warilla, 40 per cent, of the women are looking for employment and, of that number, 78 per cent, are married women who are being forced on to the labour market because of the inadequacy of the wage paid to their husbands who are on shift work. The shift worker - the production worker - is the backbone of the steel industry. From time to time, higher wages are quoted but the hard truth is that until an adequate wage is paid to these men we must depend heavily in the national interests upon a special allocation of housing funds for our area.

The former Labour Government of New South Wales allocated each year 13 per cent, of its funds for Housing Commission activities to my constituency, which contains 4 per cent, of the total population of New South Wales. The former Labour Government has discharged its responsibility to the utmost. We have now reached the stage where the steel industry is creating special problems. Special solutions must be provided. The most obvious solution is for the steel industry itself to come to the party. Nobody can doubt the industry’s technical proficiency. Nobody can doubt that its activities are wholly in the national interests so far as they go but associated with the responsibility of steel production are the social responsibilities for the welfare and, above all, for the accommodation of the industry’s workers. Today the majority of the increased number of production workers represents Commonwealth nominated migrants who are accommodated in four Commonwealth hostels in my constituency. Within the limits of the accommodation available, those people are well treated. I make no criticism whatever of the hostel staffs. They do their best with the accommodation available, but the problem is mounting and no-one is prepared to come to the party with a proper solution.

There is a definite need for a national grant in aid for my constituency. The Minister would immediately say that the Commonwealth cannot give direct aid for housing. It can be given for migrants, and migrants, whether they be from the British Commonwealth or from the various countries of Europe, constitute 50 per cent, of the approved housing applications within my constituency. A grant in aid must be given. An alternative is for the steel industry itself to make provision for company housing. Another alternative, which apparently the industry is not prepared to accept - I am not trying to make political or industrial capital out of this - is for the industry to pay to its employees an adequate wage which will permit them to make proper savings.

I commend to the attention of the Minister a survey made by Dr. Appleyard of the Australian National University into the special problems of migrants in relation to low cost housing. The survey merits the Minister’s attention and pinpoints the facts very clearly. Of all Commonwealth nominated migrants coming into this country, 67 per cent, bring with them less than £500. Again, 50 per cent, of them bring less than £200. They are normally accommodated for two years in a Commonwealth hostel. During that time, it is as much as they can do to pay their accommodation charges and provide for clothing and transport. Their chances of saving money are virtually nil. They are jammed in the hostels to the very limit of the available accommodation. Their prospects of obtaining housing from the Housing Commission are nil. Here is the problem and it must be faced.

I should like to read a statement which appeared in the “ Illawarra Daily Mercury “, which is a daily newspaper published in my constituency. The statement refers to the problems of expansion of the order proposed by the steel industry. Commenting on steelworks development the article states -

In terms of industrial expansion, the benefit will be enormous but it will also have far-reaching effects on the growth of the city.

The writer . is referring to the recently announced programme of expansion. The article continues -

Whether the city is geared to meet this expansion remains to be seen but it has been forewarned and the State Government and the City Council must give a great deal of thought to what is to come.

It has been estimated that this expansion of the steelworks alone will lift the population of the city to 200,000 by 1970.

This will throw a heavy burden on Local Government which is now hard pressed to meet its commitments.

The nation needs this expansion and it is time the Federal Government altered its hide-bound attitude to assisting Local Government and ensured the growth of this city.

I ask for leave to continue my remarks.

Leave granted; debate adjourned.

Sitting suspended from 6 to 8 p.m.

APPROPRIATION BILL (No. 1) 1965-66. Second Reading. (Budget Debate.)

Debate resumed from 17th August (vide page 83), on motion by Mr. Harold Holt -

That the Bill be now read a second time.

Leader of the Opposition · Melbourne

– I move -

That all words after “ That “ be omitted with a view to inserting the following words in place thereof - “ this House condemns the Budget because - 1. Such taxation increases as it contains add further burdens to wage and salary earners whose living standards have already been eroded by price rises and the Government’s active intervention against wage increases.

Such meagre social service benefits as it proposes are inadequate, belated and partial in their application.

The Budget fails entirely to deal with such problems as increases in imports and Australia’s dependence on foreign capital.

This House further declares that only by proper economic planning, can Australia rapidly expand the resources required to meet its urgent needs in the fields of defence, development, education and social welfare.”

Long before the presentation of this Budget, there was much talk about its toughness, and this talk has continued since the Budget was presented to the House a week ago. The Treasurer (Mr. Harold Holt), for reasons of his own - the reasons are quite obvious to anybody who speculates on the future of this uneasy and uncertain coalition - has fostered this sort of talk because it helps to obscure the real purpose of a Budget -and the real duty of a Treasurer. If this is not an uneasy coalition, why is it that the Treasurer encourages an inflow of capital and the Deputy Prime Minister (Mr. McEwen) says that every year we are selling a bit of the farm to pay our way?

Mr Fairbairn:

– You have an uneasy Opposition.


– We all have our troubles. Of course we have. The Minister for Primary Industry (Mr. Adermann) has a distinguished nephew who will be a Labour candidate at the next Federal election and will win a seat. He is obviously more intelligent than Uncle Charlie.

In May it suited the Treasurer to predict what he called a tough budget. Now it suits him to depict it as a mild one. But these are not the proper standards by which a Budget should be judged. The criteria of a successful Budget are not whether it is tough or mild. These things are simply cliches, dear alike to the Press and to the Treasurer. The real questions to be asked are these: Does the Budget have true or significant meaning as an analysis of existing economic problems? Does it have purpose as a guide and a plan for the growth, development, prosperity and security of Australia for the next year and beyond? Does it honestly justify what it contains and what it purports to do? And most importantly, is it just, both in the burdens it imposes and in the concessions it grants? These four standards - honesty, justice, meaning and purpose - are the real standards to apply to this Budget, and to any Budget, in these modern, complex times of 1965. By those standards, this Budget, and the speech with which the Treasurer introduced it, is a complete failure both as an essay in economics, and as an essay in leadership, in this critical time in Australia’s history.

This is an unjust Budget. It perpetuates old injustices and perpetrates new ones. This is a dishonest Budget. Its authors make an attempt to gain acceptance for its injustices and impositions, particularly among the ordinary wage and salary earners and the pensioners of Australia who have to bear its burdens, by falsely depicting it as a defence Budget. Whatever else this Budget might be, it is not, by any stretch of the imagination, a defence Budget. It is a meaningless, irrelevant Budget, because it does virtually nothing to deal with the very problems the Treasurer himself purports to define in his speech. It is a Budget without purpose, because it makes no attempt to grapple with any of the long term problems of Australia’s development and security. It contains no plan, and gives no guidelines. This is a banal Budget, a bookkeeper’s Budget.

The Treasurer has once again demonstrated to Australia his incapacity as financial manager and even more strikingly his inadequacies as a leader. A Budget is not merely an exercise in revenue raising, but that is exactly how the Treasurer has treated it in this bookkeeper’s Budget. In presenting his Budget, it was the Treasurer’s duty to explain the forces which are moulding Australia’s material well-being, and the fiscal and monetary policies which he thought were needed to ensure economic growth, external, and internal stability, and full and profitable employment. The Treasurer ignored this duty. He stated some of the economic problems facing Australia, but said nothing about remedies, cither in the short or the long term. We expected him to give us some detailed exposition of the State of the economy. Instead, we were told with a great flourish that the economy is “running at full pitch”. The Treasurer found this profundity so attractive that he said it twice. How can an economy run at full pitch? Anybody who has read even the first Nessfield grammar will know that that is bad English. Then, for the rest of his speech, he spelt out, item by weary item, his plan - if it can be called a plan - for his attack on the middle and lower income earning groups of this nation and upon their standards of living. Those who are asked to bear these additional burdens did not even have the consolation of hearing from the Treasurer just how he expects these things to help in meeting our problems.

What are these problems? Let me enumerate them briefly. They are - The tightest credit policy and highest interest rates in the history of this generation with imports running at a record rate and showing no signs of falling; export prices fatting and exports likely to be seriously affected by drought; capital inflow uncertain, and our dependence on that inflow increasing because of this Government’s “sell-out” policies; the world monetary situation gravely disturbed, international reserves falling rapidly and certain to continue to fall with prices rising at the most rapid rate for over ten years and continuing to rise; wage rates deliberately held back so that real incomes of wage and salary earners are falling; and their living standards are being continuously and deliberately eroded.

Dr Gibbs:

– Rubbish.


– Well, those of you who have millionaire wives do not need to worry. Our next problem is that consumer demand is stagnant in important areas, home building showing every sign of falling off rapidly. There is no interjection on that point, the last problem is that the competition for resources between record private investment and record Government expenditure is increasing at an increasing rate. All this adds up to grave uncertainty as to where Australia is heading.

The balance of the economy, both internal and external, is shifting rapidly, and the rate of change is likely to accelerate. These are the elements of the present economic situation, and the Treasurer should not be permitted to dismiss them with the cliche that “ the economy is running at full pitch “. Nor should the Treasurer be permitted to think he can escape his duties to this House, and his personal responsibilities to the nation, by pointing to anonymous White Papers issued by the Treasurer, or the frank reports of the Reserve Bank. This Parliament, Sir, still has its rights, and the Treasurer still has his responsibilities to it. The views and proposals of the Treasurer and the Government should be conveyed to the Parliament in the proper way, and at the proper time. The proper way is in the Budget speech, and the proper time is while he is presenting the Budget.

The Treasurer should not be allowed to escape his responsibilities by presenting perfunctory and misleading statements, as he has done on this occasion. I use the word “misleading” advisedly. I said before that it was dishonest to depict this as a defence Budget. A concerted campaign has been conducted to condition the public mind to accept tax increases, and the lack of social welfare concessions, by emphasising Australia’s defence needs. It is true that Australia needs expanded defences after the neglect of the past decade, but it is completely misleading to claim that this need explains and justifies the sort of Budget produced for the year 1965-66. The fact is, of course, that most of the increases in this Budget have occurred in expenditure other than defence.

Non-defence expenditure ordinarily charged to consolidated revenue rose by a fairly steady £100 million a year in the seven years up to 1962-63. In the last three years, non-defence expenditure rose by £138 million in 1963-64, by £142 million in 1964-65, and this year by £185 million. This Budget then, I submit, is a record civil Budget - not a record defence Budget.

When we examine the increases in nondefence expenditure in recent years we find that they are being spent neither on rapid and significant extensions of social services nor to enable the States to provide adequate education and health services. They are being spent mainly to restore an economy weakened in 1960 and to meet the Government’s haphazard and panic-inspired election promises made in 1963. Much of this additional expenditure is sensible, but it is totally dishonest to suggest, for instance, that because of defence commitments pension rates this year cannot be raised to meet the increase in the cost of living.

This is, perhaps, not the time to examine the real nature of these defence commitments in detail, but I must draw the attention of honorable members to the fact that the increases for which provision has been made; - £46 million in 1963-64, £44 million in 1964-65 and £83 million this financial year - do nothing more than restore defence spending in real terms to something under the level of twelve years ago. The increase in defence spending in each of these years has been only one-quarter to one-third of the total increase in Government expenditure.

Great play can be made, and has been made, by the Treasurer, in quoting expenditure figures over periods of time in money terms. This approach ignores the rise in prices, the rise in population and the rise in output per head over the period. The only realistic basis of comparison is the proportion of our available resources which we are devoting to governmental activities of each type. The simplest way to do this is to express expenditure and income as a percentage of the Commonwealth Statistician’s concept of gross national product - the total value of goods and services produced and available for consumption, investment and Government use. With the concurrence of honorable members, I incorporate in “ Hansard “ a table I have had prepared for me, showing the main items of Government outlay and receipts expressed as a percentage of gross national product.

I thank you Sir, and I thank the House for its concurrence in my request. I heard one honorable member opposite ask on what authority I produced this document. Why should not I produce this document? I have had it prepared for me. I have not the advice of departmental officers which the Treasurer and the Prime Minister (Sir Robert Menzies) have. The Treasurer does not prepare his Budget speech. The Secretary of the Treasury prepares it, assisted by all the people around the place. Members of the Opposition do not have access to any authorities in the Public Service. I acknowledge the fact that I do get assistance from outside this House.

The Prime Minister did me the honour last year of saying that my submission was a “Brown” study. I acknowledge quite freely and frankly that I had the assistance of Mr. H. P. Brown, a reader in Economic Statistics of the Australian National University. I had the assistance, too, of Dr. A. R. Hall, another distinguished academic. I had the assistance of my colleagues, including the honorable member for Melbourne Ports (Mr. Crean) who is highly qualified academically and otherwise in these matters, and I had the assistance of the honorable member for Yarra (Dr. Cairns). Government supporters are interjecting. I did have that assistance, Sir. I acknowledge quite frankly that I had the assistance of Mr. Brown and Dr. Hall. They are highly intelligent gentlemen and, being highly intelligent gentlemen, they have Socialist leanings. Every intelligent person in this community has Socialist leanings. Who are the people who vote for the Government? I divide them into two classes: First, those who cannot think; and, secondly, those who, if they can think, do not think, or will not think. That is how this Government will remain in power until the day comes when, in the classic language of the late Prime Minister Chifley, the most vital part of the human anatomy - the hip pocket nerve - is touched.

I have said that I had help from outside. I gladly admit it. I have no access to governmental authority, nor has any honorable member of this House who is not a member of the Ministry. The statement that I have had incorporated in “Hansard” is based on statement No. 6 attached to the Treasurer’s Budget Speech and the paper “ National Accounting Estimates of Public Authority Receipts and Expenditure” circulated to honorable members with the Budget speech. It covers the 13 years from 1953-54 to 1965-66. I will refer to this table from time to time in the course of my speech.

At the moment, I wish to draw particular attention to the first line of the table, “ Current Outlay on Defence “. In 1953-54 nearly 3i per cent, of our available resources were being devoted to defence. In the following nine years of neglect and apathy this was cut by one-third to a little over 21 per cent - 6d. in the £1. In the last three years, during which this Government has had the effrontery to depict itself as defence minded, we have seen defence expenditure raised to a little over 34 per cent. - still significantly lower than twelve years ago. How reminiscent this is of this same Government’s performance from 1937 to immediately before the attack by Japan on Pearl Harbour.

Let me repeat: This is not a defence Budget. Defence is an excuse for its inadequacies, its injustices and its impositions. Therefore, inasmuch as this has been presented to the public as a defence Budget, and inasmuch as defence has been used to justify it, this is a dishonest Budget. And, as I said at the beginning, it is an unjust Budget. For the majority of ordinary Australians, it is the hardest Budget since 1956.

Let us examine the situation of the 80 per cent, of the Australian work force earning low to modestly middling incomes to see how unjust it is. The Treasurer makes no reference at all to the recent changes in Arbitration Commission rulings and attitudes, nor to the fact that the wage increase of H per cent, which the Commission gave was substantially less than the price rises which have been taking place. He made no reference at all to the impact of those rising prices on living standards, nor to the probable future course of prices, except for a hint that further price rises would be quite justifiable. The Treasurer was, in effect, advocating increased prices.

The 1960 series of measures - the infamous credit squeeze - rested heavily for their justification on the rapid rise in retail prices. At least, that was what the

Government said at the time. The rise this year has been just as rapid and in much the same area, with meat the most costly commodity. But now we are merely told that the rise in costs - I quote the Treasurer’s words - “has not shown up in the final price of goods as much as might have been expected “. Is this an invitation to sellers to catch up the leeway? We are also told that “ the rise in prices has been greater than we would normally wish to see “. That is another one of the famous cliches. What rise in prices would the Treasurer normally wish to see? Will he tell us? Will he tell the wage and salary earners? Will he tell the pensioners?

Now we have a series of indirect tax increases on the three major groups of consumer demand - petrol, beer and tobacco. The round of price increases resulting from this has already commenced. It is of interest to note that these price increases are generally somewhat larger than the actual excise increase. Is it not possibly the case that producers are taking advantage of the Treasurer’s indirect invitation to gain a little to cover what he suggests they have missed in the recent past?

I should also refer to the fact that the increases became effective after 15 th August. May I draw the Treasurer’s attention to the fact that the Commonwealth Statistician collects prices of these commodities for the consumer price index on 15th August and the corresponding middle month of each quarter? Would he instruct the Statistician to take a supplementary monthly collection of the relatively few items affected to ensure that they are properly priced? If that is not done, the price increases will first appear in the December quarter index to be published in January 1966.

Presumably, of course, the Treasurer will not consider this of any importance now that the Arbitration Commission has a majority which holds the same view as himself - that wages should not be increased to compensate for higher living costs. Perhaps it is for this reason that he has felt so free to make a direct and immediate attack on the living expenses of the ordinary Australian citizen.

These remarks, however, serve as a mere introduction to the much more serious matter of what the Treasurer hopes to achieve by raising an extra £66 million from the basic expenditure of the bulk of the community. Our main economic problems at the present time are the insupportably high level of imports; the need to divert resources to private capital expenditure, government development expenditure and defence; and the falling incomes of farmers affected by lower export prices and drought - and all of these are significant. In broad terms there is an urgent need to direct expenditure away from commodities with a high import content, and from the products of the engineering trades, towards the basic primary products. It is also in the engineering trades that the shortage of skilled labour is most acute.

Let me examine the impact of higher taxes on beer, tobacco and petrol on the pattern of consumer demand in a situation in which real incomes are already falling, and living standards of the great majority are being eroded. A very high proportion of the community has heavy commitments for home purchase and instalment credit which cannot be reduced in the short period. Remaining disposable income must be spread even more thinly over ordinary living expenses when real incomes are falling. The results of the higher excise might be slightly lower quantity purchases of these items, but total expenditure on them will rise, and the amount each individual spends will be higher. Indeed, British experience over recent years indicates that the quantity of tobacco and cigarettes purchased will not fall significantly.

In simple terms, the ordinary Australian citizen who has his four beers after work, and who smokes a packet of cigarettes a day will still have his four beers and packet of cigarettes. He will simply have less to spend on other items. This is because beer and cigarettes are neither a luxury nor a necessity - they are a habit, and habits of this kind are not substantially affected by price changes. As a result, the higher expenditure on the newly taxed commodities must be offset by lower purchases on other everyday articles. These are most likely to be the more dispensable foodstuffs and clothing. Already we have seen declining purchases of meat as a result of high prices. It is now to be expected that a substantial part of the new reduction in expenditure resulting from this Budget will fall on meat, butter and eggs and clothing. These three industries - meat, dairying and textiles - are those which are already struggling with drought, low incomes and import competition respectively. They are amongst the industries requiring extra assistance through drought relief, higher subsidies and higher tariffs. I point this out for the consideration of the Country Party, and the Deputy Prime Minister in particular, in that they claim to represent rural industries.

I note in passing that the Treasurer, in his closing remarks, grouped together two problems he had to consider, those of monetary liquidity and of falling farm incomes. I can only trust that when members of the Country Party return to their electorates, they will find the farmers just as interested in the problems of monetary liquidity as they are in falling farm incomes, and will be able to explain both problems with equal ease.

But I stand here tonight as spokesman for the ordinary Australian citizen - the wage and salary earner, the farmer, the producer and the pensioner, and I say on their behalf, and I repeat: This is an unjust Budget. Under the heading of injustice I have dealt with the likely effect of the excise proposals. Now I turn to the inequity of the income tax proposals. Once again the Treasurer has taken the easy but totally unfair course of imposing a flat rate income tax increase - this time 2i per cent. For eleven years now, the tax schedules have remained unchanged. In a situation where apparent rising incomes wage a losing fight with rising prices, this has had the effect of throwing the burden increasingly on the lower and middle income earning groups.

As I listened to the opening of the Treasurer’s speech last week, I heard with pleasurable anticipation his announcement that “ each year we review the incidence of current taxation”. At last, after eleven years, I thought, something is to be done to revise the schedules, to lift some of the tax burden from the lower earning groups and place it where it can best be borne. And, indeed, the schedules have been revised, for one purpose and one purpose only - they are to be converted into decimal currency! But, in substance, in their increasingly unfair impact on the lower earning groups, they are to remain as regressive and as unjust as ever. We can only assume, therefore - and let it be openly declared - that it is the conscious, deliberate policy of this Government to impose an ever increasing burden of income tax on lower and middle class incomes. And let it be remembered that once taxation, whether direct or indirect, is increased it is seldom, if ever, reduced. The worker always pays.

Let us take these things in combination - the Government’s intervention with the Arbitration Commission to keep wages down, its failure to discourage price rises, its regressive income tax policies and its further attempt to raise further revenue from beer, petrol and cigarettes, and we can only conclude that this Government is what it has always been - a rich man’s Government determined to act as all conservative reactionary governments act.

Under the recent basic wage decision, the tradesman gained a miserable 6s. increase weekly on his margin. This represents an increase of £15 12s. a year. Soon after the decision, the consumer price index for the June quarter showed an increase of 4s. a week, or £10 8s. a year. Before the income tax increase of this Budget, his additional 6s. a week meant, in the case of a man with a wife and two children, an additional £2 10s. a year in taxation. With the 24 per cent, across the board tax increase, he will now pay an additional £1 14s. Thus, price rises, together with direct taxation, have taken £14 12s. a year out of the £15 12s. a year increase.

If this tradesman smokes half a packet of cigarettes a day he will pay now an additional £2 5s. 6d. a year in excise. If he drinks a modest 12 glasses of beer a week, he will pay an additional £2 12s. a year. If he drives a car he will, on the most conservative possible estimate, pay an extra £2 10s. a year in further petrol tax. Thus, despite the 14 per cent, margins increase, the ordinary tradesman will be £6 7s. 6d. a year poorer, as a direct result of the Government’s wage and economic policies. And all this leaves out of consideration all the increases which greedy, grasping people will add further to increase prices as additional profit for themselves.

But if we seek examples of the injustices of this Budget, we need go no further than its provisions, or lack of provision, for social services. This section of the Budget is a disgraceful and scandalous performance. For the Treasurer to pretend that in a year in which prices have risen 4 per cent., the old and invalid pensioners, the widows, the handicapped and the retarded must accept a denial and indefinite postponement of their entitlement to justice because of Australia’s defence needs is to make a mockery of their hardships. For the trivial and sectional concessions that have been granted, all that can be said is that they should have been given long ago. When such trifling amounts as these are involved, the question is not why they have been granted, but why they were not granted years ago. There is a clear and urgent need for a total revision of our approach to social services in this country. It is no longer sufficient, and no longer tolerable, that paltry annual adjustments should be urged and, as often as not, refused on Budget day after Budget day.

We need a clean sweep, an entirely new attitude, a new and different programme which will lift pensioners from their present plight as annual mendicants to their right and proper place as citizens whose financial security and well being is guaranteed and endorsed by a nation which accepts ungrudgingly their unqualified right to genuine justice - and only a new government can do that. In broad terms, this means that Australia must wage positively and unceasingly its war on poverty in this nation. The United States has declared war on poverty. Australia has not, and while this Government lasts, our needy one-fifth of the population will continue to be ignored.

The first step is to hold a national inquiry into the nature and extent of poverty in Australia. I am convinced that when the facts are fully revealed, we will be amazed and appalled by the degree of poverty that remains hidden or half hidden amongst us. But we cannot fight this enemy until we properly understand it. The Government denies and ignores the existence of poverty in our midst.

But what are the facts? There are, for instance, 402,000 married taxpayers with incomes of £21 a week or less. As well as their wives, they support 799,000 children. The total number of people they support is around 800,000. That is, a total of 1,600,000 Australians, one-seventh of the population, fall into this category. At least 150,000 of these families actually receive less than £1.7 10s. a week. Then, of course, there are the three-quarters of a million people living on age and invalid pensions, and 80 per cent, of them have nothing but their pensions on which to maintain their bodily existence. Obviously, their situation will vary from individual to individual, but the plight of hundreds of thousands of these Australian people, particularly single pensioners paying rent, is appalling, and is a disgrace to this nation.

Then there are the civilian widows, the class which perhaps bears the heaviest burden in this so-called affluent society of ours. And there are many other categories of underprivileged people. This Budget, of course, ignores all of them. It ignores the whole problem of poverty, because it suits this rich man’s Government to deny the very existence of the problem.

I have dealt with the Budget on the score of honesty and justice. I now turn to the question whether it is a meaningful document as an analysis of current economic problems and as a corrective to any of them. The Treasurer lists some of these difficulties, but nowhere in his speech does he give any indication of how the Government proposes to grapple with them. The Budget itself contains nothing that will help solve them and, indeed, as I have shown, some of the measures will aggravate them.

Of our immediate problems, that of bringing our imports down to supportable levels, and doing it rapidly, is undoubtedly the most urgent. On this matter, we have from the Treasurer the profound observation - and I quote him verbatim -

Nor would we wish to see a further large rise in imports, the level of which is already very high.

It has been suggested, and I believe there is a great deal of truth in it, that our present restrictive credit policy and high interest rates are necessary to control our overseas position and that, if either were relaxed, we should face a further flood of imports and a reduction of our net capital inflow. It would seem very pertinent to ask the Treasurer whether he intends to continue to instruct the Reserve Bank to continue these restrictive monetary policies and, if not, what alternative steps he intends to take to meet the situation? And it is a grave situation. He has said so and we agree with him.

Already the adverse effects of the Treasurer’s restrictive monetary policies are becoming apparent in the housing construction industry. As the Reserve Bank says- - and I quote from the last report of Dr. Coombs -

Figures of building and finance approvals suggested some decline in residential building could be in prospect.

The root cause of this decline is, of course, monetary policy. As yet other private investment shows no signs of slackening, though it would appear to have ceased to expand. But private investment cannot flourish when money is tight. We are moving headlong into the vicious circle that has bedevilled Great Britain for so many years under all sorts of governments. The overseas position must be corrected; the only measures the Government is prepared to use are monetary and these measures depress the internal economy at least as much as the external. Growth ceases and stagnation ensues.

It is not my intention to follow the example of the Treasurer and weary honorable members by plodding through expenditure estimates for nearly 50 minutes as he did. Much of what I would wish to say is readily apparent from a survey of the figures contained in the table which I have already submitted, but I do, in particular, wish to draw attention to State finance in relation to the Commonwealth. Honorable members are well aware that the really basic Australian governmental services are still provided by the States - education, health, police, railways and public works. These are the bread and butter of our social and economic life and it is here that our national standards have been falling most rapidly. To some extent there has been a transfer of responsibility to the Commonwealth and this, in itself, in my view, is highly desirable. But this transfer has, in fact, been achieved only by squeezing the States financially until such a void appears that the Commonwealth is forced to step in.

If we look first at works expenditure, we find that Commonwealth works have increased from 1.3 per cent, of the gross product to over 2.1 per cent, in the past twelve years - a rise of over one-third. State works expenditure and advances have fallen from just under 3.3 per cent, to a little over 2.1 per cent. - a drop of more than one-third. State works used to be three quarters of the total; now they are less than half. Current Commonwealth non-defence expenditure has risen from 1.5 per cent, of our available resources twelve years ago to over 2.2 per cent, now, a rise of just on 50 per cent. By contrast grants to the States, which provide the basis for the bulk of their current expenditure, have risen only from 4.2 per cent, to 5.2 per cent., or by about 25 per cent. And much of this increase has been in special purpose grants not available for basic State expenditure. General purpose grants to the States have risen by only 11 per cent, in twelve years, as against a rise in current Commonwealth non-defence expenditure of 12 per cent, in the last two years.

Here lies the real explanation for Commonwealth intrusion in partial and special ways into education. The States have been squeezed so hard that they have been unable to meet our real educational needs, inflated as they have been by the rapid rise in the number of school children in recent years. The pressure on the States will increase as the number of school children continues to grow rapidly in the next 15 or 20 years. The Commonwealth has imposed low educational standards on the States and now makes a virtue of a tiny gesture of aid. This Government has failed again to realise that every child in Australia should be educated to the greatest degree possible, both for the child’s benefit and the benefit of the nation.

And this, of course, brings us to the very kernel of the failures of this Government, and of this Budget in particular. The Government’s approach to every great problem is piecemeal. It has no sense of purpose, and as a result it produces Budgets which are totally lacking purpose and direction in the long term. This Government refuses to plan and prefers to allow the economy to drift along haphazardly and halfheartedly. Whatever uncertainty exists in the business community is merely a reflection of the Government’s own uncertainty. There is in this Budget a total lack of purposeful public policies, so essential to our growth and to our development in this modern, com petitive, complex world. Economic planning is now accepted as the way of life for every Western economy with the exception of those of the United States of America and Australia; and even in the United States there is far more conscious and deliberate intervention in the economy than there is in Australia. As a result, our economy drifts along, and problems accumulate.

The Government has allowed Australia to become increasingly dependent on financial fluctuations occurring outside Australia, and such international reserves as we have accumulated are the result, not of favorable trade, but of unregulated foreign investment. We know of the bitter dissensions that exist within the Government on this matter. But the Treasurer studiously ignores this grave problem in the present Budget. The Government has shown complete lack of imagination in seeking new markets for our exports, and in developing our mineral resources. Why is it that Canada, with probably less mineral wealth than Australia, produces five times the quantity that we do?

Nothing has been done to develop a national fuel policy, to reduce our dependence on imports and to protect our own supplies of coal against oil competition. Where is there in this Budget the slightest indication that this Government is concerned with the development of northern Australia? The further development of the Ord River area has been abandoned. There is no indication of any plan to build the north-south railway between Darwin and Alice Springs and on to Marree to link up with the standard gauge, although the Commonwealth has an agreement with South Australia to do this - an agreement made in 1911. Where is there anything real or substantial about the development of Queensland, or any part of northern Australia? Forty per cent, of our land is occupied - if that is the word - by 4 per cent, of our people, and that is the most vulnerable, the most neglected and the most defenceless part of Australia. Where is the plan for education - for an educational system that will provide that every Australian child shall have all the education he or she is capable of receiving? In an age when education is the key to survival, we spend less per head than almost any other advanced nation, and about as much as Spain and

Egypt. 1 think we are slightly ahead of Peru.

In this Budget, there is nothing of the big thinking that there should be about the big things that Australia should be doing, and would be capable of doing if given effective, dynamic leadership. The Treasurer is hobbled to his outmoded philosophy. He refuses to plan, and as a result robs Australia of that rapid and rational growth which would provide us with the finance for the great projects we urgently require. The right honorable gentleman alights from the plane at Canberra. Being a Sassenach, he has little or no imagination. He is met by the Secretary to the Treasury and given the document that he is to read in presenting the Budget. He takes that document along to a cabal of the Cabinet, composed of men who are all of Celtic origin, Menzies, McEwen and McMahon. They tell him what to do, and he comes into this chamber and, in his own unimaginative way, regales the House with the material prepared for him by the Secretary to the Treasury. I know Sir Roland Wilson well. He is a most competent, capable and gifted man. I regard him, in the Australian context, as something of a Fouche or a Talleyrand. But he survives, and he can produce a very good Budget according to the wishes of the government of the day. This Government, of course, hampers him. It will not let him do the things he wants to do.

So we reached the stage at which the Treasurer defended his Budget on television last weekend. He warned that defence costs might escalate - to use his own word - in the coming year. What does this mean? Does it mean that the Treasurer anticipates the need for further expenditure, not provided for in this Budget, and that we shall have another supplementary Budget early next year? And if he means this, will the increases in that supplementary Budget also go primarily to non-defence items, as has happened in this Budget? Australia needs a budget which is honest, which is just, which grapples with current problems in a courageous and meaningful way, and which plans ahead for Australia’s survival and growth. Our days could be limited. Our days could be numbered. We can defend ourselves only if Australia grows and develops. Every Australian outside the ranks of the Government parties seems to know this. Australia has obtained none of the things which it requires in this dishonest, unjust, futile, planless Budget.


– Is the amendment seconded?

Mr Whitlam:

– I second the amendment, Mr. Deputy Speaker, and reserve my right to make my remarks later.

Minister for National Development · Farrer · LP

Mr. Deputy Speaker, obviously it is impossible for me to follow the Leader of the Opposition (Mr. Calwell) through every criticism of the Government that he made tonight. However, I know that anything that I neglect to answer will be replied to later by my colleagues, for we have certainly been given plenty of ammunition. Let me begin by mentioning an observation that the honorable gentleman made with great verve in saying that this was not a defence Budget. If this is not a defence Budget, I do not know what is. Here is a Budget that will increase defence expenditure by more than £81 million. That represents over half as much again as the total defence expenditure provided for in the last Budget presented by the Labour Government. In that Budget, Labour allocated about £50 million for defence. The present Government this financial year will spend more than £385 million on defence. Yet we are told that this is not a defence Budget. I heard an interjection about tax increases. They would not even have been necessary bad it not been for the increased expenditure on defence and, in fact, the tax increases will be less than the increase in defence expenditure. In other words, if we had not increased defence expenditure we would have been able to reduce taxation. Yet we are told that this is not a defence Budget.

There was a rather humorous insight to the speech delivered tonight by the Leader of the Opposition. He told us that he had received assistance in preparing it. For a long time we have heard the rumour that assistance was given both to him and to his predecessor. All I can say is that the help he has received from outside must have come from a different source than the help received by his predecessor. Honorable members will recall that in 1959 the Treasurer decided that he would rebate 5 per cent, of income tax and Dr. Evatt, who was then Leader of the Opposition, said -

For lower and middle incomes, tax piles up more rapidly for a given increase in income tax than it does for higher incomes. What the Treasurer proposes is to give back less than this concealed increase to people on lower and middle incomes and much more than the concealed increase to people on higher incomes. The bulk of Australians will suffer a real increase in income tax. The few rich will gain by a real and substantial decrease.

One just cannot win. In that instance there was a reduction in income tax and we were told that it would benefit the rich. But what did the Leader of the Opposition say tonight? He said -

Now I turn to the inequity of the income tax proposals. Once again the Treasurer has taken the easy, but totally unfair, course of imposing a flat rate income tax increase - this time 2i per cent.

A little later he said - . . this has had the effect of throwing the burden increasingly on the lower and middle income earning groups.

One thing is certain: The outside advisers who have been advising the Leader of the Opposition have either been changed or have changed their views in the meantime.

What are the facts? Let me refer to the man on the basic wage who would be getting about £1,000 per annum. The increase of 2i per cent, will increase his income tax in a year by 21s. or less than 5d. a week. If he works two hours overtime in the year he will show a profit, if he works the overtime during the week; but if he works on a Sunday he will have to work only one hour to show a profit. But what is the position of those on higher incomes? They will pay a very much greater increase in income tax. A man on £4,000 per annum will have an increase in taxation of £26 6s. a year as against 21s. payable by a man receiving £1,000 a year. It is true, as the Leader of the Opposition said, that prices will increase on beer, cigarettes and petrol. But as the Treasurer (Mr. Harold Holt) pointed out this afternoon, nowadays these are important items. He mentioned petrol in particular and pointed out that we have a greater percentage of people owning cars than we have ever had before. Because we have an affluent society, when tax is put on petrol it is felt by so many more people than would have felt it when the Labour Party was in government.

Let us consider the way in which average male earnings have increased. Since 1949-50 they have gone up by 190 per cent. Even after the tax change that will result from this Budget, in that time beer will be up only 115 per cent., cigarettes will be up 67 per cent, and petrol up only 22 per cent. As I have said, I cannot follow the Leader of the Opposition through every avenue that he has followed, but let me have a quick word on social services because we have a proud record in social services. The Liberal Party can point to very substantial gains that have been made during its period in office. We have introduced aged persons homes, which I think was one of the best measures ever introduced into this House. It has brought tremendous benefit to old people in the community. We have introduced accommodation for the disabled, blood transfusion services and mental health institutions. These are all things which this Government has brought in during its term in office. It has provided for tuberculosis hospitals, broadcast and television licences and telephone rental concessions to pensioners, the pensioner medical service and medical, hospital and pharmaceutical benefits. In the current Budget we have introduced altogether ten different items with a total value to the pensioners of about £7 million per annum. Yet we are told by the Leader of the Opposition that we have no thought for the pensioner or for social services. This is completely untrue, of course.

Without dealing with any more of the items mentioned by the Leader of the Opposition, let me refer in particular to his statement that it is time we had some real or substantial development of north Australia. The Leader of the Opposition visits the north of Australia occasionally - I am glad that he does - but I do not know how a person like him can visit that area and yet be unable to see what goes on before his eyes. The number of Jeremiahs in the Opposition is really amazing. Honorable members opposite see something bad in anything that is happening in this country, but they see no sign whatsoever of the substantial development that is taking place. Only this morning I flew from Sydney and discovered that the person sitting next to me in the aeroplane was from New Zealand. We began talking and she said that she was amazed at the vitality and drive in Australia. She compared our present position with that of the United States of America when that country was achieving its enormous expansion. This is particularly the case in the north.

No-one can see what is being done in the north without realising the tremendous development that has hit the north of Australia. This has been brought about in three different ways. First, it has been brought about by Commonwealth Government expenditure on special projects; secondly, because Western Australia, Queensland and the Department of Territories have spent large sums of money in the north through their loan programmes; and thirdly, through private enterprise. In addition, there is other Government spending through other departments. Let me mention what the Commonwealth Government is doing or has done in the very recent past by way of special projects in the north. The beef roads scheme has been running for some time at a total expenditure of about £22 million. This expenditure is continuing and will not finish for a couple of years. In presenting the Budget the Treasurer said -

This special developmental expenditure includes provision for payments of £2,750,000 to Queensland and western Australia under the present arrangements for financing beef roads in those two States. This amount includes £750,000 for Western Australia, which- will be the last payment under the existing agreement with that State. For Queensland, estimated payments of £2,000,000 in 1965-66 will leave approximately £300,000 available to the State of the total of £8,300,000 covered by the existing agreement. The total amount expended by the Commonwealth under the- beef roads programme to the end of June 1965 was £11,631,000. These roads have already produced good dividends by enabling cattle to be marketed at younger ages and in better condition and also by facilitating the movement of cattle from drought affected areas.

However, we do not mean this to end the Commonwealth Government’s participation in this important field of activity.

I ask honorable members opposite to mark those words. The Treasurer continued -

In fact, the Government has under examination a report on the future of the beef roads programme recently prepared by the Northern Division of the Department of National Development. In due course, we will expect to hold discussions with the States about various aspects of the future programme.

The beef roads already have played an enormous part in developing the more remote areas of the north.

At present about four million acres of brigalow land is being developed at a cost of £7i million. That will step up the production of beef from the area about four or five fold. We have made advances to the States for the improvement of wharfs. The Treasurer mentioned last week that in the current Budget we are making a contribution of £1,635,000 to the Queensland Government to assist it to develop the port at Weipa. Also we have paid for coal loading facilities. The work on the Mount Isa railway line is just reaching completion at a cost of about £17.3 million, which has been provided by the Commonwealth Government.

In respect of the Ord River scheme, of the total expenditure of £8i million the Commonwealth Government has spent £61 million. Yet the Leader of the Opposition said tonight that we ought to press ahead immediately with the completion of the Ord River scheme. Does he realise that up until now we have had only the returns from five farmers for one year on which to base the expenditure of £30 million that we are asked to undertake? It is perfectly true that it looks as though this year the returns from the Ord River cotton will be considerably higher than they were last year. But the crop has not been harvested completely yet. Even after the harvesting is finished, of course, there will be a ratoon crop which will have to be harvested at a later stage. Then the productivity and economics of this area will be able to be fully assessed. We have lent about £565,000 for the Exmouth township.

I mentioned that the development of this area is not being undertaken solely by the Commonwealth Government. Perhaps these special projects do not even constitute the major development. A tremendous number of projects are being undertaken by the Queensland Government out of its loan funds. The same applies in Western Australia. Both of those States have received record loan funds this year. In fact, this year the total increase in payments to or for the States is £61 million, or an increase of 12.6 per cent, over last year’s figure. In addition there is the increase in the allocation for the Northern Territory. The largest amount that has ever been spent will be spent on the development of that Territory this year.

Over and above that, there is the tremendous development by private enterprise. Honorable members may say that development by private enterprise is not something for which the Government can claim any kudos. I say that we can. It is because we have a stable Government and stable prices here in Australia that people realise that this is a spot to come to and to develop. It is one of the few areas left in the world in respect of which people realise there is a great future in investment. Of course, honorable members opposite, if they had their way, would cut out all of this private investment. I wish they would make up their minds on where they stand in respect of investment. When there was a Labour government in New South Wales, for years the Premiers - Cahill, Heffron and Renshaw - would go abroad and send back cables from abroad extolling the fact that they had succeeded in encouraging capital to come to New South Wales. Yet here we are told now that there is something bad about this investment. Where do honorable members opposite stand on this matter? Where do they stand on the importation of capital to develop the Savage River iron ore deposits? I would like them to iron that out with Mr. Reece, the Premier of Tasmania. I am perfectly certain that if they were to tell him that the development of the Savage River iron ore deposits could not go ahead because it is bad to import capital he would be the first to tell them where to get off.

Here we have private enterprise from overseas working in co-operation with Australian capital, Australian workmen and Australian knowhow in developing an area which up until now has been one of the most remote and backward areas in the whole of the Commonwealth. No-one can visit the north-west of Western Australia without being tremendously impressed with the way in which development is occurring there. Recently I took a trip with the head of my Department to see some of these projects. We visited one where a company is spending £50 million in 12 months in building harbours, port facilities, railways, roads and township sites. It is only one of a number of companies that are developing this area. It is remarkable to look back and see that at this time last year we did not have one contract for the export of iron ore of any sort to Japan. Yet today we have written contracts to the extent of more than £1,200 million. In fact, if one believes a report in today’s Press there could be contracts for about £1,600 million worth of iron ore to be exported from this area of Western Australia alone. Of course, the development of our iron ore deposits is only one of a number of development projects.

I also had the opportunity to visit the Groote Eylandt manganese deposits, which were located by the Bureau of Mineral Resources about four or five years ago and which are now being plotted and developed by the Broken Hill Proprietary Co. Ltd. More than 15 million tons of high grade manganese has been found there. I have heard it said that the deposit represents about 10 per cent, of the world’s deposits of manganese. All of these projects are being undertaken in the north at such a fast rate that one wonders whether, even if more money were available, more money could be spent in the area. There is no doubt that considerable difficulty has been experienced in obtaining the work force that is required. I believe that it is to the credit of the Minister of Labour and National Service (Mr. McMahon) and the people concerned that they have been able to encourage sufficient workmen into this area to carry out the development that is occurring there.

In addition to the iron ore, manganese, bauxite and other developments in the north, a considerable amount of Government spending is occurring there in other ways. One of the major ways in which the north is being developed is through the search for oil. Honorable members opposite may not realise - from the way he spoke tonight I do not think the Leader of the Opposition realised this - that about nine years ago five wells were drilled in a year in Australia in the search for oil. This Government has speeded up the search for oil, first of all, by carrying out a large Bureau of Mineral Resources programme. That programme, which is running at about £2 million per annum, is basic in the collection of data, the finding of the basins suitable for drilling, geological mapping, geophysical surveys and seismic surveys.

Over and above that, this Government decided that it would encourage the search for oil by paying a subsidy. Perhaps honorable members did not realise this when it was announced. There has been a considerable increase in the amount of money available in order to match the drilling for oil this year. The result is that we expect about 320 wells to be drilled for oil in Australia this year, compared with five a few years ago. There is no need for me to tell honorable members of the terrific need to find oil and of the tremendous importance that the discovery of oil will have in Australia. We import about £130 million worth of oil annually. I am perfectly certain that in the not too distant future we will become selfsufficient in oil. That will be the product of the amount of money that we spend in looking for oil. From that point of view, I believe that the Government’s action in increasing the subsidy to £5.7 million this year in respect of a new programme costing £7 million is certainly a step in the right direction. Of course there are other ways in which the north is being developed. It would be impossible to outline them all. On defence, for example, there is the decision to put the new battle group in Townsville. This will lead to a considerable development of the Townsville area. An aerodrome is being completed just south of Katherine, at Tindal in the Northern Territory. There are many other defence works. The civil aviation authorities are spending a considerable amount on developing aerodromes. This, too, plays an important part in opening up the Territory, as does the provision of housing for the Services and for civilians. A power station is being established in Darwin. One could go on indefinitely citing the tremendous development that is taking place in the north. Over and above this we have announced a Commonwealth grant to the Queensland Government for the development of the Weipa port.

In the short time left to me, let me highlight some other developmental projects which are included in the Budget or which have been recently approved by the Government. The Treasurer has a limited time in which to deliver his speech, with the result that some matters are not mentioned in it. Some aspects do not become apparent for some considerable time. It was not mentioned, for instance, that we are pressing ahead with the construction of new facilities at Lucas Heights at a cost of some £600,000. This, as all honorable members know, is the Australian Atomic Energy Commission establishment. It has been decided that because of the advanced state the research project has reached it is essential to have a series of high activity handling cells for the highly radioactive materials produced. The £600,000 will be spent on improving these facilities.

A complete alteration has been made this year in the National Materials Handling Bureau, which used to be a very small branch of my Department. Sir John Allison, the Chairman of the Export Development Council, reported to the Government recently that he could foresee an enormous improvement in the cost of handling equipment by expanding the activities of the Bureau. From a small branch employing six to eight people it has been developed to an organisation employing 26 people. Some large demonstration buildings are to be built at a cost of £75,000 in the Sydney suburb of Ryde in which the Bureau can work with industry. We have had considerable assistance from industry and we already have a panel of industrial advisers who decide what proposals should be examined. Someone in the United States of America said that about 40 per cent, of wages costs goes, in one way or another, in moving materials. If the least reduction in the cost of freight can be made - whether by designing a better pallet or by any of a hundred and one different ways - it must be of considerable advantage to this country.

We have decided to press ahead with greater speed in the search for phosphate. In the Bureau of Mineral Resources we have created 15 new positions for geologists who will assist in the search for phosphate. Those we have been able to employ are starting to collect data to step up the search. At present in Canberra we have one of two Americans who have been invited here to advise the Government on the steps it should take in the search for phosphate. Dr. van Andel is here and next month Dr. Sheldon from the United States Geology Bureau will be coming to advise us on looking for phosphate on shore. Dr. van Andel is an expert on looking for phosphate in the coastal areas and on the continental shelf.

I have already mentioned the increase in oil search, but the next project to which I shall refer was not mentioned in the Budget. It was announced recently that the Government had decided to press ahead with the building of Tumut 3 Dam in the Snowy Mountains scheme. This is the last of the big dams in the Snowy Mountains scheme. It has been completely redesigned and it will now have a power capacity of 1.5 million kilowatts. With a height of 520 feet it will be far the highest dam in the scheme. It will have more than twice the capacity of earth and rock fill in it than went into the Eucumbene Dam. Probably the most interesting aspect of the whole project is that for the first time in Australia pump storage will be used. The proposal is that water should flow from the dam during the peak period and be caught in a small dam - to be known as Jounama Dam - down below. In the off peak period electricity, which is then available at a much cheaper rate, will be used to pump the water back into the main dam, and so the water will be recirculated. The Government has allowed for an expenditure of £67.5 million on this project. We hope to call tenders in a month or two for the building of Jounama Dam, because that will have to be at an advanced stage before water fills Blowering Dam.

Finally let me mention the National Coal Research Advisory Committee that has been set up this year and for which, in this year’s Budget, there is an additional £140,000 available for research into the use of coal. I believe that the Treasurer has done a first class job in being able to discover an additional £81 million for defence and at the same time being able to incorporate in the Budget the enormous increases in developmental expenditure that I have outlined. Personally, I am proud of my country’s development.

Melbourne Ports

. The other evening when the Treasurer (Mr. Harold Holt) introduced his Budget, among other things he said - the Budget has important social and economic effects, the policy of the Budget must be shaped, both in the large and in detail, with these effects in view.

I would suggest that that is a statement of what ought to be done, but this Budget falls lamentably short of those objectives.

The Treasurer went on to say, presumably on behalf of the Government -

We have often stated the broad aims of our economic policy - the steady growth of Australian population and output, a high standard of living, full employment, stability of prices and a strong external balance of payments.

I suggest that the policy has been deficient in several of those ingredients. It is deficient also in that it fails to include what ought to be included in the economic policy of any enlightened democratic community - some concern to see that the national income is fairly shared among all sections of the community. It is the view of the Australian Labour Party that the economy has become grossly distorted, that growth is stunted, that the existing distribution of income is inequitable and that, above all, wages are being made the sole foundation of price stability in the Australian economy.

I want to develop some of these points in the time at my disposal. It is easy enough, in considering this Budget, to get bamboozled by a mass of figures, but one cannot make an analysis without resort to some figures. I have said that growth is not as satisfactory in the Australian economy as the Government claims it to be. The Treasurer seemed to derive great satisfaction from the fact that during last year what is called the gross national product of Australia increased by 9 per cent. In terms of money it increased by £766 million. But in the previous year the aggregate growth of the economy had been £811 million. So merely in money terms, the growth last year was not as good as it was in the preceding year. But even what appears to be growth contains within itself two elements that must be disentangled. In the first place, prices rose during the year by 4 per cent. This cancels out almost half the growth that is claimed. Expressed in real terms, the growth would have been only about £350 million. The second factor is that it took 4 per cent, more people in Australia to produce that additional quantity. When you bear in mind that the increase of £766 million is shared among 11 million people it is not as big as it seems. In addition, we must bear in mind that it took more people to produce that growth and that prices had risen by 4 per cent. In other words, if you had an income of £25 a week at the beginning of the year you needed £26 a week at the end of the year in order to buy the same amount of goods. Those factors at least must be considered.

Growth is meaningful only when you relate it to a per capita figure. It is in relation to such a figure that we hear talk of what is called productivity in the community. Again, as a matter of reality, productivity in any economy is significant to the extent that you replace man-power by machines. The communities that have the greatest productivity are those that have the highest technical services behind them. The communities that have the lowest performances economically are those that rely for the most part upon man-power to produce the goods and services that the community requires. To begin with, I do not think it is fully realised just how wastefully man-power is used in many respects in Australia. The Treasurer pointed to two very serious things as he found them in the Australian economy. He pointed to the shortage of skilled labour. If you have a shortage of skilled labour you should be making the maximum possible use of the man-power at your disposal. The Treasurer drew attention also to the alarming deterioration in our balance of payments situation. All of this, in the ultimate, is bound up with how an economy utilises the resources available to it.

It is of some significance to note the constituents of the gross national product as outlined in the White Paper, “National Income and Expenditure 1964-65 “. It is easy to say, as the Government often glibly says, that wages are the greatest single cost in the community. This is true in one sense. After all, why should they not be the greatest single cost? Wages are the source of purchasing power for the great majority of the community. In Australia more than 80 per cent, of the community derive their income from wage payments. Last year the gross national product of Australia was £9,562 million, of which wages, salaries and supplements made up £4,902 million or 51 per cent. In my view, manpower is being wastefully used in Australia because it is too cheap or wages are too low. The spur to replace manpower by machines is higher wages. In the United States of America, which has a more sophisticated economy than we have and which makes greater use of machinery than we do, the gross national product in 1964 was 623 billion dollars. Wages, salaries, et cetera, on the same kind of statistical analysis as is provided in our White Paper accounted for 362 billion dollars or 60 per cent, of the gross national product. I doubt whether, proportionately, there are as many wage earners in the United States economy as there are in the Australian economy, yet wages, salaries and supplements in the United States accounted for 60 per cent, of the gross national product compared with 51 per cent, in the case of Australia. In 1964, the United Kingdom had a gross national product of £28,256 million sterling. Wages, &c, comprised £19,450 million or 69 per cent, of the total. New Zealand’s economy may be regarded as more comparable to Australia’s. In 1963, the latest year for which I have figures, wages, et cetera, in New Zealand accounted for 59 per cent, of the country’s gross national product. Of all the comparable economies, Australia has one of the worst records in this regard. I suggest that it is because of our poor performance in this regard that our performance is poor on the basis of productivity.

There has been a lot of talk about the word “ productivity “. The honorable member for Mackellar (Mr. Wentworth), who has been interjecting, knows better than most people that productivity does not increase as you use labour as manpower alone. It increases only as you invest. This is where we come to this Budget. The Treasurer, as the responsible authority, points to these two factors in the economy: The shortage of skilled labour and the balance of payments position. Actually, Australians have had it so good last year and in recent years only because they have imported into the community an average of £200 million a year more than we have been entitled to import. It is because of this importation that standards of living have risen rather than for other reasons. Standards have not risen out of productivity or the proper utilisation of the resources available here.

What does the Budget do to grapple with these problems? I suggest that it does nothing at all. We are told that total expenditure this year on account of the Commonwealth will be about £2,650 million. Without at this stage arguing about how taxes are being shifted, I ask: Is it suggested that the mere addition of £72 million to the tax net will make any very significant difference to the economy? It is about onefortieth of the total level of expenditure, to begin with, and it is less than 1 per cent, of the money that circulates in the community every year. I would suggest that we are in our present situation because the Government is thinking in terms of shifting small aggregates of expenditure through the Budget and has failed to look at what should be done.

There seems to have been intruded latterly into the analysis of the Budget some rather vague figure as a measure of whether the Government is stimulating the economy. The figure is given as the net increase in indebtedness. I find it not only in the Budget Papers; it is also mentioned, with apparent endorsement, in the report of the Reserve Bank, which says -

Accordingly, the Commonwealth’s net increase in indebtedness . . . was significantly smaller than in the previous year.

I want to <point to one of the effects of the reduction of indebtedness in the previous year. Actually Dr. Coombs is quite correct. The net increase in indebtedness dropped from £191 million in 1963-64 to £86 million in 1964-65. But what was one of the byproducts of this drop? It was to reduce the rate of increase of the gross national product. I am not suggesting that one is directly connected with the other. I do not think anybody can say whether it is or is not. This year the net increase in indebtedness is to bc reduced from £86 million to £54 million. All I am suggesting is that this sort of pyramid of £50 million or £60 million in terms of an economy circulating at the rate of £10,000 million is at least a pretty loose index to begin with.

In one of his rather grandiloquent asides in the middle if his Budget speech, the Treasurer said that an analysis of Statement No. 6 would repay study. Sometimes, as well as having teach-ins about external affairs, it would not be a bad idea to have teach-ins about internal affairs. I would commend to the Treasurer, just as he commended Statement No. 6 to the House, that he should study an article in the April 1965 issue of the “ Monthly Review “ of the Federal Reserve Bank of New York. The article is entitled “A Primer on Federal Budgets “ and is written by Joseph Scherer an economist in the Domestic Research Division of the Bank. He suggests that a lively controversy has been going on for a number of years over the relative merits of the cash versus N.I.P. budget as the best measure of the Government’s impact on the economy. In other words, this is not an open and shut question. There is more than one view as to whether this is an effective measure of the stimulating impact on the economy. He said - I agree with this point -

Only part, although a very important part, of all this economically significant behaviour is encompassed by the data typically found in the various budget documents.

One must go to other documents and study the functioning of the economy as a whole. With all respect to Statement No. 6, which is headed “The Budget in National Accounts Form”, it does not relate the picture to the total circulation of the economy. I hope that too many eggs are not being placed in this new basket of analysis. I commend the article I have mentioned to those who prepared this statement, because I doubt whether they have seen it and become aware of an alternative point of view.

In Statement No. 6 we are treated to a rather skilful argument which suggests that somehow or other the spending that the Government makes will accelerate up and the spending it takes out will accelerate down, but the acceleration upwards will apparently be higher than the acceleration downwards. I suggest that that sort of analysis is nonsense when it is included seriously in these documents. After all, it is part of the Budget speech. It is not mere officialese; it is part of the documentation. All this talk of aggregates overlooks the fact that there are differences within the aggregate. The Leader of the Opposition (Mr. Calwell) pointed out tonight that, in the statistics that were tabled here a week ago, there are still in Australia 400,000 families -that is, 400,000 husbands and 400,000 wives with between them 800,000 children - whose income is £21 a week or less. As he rightly said, their circumstances cannot in any way be regarded as affluent It is easy enough to point to the increase in average earnings. But at least a large part of the increase in average earnings arises out of something in the community that is called wage drift. After all, wage drift is a recognition of the fundamental problem that skilled labour in Australia is not being paid enough.

What has this Government done except to go into court and resist not only the payments to skilled workers but also payments to those lower down? In the Australian economy, more than eight out of ten people who derive incomes derive them from wages. How can they increase their standard of living except by higher wages or by falls in prices, and where have there been falls in prices? If productivity is increasing, the only way that their share can come to them is by means of a higher monetary payment, unless the wage system is deemed to be inadequate to distribute the fruits equitably. If it is accepted to be inadequate, something must be done through the transfer mechanism of governmental expenditure and the Government must pay increased social services. But the Government is not doing this. It is resisting the increase of wages and social service payments have become stagnant.

Mr Harold Holt:

– That is not a fact.


– Of course it is a fact.

Mr Harold Holt:

– It is not. Expenditure on national welfare represents a higher proportion of the Budget than it did in your time.


– Nobody is denying that that is so in total.

Mr Harold Holt:

– lt is also the position as a proportion.


– We will come to the proportion in a moment. Nobody is denying that, in total, the gross national product in Australia is higher this year than it was last year. Why should it not be? It is higher because the Government has more people to pay. The Government has the idea that it can come into the House and take praise to itself because its expenditure is higher this year than it was in the previous year. Why should it not be higher each year? The Government has more to do each year. It is also higher because the value of every £1 that the Government spends is 4 per cent, less at the end of the year than it is at the beginning of the year, and the Go vernment does not allow for this factor. Surely the Government must acknowledge that in this community there are inequities in the way that the total we produce is shared and, because we have this attitude to wage payments, we are using manpower wastefully in our economy instead of getting machines. That is the problem to which the Reserve Bank points. At page 19 of its report, it points to the necessity for large scale expenditures if we are to develop. It says that we cannot continue to rely on external sources for that flow, and goes on to say -

The basic problems are how to achieve an adequate level of domestic savings and how to mobilise these savings in very large sums. The latter problem might require some institutional development or adaptation; the former is inherent in the problems of an expanding economy.

What does this Budget do to alter the position? It suggests that somehow by taxing people more for beer you will buttress your economy with beer taxes; that you will plug the leaks in your economy with petrol taxes; that you will smooth over the cracks with imposts on cigarettes. The cynicism of the Budget is the assumption that because more is going to be spent on beer, petrol and cigarettes the quantities that will be consumed will increase. You can say that, technically, people could avoid paying this increased tax if they had less drink, if they did not smoke and if they left the motor car in the shed, but they will not do that. It means that more will be spent on these things, and this means in turn less spent for other purposes.

That is the cynicism behind the Budget. The Government assumes that somehow it will correct what it regards as a distortion in the economy by reducing the consumption of the great mass of the people. If it were merely a question of getting £72 million more to help offset the £81 million extra that the Government regards as necessary for defence, is this the most equitable way to get it? Why could not the Government have increased the maximum rate on top incomes from 13s. 4d. to 16s. 8d. in the £1 instead of imposing a flat rate of H per cent, increase on taxes already paid, irrespective of the size of the income? After all, which are the groups in the community that contribute most of the yield from taxes levied on liquor, petrol and cigarettes? These indirect taxes are distributed more or less proportionately to the usage of the items concerned. They are not distributed progressively according to income. Yet the viewpoint of this Budget surely is that this is the easiest and most painless form of extraction. It ignores the problems inherent in the Australian community and in the Australian economy.

At the last election both parties talked about economic growth. We talked in terms of economic growth at the rate of 5 per cent, to 5i per cent, per annum. Again, because the population increases by 2 per cent, every year, there must be an increase in productivity, or an increase by 3i per cent, in the per head production every year. We did not achieve that increase last year. Actually, the growth last year, measured against the previous year, was smaller, and I suggest that it was smaller because of the analysis that was made of the economy when the last Budget was introduced. Reliance on net capital indebtedness was used as a sort of barometer.

The time surely has come in an economy as sophisticated as Australia’s when you cannot put all the squeeze on the wage earning section of the community. I have pointed out that 51 per cent, only of the gross national product is due to wages. That 51 per cent, represents just a shade over half, which means that other constituents are, in practice, just as significant in the determination of final prices as are wages. These other constituents are company earnings, the earnings of self-employed people and the earnings of small businesses. The other element of costs in the community is the income of the farming section. That section is in a rather serious situation at the moment.

One of the greatest contributors last year to the increase in prices was the additional indirect taxes imposed on the economy. They represented £100 million more last year than the previous year because this Government, as one example, and the State Governments as other examples, increased indirect imposts, which form part of the cost structure. Yet what was the approach when Government representatives appeared before the Conciliation and Arbitration Commission? Everybody thought it was certain that the basic wage would increase by 10s. or 12s. a week in view of the way in which consumer prices had risen. This Govern ment resisted an increase, and nobody can deny that to some extent the Government’s weight was of some significance.

Here again is a problem that has to be grappled with. Sir Richard Kirby went on record .recently as saying that the Arbitration Commission could have as great an impact on Australia’s economic destiny as the Budget. Do honorable members think that the sort of power to which Sir Richard referred ought to reside in the hands of a tribunal constituted as is the Commission - and denied the information that ought to be available to it? I read an article in an American magazine today which suggests that in America during the last four years, what are called profit margins as a percentage of sales of all manufactures have declined by nearly 3 per cent. I suggest that the contrary is the case in Australia. What sort of analysis has the Government that could be charted in that form in Australia? The lack of such an analysis shows the inadequacy of statistical information available in Australia for the determination of these important matters. It is left to an unqualified tribunal to make decisions which can have as great an impact on the economy as does the Budget. At least the Budget is supposed to result from a responsible decision. Tt is subject to a vote in Parliament. The wage earning section - I have pointed out that the wage earners are the great majority of the Australian community - has no redress except to take direct action. That is the only way it can voice its protest.

I go on record finally as saying that in my view the general level of wages in Australia is lower than it ought to be, and because it is lower than it ought to be we have such a poor production performance. We are using manpower wastefully whereas we ought to be using the combined skills of technology and science that are currently available.

Mr. KING (Wimmera) [9.521.- This evening we listened with great interest to the Leader of the Opposition (Mr. Calwell). I do not wish to reply on all the issues that he put before this House. I think that the Minister for National Development (Mr. Fairbairn) answered on most of those issues very well. However, there are one or two things that were mentioned by the Leader of the Opposition to which I should like to refer. Early in his speech the Leader of the Opposition said he thought that the coalition government was weak, divided and possibly doubtful. As a Australian Country Party member of this chamber I should like to say that the two Government Parties have never been more united than they are today.

Last week the Treasurer (Mr. Harold Holt) introduced the 1965-66 Budget. It is a record Budget of some £2,667 million, being an increase of some £275 million over the Budget brought down last year. Like all Budgets, this one has been received with mixed feelings. That, of course, is not unusual. Budgets have always been received in that way and no doubt always will be, because as individuals we generally feel that we are hit harder than the other fellow.

At a time of great international uncertainty, particularly in South East Asia, and of drought conditions covering a large part of the Commonwealth, and a time in which there is a falling off in our overseas balances, it could not have been expected that the present Budget would be a rosy one. Nevertheless, it will help the economy of this country despite what the honorable member for Melbourne Ports (Mr. Crean) said this evening. Earlier this evening, the Leader of the Opposition said that he thought that this was not a defence Budget but rather a civil Budget. Later he criticised lack of adequate financial provision for various things such as social services. He also indicated that more money should be spent on defence. I just cannot work out what he meant to convey by this suggestion, especially when we remember the debate that took place in this House last week. My interpretation of the views expressed by the Opposition during that debate is that the Opposition is very strongly opposed to the efforts we are now carrying out in South East Asia.

It is interesting to note that on the morning following the introduction of the Budget by the Treasurer the “Sydney Morning Herald” published an article under the heading: “ Guns Before Fun Budget “. That does not quite tie in with what the Leader of the Opposition has said. There is no doubt that such a heading as that may be interpreted in many different ways, but I believe that by approving of this Budget, as no doubt we shall at a later date, we are indicating that we are prepared to live up to our obligations at home and overseas. Australia has agreements with its allies, one of the two more important agreements being known as A.N.Z.U.S., while the other is the South East Asia Collective Defence Treaty. As I was not privileged to speak during the debate on foreign affairs last week, I want to say here and now that Australia’s future depends on what happens in South East Asia, despite what the Opposition is saying. I am sure that failure to live up to our responsibilities there would spell disaster here within a very short time. This Budget does give the green light to go ahead on the very issues that concern us most.

The proposed defence expenditure of £385 million is the third highest item in the Budget. This represents an increase of £80 million on the amount provided last year and I believe that this is certainly a move in the right direction. It means that Australia will be spending approximately £35 per head of her total population on defence alone. The amount provided for social services represents the second highest amount to be expended and totals £465 million, an increase of £20 million on what was provided last year. The amount provided for repatriation is £127 million, which represents an increase of £30 million on the amount provided last year. The provisions for repatriation and social services combined equal just on £600 million or the equivalent of £54 per head of population.

The total provision for defence, social services and repatriation approaches £1,000 million. Although it could be argued that this represents expenditure on nonproductive items, it can also be said to be payment for past services and for protective services, and we must always keep this foremost in our minds. The biggest single item of proposed expenditure is that provided for payments to the States. This amounts to £549 million, which represents an increase of £61 million over the amount provided last year. The increase is due to increased provision for the Commonwealth Aid Roads Fund, the increased provision for special grants and generally for the larger allocations agreed to at the Premiers* Conference which was held last June. I only hope that the States will make good use of the extra £60 million that has been allocated to them and that they will not throw it away on non-essential projects in the period of great urgency through which we are passing today.

I have not the time to deal with the various items mentioned by the Treasurer when introducing the Budget. So far, I have not dealt with the extra money that will be necessary for the Postmaster-General’s Department, especially for capital works where the amount provided for has been increased by £10 million over the appropriation for last year. Perhaps that increase is a little on the light side, but nevertheless it is still an indication that the Government is prepared to increase its provision for that Department as the demand for work in it increases. Nor have I made any mention of the extra money provided for Commonwealth Territories.

In order to provide for all these increases in costs, the Treasurer has found it necessary to attempt to derive additional income amounting to £275 million. If I have any criticism to offer, it is not so much of the £275 million as of the rather limited way in which the Government is setting out to collect the extra £72 million needed to balance the Budget. When we examine the proposed sources of income for the Government, we find that the largest amount of revenue will come from customs and excise. For instance, based on an increase of approximately 3d. a gallon, the extra revenue to be derived by way of customs and excise on petroleum products alone will be some £25 million. It might be true, as the Treasurer has said, that even with the proposed increase, the total excise and customs duties on petrol in Australia is only 14.76d. per gallon, and that this is light in comparison with 48.75d. in the United Kingdom, but I submit that two wrongs do not make a right, particularly in this instance where petrol products play a very important role in our cost structure. The mere fact that in Australia we use 148 gallons of petrol per head of population per year proves that point. Out of the £25 million revenue from this tax, a very large percentage naturally will be thrown back as a cost on industry, both primary and secondary and, to my mind, this is certainly not good, for it win have a tendency to increase our general cost structure.

I turn now to customs and excise charges on tobacco products, beer and spirits. This will return an increase of some £40 million in what could be classed as an already very high tax which returns £140 million or thereabouts to the Treasurer at the present time. While I agree that non-essentials should not receive undue benefits, I say that the contributions made through this tax are made from a very limited group. They could be called a self-appointed group, if you like, and they certainly do not include all taxpayers. I doubt whether anyone could possibly work out the number who would come into this group, but from £180 million to £200 million does seem to be a fairly high sum to be contributed by it.

I come now to taxation. No doubt it is always difficult for a government to consider taxation relief when it knows that extra money must be found for important projects, and this year is no exception. The States are demanding more money, much of it, of course, for worthwhile things such as education and roads, just to mention two. Then, too, the importance of increasing the defence vote must never be overlooked, but I feel that I would like to draw attention to two issues that cannot be classed as requiring funds or as even depleting the Budget income to any great degree. I refer, first, to the desirability of making donations for church and school buildings allowable deductions for taxation purposes. I believe the present refusal to recognise these contributions as allowable deductions is somewhat of a farce. If. the proposed building for which the donation is made is called a war memorial, the donation is deductible, but if the building is to be called a memorial to our pioneers or if it is to be erected for some other needy cause, the donations are not allowed. The contributions made towards buildings erected for very many purposes are likewise not deductible for purposes of income tax. I believe that if any person is prepared to make a donation, substantial or otherwise, irrespective of his religion or the purpose of such donation, he should be encouraged to do so, or certainly not discouraged. After all, we claim to be a Christian country, and yet we are not prepared to allow as a deductible item money given as a Christian gesture.

Every State is complaining about the lack of finance for education. More and better schools are needed. More amenities are needed - and I stress this - particularly in the older established schools. In such schools more amenities are definitely needed. Do we encourage people to give money for the purposes of providing these amenities by offering them incentives? No. I am afraid we do not.

Naturally the cost to the Federal Treasury if my suggestion were adopted is at the moment unknown, but I do not believe it would be a very great cost. Indirectly, of course, over a period of time it would save Governments, particularly State Governments, a considerable amount of money if people made greater donations towards private schools and generally towards the provision of amenities. I think the Treasurer (Mr. Harold Holt) should have a look at this suggestion. It is, of course, too late for it to be adopted in this financial year, but I believe it should be given serious consideration when the next Budget is being prepared.

Now I would like to refer again to a subiect that might be called an old hobbyhorse of mine, the averaging system which applies in the computation of income tax payable by primary producers. The present provisions are completely outdated. The maximum amount of income under the averaging system today is the same as it was thirty years ago, £4,000. This should now be at least £10,000, having in mind the increase in costs since the maximum was first established. When I speak to officials of the Taxation Branch of this subject they say that it is a policy matter and that they are not prepared to comment on it, but I believe that they would agree that it is time for an increase. There is also the case of the taxpayer who elects to depart from the averaging system and who is then debarred from returning to it. However, I think that the Treasurer and his Department know my views on this matter, and I do not think there is any reason for me to dwell on it. I have spoken to a large number of primary producers and taxation consultants on these two subjects, and they all agree that the provisions are outmoded and should be revised. Unfortunately while I have been in this House I have heard little said about these issues. I am sure that if honorable members representing rural electorates take these matters up with the people concerned they will get all the support they require.

Now I want to turn to another subject, perhaps not so directly connected with the Budget, and one that is, to say the least, rather contentious in recent times. As responsible members, representing all kinds of people in the Commonwealth, we should not run away from issues because we may hurt a few or lose a few votes at election time. We have a responsibility to bring these matters forward, and this is the place to do so. As legislators we have a responsibility to act in the best interests of all, and certainly not in the interests of a few. We are ever mindful of the fact that decisions made today may be difficult to rescind at a later date. I refer how to our immigration policy. Recently the Australian Labour Party altered its policy on immigration. It is reported that the words “ White Australia “ have been deleted from that policy. There seems to be some difference of opinion as to what this really means in Labour Party circles, and I am certainly not in a position to agree or disagree with the Labour Party’s decision. But what I do know is this: Whatever members of the Labour Party do in relation to their policy is a matter for them to decide. This Government has a very firm policy and, I hope, one that will never be altered or modified too drastically. I believe that at least some members of the Opposition agree in principle with the policy of the Government.

Recently the Minister for Immigration (Mr. Opperman) came in for much criticism for his handling of a certain case in Sydney. To my mind he handled this case as it should have been handled. He could, of course, have changed his decision at any time on emotional grounds, thereby creating a kind of precedent, so that within a period of time there would have been dozens, if not hundreds, of similar cases on his hands. While our immigration laws are not completely in accord with the wishes of some people, I believe them to be superior to those of many other countries. Some countries believe in a completely homogeneous population, even going so far as to deport people who could not be considered members of such a population, even though some of those people may have been in the countries concerned for quite some time.

Unlike those countries, Australia believes in maintaining a predominantly homogeneous population, but some people are prepared to abandon this policy for one which would create much heartburn and certainly a good deal of hardship. There is no need for me to attract the attention of the House to the problems we have heard of recently in the United States of America, in Africa and in certain South East Asian countries.

Some people want to establish quotas. What I ask is this: What do these people mean when they refer to quotas? How many from this country and how many from that? Surely such a system must lead to some form of discrimination. If you are going to include orientals, do you automatically include all non-Europeans? This is a pretty important and vital question. If you do not include all non-Europeans, then surely you are introducing some kind of discrimination.

I was very interested to hear the comments of the Leader of the Victorian Country Party, the Hon. George Moss, when he returned to Australia on Friday last after spending a few days in Los Angeles during the recent disturbances in that city. He said that he hoped that Australia would not change its immigration policy, or words to that effect. This is in line with statements made by numerous people who have had the privilege of travelling abroad. Our immigration policy is one that does cover people other than Europeans, but it certainly does not include such persons in sufficient numbers to create problems. It covers only enough to allow those who come here to be assimilated. Let me elaborate this point further. At 1st June of this year we had in Australia more than 37,000 nonEuropeans not including the Torres Strait Islanders and the indigenous aborigines or part-aborigines of this country, nor the thousands of naturalised people in Papua and New Guinea. We have at this time some 11,000 non-European students studying in the various States, from the primary school level through to university level, including some people studying for the nursing profession. We have some 5,000 naturalised and we have granted resident status to about 3,000. I remember some two years ago having the privilege, with others, of interviewing the Prime Minister of Malaysia, Tunku Abdul Rahman. He said that Aus tralia was very fortunate in having such an immigration policy and that, whatever we did we should not change it. It is a good policy and before we give our approval to change we should always remember that once we open the doors we may not be able to close them for generations or possibly even centuries, during which time much damage may be done. I say here and now that I will not support a change in the broad principles of our immigration policy. Whilst the present Minister for Immigration is prepared to adopt and maintain today’s policy I am prepared to support him at any time or place, on an election platform or anywhere else he may need that assistance.

Earlier, the Leader of the Opposition (Mr. Calwell) referred to the Budget as a civil Budget; yet he went on to criticise the expenditure on social services. Whilst I do not have sufficient time to go into all the details of the social services proposals I would like to mention a few. At the present time a single pensioner who pays rent and is considered to depend entirely on his or her pension may receive an extra supplementary allowance of 10s. above the full pension rate of £6. As a result of this Budget, and, naturally, the consequent legislation, such a pensioner will be entitled to draw a further 10s., or a total of £7. There will be a similar increase for the married pensioner, providing his wife receives a wife’s allowance and not a pension. This will be a great boost for this particular type of pensioner. These decisions, coupled with the granting of a guardian’s allowance of £2, the removal of the means test for the pensioner medical service, plus the extension of the definition of a dependant to include student children, are all excellent moves and the Government must be congratulated on them.

Likewise, under repatriation benefits, the introduction of the intermediate rate pension and the increase from the 100 per cent, rate to the total and permanent incapacity rate for those receiving outpatient treatment for a period of four weeks or more will also be welcomed by a lot of exservicemen. I am particularly gratified at this decision because this was one of the first issues I brought forward in my maiden speech in this chamber and one that I later followed up in repatriation speeches. If any honorable member wants to know what

I think about the matter he may refer to my maiden speech, which I made, I think, back in 1959.

Mr Duthie:

– The honorable member has been a long time getting it through.


– Maybe I have been a long time getting it through, as the honorable member for Wilmot (Mr. Duthie) says, but at least the Government has listened to my plea in this instance and I have had some success. I do not know whether the honorable member for Wilmot has had similar successes. Perhaps some of the succeeding speakers will help me in that regard.

As a wool grower representing a very large wool growing district I would be remiss if in the few minutes remaining to me I did not refer to the important issues in the wool industry today. To many people the only issue is the proposed referendum, but before mentioning that I would like to draw attention to a few other worries facing the industry today, chiefly the price of wool and the drop in export income. According to the report of the Australian Woolgrowers and Graziers Council for the 12 months ended 30th June 1964, the average price of wool showed a drop of 12.3 pence per lb. to the low level of 57.4 pence per lb. and although the quantity of wool sold in this period was 6 million lb. more, it earned £77 million less. That is quite a drop. The actual value of exported wool fell from £480 million to £404 million. This fall may be acceptable to some people and even to some growers, but in the main the wool growers cannot carry this reduction and certainly have to look further afield - either to another form of wool marketing or another industry altogether.

This brings me to the matter of the referendum. Before growers reject or even accept the proposal put forward by the executive of the Australian Wool Industry Conference, they should study the plans. It is being said that growers are suffering from a lack of information; that they cannot get any information on the proposed plan. I am sure mat any honorable member interested in this subject, or any wool grower interested in the issue, has or can get a copy of the wool marketing report. Anyone who has not a copy can go along to Che meetings being addressed by Sir William Gunn and other members of the Wool Board and get one. Growers who are not prepared to attend these meetings and find out what is going on may write to the Australian Wool Board at 578 Bourke Street, Melbourne, and I am sure the Board will oblige, by sending a copy of the report.

This report sets out the case quite clearly. It covers 44 pages, and includes graphs on price trends as well as wool production, consumption and other details. Anyone who wants to hear the case against the Board’s proposals may obtain a document from the Committee for the Retention and Improvement of the Free Wool Market - why that lengthy name was chosen I do not know. I have a copy of the document here. This can be obtained by writing to the Committee at Room 108, Dalton House, 1 1 5 Pitt Street, Sydney. This Committee has set out its arguments against the proposal and in presenting legislation to this House the Minister for Primary Industry (Mr. Adermann) has indicated that each wool grower will receive a copy of the Wool Board’s recommendations with his ballot paper. Mr. Deputy Speaker, to my mind the issues are very clear indeed. Wool growers will have the right to vote on this issue and the real decision will be as to whether or not they support orderly marketing.


Mr. Deputy Speaker, before I deal with the Budget all I say to the honorable member for Wimmera (Mr. King) about the removal from the immigration policy of the Australian Labour Party of the obnoxious words “ White Australia “ is that there are ways and means of doing the proper thing without insulting people who should not be insulted at this time.

I speak in support of the amendment moved by the Leader of the Opposition (Mr. Calwell) in this Budget debate. The Budget this year is significant to all who are concerned for our living standards and industrial peace. Many other factors intrude prominently, of course, but I propose to devote my attention to two very important subjects which affect most intimately our working community and those who are in the evening of their lives. I want to spend a few moments referring to the impact made by this Budget on those who must wait, in accordance with the Government’s policy, another whole year before they can expect any improvement in their present impoverished circumstances, made bleaker still by this Budget, coupled with rising prices. I wonder whether the Treasurer (Mr. Harold Holt) and the Government really understood what they were doing to the aged couple living on the pension. Do they realise that since the last Budget the consumer price index, introduced with the approval of the Government - and I underline that point, as it had the full approval of the Government when it was introduced as a measuring standard in this country - shows that the actual cost of living has increased already by 16s. a week? Do the Government and the Treasurer realise that they are calling on every pensioner couple to pay an additional 5s. 6d. for a bottle of Australian brandy, although, in many instances, brandy is a sheer medical necessity in the home of an age pensioner? And this happens while the great liquor distributing companies are not called on to pay one penny more in tax. What, too, of the pensioner’s packet of cigarettes? This also will cost an additional 3d., while the great and powerful tobacco combines go free of any tax increase. And what, too, of the additional Id. on the occasional glass of beer that a pensioner may buy? The brewery monopolies, likewise, go scot free and are subject to no tax increase.

The Treasurer seems to delight in worsening the already tough position of those least able to bear the burden that this Budget will place on their shoulders. Let me deal particularly with the worsening of Australian living standards, Sir, because that is the matter with which I am most concerned. Generally, the worsening of industrial relations becomes inseparable from a slowing down of the rate of national progress. Once living standards are interfered with, the nation feels a twinge that warns of the slowing down of national progress.

I was very much concerned at the Budget speech made this year by the Treasurer. In his Budget speech last year, dealing with the economic situation, he said -

On preliminary figures put out by the Commonwealth Statistician, wages and salaries increased last year by 9 per cent., company income by 10 per cent., farm income by 26 per cent, and gross national product by 9 per cent.

This year, either through inadvertence or by deliberate intent, the Treasurer made no reference to wage and salary increases. On this occasion, he dealt with the matter in this fashion -

Last financial year, 1964-65, saw a further big rise in national output - despite labour shortages, industrial disputes, sharp falls in some export prices and drought over wide areas of the country. By any reckoning, it was a good performance. But while output thus increased substantially, expenditure increased still more. In the national accounts for the year, gross national product at current prices showed an increase of 9 per cent.

In the light of the atmosphere engendered by that statement by the Treasurer, I want to turn to some things that the right honorable gentleman is reported to have said elsewhere. The Government’s newspaper, the Sydney “ Daily Telegraph “, reported the views expressed by the Treasurer speaking as guest of honour at a luncheon given yesterday by the Executive Association of Australia. This was the right honorable gentleman’s first public speech since presenting the Budget. I had thought that before I addressed the House this evening the “ Daily Telegraph “ might give us some idea of the thinking of those who support this Government and seek to keep it in office. So I was not surprised today when I saw in that newspaper the headline, “ Holt’s ‘ best received’ Budget”. But I was rather astounded when I read the report of some of the things he had to say. The newspaper reported his observations on management as follows -

Mr. Holt said Australian management had improved noticeably over the last decade and was of high standard.

But the Government was concerned at the lack of co-operation at the trade union level.

This was worse than 10 years ago.

I was not surprised to hear that the Treasurer had made such a statement. It is now nine years since the right honorable gentleman, as Minister for Labour and National Service, introduced in this Parliament the present industrial legislation that has been gradually worsening the conditions of the Australian workers and reducing their standards bit by bit. The record shows that when that legislation was introduced in 1 956 I said -

I suggest strongly to the House that all that the Government proposes is that there shall be reestablished the machinery which was available for smashing, and which, in fact, did- smash, every award condition operating during the years from 1929 to 1934.

I want to indicate to the House tonight just what can happen as a result of legislation of the type introduced by this Government in 1956. One might ask, first: Why was the Treasurer so disturbed yesterday about the decline in good industrial relations between the trade union movement and the employers? If the Government is concerned - and 1 doubt it - why did it not take some action to show its concern when the 1965 basic wage case was before the Commonwealth Conciliation and Arbitration Commission instead of - I say this deliberately - displaying a flagrantly dishonest attitude, the like of which had never been seen previously in this country? At the opening of the proceedings, the Commonwealth appeared and indicated specifically and unequivocally that in this matter it did not desire or intend to make submissions as to what the Commission should do. Everybody accepted that as a statement of fact, believing that the Commonwealth would follow the normal practice of adducing the facts and letting it go at that. But what did the Commonwealth do when it came to making its actual submissions? It said -

An increase in the basic wage at this juncture would be fraught with great danger for the economy.

It went on to say -

There are at present such special factors in the economy and in the circumstances impinging on the economy which . . . make it inadvisable to allow the price increases indicated in the consumer price index to be reflected in the basic wage.

The Treasurer should be the last one to come into this House or to go before any organisation and complain about the lack of industrial co-operation at the level of the trade union movement when he or the Minister for Labour and National Service (Mr. McMahon) or their departments - I do not know which - were party to a dishonest act of that character before the Commission.

Let me analyse the implications of the submission that the consumer price index figure should not be reflected in the present basic wage. This is the Government that has always told the people that the Arbitration Commission should be unfettered in its determination of wage levels. Let us have a look at the consumer price index and see what it means. First, let me repeat that the Commonwealth submitted that there were circumstances -

  1. . which make it inadvisable to allow the consumer price index to be reflected in the basic wage.

Let us clear our minds about what the consumer price index is. From 1935 to 1960, the measuring stick of the different arbitral authorities - there was a number of them - for the basic wage entitlement was the C series index.

From 1935 to 1953 the quarterly adjustment system operated. In 1953 the Commission set aside the quarterly adjustment principle, but in subsequent assessments increases in the C series index figure became the actual amounts by which the Commission increased the basic wage. In June 1956 the C series index had increased by 10s. and that was the amount of the increase in the basic wage. In May 1957 the same situation arose and the wage increased by 10s. In May 1958 the C series index figure showed an increase of 15s. and this was the amount awarded. Similarly, in May, 1959, 15s. was added to the basic wage. Right up to 1959 the C series index, which was established in 1935, was the measuring stick because it was regarded as an indication of the normal requirements of the Australian family man. But in 1960 the Commission made a decision that displeased this Government and also the employers. In its judgment the Commission said - . . the ‘C Series Index was over a period becoming suspect and the court and the Commission could not have relied on it to have achieved a proper result. The emergence of the Consumer Price Index, however, has removed that difficulty and we are therefore now able to seek to ensure that the basic wage which we fix should, subject to our supervision, maintain its real standard; in other words, that employees should, between fixations of the real basic wage and subject to our supervision, continue to be able to purchase the same amount of goods and services with the basic wage portion of their wage.

Then, for the first time in the history of wage fixation in Australia, the Commission reversed the onus of proof. It said -

We will each year make the assumption that the effect of movements in the Consumer Price Index should be reflected in the basic wage unless we are persuaded to the contrary by those seeking to oppose the change.

That great change was made in 1961, and it was made on the basis that the consumer price index, which had the approval of this

Government and which finally received the approval of the trade union movement in Australia - after a good deal of examination and after it had been accepted as the best that the movement could hope to receive from this Government - would be the future measuring stick, as the Commission rightly said, to enable the workers - to purchase the same amount of goods and services with the basic wage portion of thenwage.

That decision antagonised this Government and the employers of Australia from the day the onus of proof was reversed. But what was the result of the change?

I have told the House that in each of the years 1956 and 1957 there was an increase of 10s. and that in 1958 and 1959 there was an increase each year of 15s. In 1959 the amount awarded was 2s. more than the increase revealed by the C series index. The Commission said at that time that the extra amount could take up some of the slack for the next 12 months. Right in the teeth of the 1961 decision, however, the C series index was eliminated as the measuring stick and the consumer price index was introduced.

In 1961 the Commission said that for the future the consumer price index would be the measuring stick and in that year it increased the basic wage by 12s. The remarkable feature was that the moment that the onus of proof was reversed the Commission was able to increase the basic wage by 12s. to restore its purchasing power to that of June 1960. In 1962 and 1963 there was no increase in costs in Australia. However, it irked the employers and the Government that the onus of proof was on them and not on the trade union movement, so in the 1965 case the Government, miserable, mean and contemptible in the knowledge that the Arbitration Commission of the Government’s own creation had set a standard which had given stability in Australia, decided that the Commission was not to be allowed to apply the principles which it had laid down in 1961 and which had proved to be successful.

Mr Cockle:

– You wanted to wreck that stability.


– This Government wanted to wreck stability. The

Commission had said that every three or four years it would review the economy generally to see what amount to come out of additional productivity in Australia could be given to the workers, and so in 1964 there was a review.

It must be remembered that the 1961 decision fixed the wage on the consumer price index as the proper figure for May 1960. In 1964 the Commission looked at the matter and said that over the four years there had been increased productivity in this country sufficient to give the workers an additional £1 per week in the basic wage. From that moment this Government and the employers joined forces to destroy the principle that had been laid down in the 1961 decision. I say that deliberately and I will prove it in a few minutes.

What did the Commission do in 1964? It gave to the workers of Australia the equivalent of 5s. a year from 1960 to 1964 for the added productivity of this nation. If a nation that is developing says that it cannot afford to pay 5s. a year to those responsible for the productivity of that nation, it is being unfair to the largest section of its community. In 1965 this Government decided that the 1964 decision had to be smashed. What did the employers claim? The employers asked -

  1. That the basic wage and margins be abolished as separate amounts and a total wage be inserted, made up of the sum of their amounts, plus an amount 1 per cent, of such sums; or
  2. That there should be simultaneous consideration and determination of the basic wage and margins and that 6s. be taken from the basic wage and added to margins.

In support of that claim by the employers this Government went to the Commission and indicated, in the way that I have previously mentioned, that it would be dangerous to the economy to give effect to the principles laid down by the Commission in 1960. If this Government thinks that it can do that kind of thing and still not have the worst industrial situation that it has had in 10 years, it has another think coming.

Mr Cockle:

– Is that a threat?


– No, it is a simple statement which I will prove in a few minutes if the honorable member will listen. The President of the Commission is reported on page 24 of this year’s judgment in this way -

To leave the basic wage at the same level now as it was after last year’s basic wage decision, would mean that the basic wage element of the total award wage would only allow its recipients to purchase with its goods and services 12s. less than immediately after last year’s decision.

The real commencement of the depression in this country in 1931 - on 21st January 1931, to be precise - was the decision of the court at that time to reduce the purchasing power of the basic wage by 10 per cent. Let me remind the House that Sir Richard Kirby, President of the Commission, has said that the recent decision has reduced the purchasing power of the worker in this country- by 4 per cent., nearly one half the percentage reduction which was applied in 1931 and which really set the depression in motion. The results of the decision have been felt almost immediately. The decision was delivered only two months ago and in this morning’s newspapers it was indicated that the building of homes in July of this year was down by 10 per cent, as compared with July of last year. That figure was given by the Commonwealth Statistician.

Mr Bury:

– That is approvals, not buildings.


– Approvals for buildings, yes. It means the same thing. The expenditure on buildings is the point. Do not ask me to mention the figures for June of this year as compared with those for July of this year. They are down by 15 per cent.

I now come to the effects of the judgment. I shall deal with only one part of it, which states that it - . . decides that neither the basic wage or margins should be altered because of movements in the consumer price index where those movements are up or down

I put this to the Treasurer and the Minister for Labour and National Service: If they think the workers will tolerate a situation in which, every five years, the Commission, which this Government has set up, completely reverses the approach to wage fixation in Australia, they are barking up the wrong tree. I would not have minded so much if the President of the Commission, in the report tabled in this House in November 1964, had not warned the Government, the people and the Commission itself that something was happening in this country. At page 13 of that report, when dealing, with over-award payments, he said -

Australians have for long prided themselves on the value of the arbitration system with the disciplines it imposes, particularly that imposed by the requirement that the parties put their cases to the test of open argument in public hearing. This has been a striking contrast which our system presents to the method of collective bargaining practised overseas. It would be a sorry end to the concept of “ a new province for law and order “ if now the handling of problems in the over-award area were to lead to the chaos of the jungle. The issue goes beyond the interest of one side or other seeking to get the most out of a situation for individual advantage - it goes right to the heart of the nation’s interests.

With that warning ringing in its ears, this Government went before the Commission and pleaded that the Commission’s decision in 1960, which proved to have a stabilising effect, be disregarded in this year’s decision.

Let me summarise the position. This year’s decision puts the trade union movement back to where it was in 1907. In that year the Higgins Harvester judgment fixed a fair and reasonable standard based on the normal means of an average employee. That was the beginning of the basic wage in Australia. In 1913 the Higgins A series index judgment produced a price index formula which was followed in the fixation of wages from then until 1919. In that year the man who was to become Prime Minister - W. M. Hughes - in his policy speech at Ballarat made this promise -

At least the sovereign shall always purchase the same amount of the necessaries of life.

Then in 1922 came the quarterly adjustments based on the A series index. They operated until the 1931 decision which cut the basic wage by 10 per cent. In 1934 the tribunal decided to determine the basic wage on capacity to pay. Also in that decision the C series index was established as the measuring stick for the basic wage. From then until 1953 there were reviews, but there never was the difficult position that is now facing the trade union movement. It is true that in 1922 the Hughes Government did not follow the recommendation of the royal commission. At that stage the trade unions decided to join their forces. They formed a body which developed into the Australian Council of Trade Unions.

Yesterday the Treasurer complained of bad industrial relations. The leadership of the trade union movement in Australia now finds that it can no longer trust the Government and it can no longer trust the Commission, because the Commission brought down a decision in 1960 and now a new Commission has destroyed completely the standard which was established in 1907 and which continued until 1953. 1 have indicated what happened between 1953 and 1960. Do the Treasurer and the Minister for Labour and National Service believe that they can trick the trade union movement and throw overboard principles that are acceptable to the A.C.T.U. and the trade union movement that is associated with it in the way that has been done in this year’s decision? Do they believe that they can say that the conditions that we have enjoyed from 1907 to 1965 are to continue no longer and that no longer can we have any regard to the cost of living, as shown in the price index, in the determination of the basic wage?

This Government has brought us to the stage where in 1956 margins were increased to 2i times the 1937 margins; in 1959 they were increased by 28 per cent., in 1963 they were increased by 10 per cent; and now in 1965 an increase equal to H per cent, of the whole wage is granted and the whole basic wage structure is torn to pieces. If the Treasurer expects to receive any cooperation from the trade union movement, the Government will have to back-pedal on its policy. I remind him that whatever legislation the Government proposes to introduce, it will not make the trade union movement any more fearful than it was in 1956. It will not control the trade union movement. The trade union movement has to get for its members their share of the things that are produced in Australia irrespective of the actions of this Government. The A.C.T.U. is now recommending to its component parts that they go out and deal directly with the employers. That is the only avenue left to the trade union movement. As a result of the advice that this Government gave to the Commission in the basic wage case, the Congress of the A.C.T.U. next month will consider whether or not the trade union movement should withdraw completely for all time from the Commission in basic wage cases such as have been experienced since 1953.

I remind the Government that if that happens, what I said concerning its penal provisions will still stand. I warned the Government in 1956 not to try to heap any responsibility on the trade union movement. You cannot slap the trade union movement in the face and expect it to smile back. The trade union movement will preserve for those it represents at least the standards it achieved in 1907. Why did the trade union movement accept the position in 1907, 1913, 1922, 1934, 1953, and 1960? It was because principles had been laid down upon which it could base its future activities. But the last decision of the Conciliation and Arbitration Commission destroyed completely any basis on which the trade union movement could appear before the Commission and argue a basic wage case.

The trade union movement will not be fooled by this Government, the Commission or anybody else. The trade unions know that they can go outside the Commission. Individual unions are doing that already, as the President of the Commission stated in his report. The unions are getting more from the employers in that way than they could get through the Commission. That process will go on because of the rotten attitude of this Government.

Debate (on motion by Mr. Falkinder) adjourned.

page 383


Second Reading

Debate resumed (vide page 354).


.- 1 rise briefly to complete the comment I made on this measure before the debate was adjourned. I want to recapitulate briefly my theme which is a simple one. Nothing is more important or significant to Australia than the production of steel because it is the index of strength and progress. We depend on steel for two things - national development and national defence. To get steel, we must have workers. If we have workers, we must have families. If we have families, we must have housing accommodation.

In my electorate a shocking situation exists because the wages paid to the workers, particularly those on shift work, preclude them from saving enough to make a down payment on a home. These men are being drawn to a district where there is no reservoir of housing and where the population has increased by ISO per cent, in IS years. It is not an old area. There is not a residue of accommodation into which an extraordinary influx of people can be absorbed. They come to a district where the economy is dominated by a steel monopoly with a capital of £112 million and with probable assets of £350 million. This company made an admitted profit last year of £19 million and had a cash flow of £48 million. The housing need in this district is at least 3,000 homes and it is well within the financial competency of that company to provide those homes.

It is the duty of the Minister for Housing (Mr. Bury) to come out of his ivory tower, to visit my electorate, and to have a look at the situation with me. He should face the people, see their problems and find an answer because nothing short of national intervention will solve the problem in the City of Greater Wollongong.

Minister for Housing · Wentworth · LP

– in reply - First of all in reply to the honorable member for Cunningham (Mr. Connor) I might say that his problem is one with which I have some acquaintance. His electorate shares with other rapidly expanding areas in Australia a shortage of housing due to the rate of progress which is taking place. But this clearly is not a matter in which the Commonwealth can take a direct initiative. The Commonwealth’s influence on housing is mainly through the banking system, and then it is a generalised control through the Reserve Bank. Alternatively, of course, the Commonwealth works through the State Governments. The State Government instrumentalities are the housing commissions and trusts. Where a condition exists which calls for special action the initiative must obviously, in the first place, come from those living in the area, and secondly from the State Government concerned.

One can well sympathise in this serious problem. In fact, we are all well aware that we have not yet in Australia caught up with our housing problems. If we had, there would be no need for Ministers for Housing in the Commonwealth or in the States.

Mr Kelly:

– Do not say that.


– It would be a magnificent achievement for all Ministers for Housing to organise themselves out of business. The community undoubtedly would then be in a much better position.

I should like now to refer to some remarks made during the course of this debate, particularly by the Deputy Leader of the Opposition (Mr. Whitlam) who takes a close, continuous and intelligent interest in housing problems. There are a few points on which I would correct him, in a mild way. First, he made a statement about rental rebates. It is true that under the 1956 Commonwealth and State Housing Agreement the old system of rental rebates was changed, but that did not mean that rebates came to an end. In fact, all States have been free ever since to use the interest rate concession for this purpose, and it has been used by New South Wales, Victoria, Queensland, Western Australia and Tasmania.

Another error, although of a minor order, is his statement - and I think I am right in my recollection of this - that all houses built by the States were built with Commonwealth funds. This is not strictly so. Many houses have been built with the States’ own funds, particularly in Queensland and South Australia. The States do in fact supplement the funds which come to them under the Agreement, as I pointed out in my second reading speech.

Mr Whitlam:

– Does South Australia still do that? I thought it only did it before it came into the 1945 Agreement.


– No, loans are still raised for the South Australian Housing Trust on a semi-governmental loan basis. Of course, South Australia this year is responsible for the reduction of the money flowing under the Agreement. The Deputy Leader of the Opposition has made a number of speeches on slum clearance, and I think one must agree that it is a desirable objective to redevelop many of our urban areas and, as he suggested, in many cases to acquire land and resell it either for private or public project development. This is already happening. In Melbourne, the Victorian Housing Commission, with the use of Commonwealth housing moneys, has undertaken a great deal of this work. Some of its operations are very impressive to witness. To perhaps a slightly lesser degree New South Wales is also doing this work. Of course, what this does demand are financial resources - and the real resources behind them. This brings in our old problem in Australia - the constant tug of war between competing demands for resources. We live in a fully employed economy in which resources deployed in one direction can be switched only by doing less in some other direction. Now, other members of the honorable gentleman’s party pointed particularly to the necessity for or desirability of spending large sums of money on projects in the north. If large sums are to be spent in other directions, they are not available for things like urban redevelopment in the cities. The Deputy Leader of the Opposition did in fact make some interesting remarks, or is reported to have done so, on this subject. He suggested that greater resources might be devoted relatively to this purpose rather than to some country areas or other purposes. But it is well to remember that in these matters we cannot say what we would like to do. We have to make a choice between the various competing purposes.

Mr Whitlam:

– If the Minister would allow me to correct him there, I said that more money had to be spent in cities. I was not merely referring to coastal or capital cities. I was referring to the fact that the Commonwealth housing and transport grants could be used to promote growth points in the north or the outback.


– I would agree with the honorable gentleman. But the fact is that a choice has to be made as to how capital is deployed. This is the choice we make. The Deputy Leader of the Opposition specifies these objectives which he thinks desirable. But these can be accomplished only if resources are taken away from something else.

In regard to the Commonwealth’s power generally in housing, it is very true that the basic influence on the course of housing in Australia is with the Commonwealth. It is not so much through this agreement but the strategic heart of housing lies in the Treasury-Reserve Bank complex. It is natural that this complex and the problems which impinge on it are very much those of allocating moneys for different uses. Naturally, it is tempting to regard housing not so much as something that is inherently desirable but as a necessary part of achieving overall fiscal results in the economy. One has to beware in this situation that housing does not become the fiscal fag end of the economy. The Government is now determined that this shall not be. But undoubtedly the situation, under successive governments going back as far as honorable members like, has naturally been very much influenced in regard to housing and the banking policy bearing upon it by the state of the economy at large.

Once again, basically because it has to choose between the relative applications of resources, if there is a large demand for shops, commercial buildings, factories and things of this nature which take away materials and labour from housing, the Commonwealth is not in a position to damp down this activity except in a very indirect way. If this sector booms, as it has been doing very much lately, and unless other sectors are damped down, an inflationary result ensues. In these circumstances extra money for housing just means that costs go up. A number of speakers referred to this point If everything else in the community goes up, particularly wages - because wages are a very important part of the total cost of housing - and all other prices in the community move, naturally the cost of housing moves up as well.

Mr Webb:

– We just heard the honorable member for Blaxland (Mr. E. James Harrison) say how they had gone down.


– If costs have gone down, it is not apparent in any of the wages paid to building labour which we are now considering. I would be very much surprised overall if wages had gone down. It is certainly news to me and quite contrary to common experience.

It is unfortunate that the price of land in the neighbourhood of developing cities is bound to rise. It is a very scarce commodity. The cost of developing the necessary services, such as sewerage, lighting, power and water supply, is continually rising. The charges for these services must increasingly be borne by the home builder in the price of the land when he first seeks to build on it

The things which the Deputy Leader of the Opposition said about uniform building codes were sound enough although I would certainly shrink from applying his suggestion of using Commonwealth powers in compulsory fashion for this purpose in any approach to the States. My view is that this is a matter on which agreement must be reached on the broad front between large numbers of people. Those concerned at every point of the industry must be convinced that it is a sensible approach before satisfactory results can be achieved. The House may be interested to know that a recent appointee to my Department is Mr. Benn, who was head of the architecture section of the Perth Technical College and who spent a year as visiting professor in the United States, more particularly in Texas, studying the development of uniform building codes there. He will be available to assist in this process. The State Ministers for Local Government have established a committee in order to try to introduce greater uniformity into State building codes. The secretariat of the committee is being provided by the Commonwealth Department of Works. Mr. Isaacs of the Commonwealth Experimental Building Station is Secretary to the committee.

Another promising development in this regard is that lenders in most States have got together to complete agreed lenders codes and the minimum standards that will be accepted in all of them. This is another thing that makes the task of the home builder simpler and cheaper. I might add that the War Service Homes Division has participated actively in helping to bring about this result.

The honorable member for Bennelong (Sir John Cramer) referred to rent control. This matter is related in part to what the honorable member for Hughes (Mr. L. R. Johnson) said about empty houses. Rent control means an inefficient use of property. The property in dwellings is passed over by administrative or legal edict from the owner to the tenant. This is all right in a condition of scarcity in war time but when it is perpetuated year after year it distorts the whole situation. Many people with whom I am acquainted - I am sure other honorable members know many such people also - and who have empty houses are frightened to let them even for a short period because they may well be caught up with this legislative landlord and tenant process, resulting in their being unable to pass on the property. Rent control means that property is inefficiently used because people occupying dwellings feel that they cannot leave them. People may be occupying a large house at a cheap rental. When they get on in years they could conceivably move to a small home unit and free their former accommodation for a large family, but they do not do this. Rent control virtually rivets them’ where they are. These problems cannot be dealt with overnight. You cannot suddenly increase rents for a large portion of the community without causing severe social suffering but at least progress should be made along these lines. If it were, some of the empty houses to which the honorable member for Hughes referred would become available for letting.

The honorable member for Bass (Mr. Barnard) referred, among many other things, to estimates for housing and claimed that my Department should produce estimates of requirements. In this connection he referred at length to the work of Dr. Hall.

Let me say at the outset that the work done by Dr. Hall has been an extremely useful stimulus to thought among those interested in housing and has provided a very useful intellectual chopping block. He produced estimates in October 1961, in June 1962 and on 30th October 1962, giving three lots of figures which he varied from time to time. But the danger of my Department producing these estimates is that the assumptions upon which they are made can very easily be forgotten and they can be used in a way in which they were never intended to be used. The figures can be taken too literally by the world at large, which becomes oblivious to the assumptions upon which the forecasts are based. In his latest log of forecasts of trends and demands for 1963-64, Dr. Hall projected a range of from 100,000 to 105,000 houses, and there were actually begun, in 1963-64, 107,580 houses. His projected demand for 1965-66 showed a range of from 105,000 to 111,000 houses, and actually 116,738 houses were begun.

Prior estimates and targets provide interesting illustrations. When they are published and the assumptions upon which they are based are specified, they provide interested parties with a useful basis for thought; but of course they can never give the actual requirements because they are based, among other things, on certain assumptions including immigration. If immigration falls, fewer houses are required. No one can readily predict the flow of immigration, except for a short time. On the other hand, if we were ever so fortunate as to over-shoot the mark in the provision of houses, this country would become very much more attractive to migrants and the position would alter. I think it would be a great mistake for my Department to produce target figures in great detail. Of course, we are looking at housing demands - as we should - and we are looking at population trends and everything else connected with the position. But the danger in publicising any figures is that the assumptions upon which they are made and the reservations which are put forward are, in practice, largely forgotten and overlooked.

One might say that in the last two years the Government has taken some pretty solid steps to improve the overall housing situation in Australia. One thing which fs quite evident is that, ever since the war finished, the institutions regularly providing money at low interest rates for housing have never been able to satisfy all credit-worthy customers. So there is still a very great scope for building to meet existing demands, and the extent to which these demands can be met depends upon the pull on resources in other directions.

In the year 1964-65 the Commonwealth allocated a record sum of nearly £115 million as its own contribution to housing loans and its own direct expenditure on housing. Early in 1963-64 the capacity of the savings banks to lend was greatly increased. Instead of their having to hold 70 per cent, of their deposits in cash deposits with the Reserve Bank and in Government securities, the figure was reduced to 65 per cent, and even within that percentage they were allowed to include any advances to the short-term money market. It was then also arranged that should savings bank deposits fall, housing loans would not necessarily be subject to proportionate reductions. This move has in fact freed a very large increase in savings bank money for housing. Over the last three or four years the amount provided by the savings banks - the largest single lenders for housing - has more than doubled. In 1961-62, they lent £58.6 million. This figure rose to nearly £109 million in 1962- 63 and to £151.4 million in 1963-64. la the last financial year there was a slight reduction to £149 million. During the last two years, the Commonwealth Government has in fact done a great deal to advance the cause of housing and has provided accommodation at a rate that Australia had not known before.

Question resolved in the affirmative. Bill read a second time. Message from the Administrator recommending appropriation announced.

Third Reading

Leave granted for third reading to be moved forthwith.

Bill (on motion by Mr. Bury) read a third time.

House adjourned at 11.22 p.m.

page 388


The following answers to questions upon notice were circulated ?

Export of Iron Ore. (Question No. 1099.)

Mr Jones:

s asked the Minister for National Developmen, upon notice -

  1. Is he able lo say how many iron ore export contracts have been signed during each of the last five years?
  2. If so, what is the name of the exporting company in each case, and is it Australian or foreign owned?
  3. To which country was, or is, the ore to be exported
  4. What quantity of ore was, or is to be, exported and what is its value?
  5. What royalties have been or will be paid on these exports?
Mr Fairbairn:

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

  1. 1961- none 1962- none 1963 - one contract 1964 - one contract 1965 - at this stage three contracts.
  2. 1963 - Western Mining Corporation Ltd. which is an Australian company, but a SO per cent, interest in the project has been taken up by foreign interests. 1964 - Frances-Creek Iron Mining Corporation Pty. Ltd., one-half of which is owned by an Australian company and one-half by an Australian company but whose principal lives in Japan. 1965 - Mount Goldsworthy Mining Associates, which at present is wholly-owned by overseas interests but there have been report. that Australians will be given a 20 per cent, interest. - Hamersley Iron Pty. Ltd., in which Australians indirectly hold a 9 per cent, interest. - Mr Newman Iron Ore Co. Ltd., which is 50 per cent. Australian owned.
  3. Japan in all cases.
  4. Western Mining Corporation - 5.1 million tons valued at about ?19 million.

Frances-Creek Iron Mining Corporation - 3 million tons valued at about ?12 million. Mount Goldsworthy Mining Associates - 16.5 million tons valued at about ?72 million. Hamersley Iron - 65.5 million tons valued at about ?270 million.

Mr Newman Iron Ore Co. 100 million tons value at about ?380 million.

  1. The royalties that these companies will pay on their exports are set out in the Agreements that the companies have signed with the Western Australian Government. The royalty provisions are long and complicated but basically the royalties payable by the companies will be:

Western Mining Corporation - about 4s. 6d. per ton.

Frances-Creek Iron Mining Corporation - H per cent, of the gross value at the mine, head which would equal the value in (4) minus the cost of transporting the ore from the mine to the vessel at Darwin.

Mount Goldsworthy Mining Associates, Hamersley Iron Pty. Ltd., and Mr Newman Iron Ore Co. - 7i per cent, of the f.o.b. revenue (with a 6s. per ton minimum).

Oil. (Question No. HOO.)

Mr Galvin:

n asked the Minister for National Development, upon notice -

  1. What amount of subsidy excluding that which is paid for the purpose of oil search is paid to oil companies?
  2. What is the price to the oil refineries of crude oil from: (a) Australian oil wells and (b) overseas?
Mr Fairbairn:

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

  1. None at present. Subsidies payable under the “ States Grants (Petroleum Products) Act 1965 “, which is expected to be in operation by the 1st October 1965 are expected to cost ?6 million in a full year, which must be passed on in full to the consumer. 2. (a) Sales of Moonie crude oil are made on the basis mutually agreed upon by the vendor and the refining companies. For a period of 15 months the price is firm at $2.83 per barrel less a freight allowance of 30 cents per barrel to cover the cost of shipment to refineries in other States. The selling price for Moonie crude is equivalent to 8.7 pence per gallon, or after deducting the freight allowance, to 7.8 pence per gallon.

    1. The total quantity of crude oil, topped crudes, and enriched crude and other oils for use as refinery feedstock imported in the year 1.963-64; the total corresponding f.o.b. value; and the average unit value calculated from these figures, are shown hereunder: - (Source: Commonwealth Statistician)

The f.o.b. values included in the above total would in many cases not allow for the discounts accorded on “ posted “ prices. The average weighted freight cost to be added to the f.o.b. unit value would approximate 1.9d. per gallon.

Assistance to States for Slum Clearance. (Question No. 1102.)

Mr L R Johnson:

son asked the Minister for Housing, upon notice -

  1. Has the Commonwealth ever contributed to the cost of slum clearance undertaken by the States? If so, what are the details?

    1. ls he able to say what is the average price per acre paid for the acquisition of slum areas by (a) the New South Wales Housing Commission and (b) the Victorian Housing Commission?
    2. What is the estimated acreage of slum area in each capital city?
    3. What requests have been made to the Commonwealth by the States for assistance in the reclamation of slum areas?
    4. How many people are estimated to be living in slum areas in each capital city?
    5. Does the Commonwealth have any intention of rendering financial assistance to the States for slum acquisition and clearance?
    6. What amount has been expended by each

State on (a) the resumption of slum areas and (b) the replacement of slum housing?

Mr Bury:

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

  1. Through its advances under the Housing Agreements at concessional rates of interest, the Commonwealth has assisted the States to meet the costs of the acquisition on just terms of land upon which dwellings are to be erected, the erection of homes on land cleared of slums and re-housing those previously living in slum areas.

    1. As the Commonwealth does not make advances to the States for the specific purpose of acquiring areas declared by them to be slums, the information sought is unavailable.
    2. Although estimates have been published from time to time in respect of some cities, there does not seem to be a widely-accepted definition of a slum area.
    3. In 1960 and in succeeding years, the State Ministers for Housing have requested the Commonwealth to provide financial assistance towards the cost of reclaiming slum areas.
    4. The information is unavailable.
    5. This question raises a matter of Common wealth policy. It is not the practice to deal with a policy issue in replying to a question upon notice.
    6. Up to 30th June 1964, the Housing Commission in Victoria had spent £17,850,445 on the acquisition and re-development of slum areas. Similar information is unavailable in respect of the other states.

Commonwealth and State Housing Agreements. (Question No. 1103.)

Mr L R Johnson:

son asked the Minister for Housing, upon notice -

  1. Which of the Commonwealth and State Housing Agreements (a) included and (b) excluded provision for rental rebates?
  2. What has been the cost to (a) the Commonwealth and (b) the States, of rental rebates for each year since the inception of the agreements?
  3. What are the details of rental rebates at present given by each State?
  4. What were the terms of the rental rebate provisions in the first Commonwealth and State Housing Agreement?
  5. Are rental rebates provided under the current Commonwealth and State Housing Agreement in respect of dwellings constructed for occupation by aged persons?
  6. Are all Slate housing authority tenants considered to be capable of meeting the economic rental of the dwellings they occupy? If not, which income groups are involved?
Mr Bury:

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

  1. The 1945 Commonwealth and State Housing Agreement includes formulas to determine economic rents and the rebates that may be granted on these rents. The rebate calculation takes into account the family income of the tenant. This agreement also provides for a contribution by the Commonwealth of three-fifths of the cost of rental losses incurred by the States due to the granting of rental rebates and to other factors set out in the agreement.

There is no reference to rental rebates in the 1956 and 1961 agreements.

  1. Up to 30th June 1965, the Commonwealth had paid out £552,026 as contributions to rental losses under the 1945 agreement. These losses arose largely from the rental rebate provisions of the agreement, although, as noted above, other factors enter into the calculation of these losses.

The following table lists the payments made by the Commonwealth to each State in respect of the year in which the loss on rental operations was incurred -

  1. Queensland’s claims in respect of the years 1956-57 to 1959-40 were considered in total.
  2. A claim by Queensland for a Commonwealth contribution in respect of 1963-64 is currently under investigation.

The cost to the States of rental rebates for each year since the inception of the agreements may not easily be determined. In respect df houses built under the 1945 agreement some States did not adopt the strict formulas to determine economic rents and rebates set out in that agreement.

Under the 1956 Agreement, as amended in 1961, the determination of rentals is a matter for each State.

  1. New South Wales, Victoria, Queensland and Western Australia allow rebates on the rental of dwellings constructed under the 1945 Agreement on a basis that generally conforms with the provisions of that Agreement. These States and Tasmania also allow rebates determined broadly along the lines of the .formula of the 1945 Agreement to tenants of dwellings built under the 1956 and 1961 Agreements, although they adopt varying practices in determining “economic rentals”. In South Australia concessional rentals are provided in necessitous cases, but not according to any given formula.
  2. The terms of the rental rebate provisions in the first Commonwealth and Slate Housing Agreement are set out in The Schedule to the Commonwealth and State Housing Agreement Act 1945.
  3. No. However the State housing authorities may use the interest concession on Commonwealth advances to charge relatively tow rentals for dwellings constructed for occupation by aged persons.
  4. As the States determine the rentals of the houses they acquire and lease and decide to whom these houses are let, the capacity of tenants of these homes to pay the rents charged is a matter in which the States are best informed. The Commonwealth makes housing advances at concessional rates of interest and it is the States who decide how the considerable benefits of this concession are distributed.

Housing Finance. (Question No. 1104.)

Mr L R Johnson:

son asked the Minister for Housing, upon notice -

What proportion of dwelling completions were financed by (a) the War Service Homes Division, (b) State housing authorities, (c) co-operative building societies, (d) savings and trading banks (private), (e) the Commonwealth Trading and Savings Banks, (f) Starr Bowkett societies, (g) insurance companies, (h) finance companies, (i) State savings banks and (j) other lending authorities, during each of the last five years.

Mr Bury:

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

The only relevant information available relates to commitments in a year, not to completions. The following are estimates of the number of’ dwellings commenced, according to sources of first mortgage finance, expressed as percentages of the total number of dwellings commenced in the year.

Shipping Freights. (Question No. 1119.)

Mr Webb:

b asked the Minister for Trade and Industry, upon notice -

  1. Does the recent rise in shipping freights from Australia to eastern countries, which will add about £350,000 to the current annual freight charge of about £15 million, make the establishment of an Australian Shipping Line imperative?
  2. If not, how high will overseas shipping freights have to rise before the Government examines the possibility of creating its own shipping line?
Mr McEwen:

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

The Australian National Line is at present empowered to operate in overseas trades. However, as the costs of Australian Flag vessels are higher than those of vessels of the traditional maritime nations operating to and from Australia, Australian National Line vessels are unable to operate commercially at existing freight levels in Australia’s overseas liner trades.

Flax. (Question No. 1125.)

Mr Webb:

b asked the Minister for Primary Industry, upon notice -

  1. ls it a fact that the only surviving section of the flax industry in Australia, which is located at Boyup Brook, Western Australia, is about to collapse because of the refusal of the Government to grant a subsidy to this industry and because of competition from Sax fibre imports from European countries which can sell at a profit in Australia because of their own heavy subsidies?
  2. Was this industry started as an emergency scheme for defence purposes during the last war?
  3. Will he consider granting a subsidy to this industry to keep it in existence?
Mr Adermann:

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

  1. lt is understood that production and processing of flax at Boyup Brook, Western Australia, will cease this year.
  2. Although flax had been grown previously in Australia, production expanded rapidly during the last war.
  3. Following upon an enquiry by an interdepartmental committee in 1957, the Commonwealth decided that assistance to the flax growing industry in Australia could not be justified on defence grounds. The Tariff Board conducted inquiries Into the industry in 1959 and 1964 and recommended that assistance to the industry could not be justified on economic grounds. The Government accepted the Board’s recommendations.

Communism. (Question No. 1110.)

Sir Wilfrid Kent Hughes:

asked the Minister for Primary Industry, upon notice -

  1. Did he state in reply to a question which I placed upon the notice paper on 4th May 1965, that the Australian Wool Board had received a cable on 29th December 1964, from the Peking authorities asking it to protest against the arrest of nine Chinese Communists in Brazil and that the Board did not reply to the cable?
  2. Was (he cable from Peking in fact sent, not to the Australian Wool Board, but to the International Wool Secretariat?
  3. Did the Secretariat refer the cable to its constituent members?
  4. If as stated by him, the Wool Board did not reply, is there any known reason why the Austraiian Wool Board alone, and not the New Zealand and South African Wool Boards, was singled out for special mention in the New China Newsagency world press release giving the names of Guns and associations which had protested against the Brazilian arrests?
  5. In fairness to the Chairman of the Australian Wool Board, will the fullest information be obtained as to who sent and received the cable, who replied, and what was the text of the reply?
Mr Adermann:

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

  1. Yes. 2, 3 and 4. As stated in my reply to your earlier question on this subject, the cable from Peking was sent by Chen Cheng-Chung, Director of the China National Textile Import and Export Corporation, ft was addressed to “Mister John Hopkins, Auswobo, Melbourne”.

Although Mr. Hopkins is an officer of the International Wool Secretariat his services were made available to the Australian Wool Board to assist the Board in investigating the prospects of promoting the sale of wool to Mainland China. The Australian Wool Board had undertaken this task because the Chinese authorities expressed the wish to deal with a national body rather than an international organization in the matter. Under this arrangement, Mr. Hopkins was a member of a party led by the Chairman of the Australian Wool Board and he also subsequently visited that country to follow up the investigations on behalf of the Wool Board.

Mr. Hopkins’ office is located at the headquarters of the Australian Wool Board in Melbourne. When the cable arrived he was overseas and the Secretary of the Wool Board notified the sender by cable as follows: - “John Hopkins overseas and not available. Not expected to return for at least three weeks. Your cable will be handed to him on his return.”

When Mr. Hopkins returned he referred the cable to the Chairman of the Australian Wool Board because he considered that as the Board was conducting the investigations in Mainland China, the cable was aimed at enlisting its support.

The above details were not included in my reply to your earlier question because I did not consider them of sufficient importance.

  1. My previous reply still stands.

Cite as: Australia, House of Representatives, Debates, 24 August 1965, viewed 22 October 2017, <>.