25th Parliament · 1st Session
Mr SPEAKER (Hon. Sir John McLeay) took the chair at 9.30 a.m., and read prayers.
Mr. BRYANT presented a petition from certain citizens of the Commonwealth praying that the Government remove section 127, and the words discriminating against Aborigines in section 51, of the Commonwealth Constitution, by the holding of a referendum at an early date.
Petition received and read.
A similar petition was presented by Mr. Mclvor.
– The Minister for Primary Industry (Mr. Adermann) left Canberra this morning to begin a journey to New Zealand, where he will lead an Australian delegation to a meeting of the Commonwealth Parliamentary Association. He will be absent from Australia until about 8th December, and during his absence the Minister for the Interior (Mr. Anthony) will act for him.
– Is the Minister for Housing aware that current figures show a 25 per cent, drop in building construction in Victoria and a 12 per cent, drop throughout Australia? Does he consider this drift serious enough to warrant taking immediate action to arrest it? If it is not considered serious, what must the drift be before it is considered to be a serious economic problem?
– Of course, I am well aware that there has been quite a severe drop in housing, particularly in Victoria - Victoria is the worst State in this respect - and to a lesser extent in South Australia. Elsewhere any decline has been of very small proportions. Moreover, this decline is from record high levels. As far as action is concerned, the honorable member will be aware that it is extremely difficult and complex for the Commonwealth to take action in any one particular State. Although the flow of finance for housing comes under the watchful eye of my Department and myself it is a matter which has very widespread bearings on other activities of the Government and it lies very largely outside my departmental jurisdiction.
– I ask the Minister for National Development a question about the search for oil at Barrow Island, Western Australia. It appears from reports that the company working this area has met with remarkable success and that, of the 13 holes drilled, 12 have been oil flowing and one gas producing. As work in this area attracts the Commonwealth subsidy and much of the exploration has been going on for some considerable time, will the Minister tell the House what possibilities there are of proclaiming this field a commercial one? When, approximately, can the people of Australia expect that the build up of oil reserves in this area will help to reduce our hard pressed Australian overseas balances?
– The company concerned with the drilling on Barrow Island has done a remarkable job. This is a remote and deserted area and the geology of the island has been particularly difficult. There have been at least two structures and two oil bearing horizons. This has complicated the drilling considerably. However, the position has been reached where undoubtedly it is true to say that this is a far more exciting field with greater possibilities than Moonie and it looks like being our third producing field. I hope that the company concerned will press on with the greatest expedition. If I could offer my own views, I think the company could have moved at a faster rate than it has moved so far. I hope it will not be too long before this is declared to be a commercial field and commercial production is undertaken there.
– Is the
Prime Minister aware of the expressed view of the Minister for Labour and
National Service favouring the employment of women in executive posts in commerce and industry? If he is aware of this, is this view in line with a changed Government policy? If it is, has any decision been made to reverse the age old principle of the Commonwealth Public Service which precludes female employees being elevated to so many high positions in the Public Service?
– No recent change has been made in that matter, but I shall make further inquiries to find out whether any change is contemplated.
– Will the Prime Minister also find out what the Minister said?
– I am always delighted to find out what the Minister said.
– Can the Minister for the Interior say when the delayed extensions to the Australian War Memorial will take place? The Minister will be aware that a decision to include the 1939-45 war exhibits was made some years ago and, as yet, a great deal of material remains in store and greatly limits the ability to place on public view other exhibits.
– I am pleased to see the interest shown by the honorable member in the Australian War Memorial, which I think all of us agree is a credit to the nation. Plans have been considered for an extension of the Memorial, but any extension depends largely on a budgetary allocation. We have done considerable work around the Australian War Memorial. The most noticeable work in the last 12 months has been the construction of Anzac .Parade which I think has added greatly to the display of the Memorial. I shall have a further examination made to see when the extension is likely to be made and I shall let the honorable member know.
– Is the Minister for Labour and National Service aware that with the rapid strides now being made with the containerisation of cargo within the next five years 75 per cent, of the work force on the waterfront could be redundant?
What steps is the Minister taking to compensate workers on the waterfront when containerisation is complete?
– I am aware of the fact - and so are the Government and, particularly, my colleague, the Minister for Shipping and Transport - that in other parts of the world large scale containerisation of cargo has taken place. That particularly applies in relation to European continental traffic and traffic between the west coast of America and Honolulu. I do not agree with the statement of the honorable gentleman that containerisation could immediately affect 75 per cent, of total cargoes. This problem has been receiving the detailed . attention of the several Commonwealth departments involved, including the Department of Trade and Industry and my own Department, and the matter is under current review by the Department.
I want also to point out to the honorable gentleman that the all-in conference approved by the Government contains amongst its terms of reference the relationship to a mechanisation fund, that is, the establishment of a fund in case there should be redundancy on the Australian waterfront. I want to point out to the House that one of the impediments to our international trade in the past has been the all too frequent stoppages that have occurred. In my view, the prospects for increased exports are great, provided we have common sense and reasonable efficiency. I believe that the prospects of substantially increased exports themselves give opportunities for retaining if not increasing the number employed on the waterfront.
– I direct a question to . the Prime Minister. Has the Commonwealth Government received a request from the New South Wales Government for financial assistance for drought relief, in response to the Prime Minister’s repeated offers of such assistance? If the Government has received such a request, will the Prime Minister tell the House of the assistance that he has offered to the States of New South Wales and Queensland to aid them in dealing with the increasingly disastrous drought covering the major portion of those two States?
– I had further letters from both the Premier of New South Wales and the Premier of Queensland and I replied to them some days ago in similar terms. I shall be very happy to incorporate in “ Hansard “ the full text of the last letter that I sent, but the material part from the point of view of honorable members, I think, is this: Having pointed out that at this stage it is not possible to work out what the final figure of Commonwealth assistance would need to be, I went on to say -
As to the extent of Commonwealth aid, you have yourself pointed out that it is not possible at this stage to put a precise figure to the effect on your Budget of drought measures and hence to the amount of assistance it would be appropriate for us to provide. But you may take it that it will substantially cover whatever deficit you ultimately have in your Budget as a result of the drought measures you take - and here I have in mind measures of the kind referred to in your recent Budget Speech.
As to the nature of Commonwealth aid, we have thought of our assistance as taking in the main the form of general purpose grants to your State. A final determination of that question must, however, await our consultations with you later in the financial year.
I might add that, should you see merit in the Commonwealth’s making an interim payment to your State in advance of the determination to be made later, we would be quite prepared to consider such a payment. If you wish this to be pursued it would, I suggest, be desirable for your Treasury officers to meet with ours to discuss the matter.
– This is a Dorothy Dixer.
– I would need to be even more unintelligent than I am not to have known that I would have a question on drought relief this morning. But that is the material matter, and some of it is by way of addition to the earlier statement I made to the House. With the concurrence of honorable members, I incorporate the correspondence in “Hansard “. 5th November, 1965.
Dear Mr. Asian,
I refer to your letters of 14th and 15th October concerning Commonwealth assistance to your State for drought relief.
You make the point that your State’s budgetary prospects may change materially over the balance of this financial year and that the extent of the special Commonwealth assistance finally required by New South Wales this year will only be capable of precise determination towards the end of the year in the light of what happens between now and then.
It seems to me that you have cited here the predominant fact in this problem of assisting your State at this point of time to cope with necessary drought measures. The drought may be relieved, in part if not wholly, during the course of the year; on the other hand it may deepen. For this reason, which is fundamental, you are unable to assess now the cost to your Budget of the drought measures you find it necessary to take. Even less, may I suggest, is the Commonwealth in a position to do so since we could not have as much firsthand knowledge of the drought situation in your State as your Government, with its various agencies, will have or as close a view of your changing bugetary position.
Essentially these are the grounds on which we have based the approach I have earlier outlined to you and on which I have hitherto thought that we were agreed. Almost from the start, the Commonwealth has recognised that the financial burden of drought measures would exceed the budgetary resources of your State and that we should therefore come to the aid of your Government in terms of the general financial arrangements we have with your State and the other States. But since, for the reasons you have quoted, the precise amount of the assistance you would require for your Budget, as affected by drought measures, and the form it should take could not be known until later in the financial year, we proposed that the final determination of these matters should be deferred until then when we would have consultations with you.
Meanwhile, as we have recognised, expenditures will have to be met and the State may need cash for the purpose. Here we have pointed to the long-standing arrangement under which the State may obtain temporary finance against Treasury Bills at a low rate of interest, and have contemplated that this finance should enable your State to meet its day-to-day requirements over the period until the substantive grants or other forms of assistance the Commonwealth will make available are determined in consultation with you. We have also had in mind, of course, that the effect of the interest cost of this finance on your budgetary position would be taken into account for the purposes of that determination. lt has seemed to us that this approach to the matter is as convenient and efficacious as could be devised having regard to the nature of the problem. No doubt the Commonwealth could give assistance in other forms. For example, it could make specific grants or advances (o finance particular forms of drought relief. As indicated in the statement I made in Parliament on 26th August, we believe it would not be appropriate for the Commonwealth to do this. Even if we did, it would have the drawback that there may have to be various forms of drought relief, some of which might not fall within the scope of specific Commonwealth grants and would therefore be entirely for the account of the State. It seems preferable that Commonwealth assistance should be comprehensive, as it will be under our proposal. Again, I recall that under someearlier drought relief schemes, the Commonwealth made grants to the States on a £ for £ basis which meant that in order to obtain £1 from the Commonwealth, the States had to find £1 from their own funds. There is no such condition under our present scheme and that should be very much to the advantage of the States.
I am confident that on reflection, and in the light of the foregoing clarification, you will find yourself fully in accord with our general approach. J gather from your letter, however, that you would still see a need, from the standpoint of the management of your finances, for rather more specific advice about the extent and nature of Commonwealth aid you can reasonably expect to receive.
As to the extent of Commonwealth aid, you have yourself pointed out that it is not possible at this stage to put a precise figure to the effect on your Budget of drought measures and hence to the amount of assistance it would be appropriate for us to provide. But you may take it that it will substantially cover whatever deficit you ultimately have in your Budget as a result of the drought measures you take - and here I nave in mind measures of the kind referred to in your recent Budget Speech.
As to the nature of Commonwealth aid, we have thought of our assistance as taking in the main the form of general purpose grants to your State. A final determination of that question must, however, await our consultations with you later in the financial year. - T might add that, should you see merit in the Commonwealth’s making an interim payment to your State in advance of the determination to be made later, we would be quite prepared to consider such a payment. If you wish this to be pursued it would, I suggest, be desirable for your Treasury officers to meet with ours to discuss the matter.
I do sincerely hope that this letter will clear up any misunderstandings there may have been between us since, I can assure you, the Commonwealth has every desire to help your Government in the situation which the drought has created.
Yours sincerely, (signed) (R. G. MENZIES)
The Hon. R. W. Askin, MLA., Premier of New South Wales, sydney. N.S.W.
– I ask the Treasurer whether it is a fact that ari anomaly exists in the income tax law concerning entitlement for an allowance in respect of earnings in the area north of the 26th parallel. Does this allowance apply only to workers who have completed six months of the financial year in that zone? Would this mean that a worker who has worked five and a half months in each of two financial years, a total of eleven months continuously, would lose the allowance? Has consideration been given to removing this anomaly? The Treasurer will remember that 1 have raised this matter on several occasions and that he has said each time that it would to considered when the Budget was under review.
– I have a recollection of the honorable gentleman raising this matter with me before, but I do not like giving answers in taxation matters off the cuff. Such answers should be quite precise and authoritative. I shall therefore see what the present stage of consideration of this matter is and advise the honorable member in precise terms.
– By way of explanation of a question that I shall address to the Minister for National Development I point out that at Carnarvon the Government Members Food and Agriculture Committee was approached by the shire President, Councillor Wilson Tucker, with relation to the Gascoyne River. Has the Western Australian Government, or its Minister for the North-West, the honorable Charles Court discussed with the Commonwealth Government the development of the water resources of the Gascoyne River?
– The answer that I gave in the House the other day was correct. There have been some unofficial consultations between the Northern Division of the Department of National Development and officers of the Western Australian Government. There has been no official approach or request for funds from the Commonwealth by the Western Australian Government; nor has there been any official approach by the Western Australian Government for us to investigate this particular project.
– I address a question to the Prime Minister. What forces would Australia have available to support Britain in keeping the peace in Rhodesia if requested by Britain or the United Nations to do so?
– That is what we would expect from you.
– I do not expect much from you except racialism. As the issues of Rhodesia are more clear cut than those in South Vietnam, and as action to protect the rights of the African people would have the backing of the majority of the United Nations, will the right honorable gentleman consider the withdrawal of Australian troops from Vietnam so that Australia may have forces available if necessary? If the Government is not prepared to do this because it is committed to the Government of South Vietnam, why does it act so vigorously to support the doubtful Government of South Vietnam and not the democratic Government of Britain?
– You will get a purple certificate from the Congo.
– Order! The honorable member for Mitchell will remain silent.
– I cannot.
– Order! I warn the honorable member that the Chair has a method of curing that malady.
– I think everybody will regret the news that a unilateral declaration of independence has been made illegally by the Government of Rhodesia. As I indicated the other day, we cannot recognise a government so formed.
As to the question put to me by the honorable gentleman, I would like to remind him that the problem of what comes next is an extremely difficult one to which we shall be devoting close attention at the weekend. The decision is one not to be hastily arrived at and one certainly not lending itself to much rhetoric. A very very serious group of problems is involved. But I will come to this point at once: If the honorable member is urging that my Government should take steps to put Australian forces into a position of war with the forces of Rhodesia, then I can assure him that he has no hope of seeing that.
– I wish to ask the Minister for Labour and National Service a question. In view of the fact that this country now has a substantial balance of payments problem, will he indicate to the House the causes of the present dispute in the wool stores and its effect on the transport of wool to overseas purchasers? When does the Minister expect that the dispute will be settled?
– lt is a matter for great concern to the Government, and I am sure it is a matter of great concern to the House, that in Victoria the Storemen and Packers Union has illegally called a strike in the wool stores at Geelong, Melbourne and Portland, and this at a time when the wool export season is at its height and we have substantial balance of payments problems.
– Why do you not pay them more money?
– I ask the Leader of the Opposition to listen to my answer. As late as in November last year an agreement was voluntarily made between the union and the woolbrokers. lt was to exist for a period of three years and under it there was a substantial increase in the amount of wages paid. At the moment the dispute is confined to Victoria and has not extended to New South Wales or Queensland. The dispute is contrary to the wishes of the federal executive of the union involved. At the moment it has not been placed in the hands of either the Australian Council of Trade Unions or the Melbourne Trades and Labour Council. It is a matter of great regret and of deep concern to us that this should be occurring, and particularly that a voluntary agreement, indeed an award of the Commission, should be broken so soon after it had been freely negotiated. Mr. Commissioner Clarkson has placed a bans clause in the award, and the matter is now in his hands. I cannot express an opinion as to when the dispute will be settled. But I do hope that the men will themselves see the common sense in going back to work and permitting the free movement of wool out of Victoria to international markets.
– I would like to ask the Minister for Labour and National Service a question. Will the honorable gentleman tell the House whether there is any truth in the report that, in order to create a better understanding between the union, the Government and the employers, he has invited Mr. Nelson to act as best man at the wedding which is coming off shortly-
– Order! I point out to the honorable member that the Minister is not answerable to this House for anything that he does of a private nature.
– My question is addressed to the Minister for Air. Is it correct, as reported, that the Royal Australian Air Force is planning to service and maintain the extremely complicated electronic and computing equipment associated with the FI IIA bomber? If the R.A.A.F. has decided to go it alone on this complex problem, can the Minister tell the -House why this is so, as the United States Air Force is not prepared to accept this responsibility with its FI IIA bombers? What is the manpower situation regarding R.A.A.F. recruitment, which would enable this service adequately to cover these requirements?
– Answering the honorable member I say, first of all, that no final decision has yet been arrived at by the Air Board. In fact we have some experts over from the United States of America at present and we are going into this matter together. I understand that the United States Air Force has not yet made its decision in the matter. All I would say is that in the past, with such complicated aircraft as the C I 30s and the Neptunes, we have had very close co-operation with industry, which has dealt with the things it is most competent to deal with. The position in relation to the FI IIA is not greatly different from that which existed in relation to other aircraft. The FI IIA is a more complicated aircraft, but I imagine that we will receive similar co-operation from industry and will endeavour to come to an agreement. All I can say is that there is still plenty of time to work out our policy before this aircraft arrives. Regarding manpower, we estimated two or three years ago the number of skilled men that we would require. On the advice that we have had recently, our estimate is still accurate. However, we have recruited more skilled workers than we originally thought we would have at this stage. Rather than the Air Force taking skilled workers from industry, the flow is in the other direction. Our training seems to be better.
– My question is addressed to the Treasurer. Why is the Commonwealth making no contribution towards meeting the cost incurred by school libraries and hiring services in replacing reference books and text books which will become obsolete or inadequate when decimal currency is introduced, particularly as the cost of such replacements represents a minute fraction of the cost of the Commonwealth’s assistance to the decimal changeover in commerce and industry but represents a great proportion of the resources of the voluntary school authorities and organisations?
– A general policy decision was taken by the Commonwealth as to the areas in which compensation would be provided as a result of the introduction of decimal currency. The Government’s decision on this matter was announced at an earlier point of time. No doubt costs will be incurred by many sections of the community as a result of the introduction of decimal currency, but it is the general view of the Government that the savings in time and cost which will follow the introduction of decimal currency will serve as general compensation in many areas. I shall study the question asked by the honorable gentleman, but I think it will be found that the matters about which he has asked come within the category of exclusion to which I have just referred.
– My question to the Minister for Housing relates to the decision made by the South Australian Government last week, I believe, to decrease the rate of commencement of Housing Trust homes. Did the South Australian Premier request this year as large an allocation of loan funds for housing purposes as has been requested in the past? Of total loan funds granted to South Australia, does the proportion devoted to housing this year compare favourably with the proportions devoted to that purpose in years gone by?
– Each State has to decide what proportion of the total loan funds it receives from the Australian Loan Council it will devote to housing. I think that this year South Australia, as well as other States, received an increased loan allocation, but South Australia requested for housing purposes about £750,000 less than it requested last year. That, of course, is a matter for the South Australian Government to decide, not the Commonwealth. On the whole, South Australia devotes a larger proportion of its loan funds to housing than do other States, but the amount this year is a reduction on previous years. I would imagine that the reduction of the Housing Trust programme which has just been announced follows at least in part from this reduction in the amount of loan proceeds to be spent on housing, because, not wholly but in large part, the Trust depends on Commonwealth and State Housing Agreement funds for financing its operations.
– I ask the PostmasterGeneral a question. Is there in Sydney a delay of from six to eight weeks between payment of the required charges for the installation of a telephone service and the actual installation? Is the main reason for this delay the shortage of technicians in all exchange areas, brought about by dissatisfaction with wages and working conditions? What action is being taken to remove the causes of this dissatisfaction and thus retain the services of trained staff with a consequent increase in the efficiency of the Department?
– Usually telephones can be installed within about six weeks of notification to the intending subscriber that the Department is ready to proceed with the work. At this point the intending subscriber is asked to pay the installation fee and the first six months’ rental in advance. It may be that in odd cases a period of longer than six weeks elapses before installation is effected. I do not accept the honorable member’s suggestion that discontent or dissatisfaction exists amongst the technical staff of the Post Office. In our free enterprise community some movement of staff from one place to another is to be expected. We must remember that all of the technical staff of the Post Office is trained within the Post Office itself. Private industry does not provide such training. So the drift is always in one direction - out of the Post Office into private industry. I believe that the number of telephones installed in Australia, and particularly in the Sydney area, this year will exceed the number installed last year. This is a fair indication that we are not losing staff merely because employees are discontented. I do not believe that they are.
– I ask the Minister for External Affairs a question. I refer to the massacre last year in Rwanda of an estimated 25,000 natives by members of the Watutsi tribe. Will the honorable gentleman say whether this matter has yet been discussed by the United Nations? If the matter has not been discussed, will the Minister, in view of contemporary expressions of regard for the rule of law, offer any explanation for the failure to consider the implications of what assuredly was a most brutal outraging of the rule of law?
– Subject to any defects in my memory, I do not think this matter has been discussed by the United Nations. As for the rest of the question, I think the honorable gentleman has made his point quite emphatically and there is no need for me to enlarge on it.
– I ask the Prime Minister a question. In view of the unlawful action taken by Mr. Smith in Rhodesia, has the Australian Government made a survey of its trading position with that country? Is the right honorable gentleman able to report to the House the action that Australia will take in regard to economic sanctions against Rhodesia or other action which the Government intends to take?
– I thought that I had indicated a little earlier that the problems that now arise are not simple and are not to be solved with any measure of heat. There has been a deplorable error of judgment, I am sure, in this matter, but what happens next will have to be considered by us. We will have to consider what proposals are being made by Great Britain, of which we at the moment have a short outline. I understand that the matter will be discussed in the United Nations. We do not know what may be ut forward there. All I oan tell the honorable member is that I will not make any catchpenny piecemeal statements on this matter. My colleagues and I will discuss the matter not only later today but also over the weekend, when we will be in communication with each other. I hope that by the time the House meets next week I will be able to indicate what our approach to this matter is. But I will not attempt to deal with the matter in a piecemeal fashion.
– My question, which I direct to the Prime Minister, relates to the earlier question relative to drought finance asked by the honorable member for Hume and the answer which the Prime Minister gave. I ask: “Can the Prime Minister indicate what steps can ‘be taken to ensure that State rural and agricultural banks in New South Wales and Queensland make available long term loans at low rates of interest urgently needed to aid primary’ producers in their efforts to save stock losses in areas where the drought is still prevalent and also to enable restocking and rehabilitation in areas where the drought has ceased?
– This particular aspect of the problem was canvassed before several of us yesterday by a deputation representing various rural bodies. . It cannot be answered offhand. We said we would take it into study. This matter involves discussions not only with the State Governments but also with the banking system as a whole. The Treasurer himself has had extensive discussions on the banking side. He was with me yesterday and we agreed that, in . the light of what had been put to us, we would examine the problem further. I am not in a position, today, to answer the honorable member’s question finally.
– In the absence of the Attorney-General, I desire to ask the Prime Minister a question. In view of the decision by the Federal Council of the Liberal Party, meeting behind closed doors, to instruct the Government to produce a White Paper on Communism, will the Prime Minister instruct the Attorney-General to complete the farce by having his Depart* ment prepare a paper on. the racist and anti-semitic activities of the League ofl Rights headed by Mr. Eric Butler, an. associate of the . honorable member for Moreton, and the equally un-Australian activities of the National Civic Council?,
– Sir, I will not enter into a competition in a field which appears to lend itself to a little violence of language. All I can say is that I am familiar with the terms of the motion carried at the meeting of the Federal Council of the. Liberal Party of Australia. It is not an instruction. The Council does not give the Government instructions. Nor do I regard the resolution of the Council as in any way binding on me. This marks the material distinction between my relationship with my Council and the relationship of the Leader of the Opposition with his.
– I ask the Minister for Health a question which relates to the reply he gave to the honorable member for Bass regarding negotiations with the Australian Medical Association on doctors’ fees. In view of the Minister’s appeal to doctors that they should not overcharge and that they should limit their fees, has the Minister received any satisfactory answer to the question of how the Australian Medical Association justifies the new fee which, in Victoria, will be 25s., an increase of 19 per cent., when the cost survey on which this increase is based indicated a rise of only 4 per cent, in costs?
– I have had negotiations only with the Australian Medical Association in relation to fees on matters which directly concern the Commonwealth. In my own case, this applies to the pensioner medical service only. The question of private doctors’ fees, as I have mentioned on a number of occasions in this House, is outside the constitutional responsibility of the Commonwealth. Therefore, I cannot negotiate with the Association on that matter. I have made a public statement, and I repeated it only recently, drawing the attention of the medical profession to its responsibiltiy in relation to doctors’ fees and its responsibility to maintain the present national health scheme which I am sure the majority fully support. The decision made by the Federal Assembly of the Australian Medical Association is entirely within its own hands. The Assembly decided that there should be an increase of doctors’ fees. It made a recommendation to the States and the State branches made recommendations to their divisions, which in turn decided what the fees were to be. The survey undertaken by the Association was not in any way associated with my Department. It was purely a private survey and has never been disclosed to me. Therefore, I cannot confirm the figures relating to the percentage increase of costs, which were given by the honorable member. I assure the House that the Australian Medical Association is fully aware of its responsibilities in this matter.
– My question is addressed to the Minister for Labour and National Service. On 13th May last, I asked the Minister whether a survey had been carried out to ascertain the extent of suitable labour aavilable from Aboriginal sources for work associated with iron ore mining in Western Australia. The Minister replied that he would have inquiries made and would let me have a report of the result. As that was almost six months ago, I ask the Minister whether inquiries have been finalised or are in progress. When does he expect to be in a position to report on them?
– The first factor that needs to be stressed is that up to the moment we have been able to find the labour that has been required for north west development projects in the Pilbara area. We have been able to arrange for the staggering of the construction jobs and we have come to an agreement with the employers as to the methods of procedure. I must confess to the honorable gentleman that I had forgotten the question he raised regarding a survey of Aborigines to determine whether they could be usefully employed in iron ore mining. I have pointed out on several occasions that I think Aborigines will in the future provide a suitable source of supply of labour. I will get an answer for the honorable gentleman and let him have it as quickly as I can.
– My question is addressed to the Minister for Immigration. It is reported that six officers of the Department of Immigration in Canberra have been appointed to overseas posts. I ask: What duties will they be required to undertake? Will such duties be only of an administrative nature or are the officers qualified to represent Australia in a practical way from knowledge gained from experience?
– Various officers go from Australia to overseas posts all the time. We wish people who have up to date experience and knowledge of the Australian scene to be able to use their experience and knowledge in other countries. I cannot define exactly the duties of the officers to whom the honorable member referred, but I can assure him that the policy of the Department is never to leave anyone in a post for so long that he will get out of touch with events in Australia. The honorable member can be assured that the officers now going overseas will be able to apply their knowledge of Australia quite efficiently in the best interests of Australia’s migration policy.
– I direct my question to the Minister for Health. Are insurance companies with workers’ compensation commitments deriving great benefit from the national health scheme? Is it a fact that the Commonwealth health benefit relieves the insurance companies of a large part of the cost of medical, hospital and pharmaceutical services provided in compensation cases? Has any effort been made to assess the value of these services so that the insurance companies concerned can be called on to recompense the Australian taxpayers?
– I presume that the question relates to medical and hospital benefit funds, and not to outside insurance corn.nies. Obviously, of course, benefits are not paid twice. In some cases where compensation is paid an adjustment is made between the medical benefit fund and the insurance company that is responsible for the payment of compensation within the State. The only problem that I can see in relation to this matter is the delay that sometimes occurs when a medical or hospital benefit fund withholds its decision on payment pending the outcome of a compensation claim. I am looking at this problem to see whether we can overcome the difficulty. In relation to the other matter, the principle involved is that medical benefits or hospital benefits are not paid if compensation is paid.
– Order! Let us get this in order. I understand that the honorable member is seeking leave to make a statement.
– I was misrepresented.
– Is leave granted? There being no objection, leave is granted.
– The Prime Minister in answer to a question of mine, implied that I was asking for us to take warlike action against Rhodesia. These were the words that I used: What forces would Australia have available to support Britain in keeping the peace in Rhodesia if requested to do so by Britain or the United Nations? I made the same point later in the question. It was quite clear that I was misrepresented deliberately and, I think, seriously.
– In accordance with the provisions of the Public Works Committee Act 1913-1960,
I present the report relating to the following proposed work: -
Extension of 02/20 Runway and Associated Taxiway Works at Perth Airport.
I ask for leave to make a statement in connection with the report.
– There being no objection, leave is granted.
– As a result of a question asked during the public hearings on this reference concerning costs, the Committee received supplementary written information from the Department of Works comparing the estimates for the proposed runway extensions at Perth with the actual cost of constructing pavements at Tullamarine Airport in Melbourne. The advice was that in both cases the payment cost is about £100 per foot. In each case the pavement comprises about 10 in. of fine crushed rock sealed with a coat of bituminous concrete. At Perth this pavement is to be founded substantially on sand which occurs naturally in the airport area or in a number of minor areas on sand filling obtained from areas within the airport boundary immediately adjacent to the proposed extensions. At Tullamarine, however, the pavement is based on about 4 ft. of selected nonexpansive material which also comes from sources within the airport boundary but for which considerable excavations were needed.
The Committee appreciated that in the work at Tullamarine the magnitude of the project and highly competitive tendering resulted in favorable costs but it had difficulty in understanding why the cost of extending the runway at Perth should be so high considering the significantly greater amount of work involved in the construction at Tullamarine. The Committee has, therefore, recommended that the estimated cost of the runway extension at Perth be reexamined in this light.
That the report be printed.
Motion (by Mr. Hasluck) agreed to -
That leave of absence for one month be given to the honorable member for Maribyrnong (Mr. Stokes) owing to his absence from Australia.
Bill presented by Sir Robert Menzies, and read a first time.
– Mr. Speaker, I move -
That the Bill be now read a second time. The purpose of this Bill is to establish machinery which will enable grants to be made to the States for the benefit of individual research projects of particular merit. Under the authority of this measure the responsible Minister will have power to approve Commonwealth grants to selected research workers in the States, within the limits of the amounts of money appropriated by the Parliament from time to time. The Australian Government believes that in order to obtain the best possible use of the funds which it, and where appropriate the State Governments also, will provide for scientific research, grants should be made for the direct benefit of selected research activities which are judged most likely to make a significant contribution to the advancement of science and of scientific knowledge in Australia. These special research grants will be available to research workers in the universities and other institutions, but not to those employed by government authorities. However, the adoption of this method does not mean that other forms of research will no longer receive Government support. For instance, the Australian Universities Commission will be free to provide for the needs of research in the sense of the training of postgraduate students within its general recommendations for the support of the universities.
To decide which research project should be supported is clearly a difficult task and one requiring expert knowledge. Therefore, we established the Australian Research Grants Committee under the chairmanship of Professor R. N. Robertson to receive applications, assess their relative merits, and select the most worthy projects. The Committee, which comprises distinguished representatives of the major fields of learning, has considered a large number of applications and has recommended research grants in various branches of science and learning, including the humanities and the social sciences. Within the limit of the total sum of £2 million nominated for it, the Committee has recommended grants during 1965 and the whole of 1966 to a total value of £1,848,875 of which the Commonwealth will pay £932,214, assuming that each State provides half of the amounts recommended for research workers in the universities in that State. The distribution of these grants among research workers in the various States is set out in a table which, with the concurrence of honorable members, I incorporate in “ Hansard.”
Grants recommended for research workers in institutions in the States:
My colleague, the Minister in Charge of Commonwealth Activities in Education and Research (Senator Gorton), has released the details of the Committee’s recommendations and has announced that the Australian details of the Committee’s recommendations A statement setting out the details has been distributed to honorable members. The sum of £2 million which was nominated for the Australian Research Grants Committee is the balance of a sum of £5 million which the Australian Universities Commission in its Second report recommended should be provided by the Commonwealth and the States for research in State universities during the 1964- 66 triennium. By agreement the Commonwealth and the States are providing the other £3 million for general research training purposes during the triennium.
On this occasion almost all of the grants recommended are for the benefit of research workers in State universities and the Commonwealth stands ready to meet half the cost of such grants. It is, of course, the prerogative of each State Government to decide whether and, if so, to what extent, it will join with the Commonwealth in matching the grants. While the States have known for some time about this programme of support for special research projects and of its financial implications, they could not know until the Australian Research Grants Committee had framed its recommendations what the financial commitment of each State would, in fact, be. Under these circumstances, I am pleased to inform the House that the Governments of five States have agreed to support the Committee’s recommendations in full. The Government of New South Wales is still considering its position. It has some problem of its own.
This Bill gives general authority for the payment of special research grants to research workers in the States who will be selected under the procedures I have outlined. The Appropriation Bill (No. 2) 1965- 66 includes provision under Division No. 945, sub-division 1, for the estimated expenditure of £750,000 during the current financial year, on the first series of special research grants. I commend the Bill to the House.
Debate (on motion by Mr. Calwell) adjourned.
Bill presented by Mr. Harold Holt, and read a first time.
– I move-
That the Bill be now read a second time.
In my statement of 25th March 1965, I announced the Government’s decisions in relation to the surplus in the Superannuation Fund that was reported in the eighth quinquennial investigation of the Fund as at 30th June 1962. The main purpose of this Bill is to give legislative effect to those decisions, first, by reductions in the rates of contribution, which are to take effect from 1st July 1962. Secondly, the Bill authorises the cash distribution to eligible contributors and pensioners of shares of the re-assessed surplus which is to be calculated in the light of the revised assumptions about earning rates. As explained in the March statement, those revised earning assumptions and these reductions in the rates of contribution which are based upon them will be reviewed at the next actuarial investigation of the Fund at 30th June 1967, in the light of circumstances then existing. Contributors to the Provident Account will be credited with interest from 1st July 1957 at the average rate earned by the Fund in each financial year and these additional amounts will be paid in cash for those who have now ceased to contribute.
I know that the many contributors and former contributors, or their widows, who will benefit under this Bill are anxious to know when they will receive payment. Although the legislation will provide the authority for the payments, there is still a considerable volume of complex actuarial calculations and administrative arrangements to be completed before the surplus can be finally distributed to individual contributors and pensioners. The task of distributing a surplus of this magnitude in cash payments to so many contributors and pensioners, or their dependants, is quite unprecedented. Moreover, the difficulties have been accentuated by an extreme shortage of trained actuarial staff. As some indication of the administrative task, honorable members may be interested to learn that some two million individual units must be repriced by the Superannuation Board at the new lower rates of contribution before the revised statistical data can be supplied for the re-assessment of the surplus in the Fund as at 30th June 1962.
Every effort is being made to finalise these matters as quickly as possible but, because of the volume and complexity of the calculations which have yet to be com pleted, it will still take some time before all the payments can be made. For this reason, it is not proposed to defer all action until the re-assessment of the state of the Fund is complete but to introduce the many changes required by the Government’s decisions progressively and with the least possible delay. With this in view, I have been examining the possibility of making interim payments of surplus to pensioners and of refunding excess contributions to contributors in advance of .the complete distribution. This examination has shown that, in the vast majority of cases, some payments in advance of the final distribution are both actuarially feasible and administratively practicable.
The necessary preparations are already in hand for an interim payment to those now in receipt of pensions whose pensions commenced prior to 30th June 1962. The work is not yet sufficiently advanced to permit the announcement with certainty of a date of payment but the President of the Superannution Board has advised me that he hopes to commence these payments before Christmas.
Preliminary work towards reducing the fortnightly contributions of current contributors with effect from 1st July 1962 is also under way. The new lower rates or contribution will be applied by Departments to all units taken up since 1st July 1965, and to all future units immediately the Bill becomes law. Once the interim payments to pensioners have been made the next step will be for the Superannuation Board to reduce contributions for units in force at 30th June 1965 and to refund to contributors, and former contributors now in receipt of pension, or their widows, the excess contributions paid since 1962, together with earnings thereon. It is, therefore, my hope that most persons who will be entitled to payments under the Bill will receive some payment within the next few months. Simultaneously with the work that is proceeding in respect of contributors and former contributors to the Superannuation Fund, Provident Account records are also being revised for the application of the new interest rates and the calculation of the amounts due to, or in respect of, former contributors.
The Bill also increases children’s pensions, from 24th September last, from £1 per week to £2 per week for a child whose mother is still alive, and from £3 per week to £5 per week for a child who has lost both parents. These matters were referred to in my Budget Speech, as was the item relating to the increase in the age of eligibility for pension. These pensions will be paid until 21 years of age for children under-going full time education instead of terminating at age 16. The adjustments in existing pensions for children will be made shortly after the Bill receives the royal assent. However, the extension of the age limit for student children means that pensions will now be payable for some children who have either ceased to receive pension on attaining 16 years of age or who have not previously been entitled to pension under the Act. It will not be possible to make these payments until applications are obtained from the mothers or guardians and it is established that the children are, in fact, undergoing full time education.
The Bill makes two other changes of importance to pensioners and contributors. The first will remove the existing reduction of pension upon re-employment by the Commonwealth after retirement. Subject to a minimum pension, the Act now provides for a reduction in pension to one half of the full rate during a period of re-employment by the Commonwealth. The Government has now decided to remove this limitation. The second change affects those contributors who elected under the 1959 Act not to pay additional contributions for a five eighths pension for a widow but to continue their existing contribution for a one half pension for a widow. The Government intended that the 1959 option should be a single option and this was given wide publicity; the 1959 Act required the payment of additional contributions for the higher pension unless the contributor elected in writing to continue to pay only for the lower entitlement. Contributors therefore could not fail to contribute on a five eighths basis through ignorance of the opportunity. Despite these precautions, some contributors are said to have acted under a misapprehension. The Government has therefore decided to provide a further opportunity for those contributors to elect to change to the higher basis, subject to their passing a medical examination and paying additional contribution at rates which will be specially determined.
A number of other structural and machinery changes have been incorporated in the Bill, and these will be explained during the Committee stage. They are mainly for the purpose of facilitating administration or correcting minor defects in the legislation which have been detected in recent years. I commend the Bill to honorable members.
Debate (on motion by Mr. Crean) adjourned.
Bill presented by Mr. Harold Holt, and read a first time.
– I move -
That the Bill be now read a second time.
The purpose of this Bill is to extend to members of the Defence Forces a number of the changes in retirement benefit provisions just introduced in the Superannuation Bill, with the exception, of course, of those provisions relating to the surplus in the Superannuation Fund. It will not be known whether the Defence Forces Retirement Benefits Fund is in surplus or not until the actuarial investigation into the state of the Fund is complete. The Bill increases children’s pensions, as announced in the Budget Speech, from £1 per week to £2 per week for a child whose mother is still alive, and from £3 per week to £5 per week for a child who has lost both parents, and extends those pensions from the present age limit of 16 years to the age of 21 years for children undergoing full time education.
The present limitation on the pension of a Defence Forces Retirement Benefits pensioner who is re-employed by the Common wealth in a civilian capacity after his retirement from the Forces is removed but the existing restriction is maintained if a pensioner under the Act engages in full time continuous service in the armed forces. This amendment will be of great significance to retired servicemen because of their earlier retiring ages and should materially assist their rehabilitation into civilian employment.
The third major change is the extension to contributors of a further opportunity to elect for a five eighths pension for a widow, subject to their passing a medical examination and paying additional contributions at rates which will be specially determined. Despite precautions in 1959 to ensure that contributors could not fail to contribute on a five eighths basis through ignorance of the opportunity, some are said to have acted under a misapprehension.
In addition to these more important changes, the Bill includes some machinery and administrative amendments which can be explained in detail in the Committee stage. I commend the Bill to the House.
Debate (on motion by Mr. Crean) adjourned.
Debate resumed from 11th November (vide page 2661), on motion by Mr. Harold Holt-
That the Bill be now read a second time.
.- This Bill, more than all other bills we pass, deals with the financial fabric of our Federation. It provides that £378 million will be paid this year by the Commonwealth to the States. The magnitude of the Bill shows the importance which it should be given. Furthermore, it is a bill which comes up every five years. Accordingly, it is a bill on which we can speak with a slightly longer view and broader scope than is possible in a Budget or Estimates debate, or in debates on ad hoc bills. In these circumstances, it is all the more remarkable that, apart from the Treasurer (Mr. Harold Holt), who introduced the Bill, only one Liberal Party member chose to speak in this second reading debate. No Australian Country Party member at all is to speak.
– How does the honorable member know that a Country Party member will not be speaking?
– No Country Party member’s name appears on the list of members who will speak.
– A Country Party member will be speaking.
– The honorable gentleman who interjects is the Country Party Whip. I would have thought, therefore, that in accordance with the usual practice he would have given to you, Mr. Speaker, and the Liberal Party and Australian Labour Party Whips, the names of the persons who were to speak on the Bill. At present, he is the only member of the Country Party in the chamber. Obviously he has made the decision to speak in answer to my introductory remarks.
– The honorable member made the decision beforehand. Who is the Deputy Leader of the Opposition to make the decision?
– The honorable member would have taken an unfair advantage of us. He would have caught us by surprise. He did not intend to let the Speaker, the Whips, or the Leaders of the House, know that for the first time in 15 years he was about to contribute to debates on this legislation.
– That is completely wrong.
– Order! The Deputy Leader of the Opposition has the call.
– I hope that the Country Party will take an interest in this matter which concerns, I repeat, the financial fabric of our Federation. The Liberal Party certainly should take an interest because its platform proclaims the maintenance unimpaired of the federal system of government. As recently as April last, the now retired Federal President of the Liberal Party, Sir Philip McBride, said: “ We are all firm upholders of the federal system.” We all know, however, that under this Bill and its predecessors the whole basis of our Federation has been changed. The financial responsibility of the States has been completely subverted. No Labour Government in a comparable period of time could have done more than the Menzies Government has done in the last 16 years to unify Australia in the financial sense.
It is true that we would have sought to co-ordinate the unification better, and planned it better; but the financial dominance which the Commonwealth now holds is incomparably greater than was ever expected when the Menzies Government came into office. In these circumstances, one would expect the Liberal Party to explain why it has presided over the financial disintegration of our Federation. The Minister for Supply (Mr. Fairhall), is as clear-headed and plain-spoken a man as is to be found in public life. He has spoken and written on this subject. I quote his words -
We cannot go on in a sort of twilight zone between federalism and unification, trying to retain political federation in the face of financial unification. We must restore federalism or admit and accept unification and face up to its consequences. There is no virtue in delay. The “maintenance of the federal system unimpaired” is an article of Liberal Party faith … It is a job to be done by the present Government, and since delay can only work to turn a difficulty into an impossibility, it ought to be commenced now and pursued relentlessly to finality if, indeed, expressions of faith in the federal system are sincere.
I have quoted from an article the present Minister for Supply wrote for the “ Sydney Morning Herald” of 17th June 1955. Quite clearly in the intervening 10 years the Minister’s forecast has come about. Everybody in the Government parties accepts it, tacitly in the case of this debate. Therefore, let there be no more statements outside the House by the Liberal Party on the virtues of federalism. The intervening 10 years have made it quite plain that there is no real federalism in Australia now, and there cannot be any real federalism ever again. Federal financial predominance is complete.
This Bill is designed to provide the States for the next five years with most of the money they require to carry on their existing responsibilities and most of the money with which they can undertake new responsibilities. I adhere to the general principle thai’ the people who spend the money should raise it; but I state the corollary that the people who raise the money should spend it. There are two ways of approaching this problem in Australia. Some Government members still propound the idea that we should equate State taxation to State expenditure; that is, if the States are to expend a certain amount of money, they should raise it, or most of it. I should think than an equally logical approach, and the only feasible approach, is to equate Commonwealth responsibility to Commonwealth taxation. If, as we all say, we want to have governmental financial responsibility and accountability in Australia, the way to get it is not by requiring the States, with their unequal opportunities, to raise taxation to pay for those activities which, in the last SO years, have become their principal activities. The way to obtain it is to allow the Federal parliament, which raises the money for those activities, to be responsible for them. In that way we will obtain responsibility. Otherwise, we shall not.
This Bill makes provision for the States under section 96 of the Constitution. It makes, as I have said, the largest and the longest provision under section 96, under which the Parliament may grant financial assistance to any State on such terms and conditions as it thinks fit. It is under that section that the Commonwealth provides the money for the States to carry out governmental responsibilities which they undertake. There are, however, two other sections under which the Commonwealth could carry out governmental responsibilities for which it solely or principally pays. Under section 51 paragraph (xxxvii) this Parliament can make laws with respect to matters referred to it by the Parliament or Parliaments of any State or States. Under section 122 of the Constitution the Parliament may make laws for the government of any territory surrendered by any State to and accepted by the Commonwealth. Therefore the Constitution permits, and in fact contemplates, references of powers by the States to the Commonwealth and surrender of territories by the States to the Commonwealth.
If, to give a crucial case, the States were to refer their railways to the Commonwealth the States would then, with their own sources of finance, be much better able to carry on their functions. If, moreover, the States were progressively to refer the higher - university, technical, teacher training - fields of education and hospitals as well as railways, then the remaining functions of the States could be carried out within their own financial resources. Again, if Western Australia were to surrender to the Commonwealth the part of its territory above the same latitude as South Australia did in 1910, then the development of the whole of the north-western part of our continent would be very greatly accelerated. If Queensland were to surrender some of the Gulf country or Channel country to the Commonwealth the development in minerals and cattle and all the other fields for which there is a great potential in those areas would likewise be greatly accelerated. If both States were to make such surrenders then at least there would be no excuses, no alibis, for failure to develop the whole of this continent. The development of the surrendered areas could be dovetailed into the development of the Northern Territory for which the Government has been responsible for the last 55 years.
My colleague, the honorable member for Melbourne Ports (Mr. Crean), has convincingly demonstrated the regressive and unjust aspects which are inevitably multiplied if we urge that the States make a greater contribution towards the functions which they now perform than they do at the present time. The Commonwealth’s taxes are the only taxes which are fair in their incidence and easy in their collection. Income tax is paid, not ideally but roughly, in accordance with capacity to pay. Indirect taxes for which the Commonwealth has a constitutional monopoly, such as excise and customs duties, are often paid in accordance with the amount that one consumes. There can, of course, be family demands which import unjust features into the imposition of customs and excise duties on certain goods.
State taxes on the other hand are inequitable. They are in general blanket taxes. If a man owns a motor car he contributes to the Commonwealth, through petrol tax, in accordance with the use to which be puts the motor car. He contributes to the State the same amount whether he drives 5,000 miles a year or 50,000 miles a year. Again, the State taxes are those imposed on foibles, such as gambling and drinking. The burden of State taxes on individuals varies between States, but I shall quote the average over all the States. The Statistician’s figures for 1963-64 show that the States impose, per head of population, £6.23 for motor taxes, £4.13 for probate and succession duties, £4.23 for stamp duties, £2.50 for land taxes, £1.08 for liquor taxes and £1.06 for racing. It is clear that, as I have said, State taxes are blanket taxes and they are inevitably inequitable taxes. As I have already said in opening, the severity of State taxes varies between States. The taxability inevitably varies. It may be that, in so far as new primary resources are found, greater variations will develop between States according to the royalties which they impose.
The increase in State taxes as distinct from Commonwealth taxes can be shown by comparing the amounts collected by the Commonwealth and the States in 1946-47 with those collected in 1963-64. Commonwealth taxes rose from £334 million to £1,281 million, an increase of 280 per cent. State taxes, however, increased from £31 million to £235 million, an increase of 660 per cent. I give another yardstick from the questions which I annually put on the notice paper for the Treasurer (Mr. Harold Holt), asking what percentage of their total revenues, apart from income from business enterprises, the States receive from the Commonwealth. In the last year before the recently expired uniform tax reimbursement formula was introduced, 1959-60, the States received 56.77 per cent, of their revenues from the Commonwealth. In 1964-65 they received 54.5 per cent. It is clear that the proportion of their revenues which the States are getting from their own inequitable taxes is increasing. The way in which State functions - the governmental functions still carried on by the States - are financed is becoming steadily less just.
Even within the Liberal philosophy - that is, discarding the frank reference of power and the surrender of territories - there are inefficiences in the present system. The present system makes it difficult to achieve a proper priority between governmental responsibilities, Federal, State and local, and in each of these governmental fields essential functions are carried out. Our community would grind to a halt if the functions performed in any one of those fields were to cease. The situation would inevitably become more difficult if any one of those fields, were starved financially.
Quite apart from making it difficult to achieve a proper priority for the various governmental responsibilities, the present system makes it difficult to ensure proper application of the funds. This has been well illustrated in the case of the Western Australian railways standardisation scheme. It was estimated originally that the whole project would cost £41 million. On the latest estimate it will cost £55 million and the Commonwealth believes the final cost may well reach £60 million. This shows that we are going about the expenditure of government funds in a. completely inefficient way. The Commonwealth is providing the funds, the States are spending them and the estimates are grossly inaccurate.
Again, we can only assume from reports which some of the States have received that expenditure on hospitals is inefficient. The Starr Committee which was appointed by the Labour Government in New South Wales and which recently reported to the present Liberal-Country Party Government shows that there has been inefficient staffing, and a lack of regionalisation of hospitals and their equipment in New South Wales. We know that the same situation exists in all States. The position has arisen, however, in which the Commonwealth spends more money on health, including hospitals, than all the States combined, yet the Commonwealth still has done nothing about the supervision of that expenditure. There is still nothing in the Australian Federation comparable to the Hill-Burton legislation of 20 years ago in the American Federation.
Then, coming to a third instance, there is expenditure on roads. The Commonwealth provides much more money for roads in Australia now than do all the States and local government authorities combined. It was because of dissatisfaction with the planning of and expenditure on roads that the Treasury insisted at last that the Department of Shipping and Transport should reverse its old opposition to a bureau of roads and should establish the Commonwealth Bureau of Roads. This organisation is not yet in operation but at least we shall soon have a continuing body to report on road costs and plans. In transport generally, the Commonwealth takes a direct interest in aviation alone but none in the other forms of transport. It accepts no direct responsibility in such forms of transport as roads, railways and ports.
Turning to power and fuel, we find that the Commonwealth spends money on, for instance, the Snowy Mountains project and on the search for oil but it has no fuel policy to co-ordinate the power which is to be gained from hydro-electricity and oil with that to be gained from coal and nuclear power.
In the field of education the Commonwealth now spends more on universities than do all the States and all the private endowments combined. This situation has now been met by the Australian Universities Commission in effect determining the finances of our universities. No new university is set up, indeed no new faculty is set up, without ‘die Commonwealth’s permission - in fact, in most cases, without the Commonwealth’s initiative. This morning the Prime Minister (Sir Robert Menzies) introduced a bill to set up the Robertson Committee on research. Here the Commonwealth will take the lead in determining research in the universities and non-government institutions. We now have continuing bodies investigating and supervising these functions in which the Commonwealth provides most of the funds. This is still not an ideal way of dealing with the matter. It would be best for the Commonwealth to receive a reference from the States of these functions which it now principally finances itself.
Some honorable gentlemen may resent the suggestion that bodies like the Bureau of Roads, the Robertson Committee or the Australian Universities Commission should supervise State expenditure of Commonwealth: grants. This Parliament should receive reports from the various committees which have been set up in relation to the provision of science blocks just as it has received reports from eight ad hoc committees inquiring into tertiary education in the last ten years. It is a generation now since we set up the Commonwealth Grants Commission. That body still investigates and in fact supervises the finances of two States. It used to do so in respect of more.
The Vernon Committee, dealing with government investment, had this to say -
In our discussions with State Governments, we noted considerable variation in the degree of forward planning of public investment by State authorities and in the nature of the planning methods adopted. In most cases, State electricity, water, railway and road authorities had plans for expenditure for five to ten years ahead. However, in some States, even medium term planning for education and health appears to be lacking. We do not propose to comment further on State planning, but we felt the need for a greater degree of coordination between States and the Commonwealth in this field. At present, details of the States’ works proposals are examined each year by the Commonwealth Coordinator-General of Works, who presents a report on them to the Loan Council, with particular comment on their general practicability from the point of view of the availability of labour and materials, etc. There is, however, no established machinery for a co-ordinated examination of long term requirements. There seems to us to be a real need for this.
The “ specific purpose “ type of grant to the States has increased in importance during the past decade. This kind of grant is of special importance because it involves agreement between the Commonwealth and the States regarding the purposes for which the money is spent. Moreover, as these grants are made by negotiation outside Loan Council machinery, they bring the Commonwealth more directly into the problems of individual States. They also provide a basis for joint CommonwealthState planning of particular projects.
We realise that there are dangers in the special projects approach to public investment in the States. In particular, ad hoc negotiations between governments on such matters may be subject to strong local pressures, and there is also a danger that the preliminary feasibility studies of the projects involved will be inadequate. . . .
We would favour the creation of an independent Special Projects Commission to undertake detailed studies of possible projects, either at the request of Commonwealth or State Governments, or on its own initiative. Such a Commission should report each year to the Commonwealth Parliament on its activities.
The Vernon Committee has said now what the Labour Party has been saying for years - if you must have a system by which the States spend Commonwealth money to an increasing degree on ad hoc or regional projects, then you must have some system of priorities and some system of investigation and supervision.
Let me point out three trends in relation to these specific purpose grants: They are increasing in number, they are being made more and more on condition that the States match them, and they are being made more and more for regional purposes.
I shall illustrate the increasing number of specific purpose grants from the Treasurer’s reply on 29th September 1964 to a question placed on the notice paper by the honorable member for East Sydney (Mr. Devine). Before 1950 the Commonwealth made six specific purpose grants. These were roads grants, which are still increasing; tuberculosis grants, which are now declining; Morgan-Whyalla water works grants, which have concluded; rail standardisation grants; Western Australia water supply project grants, which have concluded; and finally, the grants for the encouragement of meat production, which petered out some years ago.
In 1959-60, the last year of the recently expired uniform tax reimbursement arrangement, there were eight such projects. There were grants for roads, railways, universities, mental health institutions, tuberculosis hospitals, Western Australia water supply, Western Australia northern development and the encouragement of meat production. In the last year in the Treasurer’s answer, 1963-64, there were already 14 projects current. There have been more since then. During the last quinquennium of the uniform tax reimbursement arrangement the number of specific purpose grants has doubled.
I illustrate the trend towards matching grants from the Treasurer’s answer to me on 14th September 1965. An increasing number of specific purpose grants are subject to the States earmarking their funds. Additional projects tied in this fashion in the last 5 years include science laboratories, coal loading facilities, beef cattle roads in Western Australia, the Blowering Dam, flood mitigation works in New South Wales, water resources in all States, south west region water supplies in Western Australia, research in universities and nongovernment institutions and colleges of advanced education, which are soon to be the subject of discussion. Not only is the Commonwealth earmarking more of its grants to the States for specific purposes but also it is requiring the States to divert more of their funds for those purposes which it chooses.
The third trend is towards specific purpose grants in selected regions rather than to the States as a whole. The Commonwealth is indulging more and more in eye-catching and vote-catching proposals. It is playing politics with States grants. In 1959-60 there were three regional projects, one in South Australia - railways - and two in Western Australia - water supply and northern development. This year there will be four in New South Wales - coal ports, Chowilla and Blowering reservoirs and northern rivers - three in Queensland - beef roads, brigalow lands and Weipa - six in Western Australia - railways, Derby jetty, Exmouth township, beef roads, northern development, and comprehensive water supply - and one each in South Australia - railways - and Tasmania - Gordon River road.
Clearly, over the last five years, there have been marked changes in the nature and purposes of Commonwealth grants to the States. The trends and the faults are inevitable under the present distribution of responsibilities, lt is time there was more frank acceptance of the Commonwealth responsibilities in all fields of government investment.
– Order! The honorable member’s time has expired.
.- Mr. Deputy Speaker, we have just listened to an interesting speech by the Deputy Leader of the Opposition (Mr. Whitlam). All I can say about it is that it would have been better if it had been shorter. He touched on one or two vital subjects, but 1 do not consider that he contributed much to the debate, although I appreciate certain things that he said. When I interjected during his speech, of course, I did not appreciate what he was saying at the time. He stated that the Australian Country Party would not have a speaker in this debate. I interjected to ask what authority he had for that statement. The Deputy Leader of the Opposition replied that the list of speakers showed that no Country Party member was to speak and that the Country Party Whip should toe condemned for this. I am perhaps not using his exact words, but this is the meaning of what he said. He stated that no Country Party member’s name appeared on the list handed to Mr. Speaker. This is the most incorrect statement that I have heard in this chamber, at least during the present sessional period, because Mr. Speaker had not a list at that time, nor had the Opposition Whip.
– Yes, he had.
– I have conferred with the Opposition Whip since. At that time, he had only a list of speakers belonging to his own party. He has been handed the full list of speakers only in the last 10 minutes. The only list that he had at the time in question was a list of speakers belonging to his own party. This statement will be supported by the Opposition Whip. I made it my special business to find out about the matter. Arrogant statements of the sort just made by the Deputy Leader of the Opposition are not appreciated by members of the Australian Country Party. We do not mind his attacking our policy. He may say what he likes about our policy. But we object when he tries to run the affairs of our Party and says that we do not intend to put up a speaker in a particular debate. When I interjected, he said that I was the only Country Party member present in the House. At the time, he was, in his usual way, directing his remarks to his own supporters. You, Mr. Deputy Speaker, had not then taken the chair, but you were in the chamber at the time and you can confirm what I say.
– The Country Party has no speakers. It has only talkers and the Deputy Speaker.
– It is of no use for the honorable member to protest now. He has made a mis-statement and the best thing for him to do would be to apologise. Too often, he has come into this House and insulted people. I have told some of my constituents at times that I believe that the Deputy Leader of the Opposition is the most insulting person in the Parliament. I can support that assertion by reference to “ Hansard “. This morning, he has merely given me more fuel to put on the fire. But I do not want to use it. All members of the Australian Labour Party know quite well that I have extended courtesy to them in every possible way. I have never made personal attacks, though I do attack policies. 1 do not know why the Deputy Leader of the Opposition has singled me out this morning. I can instance five cases-
– The honorable member was the only Country Party member in the chamber.
– I was not the only one present. That is the point. The honorable member’s statement is untrue.
– Where was the other one?
– The other one was sitting in the House at the back. There may have been only one other Country Party member present, but I was not the only member of our Party who was present. Why does not the Deputy Leader of the Opposition apologise? Why does he not make sure that what he says is correct? I shall now get back to the subject of the Bill, because the Country Party is vitally interested in it.
– I apologise to you now, Mr. Deputy Speaker.
– I shall be glad to see that apology in “ Hansard “.
– I rise to order, Mr. Deputy Speaker. I wish to apologise for having failed to note that you were in the chamber when I made the comments to which the honorable member for Mallee objects. As you will concede, Sir, you were sitting in a position in which I would not have expected you to be seated, and that position was not within my range of sight. May I say that there is no more regular attender in the chamber than you are, even though you are not always in your own seat.
– The honorable member should now apologise to the Whip of the Country Party.
– There were no others present.
– The honorable member ought to apologise for saying .that the Country Party Whip neglected his job regarding the list of speakers. He did not neglect it.
-Order! I suggest that the honorable member for Mallee return to the subject matter of the Bill.
– This is a very important measure and the Country Party has members listed to speak on it, though it has been suggested that our Party would have no speakers in this debate. Our next speaker will be the honorable member for Canning (Mr. Hallett). We have other members of the Party present in the chamber and they, too, will speak in this debate if necessary. Everyone who has read the second reading speech made by the Treasurer (Mr. Harold Holt) knows what has taken place in determining the allocations of funds provided for in this Bill. We know that discussions relating to grants such as these take place at Premiers’ Conferences and meetings of the Australian Loan Council every year. Arising out of those discussions, legislation comes before the Parliament to authorise the making of the grants to the States. Members of the Australian Country Party watch these matters very closely. We do not all speak on every subject, but we all speak on every subject concerning which we believe that something is not in the best interests of the people we represent or of the people of Australia as a whole.
We who belong to the Country Party have always advocated that the Federal Government allocate to the States as much money as possible. We know that certain grants are made for specific purposes and that other general grants may be used freely by the States as they wish. We believe that is in the best interests of financial relations between the Commonwealth and the States. We have often heard speeches finding fault with the system of tax reimbursement grants, but we all remember that a Labour government introduced it. If the Deputy Leader of the Opposition or anybody else wants to find fault with it, let him look at what was said by the Labour Prime Minister of the day when the legislation providing for the introduction of this system was before this House. The honorable member has just said that if a member of the Country Party spoke in this debate, this would be the first time in 15 years that a Country Party speaker had taken part in a debate on a measure such as this. Dear me, he piles one untruth on top of another. The Country Party has always put up as many speakers as have been considered necessary in debates on this subject and on other subjects, ranging from foreign affairs to minor rural matters. If ever there was an active party, it is the Australian Country Party.
I state, not speaking on behalf of my Party, but speaking personally as the member for Mallee, that I have often heard people in my electorate strongly advocating the making of grants to the States specifically for education. I have talked to meetings of mothers clubs and many other kinds of gatherings on this subject. I shall deal specifically with Victoria, because it is the State that I know best. It has its own Minister for Education, buildings and everything else necessary for education, and the State Government should know how much money is needed to provide school accommodation and to run the education system. I have always adopted the attitude that I take here in Canberra in the Parliament when each year bills such as this are before us, and at other opportune times. What I have always said is that the Federal Goernment should grant to the States for their free use as much money as possible. The States can then allocate the proportion needed for education. The needs of education should not be provided for by special grants. The Deputy Leader of the Opposition pointed out, quite truthfully - I give him credit where it is due - that the Commonwealth Government would have very little time and very little opportunity to dictate, or even suggest with the hope of its suggestion being taken up, how the States should spend the funds granted to them. But my personal view all along has been that education should not be provided for by means of special grants.
When we come to universities, specific grants must be made. But this should not apply to the ordinary schools that are run by the States. The wife of an irrigation farmer in the Mallee electorate questioned me about the making of special grants. I said: “Why not have special grants for irrigation in your area?” She replied: “ Yes, that would be very good too.” I said: “ You want the train that runs from Mildura improved. What about a special grant for the railways to take care of that?” I added: “ If you go the whole way, you do away with the States altogether or you undermine them to such an extent that they will not operate satisfactorily and you centralise all authority in Canberra.” We have a lot of authority centralised in Canberra now. Dowe want any more?
When I first entered this Parliament about 20 years ago, I was of the opinion that it probably would be better if the State Parliaments were abolished and Canberra became the seat of all authority with, perhaps, some small committees in the various States to do certain administrative work. But, after I had been here a little while and had heard speeches from both sides of the chamber, I changed my mind. I was consistent. Being consistent does not mean maintaining one opinion, but being, willing to change your mind if you see reason to do so. I was not here very long - the Labour Party was in office at the time - before I had reason to change my mind regarding the centralisation of power in Canberra. I am very much in favour of the present system.
Of course, some State Premiers, such as the Victorian Premier, say that they want the States’ taxing powers returned to them. No matter of what advantage that would be, we have to be realistic. We have to realise that that will not happen because, although one or two States would agree to it, the others would not. It will never be a working proposition again, as far as I can $ee. One pleasing feature of this Bill is that it provides for an increase in Commonwealth grants to the States for this year. I will not refer to the details for the various States. This year’s grants represent an increase of £36,873,000 on last year’s grants. That is only to be expected because Australia is a growing country and a growing country needs more and more money for development.
The Deputy Leader of the Opposition spoke about certain reports that had been made. He said that they stated only what the Labour Party has been saying for years. I do not think that would help us to decide whether or not their implementation would be good for Australia, because what the Labour Party has been saying for about IS years in this chamber - this covers its whole policy - is that the people should elect a Socialist government. The Labour Party says that the Country Party is quite in favour of Socialism in certain spheres but not in other spheres. For instance, the Labour Party points to the Post Office and says that that is a Socialist undertaking and that the Country Party is quite in agreement with that. But whether it is the Post Office or grants to the States, which is the subject of this debate, we have to remember that if an undertaking is working on Socialist lines it does not go off the rails to direct Socialism, which this country does not want, if it is under the jurisdiction of the present coalition Government, which is a free enterprise government. But under the jurisdiction of the Labour Party, which is pledged to Socialism, we soon would have a Socialist state in this country, and then all the things that matter would suffer because the incentive of Australians would be taken away from them. In the past that incentive has caused men and women to work for Australia and to produce the great prosperity on which we are riding.
The next Country Party speaker in this debate will be the honorable member for Canning. If it becomes necessary for other members of the Country Party to speak, I have behind me a fine band of orators.
– Hear, hear!
– They speak on all subjects, although some of them are specialists on certain subjects, just as the honorable member who has interjected is. They will speak on all subjects, because grants to the States cover not just some parochial matters but everything that the State Governments are doing. I pay a tribute to the work of the State Governments. They are nearer to the people than we are, and local government authorities are still nearer to the people. The State Governments give certain aid to local government authorities. With local government authorities, State Governments and the Commonwealth Government, Australia is well served.
– I wish to make a personal explanation.
– Order! Does the honorable member claim to have been misrepresented?
– Yes, I have been misrepresented. The honorable member for Mallee (Mr. Turnbull) referred to the list of speakers in this debate.
– Order! The honorable member for Wilmot has not spoken in this debate. I do not think this is an appropriate time for him to make a personal explanation.
– At what other time may I do so? I was misrepresented as the Labour Party Whip-
– Order! The honorable member for Wilmot will have an opportunity to answer any allegation that was made.
– We have just heard a remarkable speech by the honorable member for Mallee (Mr. Turnbull). There is no need for me to speak in defence of the Deputy Leader of the Opposition (Mr. Whitlam) because he is quite a brilliant personality and is quite capable of taking care of himself. But, at the same time, I deprecate the remarks that the honorable member for Mallee made in the first six or seven minutes of his speech, when he launched a personal attack on the Deputy Leader of the Opposition. I was surprised to hear him, as the
Country Party Whip, admit openly in this Parliament that he carries personalities out into his electorate, tells people that the Deputy Leader of the Opposition is the most insulting member of the Parliament and stoops to that sort of thing. That is not in keeping with the kind of man that I always imagined him to be. As I have said, I deprecate his remarks and I was very disappointed to hear him open his speech this morning in that manner.
Having said that, I pass to the Bill that is now under consideration. Its purpose is to authorise the new arrangements that were agreed to at the Premiers’ Conference in June this year for the payment of financial assistance grants to the various States of Australia. The original arrangement, which was drawn up in 1946, was the basis for grants for the 13 years until 1959. The tax reimbursement grants, as they were known during that time, became the financial assistance grants in 1959 under a new method of determination. That system was in operation for a period of six years which ended at the end of the last financial year.
During wartime the States had ceded their taxation rights to the Commonwealth. The old tax reimbursement formula, which was devised in 1946, was intended to provide grants to compensate the States for loss of income tax revenue. That formula provided for a base amount of £45 million, to be varied each year according to movements in population and average wages. The total amount of the grant determined each year was then divided among the States in proportion to the adjusted population in each State. This amount was calculated on a formula which took into account such matters as population, numbers of school children and density of population.
Criticisms and misgivings about the 1946 formula began to grow, and it became apparent that it had outlived its usefulness by the mid-1 950’s. The first part of the formula had produced a total grant that was completely inadequate for the requirements of the States. That gave rise to the introduction of supplementary grants. These were amounts which were determined each year by the Commonwealth and added to the formula grant. Special criticism of the system came from Victoria and Queensland. Those two States claimed that the distri bution formula had failed to produce a reasonable distribution among the States. They claimed that they suffered under the then existing formula in the tax reimbursement scheme to such an extent that they felt justified in submitting to the Commonwealth claims for special financial assistance under section 96 of the Constitution in the financial year 1958-59.
It was obvious then that the time was long overdue for a review of Commonwealth and State financial relations and all States were invited to submit definite proposals to the Premiers’ Conference of June 1959. From this conference emerged the new label, the “ financial assistance grant “. This grant incorporated the old tax reimbursement grant, the supplementary grant and all special grants formerly paid to South Australia and part of the special grants formerly paid to Tasmania and Western Australia, in addition to making an absolute increase in the amount of the grant. As the Treasurer (Mr. Harold Holt) mentioned in his second reading speech, the financial assistance grants were varied from year to year by reference to the two main factors affecting the current expenditures of State Governments, which he said were changes in population and wages. The new arrangement began in 1959-60. In that year the grant to each State was expressed as an amount per head of population at 30th June 1959. This grant was increased by 1.1 times the percentage increase in average wages during 1959-60 and multiplied by the population as at 30th June 1960 to determine the amount of grant to each State in the following year, 1960-61. This process has been repeated down each of the four years since 1960-61.
The Tasmanian Premier submitted several proposals in 1959 and one of these was adopted. This was the betterment factor, which was expressed as a loading to the average wages factor in the formula. An increase in wages was itself increased by 10 per cent, so that if, for example, the average wages rose by 5 per cent, in one year, the grant was increased by 5.5 per cent, in the following year. This loading was designed to give the States revenue which was more than sufficient to pay for the increased wages bill and so they were able to provide better standards of services for their people. The effect of the betterment factor was to increase grants by an average of .4 per cent, each year for the six years that the agreement ran. The effect varied from year to year depending on the movement in average wages, but it averaged out at .4 per cent, a year. I recall that in the first year of the agreement, 1960-61, the total payment to the States increased by £1.8 million and Tasmania benefited by an extra £79,000. This increase, as I intimated earlier, was due to the inclusion of the betterment factor which arose out of the submissions made to the conference by the Tasmanian Premier and Treasurer, the Hon. Eric Reece.
The new arrangement which the House is now debating provides for a betterment factor of 1.2 per cent, a year. This is three times as great as previously and it will benefit the States still further. I understand that Tasmania will receive about £100,000 more under the new formula this year than it would have received under the old formula and that increased grants for the States will be the general pattern of things from now on. The new formula is to operate for five years, but apart from standardising the betterment factor to three times its original worth there has been little fundamental change. The grant to be paid to any State in any one year of the new five year agreement is to be calculated by increasing the grant for the preceding year by the percentage increase in the population during the 12 months ending on 31st December of that year. In addition, the grant is increased by the percentage increase in average wages in Australia as a whole during the preceding financial year. This result is then increased by the betterment factor of 1.2 per cent., as I mentioned earlier.
The Treasurer referred also to adjustments which he proposed to the new formula to reduce the time lag before changes in State population and wages were shown up in the grants. This matter has for some time exercised the minds of some of the State Premiers. I refer here specifically to Mr. Reece, the Premier of Tasmania. He is fully aware that under the old and the new formulas any increase in average wages in one year is not reflected in an increase in the grant until the next year. If there is an increase in the basic wage or in margins at any time the State
Government is called upon to meet these charges immediately they become operative. However, the increased revenue from the Commonwealth to meet these costs is not received until the following year. The Commonwealth Treasury is in a different category. It receives an immediate increase in revenue because under the taxation system in this country the Commonwealth receives straight away any increase in income tax yield that results from higher wages. If the States had retained their income taxing powers they could have received these immediate benefits to cushion the effects of higher pay-outs in terms of increases in wages, but under the present system there is a time lag of 12 months. This is important to any State, but it is particularly important to a small State like Tasmania. I need only to point to a couple of examples to illustrate this. A 10 per cent, increase in margins as from 22nd April 1963 cost the State’s Consolidated Revenue about £600,000 in the financial year 1963-64, and under this system the State does not get the balancing amount until the following year. Similarly, the increase of £1 a week in the Federal basic wage in 1964-65 meant a direct cost to the State’s Consolidated Revenue of about £525,000 for the remainder of the year, but it could not be recouped until the following year.
At the first Premiers’ Conference in April this year Mr. Reece put forward a proposal designed to overcome the time lag in the adjustment for wages. I understand that when the conference reassembled in June the Commonwealth offer to the States incorporated Mr. Reece’s proposal for overcoming the time lag. The Treasurer referred to this in some detail in his second reading speech. He said -
We also proposed adjustments to the formula to reduce the time lag before changes in State population and wages are reflected in the grants.
Under the 1959 arrangements, the grants for a financial year were calculated by reference to the increase in State populations and average wages in the preceding financial year. We suggested that under the new formula the grants for a financial year be determined on the basis of the increase in State populations during the 12 months ending in December of that financial year and the increase in average wages during the 12 months ending in March of that financial year.
Under this proposal the time lag before movements in State population were taken into account in the formula would be reduced to six months and the time lag before movements in average wages were similarly reflected would be reduced to three months.
Some of the Premiers expressed concern that the abolition of the time lag would result in a slightly smaller grant than otherwise expected in this financial year because of the steep increase in average wages in 1964-65 to which I have already referred. So a compromise was -reached at the conference. It was agreed that the increase in average wages would continue to be calculated as under the old 1959 arrangement, that is, a year behind, but that the increase in population would be calculated as at the year of the grant. I strongly support the contention of the Tasmanian authorities with reference to the need to overcome the time lag in view of State financial commitments and I hope that when the agreement comes up for consideration again some unanimity will be reached on this matter.
Two States are to receive special consideration. Sub-clause (2.) of clause 5 of the Bill refers to an increase for Queensland, and sub-clause (4.) mentions an increase for Victoria. The Premiers’ Conference recognised special difficulties facing the Government of Queensland because of the large area of that State and its relatively small population. Queensland has an area of 667,000 square miles and a density of population of 2.397 persons per square mile. Its area is almost double that of any of the three other standard States, New South Wales, Queensland and South Australia, yet it has the lowest density of population. Therefore, the provision of essential services to the outback areas must be very expensive and there must be a heavy drain on the State’s financial resources because of this. We all recognise this great financial strain on the State of Queensland in providing services for isolated communities, and we support the increase for that State.
The Premiers of the other States agreed to increase Queensland’s share of the grants by adding £1 million to the amount on which Queensland’s grant is to be calculated for each year under the new agreement. The Victorian Premier came out of the conference with an amount of £600,000 in addition to the grant which Victoria would receive this financial year under the new formula. We all realise that the Press is not admitted to these conferences, but it certainly has a happy knack of getting the story. Press comment at the time of the conference held in this chamber referred to the deal made by the Victorians behind the Speaker’s chair. It described how Mr. Bolte held up the conference for more finance. The “Financial Review” of 4th June 1965, at page 3, after referring to the fact that Mr. Askin had come here for the first time as Premier of N.S.W. and was very pleased with the way he thought he was handling matters for his State, went on to state -
The general consensus was that Mr. Askin had every reason to be proud of himself. Henry Bolte, on the other hand, had apparently simply dug his toes in and refused to agree to any Commonwealth proposals unless he got more money.
Referring to the deal behind the Speaker’s chair, the article stated -
When the Premiers resumed their conference after a brief session of Loan Council, Sir Robert beckoned Mr. Bolte behind the Speaker’s chair, from where they emerged within a few minutes with the agreement to give Victoria £600,000 extra.
Askin was shocked. He told an aide he was seriously considering walking out. By the time the meeting was wound up he was in high dudgeon. All his eloquent submissions had been mere straws in the wind while Mr. Bolte’s sheer obdurateness had won the day.
There must have been the inescapable suspicion in Mr. Askin’s mind that he had been the victim of a three card trick. After all, you do not imagine that the Prime Minister of Australia caves in when confronted with mere obstinacy. Certainly some of his aides suggested that “a few Victorians had got together “.
Here we see a case of power politics within the States. Because the Victorian Premier simply dug his toes in, he was called behind the Speaker’s chair, a deal was made, and Victoria came out of it this financial year £600,000 better off than it would have been under the new formula. I understand that Mr. Bolte referred to it as “ peanuts “ but he was quite happy to accept the money. Clause 6 of the Bill removes any doubt as to the estimates of population that will be used in determining the grants. Sub-clause (1.) provides -
All statistical and mathematical calculations and determinations required for the purposes of this Act shall be made by the Commonwealth Statistician, after consultation, where practicable, with the official Statisticians of the States.
Sub-clause (2.) of the same clause makes it plain that the Statistician is required to make his calculations of the populations of each State before 1st June in the year in which the grant is made.
Both the Bill and the Treasurer’s statement make quite clear that there will be no subsequent adjustments to a grant through any later revision of population estimates in any State. Every effort has been made in the new formula and in the provisions of the Bill to prevent a repetition of the occurrence back in 1961-62 when the Tasmanian Government suffered an unexpected reduction in its grant. This was brought about by the fact that the census of 1961 revealed that our State’s population had been overestimated and, as the formula is based partly on movements in population, we received an unexpected shock in the reduction of the grant. Such a state of affairs is not in the best interests of harmony in the field of Commonwealth and State financial relations and, as I have indicated, the Bill before us provides that the Statistician will have the latest figures available to him in determining the estimates of population from now on.
I have already indicated that the States are better off financially under the new formula than they were under the old, mainly because the betterment factor is three times greater than it was before. Tasmania will receive about £100,000 more under this arrangement than it would have received under the old arrangement and, taking into account the effects of movements in population and wages we are to receive this year £1,268,000 more than we received under the old formula last year. The overall increase to the States will be £36.9 million.
The new agreement will improve on the old, and it will provide a very sound basis for financial relations between the Commonwealth and the States. To sum up, it provides for the grant of last year to be taken as the base figure. This is to be increased by the percentage change in the population of the particular State during the year ending 31st December in the year of payment. This amount is to be further increased by the percentage increase in average wages for Australia as a whole in the financial year immediately prior to the year of payment. Then the amount is to be further increased by the betterment factor of 1.2 per cent., and I have given credit to the Tasmanian Premier for advancing this concept which was accepted in 1959. 1 have also outlined the special consideration that is to be given to Queeensland and Victoria. While not commenting on the Victorian increase except as to the deal behind the Speaker’s chair, I support strongly the extra grant of £1 million to Queensland, because of its vast area and the need to provide services in the outback. I hope that when the agreement is next reviewed, further consideration will be given to overcoming the time lag in passing on to the States the adjustments to meet increases in average wages. I support the Bill.
– As Opposition Whip, I desire to make a personal explanation concerning a statement made by the honorable member for Mallee (Mr. Turnbull) just prior to the commencement of his speech earlier this morning. The Deputy Leader of the Opposition (Mr. Whitlam) more or less accused the Australian Country Party of not standing up to this debate by coming in and saying something. At 10.20 this morning, as usual I was in conference with the Government Whip (Mr. Aston) and the honorable member for Wakefield (Mr. Kelly) who is the Deputy Government Whip in their room. At that stage the only speakers on the list for today in both debates on States grants were Labour members. There were four Labour members to speak on the first Bill, the States Grants Bil), this morning. Just before my Deputy Leader finished his speech, the honorable member for Mallee came round to me and said: “You have only your own list of speakers. That is not the Government’s list.” I said: “ This is the Government’s list but it is in my writing.” He said: “Well, two Country Party members are going to speak - myself and Mr. Hallett.” So I wrote those names in; but up to that moment none of us knew that any Country Party member was to speak in this debate.
– I desire to make a personal explanation.
– Does the honorable member claim to have been misrepresented?
– Yes. I have been misrepresented to some extent - not very greatly - by the honorable member for Wilmot (Mr. Duthie). The position is that I went round to him and he had a list there, but it was not the official list. He received the official list while I was speaking to him. The honorable member for Wakefield (Mr. Kelly) will confirm this. He brought the list over and handed it to the honorable member for Wilmot. I had not seen the official list before. It was handed to the honorable member for Wilmot while I was speaking to him. He certainly had a list then, but it was not the official list because no list had come into the House. To support to the hilt what I am saying, I remind you, Sir, that I did walk up to the Chair. You were in the Chair at the time and you will confirm that, as Deputy Speaker, you had not received any list up to that time. Therefore, what I said was right, and I stand by it.
.- It affords me great pleasure to speak on this important Bill this morning. The new provisions contained in it are most welcome. We know that from time to time there have been disputes as to how moneys made available by the Commonwealth to the States should be distributed, and I feel that even this Bill will not cure all the evils and difficulties associated with the financing of the various works, projects and general administration of this country. It is mainly along those lines that I wish to direct my remarks today.
Western Australia has some special disadvantages which are taken care of in another Bill. The Bill under consideration is very important to Western Australia and no doubt also to Tasmania. I note, too, that this Bill provides for some flexibility, if I may call it that, with relation to Queensland. During his second reading speech, the Treasurer (Mr. Harold Holt) made some references to South Australia and what might be done if that State should experience financial difficulty.
I should like to say that I feel that the present system of Federal, State and local government operating in Australia is the only correct system, but we have to make up our minds whether we wish to continue this form of government. Having decided to continue it, we have to make up our minds as to the way in which these three compartments of government are to be financed. The States are having great difficulty, but for reasons which I shall explain to some extent, local authorities and semigovernment departments are experiencing even greater difficulties.
I do not know whether the Deputy Leader of the Opposition (Mr. Whitlam) was attacking me a little while ago, but he raised a very interesting point when he asked whether the honorable member for Canning was equally prepared - I think those were the words he used - to speak on this subject. I am wondering what he meant and what one has to do to become prepared to speak on an important subject such as this. Does one do a lot of reading, for example? Or does one need to have some actual practical experience of Commonwealth and State financing? If I may say so, I think I have a little, experience in this field and some knowledge of the difficulties encountered in it. One does not sit for 7 or 8 years on a commission dealing with vast sums of money, especially in a port where everything comes and goes over the wharves, and on other authorities, without gaining some practical background experience in these matters. With all due respect, I suggest that such is not bad experience for qualifying one to know something about these matters.
As we know, the Commonwealth uses its revenue principally for the financing of works and general administrative purposes and is in a fairly good position. I have no objection to that situation; it is fair enough; but a different set of circumstances applies to the States, the local authorities and the semi-government departments. It is obvious from the figures available to us that they are moving into great difficulties.
First, I refer to loans made by the Commonwealth to the States. As honorable members know, the burden of repaying these loans rests entirely on the States and the period of repayment is 53 years. This system has presented great difficulties right from its inception because of lack of experience in distributing the money amongst the various State departments and spreading the cost. Western Australia and no doubt other States are suffering to some extent under that formula. I am referring now to the formula in relation to the Commonwealth and the States, not the method of distribution of moneys by the States to their various departments. The original arrangement was for repayment of the loans by the States over a period of S3 years, the amount of interest to be paid being 41 per cent, while i per cent, had to be credited to a sinking fund.
In the early stages the various State departments were writing off the loans over a period of 53 years as costs against the department. This was not a practical method. The position has been remedied somewhat in some directions in that the departments obtaining the money are now writing off the loan on the basis of, for example, the life of the machine which may have been purchased, or the project to which the money was applied. But damage was done in many cases and we are now paying for the mistakes that were made in the early days. Making the States responsible for the repayment of the loans and for the payment of interest on those loans imposes a tremendous burden on the States themselves.
Another point I wish to make is that semigovernment authorities and local authorities are experiencing difficulty in connection with the repayment of something over £100 million of loan money which the Commonwealth has approved for the financing of semi-government departments and local authorities. This is dearer than the normal loan money, and a perusal of the figures gives some indication of the burden placed upon local authorities and semi-government departments.
Western Australia receives a very small allocation indeed under the formula which has operated in the past. I do not know exactly what the figure is, but it is between 4 per cent, and 5 per cent, of the total of approximately £100 million approved by the Commonwealth each year. If approached collectively, the States perhaps would not agree to an increase for Western Australia, but I would say now that as development progresses in that State some alteration to the formula will have to be made. It is only reasonable to suggest that a bigger percentage than is at present available to Western Australia should be permitted. The servicing of these loans is becoming a tremendous load for the semigovernment and local authorities to bear and we cannot allow the present state of affairs to continue. As I said earlier, if we believe in the system of Federal, State and local government authorities, we must look closely at this matter because, unless some alteration is made, the position will become drastic and the burden so .heavy for semigovernment departments, local authorities, and even the States themselves, that the whole system will become unbalanced. In fact, I believe that it is unbalanced now.
I feel, too, that the responsibility for deciding what works shall be done within the States from time to time should rest with the States. It should be the responsibility of the States to decide the order of priority of the various works within their borders. The question of whether the Commonwealth should enter a State or tell a State what should or should not be done within its boundaries has been debated on many occasions. I feel that the States are much closer, in a big continent like Australia, to the various problems and requirements of the individual States and, therefore, are in a better position to say what shall or shall not be done within their boundaries. To support this contention I refer to the special grant of something like £5i million which was made recently by the Commonwealth to Western Australia for the extension of the comprehensive water scheme. This scheme was devised originally by the State. It was not suggested by the Commonwealth, but the Commonwealth has assisted Western Australia in extending it. I feel this is an excellent example of a State being much closer to the requirements and therefore better able to make decisions. Perhaps some of the other States should take a leaf out of Western Australia’s book and do precisely the same. We are progressing all the time.
I say, as I have perhaps said before in this House, that in this field, where the primary responsibility rests with the States, the Commonwealth must negotiate with the States and provide special grants - I will not say “ loans “ because I do not believe that would be right - to assist the States and their port authorities to do the right thing in relation to ports. The Commonwealth is responsible, in the main, for trade. It is responsible for our balance of payments and also for defence. The States and the port authorities are responsible for the maintenance and construction of ports and they have to rely almost entirely on the two types of loans I have mentioned - the normal loans and the loans approved by the Commonwealth. In that respect they are in the same position as are the local government authorities.
– Would it not be better for the Commonwealth to take over all port development?
– I do not think so. I have already said that I believe the present system of government is the best. I believe this because the States are much closer to the requirements. However, I do believe that the Commonwealth and the States and the port authorities can come together on these things. This is an important point which has been raised. Port construction is a very intricate piece of engineering and it varies all around our coastline. For this work special on the spot engineers who know port development work are needed. This has been proved all over the world. There is nothing to stop the Commonwealth from negotiating with the States in order to make special grants available to the States or the port authorities for the development of ports; but wherever there are major port authorities we must allow them to carry out the work, under the approval of the Commonwealth. The plans, specifications, and so on would no doubt have to be approved by the Commonwealth Government. This is important and from my experience in this field I think it is much better to leave the work to the authorities concerned. Experience in ports has taught me this, but I feel that the Commonwealth must provide the necessary grants.
For many reasons we are lagging behind in port development. I do not blame the port authorities for this. I know too much about the matter for that; but finance has been terribly hard to get and big finance is needed for this sort of project. In some areas a single wharf would cost a tremendous amount of money. The jetty type of wharf at Broome, for instance, cost well over £1 million. A land backed berth in a major port in Australia can cost up to £1 million to develop correctly. This is not small money. It is big money, and where can we get it? Western Australia, for instance, gets about 4 per cent, of the £120 million made available annually to the States for semi-governmental and local government purposes. How can the vast port potential on the western side of Australia be developed when £5 or £6 million has to be spread among all the semigovernment and local government authorities? It is not reasonable to expect that sum to be sufficient.
The port of Fremantle requires a vast expenditure and so do the ports of Albany, Esperance, Bunbury and Geraldton. Right up the coast the same position applies. The Commonwealth has assisted in some places in the north, but these are big projects.
– The honorable member wants the Commonwealth to pay and have no say in trying to get uniform and better port handling facilities.
– No, I do not want that at all. I thought I had explained that I want the Commonwealth to assist by negotiating with the States on what shall be or can be done. This is important. -Port facilities have to be maintained by the States and the port authorities. This is part of the agreement and if my suggestion were followed (he Commonwealth would be able to take over modern port facilities in a time of emergency. But in the interim, 24 hours a day, every day of the week, and 365 days a year, the ports are open and the port authorities themselves are in the best position to know what is required to maintain the services. So I feel that this is the correct method to follow. In this great continent of ours, far from our overseas markets, these special allocations and special negotiations are extremely important.
When dealing with these allocations to the States I think we should look more closely at the provision made for home building. I am not disputing the agreement between the States and the Commonwealth, but when allocations are made to the States for homes for the Australian people generally we should ensure that all sections of the community and of industry receive equal benefits from the money made available. I am speaking of the Commonwealth and Stale Housing Agreement. In the loan allocations to the States I think more provision should be made for homes. Also, agriculture receives little, if any, of the money made available and this should be remedied. Every industry should be given every opportunity to take advantage of the money that is made available. I think it is only reasonable that there should be no discrimination between industries and no discrimination on account of where a person lives, if adequate housing is to be provided.
Of course, in a vast continent such as Australia the capital cost of home building must vary enormously and this will create a tremendous problem in the development of the northern parts of Australia. All our factories and sources of supply are in the south and I understand that it costs almost twice as much to build a house in the far north as it does in the south. These things must be taken into consideration when discussing grants to the States. We know we have disabilities in Western Australia, but we have the Commonwealth Grants Commission which looks at the disabilities and gives them appropriate recognition.
It is quite true that as we are developing the north, a great amount of money provided from other sources is being spent in the north. We must look more realistically at the services required and the problems associated with them. We have in Western Australia, for instance, a situation where the State Shipping Service is run at a considerable loss. This is a difficulty for the State itself and a still greater difficulty for the people living in the north. These things must be taken into consideration if we are to be realistic to our approach to northern development. I have pleasure in supporting the Bill.
.- We are now discussing the States Grants Bill which, according to the Treasurer (Mr. Harold Holt), is for the simple purpose of authorising the new arrangements for the payment to the several States of financial assistance grants from the Commonwealth which, in turn, the Treasurer has informed us, were agreed to at the Premiers’ Conference held in June of this year. Honorable members are aware, generally speaking, that grants to the States come under two major headings - the financial assistance grants which we are now dealing with and the special assistance grants or those made for specific purposes. This measure deals with the general purpose grants. The money made available is not earmarked for any particular purpose and can be used by the recipient States in any way they see fit. The existing measures which the Bill seeks to repeal are the State Grants Act of 1959, which has operated since 1st July of that year and which was passed subsequent to a Premiers’ Conference held in that year. The main purpose of the earlier Act was to come to an understanding, and have legislation brought down, in an attempt to overcome the arguments and controversies which existed between the States in relation to what should be their individual share from uniform taxation. The 1959 legislation which repealed the States Grants (Tax Reimbursement) Acts of 1946, 1947 and 1948 did not have the desired effect of completely satisfying the financial needs of the States, nor did it halt the arguments and differences as to whether one State was receiving more favorable treatment than other States. I am sure that the passing of this Bill will not do so either. It may appear to do so on the surface, but that will be all, for even though, as the Commonwealth Grants Commission report points out, the Premiers conferred and agreed to the revised system of determining the amounts of financial assistance grants to the States, that does not necessarily mean that all States, or any of the States for that matter, are satisfied with the amounts they receive.
The fact is that the Premiers’ Conference did not really determine the amount to be distributed. All it did really was to come to an agreement - by what majority I would not know - on how the money offered by the Treasurer (Mr. Harold Holt) would be distributed. The Treasury or the Commonwealth Government and not the Conference made the decision on what the total amount would be, and the Government will continue under this legislation to determine how much will be offered. Undoubtedly, of course, it will be much less than the States really require. By the same token, even if the grants were half as much again, I have no doubt that not one of the States would experience any difficulty in putting its share to good use. Most governments seem to be starved for finance, although it could be said that some use what they receive to better purpose than do others.
I suppose it was a good thing really that the State Premiers did not express complete satisfaction. The Commonwealth is the source of supply, and this particular Government has certainly not been noted for its generosity. If State Premiers were to express complete satisfaction with what they are receiving I can well imagine that the Treasurer that we have with us today would take up a notch or two on the next occasion. However, irrespective of what the attitude of the Treasurer would be, it has to be agreed that from the time uniform taxation was introduced the States have become more and more dependent upon the Commonwealth for their financial requirements. That, of course, is only natural. The Bill with which we are dealing, and the Acts which it seeks to repeal, all arise from a system of uniform taxation which was adopted in preference to a previous system of State revenue collection.
Uniform taxation is still a hot subject of argument, and it is only recently that we had the experience of the Premier of Victoria, Mr. Bolte, seeking a return of the taxation powers to the States. I should like to say here and now that I was very pleased to see him soundly rebuffed because to my mind it would be a retrograde step, at this moment anyway, and I think for some time in the future. It would lead only to the gradual deterioration of conditions and developments within the States themselves, and would also weaken the whole structure of the Commonwealth. I was also pleased to note that the majority of the States at the Premiers’ Conference rejected the suggestion of even a modification of the existing system. Uniform taxation from which this legislation results does no doubt possess some disadvantages for the individual States, but anyone who is prepared to examine it on the overall basis of its effect on the whole of the Commonwealth, must surely agree that its many advantages greatly outweigh the disadvantages. For instance, it must surely be much more advantageous and more equitable, and lead to better trading, travel and communication between States and within the States, to have a system of uniform taxation rather than the previous system under which all States had the right to impose their own rates of income tax.
Under the old system you could have, and undoubtedly would have the position that income tax and other taxes in some States were much higher or lower than in other States, and one could expect that the higher rates would apply in the less wealthy, less developed and less populated States and that this in turn would encourage a drift of people from the highly taxed States to the States with lower taxation. Actually it would be much more preferable if the movement were the other way, with a flow of people into the less developed and less populous States rather than into the highly developed States with a greater population. The effect of the old system, had it continued, would have meant an increase in wealth, development and population of some States to the detriment of the less wealthy and less developed States. This in turn, to my mind, would have brought about still greater differences in taxation rates between the States and would have led to a further deterioration of the less wealthy and less developed States, which must have weakened the Commonwealth structure as a whole.
The Commonwealth Government, irrespective of which party happens to be in office, has a job to do which involves the financial policy which the particular Government supports or considers is best, not just for one or two States, but for the whole of the Commonwealth. This being so the Commonwealth must have complete power to levy taxes throughout the Commonwealth, to gather these taxes and to control the spending of them after they have been gathered. I do not see how you can have it otherwise - not in the foreseeable future at any rate. I cannot see how any Commonwealth Government could operate or carry out its financial policy if it did not have that power. Of course, there is the other angle or problem, namely that which faces the less developed and less populated States with smaller resources. They would be obliged to plan and finance all their essential development and maintenance works on finance which they would be obliged to recover from within their State borders. One can just imagine the position today in the less developed States had they been obliged to continue to be responsible for the raising of their own finance. What, for instance, would have been the position in Western Australia, a State with an area of just on 976,000 square miles - almost one-third of the area of Australia - and even now a population of only 800,000? It is quite obvious that not only would it be much less developed and populated, but also it would have a much lower standard of living. That could not possibly be avoided. The State could not possibly raise sufficient money from within its borders to meet its requirements. Queensland, with an area of 667,000 square miles and a population of only li million would also suffer badly - not so much perhaps as Western Australia, but still to a very large extent, South Australia with an area of 380,000 square miles and a population of just over 1 million would be at a disadvantage as would also Tasmania which has an area of only 26,000 square miles and a population of 370,000. One could well imagine the taxes that would have to be imposed on the people of that State if it had to be completely selfsupporting.
It is all very well for Victoria’s Premier to highlight himself about taxation and to want the power to tax to revert to the States, but it must be remembered that Victoria is only a pocket handkerchief in size compared to the other States. Its area represents only 2.96 per cent, of the area of Australia although it has a population of more than 3 million. Compare that with Western Australia which has 32.85 per cent, of the area of the Commonwealth and only 800,000 people. Imagine how the people of Western Australia would fare in relation to development and progress. Even though virtually all of the States voted - at least 4 to 2 and perhaps 5 to 1 - to continue the principle of uniform taxation because it was to the advantage of the progress and development of Australia as a whole, that would not mean necessarily that they were completely or reasonably satisfied with what they received by way of financial assistance grants from the Commonwealth over the next five years. There can still be plenty of room for argument as to whether a fair and sufficient amount of the taxes collected by the Commonwealth is being returned to the States.
The Bill provides that this year New South Wales will receive, by way of financial assistance grants, £126,920,000. Victoria will receive £95,954,000. That is not a bad whack for a State whose area is only 2.96 per cent, of the area of the Commonwealth. Queensland will receive £56,589,000, South Australia £43,290,000 and Western Australia £38,877,000. The amount that Western Australia will receive is not overmuch for a State whose area is almost one-third the total area of the. Commonwealth. Tasmania will receive £15,917,000. The total grants to the six States will be £377,547,000. This amount is an increase of about £130 million over what was granted to the States in 1959-60. But against that increase must be. offset the fact that the population of Australia has increased from a little less than 10 million people in’ 1958-59 to more than Hi million people in 1964-65. You do not have to be a Rhodes Scholar to work out that in that period the population has increased by li million people. The States need more money to meet the requirements of those extra people. In addition, the employment of a work force, the purchase of equipment and the carrying out of all the things that are necessary to meet the needs of the States cannot be done today at anything like the cost at which they could be done in 1959. Costs in all States have increased considerably and it appears as though they will continue to increase, lt is against these increases in population and in costs that the value of the grants must be measured. It is not simply a case of looking at the grants and seeing how much is being distributed; it is a case of deciding how far the grants will go in meeting the needs of the States.
On the other side of the ledger is the amount of revenue collected by the Commonwealth from the States by way of taxes in 1958-59. This should be compared with the amount collected last year and the amount that will be collected during each of the next five years during which this Bill will operate. We find that as a result of the different system of payment to be adopted under this Bill the Commonwealth will hand over to the States in 1965-66 about £377i million, or £36.9 million more than was granted in 1964-65. But the Treasurer has not told us whether the £377i million represents a greater or lesser percentage of the total revenue collected in the States. It could be that although the increase in the grants this year looks substantial - on the surface it is substantial - it may not be so substantial if it is measured against the amount of revenue collected by the Commonwealth from within the States. I wonder whether at the time of the Premiers’ Conference the Premiers were aware of the steep increases in indirect taxes which the Commonwealth proposed to impose and of the large amount of revenue which would be collected as a result within the States, which in turn would no doubt affect the revenue gathering methods used or proposed to be used by the States themselves. For instance, were the Premiers aware of the expected increase in revenue this year as a result of increased customs and excise duties on petrol, tobacco, cigarettes and beef? Were they aware that duties on these goods would yield this year an extra £66 million to the Commonwealth - an amount equivalent to more than half the difference between the grants of 1959-60 and this year?
The increased revenue derived this year by the Commonwealth from increased customs and excise duties is almost twice as great as the increase this year in the grants to the States compared with the grants made last year. In effect the Government expects to collect in one year by way of increased duties on petrol, tobacco and beer an amount almost equal to the increases made over the last two years in grants to the States. J think that in all probability the revenue from the increased taxes on petrol, tobacco and beer is earmarked for defence purposes and not for general purposes. If the Premiers were not aware of the proposed increases in these taxes they may have felt that, as the grants were much less than they required, they would be able to raise additional finance by State taxes. But if they had known of the Government’s proposal to increase customs and excise duties the attitude of the Premiers might have been completely different, because they surely would have realised that the additional burden imposed by the Commonwealth on the ordinary people in the States would make it more difficult for the States to gather finance by local action. If, on the other hand, the Premiers were aware of the new taxes to be imposed, I find it difficult to accept that they would have left the Conference in June last feeling completely satisfied. For instance, if the Premier of Western Australia was satisfied, he played a very poor hand for his State, because although Western Australia is, under this Bill, to receive only an additional £3i million in 1965-66, the Government of Western Australia is budgeting this year for a rise of almost £11 million in State revenues. In other words, the State Government intends to increase State tax collections from freights, licence fees and other means to the extent of almost £11 million.
In his second reading speech the Treasurer said that the Commonwealth has decided to include full blood Aborigines in arriving at population figures to be used in calculating the grants for each year. Previously these people were excluded. As both Queensland and Western Australia have several thousand full blood Aborigines in their populations, the Government’s proposal should mean additional revenue for those States. I will be interested to find out just what this proposal means and just how much extra finance those two States will receive as a result of full blood Aborigines being counted in the population. I will be interested also to see how much of the additional financial assistance forthcoming as a result of counting full blood Aborigines is used by those States for the purpose of providing better conditions generally for the Aboriginal people. The Aboriginal population of Australia is certainly sadly neglected. It has been neglected since time immemorial. Because of this neglect hundreds of men and women who could be trained to take their places in useful employment are not able to find useful employment. If the inclusion of full blood Aborigines in the population count means that Western Australia and Queensland will receive a substantial increase by way of grants compared with what they would have received otherwise, it is to be hoped that something will be done with the additional finance to provide training facilities for the Aboriginal people so that they may take their place in the work force of this country. I appreciate that it is not the job of this Government or of this Parliament to say how these grants shall be used. This is the job of the State Governments. Nevertheless, the Commonwealth should endeavour to persuade the States to grant some benefit to the Aborigines from the increases forthcoming as a result of this proposal.
Local government authorities are naturally vitally interested in the amounts of Commonwealth grants to the States because they must have almost reached the stage of finding it practically impossible to raise substantial additional finance by way of local rates, which is the only method available to them outside charges and fees for services rendered, such as garbage services and the provision of lighting and power. Those charges and fees are absorbed in the provision of such services, so the local government authorities actually make no gains from this source. The local government authorities are responsible for all works within their areas except main roads and railway works. In some cases they are responsible for water and electricity supply. This means that local government authorities are responsible for roads other than main roads, streets, parks, playing areas, health facilities and electricity supply. In addition they are responsible for many other things too numerous to mention. I suppose that roads would be the major item of expenditure for local government authorities. I appreciate that a separate grant is made to the States for roads, but we all know that the amounts granted for this purpose are not sufficient to meet requirements. While the State Governments have the responsibility of meeting certain financial needs of local government authorities, the States must of necessity determine what portion of the grants can be made available to local government authorities, keeping in mind all the time the amount that they will need for their own departments, such as those concerned with main roads and public works. If the grants to the States are not sufficient to enable the States to make sufficient money available to the local government authorities, the services performed by those authorities will be reduced.
The charges against ratepayers by local authorities - and I think these charges have reached the stage where they cannot be increased much more - are well illustrated by a table set out in a local government finance booklet published by the Australian Council of Local Government Associations. The table shows that in 1959-60 rates made up 61.6 per cent, of local government revenue while only 14 per cent, of this revenue came from Government grants. The pamphlet also points out that the other 24.4 per cent, of the revenue came from charges and fees as a direct payment for services rendered and that the finance for projects such as roadbuilding and maintenance, parks and playing areas, etc., was made up of 81.5 per cent, from rates on local ratepayers and only 18.5 per cent, from Government grants. The high rate of direct and indirect taxation now imposed by the Commonwealth Government, the high rate of State revenue collections such as by the Government of Western Australia this year and the necessary high local government rates as illustrated by the figures I have just quoted show very clearly that any further increase in local government rates could be crippling, in most cases anyway. Therefore it becomes obvious that if insufficient grant money is received a gradual worsening of amenities and services provided to country people by local governments will take place.
In 1959 the Treasurer told the Parliament that the grants scheme placed before the Premiers had met with their unanimous and warm approval. On this occasion, however, the Treasurer has said simply that the new arrangements were agreed to at the last Premiers’ Conference. Whether the words were deliberately chosen on both occasions, I would not know. But if they were deliberately chosen, then this would mean surely that the Premiers on this occasion are nowhere near as enthusiastic or as well satisfied with the scheme as they were in 1959. This of course could be because they are all well aware of the increasing costs which the States must face not only for development but also with regard to costs of ordinary improvements. However, the Premiers have put their case. The Commonwealth has decided what amount of money should be distributed. The Conference has agreed, perhaps reluctantly, how the money shall be distributed. So it appears that all that now remains for us is to watch with interest, or perhaps dismay, the way in which the money is spent.
.- The Bill now before the House has been explained very well by those who have spoken from the Labour Party side. They are the speakers who have principally taken part in the debate. It is pleasing to note that the Bill provides for a new formula in regard to grants to the States over the next five years. The Bill provides for the reimbursement of taxation revenues raised by the Commonwealth Government, which is the income taxing authority. The fact that Queensland’s disabilities have been recognised by the Commonwealth Government and by the Premiers’ Conference is very pleasing to me. Queensland is to receive £6 million more this year than it received last year. Further disabilities have been recognised, and for the next five years, as a further recognition of these disabilities, the Queensland Government will benefit by the payment of £1 million per year. It is true that when the Premiers come to the Premiers’ Conference in Canberra they put on a front and complain very strongly about the harshness of the Commonwealth Government, which holds the purse strings. But whereas the States are frequently indignant - and I think my friend from Braddon (Mr. Davies) used the words “ in high dudgeon “ - at the attitude of the Commonwealth Government in not giving to them what they want, the Premiers return to their capital cities and adopt a difficult attitude to the authorities under their control, particularly local government authorities.
We have three forms of government in Australia. The most remote from the people is the Commonwealth Government, which is the principal taxing authority. As I have said, and as other honorable members have made clear, the Commonwealth makes it quite easy for the State governments to obtain the revenues they need to carry out their various activities in the fields that are their responsibility. Descending the line of government we come to local authorities, which are the closest form of government to the people. Local authorities deal with activities that touch the everyday lives of the people. These are the authorities which, in my own State and, I suppose, in the other States, are receiving the worst deal of all the governing authorities in Australia today. Their field of revenue is limited to the raising of money by rates imposed on land. That is something that affects the householder considerably.
I can speak with some knowledge of the activities of local government in Queensland. I do not speak with any bias or prejudice. Having been associated with local government over a long period I feel I can make some assessment of the requirements of local government and criticise those who do not recognise the requirements of local authorities generally in Australia. Perhaps I should touch on this matter a little later. There is the need for a recasting of both Commonwealth and State ideas concerning local authorities. I would be the first to admit that, constitutionally, the Commonwealth Government has nothing to do with local authorities. The rights and powers of local authorities are delegated by law from the State Governments. The State Governments are very jealous of the powers that they give away. We know this, from our own limited Constitution, which had its origin in the closing days of the last century and can be described really as the rights that have been delegated or handed out by the various State governments. The same situation applies to the powers and rights of local governments. Local governments draw their right to exist from the State Governments. So, while I suggest that something should be done to give new recognition to the rights of local governments I admit that the Commonwealth has no constitutional rights in this matter. The States should give the lead in doing something to provide greater recognition of local governments. I feel that the Commonwealth Government could be drawn in then because of the difficulties in relation to raising the money which is required for local government development.
I come from a city which can be described as a State within a State -I refer to the city of Brisbane - because of the great experiment in local government which was initiated there in 1925. Generally speaking, all those who have been associated with local government throughout Australia and who have taken a keen and unbiased interest in the development of local government have been prepared to recognise that the experiment in Brisbane has been well worth while.
– Has Brisbane got sewerage yet?
– I am glad that the honorable member for La Trobe has made that interjection. The rate of sewerage extension today in Brisbane is greater than the rate of extension in any other capital city in Australia. This is due to the administration of the city by a very progressive Australian Labour Party Lord Mayor.
– Right in the centre of Brisbane there is no sewerage.
– That would be untrue.
– It is not untrue.
– Order! The honorable member for Griffith has the call.
– Now that some honorable members on the Government side have interjected about the City of Brisbane, perhaps I could be permitted to tell the House what is involved in this very important field of local government. I regard this as a good example to other local government authorities throughout Australia which would like to have the power to arrange for the co-ordinated development of their cities without having a multiplicity of authorities dealing with various activities. The Brisbane City Council administers the normal municipal activities that have been mentioned by my friend and colleague from Kalgoorlie (Mr. Collard), such as roads and parks. In addition, it controls all public transport in the city, with the exception of the State railways. It is a large property owner, owning many wharves. It undertakes the reticulation of electricity and is responsible for the water storage and supply for the whole of the city, which has a population approaching 700,000. It is responsible for sewerage reticulation and disposal and is carrying out a most ambitious sewerage extension programme.
In other cities, these activities are controlled by a number of boards and authorities constituted in different ways. Whilst the idea of having one authority is excellent, the authority itself is confronted with many grave problems. The really grave problem facing municipal authorities throughout Australia and in the City of Brisbane in particular, because of the multiplicity of functions that are handled by the one authority, ls the problem of obtaining finance for the progressive development that is being demanded by the citizens in the areas controlled by these authorities. The lot of the State Governments in the financial sense is made quite easy by the action of the Commonwealth Government. I would say that the introduction of uniform taxation was a godsend to the Queensland Government, because it is not now obliged to impose a State income tax. Because of the long distances to be travelled, the large area of the State and the scattered population, the financial responsiblity of the Government was heavy and consequently it faced very difficult taxation problems. But this has all been overcome by the new system of taxation. Therefore. 1 say that the financial problems of the State Governments have gone by the board. However, they still remain for the local government authorities. The Australian Loan Council decides how much money can be borrowed by the States for their development and how much the local government authorities will be permitted to borrow.
Sitting suspended from 12.45 to 2.15 p.m.
– When the sitting was suspended I was about to refer to the ease with which the State Governments obtain their money from the Commonwealth and the difficulties that are experienced by local governing bodies. When the Australian Loan Council meets it allocates money for State development and the State Premiers know that they will get that money. The Premiers have not to worry any more about obtaining the money; they know that it will be raised by the Commonwealth by way of a loan or, if the loan is not successful, by drawing on the Consolidated Revenue Fund and that it will be handed to them. But when local governing bodies are notified that they have permission to raise certain sums of money they know that their troubles are only starting.
At its last meeting, the Loan Council approved loan money for local government and semi government bodies in the State of Queensland which was £900,000 less than was approved for the previous year. In view of the inflationary period through which we are passing and in view of continually rising costs, it seems to me to be quite absurd that local authority loan raisings should be reduced by £900,000. This is what happens: The local authorities are given permission to go on the loan market. They do not get the money; they are told only that they have Loan Council approval to get it, and they must get it in the best way they can. Then the local authority leaders - the lord mayors and the mayors - have to go searching for the money. That is really where the trouble starts.
There is great competition for the money that is available in the nation for investment. The Loan Council has decided that local authorities may pay an interest rate of no more than £5 7s. 6d. per cent, on money that is raised for city development. The local authorities find themselves in competition with business people who go on the market with debentures and offer a return of £7 10s. per cent. Obviously, a man who has money to invest looks for the best return. Naturally he will invest his money in debentures, on which the interest rate is higher. The local authorities then find themselves in real trouble. It has been my bitter experience to suffer the embarrassment of being unable to obtain money for city development, even though the Loan Council has approved the raising of that money. Quite naturally, people make the best investment that they can. As I said a moment or two ago, if a man has a sum of money to invest and the security is the same in both cases, he will invest his money where he can get a return of £7 10s. per cent, rather than where he can get a return of only £5 7s. 6d. per cent. That is the tragedy that is associated with local government today.
– It has been so for years.
– Quite so. I am glad that the honorable member for Gellibrand made that observation. This sort of thing has been going on for years without being recognised by the State Governments or the Commonwealth Government. I do not really blame the Commonwealth Government for this state of affairs; it is the responsibility of the States. They should do something to remedy the situation. In my own city of Brisbane many development projects have been put in train, but suddenly money has commenced to dry up. Quite recently underwriters underwrote a loan of £1,600,000 and they were left carrying a burden of £1 million. Obviously they will be chary when the next loan is sought. This applies, not only to the city of Brisbane, but to all the municipalities in Queensland. There is not merely a natural drought in the States; there is also a financial drought as far as the municipalities are concerned.
Let me tell honorable members about the situation that exists in the lovely city of Toowoomba, which is represented in this place by the Minister for Health (Mr. Swartz) and is ruled by a mayor who is a member of the Australian Country Party. Because of the non-availability of loan money, the Toowoomba City Council decided to sack its employees who are engaged on sewerage work. The mayor has found that he is unable to supply water for this developing city. So he has suggested that the citizens should install 40-gallon tanks in their homes to accumulate water to meet water supply difficulties. All this has been occasioned by the amazingly stupid situation that has been allowed to grow up over the years and in which local authorities are denied sufficient funds to develop their cities or areas. I shudder to think what will happen in the city of Brisbane in the near future. Recently a survey of traffic requirements has been carried out with the co-operation of the State Government and the City Council with a view to preparing a plan for the future development of the city. A plan which has been subjected to a lot of criticism has been evolved. It envisages the expenditure of £170 million over the next 20 years. Unless some authority such as the Commonwealth Government comes into the picture, I fail to see how any plan to meet the requirements of this modern, growing city can be financed. This sort of thing is happening all over the Commonwealth, but it is happening to a greater extent in Queensland than elsewhere.
Recently the Toowoomba City Council failed to raise £200,000 of its loan allocation for this year. The mayor has said that this will seriously affect the city’s works programme. As I have pointed out, the Council has already sacked the sewerage gang and has almost admitted the complete failure of its water reticulation system. It has asked the people to return to the antiquated system of installing a 40-gallon tank in the roof. There was a time when this city boasted that it was quite free of mosquitoes. But, with the installation of tanks in the homes, this grand boast may well cease very soon.
I want to make one or two observations about the way in which this situation can be met. I believe that, first, there should be a conference of State authorities to ascertain where local governing bodies are failing in their efforts to obtain money for city and shire development. All the power that the local authorities possess comes from the States. Consequently the States must be prepared to call a conference to iron these matters out. The Commonwealth must be asked to involve itself in the situation because all moneys flow from the Commonwealth Government as the Bill before us indicates. One cannot separate the three. They are a trinity. They must be regarded in such a way because, after all, these various forms of government in Australia are looking after the people of Australia. What a municipality does is for the benefit of the people who, in turn, know that they are citizens not merely of that city but of the State and of the Commonwealth. Consequently, all are involved.
I believe that a move must be initiated by some State that realises the gravity of the difficulties local authorities are facing today. Ultimately the Commonwealth Government must be prepared to accept some share of the responsibility in arranging for the financing of developmental projects. It seems to me completely wrong that although the Commonwealth Government will make available money for a State authority to carry out a developmental project, it will only give approval for a municipal authority to carry out a project. It will merely say to the municipal authority: “ Get the money the best way. you can. If the State were doing it we would supply the money “. There is an urgent need for a recasting of ideas about municipal authorities. Local government is a grand thing. It brings great benefits to the people and we must recognise its importance; but we must also recognise the difficulties it is facing. I make these few observations sincerely, knowing the difficulties that local authorities are facing. I hope that some statesmen, irrespective of party, will give a lead and do something to put local authorities on a reasonable financial level so that they will know that they can plan for the development of their cities without being hamstrung by other authorities.
Question resolved in the affirmative.
Bill read a second time.
Message from the Governor-General recommending appropriation announced.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr. Bury) read a third time.
Debate resumed from 26th October (vide page 2170), on motion by Mr. Harold Holt-
That the Bill be now read a second time.
.- I support this measure. The Opposition is not opposing it, but there are one or two comments I should like to make. I draw attention to the fact that, as the Treasurer (Mr. Harold Holt) stated in his second reading speech, the main purpose of this Bill is to authorise the payment in 1965-66 of special grants totalling £20,885,000 to the States of Western Australia and Tasmania. The grants were recommended by the Commonwealth Grants Commission in its 32nd report. Western Australia is to receive £12,019,000 and Tasmania £8,866,000. The importance of the Grants Commission is its function of adjusting, by added financial assistance, the inferior position of the States of Western Australia and Tasmania due to the unequal distribution of resources and population. The fact that these States are sparsely populated, less industrialised and have less wealth at their disposal, means that they are faced with very heavy expenditure if they are to develop their resources sufficiently to give them anything like equality with the more highly developed, more populous and wealthier States of New South Wales and Victoria. The principle governing the State grants is that of financial need, and the principle was expressed in the third report of the Commonwealth Grants Commission in 1936. It has been repeated in the 32nd report where, at page 39, the following appears -
Special grants are justified when a State through financial stress from any cause is unable efficiently to discharge its functions as a member of the Federation and should be determined by the amount of help found necessary to make it possible for that State by reasonable effort to function at a standard not appreciably below that of other States.
The claimant States, because they need Commonwealth financial assistance, have been forced to accept the decisions of the Commission in regard to their claims. Acceptance of these decisions is easier because they are made by a body which is more or less non-political and which has heard quite substantial evidence. It is an independent body that makes its recommendations to the Commonwealth Government, and Parliament decides whether or not the recommendations are acceptable. The recommendations of the Commonwealth Grants Commission have been accepted ever since the formation of the Commission in 1933.
I point out that this method of arranging finance is an improvement on the procedure of the Loan Council where the States were subjected to dictation by the Commonwealth and where the very method of voting acts to the detriment of the States. In the Loan Council the Commonwealth has three votes - two deliberative votes and a casting vote. If it can get two States on its side the Commonwealth can impose its will on the four other States. This was made clear in the debate on the previous measure. It is extremely doubtful whether a similar system of voting could be found elsewhere in the world. It certainly would not be found in any democratic country.
From time to time this Government has attempted to force its policy - its political views - on the Grants Commission, but it has not succeeded to any great extent. In its 28th report, the Commission announced its decision to adopt a standard for the year of review based on the budgetary position of New South Wales and Victoria. The Treasurer stated that the Government was not satisfied that the adoption of the twoState standard was justified in principle and believed that the Commission should re-examine its decision to adopt that standard. The Commission, after examining the submission of the Commonwealth, refused to alter its decision and adhered to the twoState standard based on New South Wales and Victoria. A perusal of other reports provides further examples of interference by the Commonwealth in the work of the Commission. The stand taken by the Commission against political interference is to be applauded. While the claimant States are not 100 per cent, satisfied with the decisions of the Commission, those decisions are easier to take than those of the Loan Council for the reasons I have given. The reports of the Commonwealth Grants Commission emphasise the special disabilities that are suffered by the claimant States. For instance, paragraph 16 on page 17 of the report of the Commonwealth Grants Commission refers to the underlying differences between the States. It says -
These “ underlying differences “ seriously affected the budgetary position of the claimant States during the depression of the 1930’s, as the Commission set out in its early Reports. They have also resulted in relatively heavy development costs in the less well-endowed States and, in addition have resulted in increasing the operating costs of business undertakings and the administrative costs of other Government Departments. These differences have also affected the taxable capacity of the States.
Paragraph 19 on page 18 refers to the fact that the claimant States have the highest rates of natural increase in population. This matter was referred to in the debate last night. The report states -
The two claimant States of Western Australia and Tasmania had the highest rates of natural increase. This situation has persisted for some years and is a prime cause of the relatively large number of school children in those States which is reflected in the costs of the provision of education services.
– That is not correct.
– According to this report it is. If it is correct, as it should be, it means that Western Australia is faced with a higher proportion of school children. That increases the cost of education because more schools are needed. Of course, the greater proportion of children under the age of five years increases the need for the State social services. If we look at table 5 on page 24 of the report we see that the average weekly earnings in Western Australia per employed male unit are lower than they are in any other State with the exception of Queensland. The table shows the figures for 1963- 64. I do not want to quote them because I think they are fairly well known to honorable members. But if we look at the latest “ Monthly Review of Business Statistics “, for October 1965 “, we see that in June 1965 the weekly earnings per employed male in Western Australia were the lowest of all the States. So the position has worsened, as far as average weekly earnings are concerned.
There is some interesting information to be found in table 6 of the Commission’s report. It shows that the personal income per capita in the States of Western Australia and Tasmania is lower than it is in the other States. I shall make a comparison with Victoria. The personal income per capita in Victoria is £648, compared with £547 in Western Australia and £541 in Tasmania. We know, of course, that overaward payments can have quite a bearing on this matter. I am not certain what the position is in Tasmania, but in Western Australia over-award payments are the exception rather than the rule. I do not think that overtime is worked there to the extent that it is in the more highly industrialised States, although it is increasing in Western Australia. The difference in the personal income per capita indicates that the people of Western Australia and Tasmania are not as well off financially as are the people of the standard States of Victoria and New South Wales.
Paragraph 27 on page 26 of the report draws attention to the relatively high proportion of loan expenditure items chiefly responsible for the higher financial burdens in Western Australia, such as railways, harbours and water supplies. I do not pro-, pose to refer to the figures that are given in the table, but they are there for the information of honorable members who have not yet studied the report of the Commonwealth Grants Commission. Incidentally, it is a very important report and is full of useful statistical information. If we look at paragraph 29 on page 27 we see that it refers to the burden of unrecovered debt charges being higher in Western Australia than in any other State. There is a table in paragraph 30, which shows that the per capita unrecovered debt charges are £6 15s. lOd. in New South Wales, £10 14s. 4d. in Victoria, £11 10s. 8d. in Queensland, £13 15s. 5d. in South Australia, £14 0s. Id. in Western Australia and £13 16s. 8d. in Tasmania.
In paragraph 34 on page 29 there is reference to the cost of development being heavier in the two claimant States, and there is also a reference to South Australia. This paragraph is worth quoting. It states -
From this general review of changes in, and development of, resources during the post-war years, it is obvious that substantial progress has been made in all States and, that the relative progress of the smaller States has been particularly noteworthy. Notwithstanding this trend, the net cost to the State budgets of development and of the provision ot social services institutions, associated with a high rate of population growth, has been heavier for States other than New South Wales and Victoria. These costs are reflected in the growing burden of debt charges. As the figures in paragraph 30 show, this annual net cost of debt charges is far heavier in South Australia, Western
Australia and Tasmania than in the other three States.
If we look at paragraph 35 on page 30 we find it points out that the net cost to the Budget of operating railways over wide areas or for small populations is high when compared with the operation of this service in the standard States. I will not quote this paragraph, but I draw it to the attention of honorable members.
Paragraph 77 on page 49 refers to the transportation of school children. It states that the cost of transporting school children per unit is higher in Western Australia than it is in New South Wales and Victoria. Of course, this is due to the long distances that have to be travelled in Western Australia, combined with the scattered population in the country areas. It is true that the Commission, in- arriving at its final adjustment regarding the Commonwealth grants, allowed only a part of the additional cost of transportation. Western Australia and Tasmania were penalised in this regard because in New South Wales parents have to pay part of the child’s fare on the buses under contract to the Education Department. Western Australia was able to show that removing children from smaller schools to larger schools, in order to get a greater concentration of children in the larger schools, had resulted in certain economies, but because children had to be transported longer distances, increased transport costs were involved. The Commission is going to have another look at this matter. A further discussion on transport costs for school children will take place at its next meeting.
In paragraph 296 on page 138 of the report attention is drawn to the high total and percentage cost increase in Western Australia in regard to water supplies. The table which is contained in this paragraph is very interesting because it shows the per capita burden in 1963-64 as related to the rural population. It shows that the per capita burden in New South Wales was £3 2s. 2d., in Victoria, £5 10s. 10d., in Queensland, £1 8s. 8d., in South Australia, £5 18s. 2d., in Western Australia £8 5s. 10d. and in Tasmania, 16s. Despite the heavy cost to the State for providing water to the country areas, the Commonwealth Government, as honorable members well know, departed from the previous method of providing finance for the comprehensive water scheme in Western Australia. The State was being provided with grants of £1 for £1 basis, but from 1st July of this year the Commonwealth is supplying finance equal to half the State’s expenditure as an interest bearing loan. I repeat what I emphasised when the Bill in that connection was under discussion. This comprehensive water scheme was undertaken to supply water for the opening up and development of an important pastoral and grain growing area, which would mean, and will mean, an increase in our export earnings. The information I have mentioned is also dealt with in the report of the Grants Commission. I think that report bears out the claim that this Government should have continued to supply such finance in the form of grants on a £1 for £1 basis rather than by an interest bearing loan.
Apart from the matters I have just mentioned, added costs are caused because Western Australia is so sparsely populated. Last year Victoria increased its railway freights by 10 per cent. Western Australia had to do likewise, otherwise it would have been penalised by the Grants Commission. Increased freights naturally mean increased costs to primary producers, and this in turn affects our exports. There is a certain amount of antagonism from the States of Victoria and New South Wales because Western Australia wants finance to build the main diversion dam on the Ord River. This matter has been delayed for about 12 months, but it has been proved that cotton can be grown profitably in that area. This does not suit some of the other States. There is no doubt that the influence of these other States has been responsible for the Commonwealth’s decision to defer consideration of this important northern development project. The Ord River project, as I have said before in this House and as other honorable members have said, should be treated as a national project similar to the Snowy Mountains scheme. It should no more be considered as a debit against Western Australia than the Snowy Mountains scheme should be considered as a debit against Victoria and New South Wales. A project such as the Ord River scheme will make Western Australia a much stronger economic unit in the Commonwealth. It will create bigger markets for goods from the eastern States and will help our foreign exchange position by producing more goods for export. I have already quoted figures showing the difference in the per capita incomes of the various States. Obviously the stronger a State becomes, the more the State will contribute towards taxation revenue.
Another important feature that we should not lose sight of is that royalties from iron ore are going to play a big part in the revenue of Western Australia in the future. It is anticipated by the Western Australian Government that the population of the north-west of that State will increase by 25 per cent, as a result of iron ore discoveries and the development taking place in those fields. That is all in the future, of course, and for the time being Western Australia requires much financial assistance to develop its northern areas. That is why I say that the Government’s attitude towards northern development is a national disgrace. Not one project that has been recommended by the Northern Division of the Department of National Development since it was founded has been commenced. Consequently the staff of the Division feels frustrated.
Getting back to the report of the Grants Commission, the Commission drew attention to developmental projects undertaken by State Governments which would have remained unattempted if the States were limited to their own resources. The Commission reported -
The settlement and growth of the North Western Region of Western Australia is one example. Others are exploitation of the mineral resources of the Pilbara region of Western Australia, the research and study devoted to the expansion of the export crop of apples and pears from the Huon Valley in Tasmania; the extension of some of the wheat growing areas of Western Australia.
The Commission also drew attention to a very important matter which was recently in the news in Western Australia. I refer to the cost of the State Shipping Service. At page 76 of its report the Commission said -
The operation, as a whole, cannot be judged by comparison with similar operations in other States in the Commonwealth. … No comparable activities are carried out in the standard States, or for that matter in any other States of the Commonwealth.
During 1963-64 the State Shipping Service in Western Australia showed a loss of £1,226,000. In its report the Commission allowed £1.2 million as an element in the special grant. It pointed out that a certain portion of this sum represented concessions made to settlers in the north-west area of the State, both for the provision of services considered uneconomic by commercial operators and for providing a lower level of freights and fares than would be charged by private enterprise. The Commission, in paragraph 169 of its Report, said -
The Commission, however, is impressed wilh the fact that the amount of the loss on this service has been continuously increasing. This represents a continually increasing contribution to the cost of settlement. If this increasing contribution is to be made, in the opinion of the Commission it should be made as a deliberate act of policy by those who are in a position to determine this policy.
The implication of that statement is quite clear. In effect, the Commission says that the Commonwealth Government should deal with the State shipping service in Western Australia as a separate identity. This is one of the matters which, in my opinion, should receive special consideration when we consider the reliance of the States on the Commonwealth. It must be remembered that this shipping service is inseparable from the big problem of northern development. It is considered by many people that the State shipping service should be removed from the ambit of the Commonwealth Grants Commission. If honorable members analysed this report, they would see that the Commission must have been thinking on those lines when it said that there was no comparison with any similar industry in the standard States or any other part of the Commonwealth. If there is no method of comparison, does not that break down the very principles under which the Commission works? This service should be the subject of special grants from the Commonwealth, taking into account the varying costs and circumstances of its operations.
Captain J. P- Williams, who is Chairman of the National Shipping Line, was commissioned to make an investigation of the State shipping service in 1961. He found that there was no inefficiency in the service itself. That being so, it seems unreasonable that Western Australia should suffer any adverse financial adjustment as a result of its support of this shipping service. It is an essential service. It was not established to make a profit. Private enterprise would not undertake such a service because no profit could be made from it. Throughout the 52 years of its existence it has been held that its main job is to make life better for the people of the north. Its freights and fares have been kept low for that purpose. Its operations are complicated by lack of deep water ports in the north, where tides of up to 30 feet have dictated the necessity to design a ship to sit on the beach at low tides.
Many members of this Parliament, from both sides, have taken a trip to those areas and are familiar with the shipping service. Neap tides at Broome can delay a vessel for a considerable time at a cost of about £1,000 a day. The new Broome jetty, because it is a deep water jetty, will overcome this problem, but delays due to tides will still occur at other ports. The State Shipping Service is carrying about three times as much cargo northwards as it carries southwards, and the gap is widening because of development in northern areas. Recently fares and freights were increased to make up some of the losses, but it is the opinion of those who are responsible for the State Shipping Service that further increases would place an unfair burden upon the people who are trying to develop the north.
The Commonwealth Grants Commission has made an adverse adjustment of £26,000 because of losses incurred by the State Shipping Service. The State Budget must carry that adjustment. How the Commission could arrive at any figure with a degree of certainty is doubtful when no basis exists for comparison with the standard States or, as the Commission’s report states, with any other State. Because there is no basis of comparison, in the view of many people the State Shipping Service should be covered by a special grant, taking into account the special needs of the north.
.- I shall be brief in speaking in this debate because we are rather rushed for time this afternoon. My colleague, the honorable member for Braddon (Mr. Davies), is to follow me. Tasmanians are grateful for the increase of over £1 million on last year’s grant to Tasmania. The actual figures are contained in the second reading speech of the Treasurer (Mr. Harold Holt). Last year Tasmania received £7,300,000 and this year is to receive £8,866,000. The increase is certainly needed by Tasmania and it will be used wisely and well to assist the Tasmanian economy and maintain the living standards of Tasmanians.
The Commonwealth Grants Commission uses, to arrive at the amount of the grant, a method which is devious to those of us who are. not experts in finance. I guess that the Commission knows what it is doing and believes that it uses the best possible method to determine a just grant for Tasmania and Western Australia. The grants are determined in two parts. The Commission is two years behind in its calculations because it works on past State Budgets, rather than on the future. At page 106 of the Thirty-second Report of the Commission - an excellent report - it is shown that Tasmania had an adjusted Budget deficit of £858,000. A deficit standard for 366,187 people at 10s. 6d. a head brought about an adjustment of £192,000. The positive first part of the grant recommended for payment in 1965-66 is £666,000. Added to the second part grant of £8,200,000, the total grant is £8,866,000. I do not have time this afternoon to speak in detail on the formula used by the Commission. I would rather refer to one or two specific items outlined by the Commission.
Tasmania has been penalised by the Commission this year because of what it calls Tasmania’s low State taxation levels when compared with the standard States of Victoria and New South Wales on which the Commission’s formula and decisions are based. Because of this factor Tasmania was penalised £109,000. In the past, Tasmania has been penalised because it has spent too much on education and social services. Now it is being penalised because, the Commission says, Tasmanians are not being taxed enough by the State Government. In a very interesting comment the Commission says that the taxation rate of Tasmania is lower than the rates in the standard States of New South Wales and Victoria. I shall give a breakdown of the individual State taxes. In Tasmania a motor tax of £5 ls. 2d. a head was paid; in New South Wales £6 ls. 9d.; in Victoria £5 14s. 2d. It is plain that Tasmania paid the lowest motor taxation. In probate Tasmania paid £2 8s. 4d. a head, New South Wales £4 16s. 10d.,. Victoria £4 15s. 3d. Western Australia is the only State which pays a lower probate than Tasmania.
In Tasmania a land tax of £2 2s. 5d. a head was paid; in New South Wales, £2 19s.; and in Victoria, £2 19s. Id. Western Australia and South Australia pay lower land taxes than Tasmania. In respect of stamp duties, Tasmania paid £2 19s. lOd. a head, New South Wales £4 Ils. lid. and Victoria £4 14s. 5d. South Australia, where £2 12s. 9d. a head was paid, was the only State to pay lower stamp duties. In respect of taxation on racing, Tasmania paid 23s. 5d. a head, New South Wales 24s. 8d. and Victoria 29s. 2d. This disparity cost Tasmania £20,000 in an adverse adjustment by the Commission. Tasmanians paid 16s. Id. a head taxation on liquor; in New South Wales 25s. a head was paid; Victorians paid 22s. 8d. a head. Tasmania’s level of incidence of taxation on liquor was considerably below Western Australia’s payments of 16s. 2d. a head.
Since the details I have given were gathered the Tasmanian Government has corrected the situation almost entirely. In the past year Tasmania has lifted its incidence of stamp tax to that ruling in New South Wales and Victoria. Taxation of off-course bookmakers has also been brought into line with the tax levied on on-course bookmakers in New South Wales and Victoria. Land tax has been increased by the removal of a 10 per cent, rebate granted two years ago. The incidence of tax is now much closer to the levels of New South Wales and Victoria. The Tasmanian Government has also considered probate and motor taxes. Tasmanians, of course, pay for drivers’ licences.
– What amount is paid now?
– I think it is 30s. It has been increased from £1. The figures I have given indicate that Tasmania has come into line because of the Commission’s wishes in respect of racing taxation in Tasmania. Honorable members will admit - and the Government and the Commission must admit - that the field of State taxation is not wide. It is a limited field. There is a limit on how far a State Government may tax its people, even to come into line with the rulings or views of the Commonwealth Grants Commission.
The Commonwealth Grants Commission plays a very important part in the Tasmanian economy. It is a government within a government; a treasury within a treasury. Its work is appreciated. The Commission must examine a tremendous number of figures and conduct many interviews before it arrives at its conclusions. However, I think the Commission should beware that it does not become a financial dictator to Tasmania and Western Australia. I say that, with the best intentions in the world, it is getting into that position. The Tasmanian Government would like to take certain actions, especially in respect to the shipping service between Tasmania and King Island. The honorable member for Braddon will refer to this aspect. If the Tasmanian Government were to go far in assisting that shipping service the Commission would take it out of Tasmania at its next meeting.
When we find that kind of thing happening we realise that we are getting to a stage at which we in Tasmania cannot make a move of any kind without the explicit approval of the Commonwealth Grants Commission. That is why I say it is a case of a government within a government telling Tasmania what to do. The members of the Grants Commission tell us that we must increase our taxation. They say we should not spend so much on social services. We hear more and more of these strictures year after year, and at times they have far-reaching effects on our economy.
The Commission criticised our expenditure on forestry. Tasmania is a mountainous country. Our Forestry Commission has a tremendous task in providing access roads to mountain areas to open up our forest lands. The Commission says, in effect, that it is going to have a mighty good look at forestry when it makes its next annual visit to our State at the end of this year. Let me read what the Commission said at page 142 of its report -
For some years, the Commission has been concerned with the budgetary cost of forestry operations in Tasmania, all of which occurs from un recouped debt charges. In recent years, the amount of loan funds expended on forestry has risen sharply. This has been mainly caused by heavy expenditure on access roads to the forest areas in difficult terrain. . . The State is forced to use loan funds to meet large expenditure on access roads for which forestry revenue is insufficient. It was also claimed that the Tasmanian timber industry depends on the demand from the mainland for a large portion of its total sales-
In fact as much as 80 per cent, of its total sales - and that the timber merchants’ costs resulting from freight rates to the mainland tend, in consequence, to limit the level of royalties which may be charged.
Tasmania is an island State. We are dependent on shipping; 99 per cent, of goods coming to or going from Tasmania are transported by ships. Our timber industry has to meet heavy freight charges for transport of timber to the mainland - to the Melbourne, Adelaide and Sydney markets. Royalties have to be kept within a reasonable limit in order to keep production costs down. These are vital factors and I quite frankly criticise the Commission for coming into this field and saying that we are spending too much on forestry operations. We are doing nothing of the kind. Let me point out to the Commission and to the Government that coal mines in my electorate, which contains all the coal mines in Tasmania, have been closing down. Where previously these mines employed 280 men there are now only 50 left in the industry. We have had coal mines close down completely. What were the employees of those mines to do for work? Our State Government did a magnificent job in this direction. It inaugurated a pine planting programme in the Fingal Valley in which most of the mines are situated. The miners who had been dismissed were given jobs by the Forestry Commission. More than 120 of them are now working on this tremendous plantation project which involves the clearing and planting of 1,000 acres a year for a period of 50 years. The cost of the programme is great. We have set up a new headquarters for the Forestry Commission at Fingal with a beautiful central office and other buildings attached thereto. This planting project on the hills of the Fingal Valley is a most creditable one. The Government has done a magnificent job and the men who used to work underground are now happy in their new employment out in the open. Are we to be criticised for this? Are we to be penalised for this?
It is in matters such as these that I believe the Grants Commission should be made to stand up and should be told quite frankly that any interference with what we are spending could deliver a blow to the economy of our island and particularly to these people who are being employed in a project which will, after 15 years, bring pine in increasing quantities into new sawmills. Later we expect to establish a small board mill in the valley to produce particle board. We may even be able to manufacture paper. I say frankly that there is a limit to how far we can be dictated to by the Grants Commission, much as we appreciate what it is doing for us. I make no apology for saying this, and I will wait anxiously to see how the Commission treats this matter when it comes to Tasmania again. Our Premier has had tremendous problems. There has been the development of iron ore reserves in my colleague’s electorate on the west coast. He has been negotiating with firms all over the place about other projects in the island, trying to build up our secondary industries which we need so much in order to provide employment.
While speaking about the forestry project in the Fingal Valley I may mention that in the Valley we wanted to establish a thermal power station, and we’ asked the Commonwealth Government to help us to the extent of £10 million. Our HydroElectric Commission was at first not very happy about the proposal, but in the two years since it was proposed the Commission has studied the proposition and now says that we need a thermal power station in the Valley, using the coal that is available there, in addition to the power stations in the hydro-electric system, because a good deal of power will be required by our new iron ore industry. Our request was coldbloodedly rejected by the Commonwealth Government, so now the mines can keep their coal and fall to dust and ruin. The mines’ employees can be thrown out of work. The Federal Government will not give a penny for this project.
Only this week the Commonwealth Government rejected another request by the Tasmanian Government for a mere £396,000 to set up an irrigation project in the northern part of my electorate, in the Poatina - Cressy - Bishopsbourne - Longford district. This project would assist 100 farmers and would irrigate 10,000 acres with water from the Poatina hydro-electric station. This is an underground power station on the eastern slopes of the Western Tiers. It uses Great Lakes water which is fed through pipleines down to the station 500 feet below the ground. Nothing in the Snowy scheme can better this wonderful project which has just been finished at a cost of £29 million. We wanted to use the water from this station to set up an irrigation scheme. We need more irrigation in Australia. The dryness of this country may be our Achilles heel for years to come if we do not undertake projects to divert our available water inland instead of letting it go to waste in the sea. We must build dams for irrigation. We must spend more money on irrigation to beat erosion and drought and increase production. Yet the Commonwealth Government rejected our scheme after the most analytical statistical information had been prepared by the Rivers and Waters Commission. I am absolutely disgusted and shocked that the Government should reject such a scheme in view of what we need in the way of irrigation.
The Commonwealth Government gave us £2 million before the last election to build a road into the Gordon River area in the southern part of my electorate, where a tremendous hydro-electric scheme will be carried out. That is the only direct grant that this Government has given my State in 13 years. In that time it has given £470 million in non-repayable grants to the other States for various projects, including the Snowy Mountains scheme. Yet it has given us no more than £2 million for one road 50 miles long, which happens to be in my electorate. Should not the Government re-examine the position in Tasmania? Should not Canberra realise that we have a State in the South which has some justification for asking for assistance?
I close on that note We feel we have been badly treated in the matter of direct grants for what we call “ developmental purposes “. It seems that the view is held that Tasmania has nothing at all to offer the Commonwealth. We are very upset to think that in all these years all we have received has been £2 million for a road, although other States have received hundreds of millions of pounds for developmental projects. I conclude by expressing my disappointment and disgust that the Government has rejected this latest request.
. -The Bill before the House provides for the payment of £20,885,000 to the States of Western Australia and Tasmania. Of this amount Western Australia is to receive £12,019,000 and Tasmania £8,866,000. I should have liked to have the opportunity to deal with the change of method adopted by the Commonwealth Grants Commission this year from the per capita system of establishing our adjustments in the fields of education and hospitalisation but unfortunately time may not permit me to do so now. However, I should like to return to that subject later.
Because of the importance of the relevant section of the report to Tasmania, I should like to refer to the severity of State taxation which is one of the factors the Commission takes into account when determining the financial needs of claimant States. Many people have criticised unfairly the taxes levied within Tasmania as being too high, but an examination of the facts will show that our rates of taxation are lower than those of other States. I refer particularly to the people in Tasmania - we call them knockers - who say that the Tasmanian Government, because of its State taxation on a non-income tax basis, is forcing people to leave Tasmania and go to the mainland. An examination of the facts will prove that this is not true. In fact, the percentage increase in State taxation for the five years 1959-60 to 1964-65 reveals this.
The two standard States of Victoria and New South Wales increased their State taxation during the period in question by 60 per cent, and 63 per cent, respectively. The other claimant State of Western Australia increased taxation by 67 per cent, but we in Tasmania lagged behind. We increased our taxation by only 39 per cent. The Commission directs attention to this and points out that if Western Australia had levied taxes at the average rates adopted by the standard States it would have raised £798,000 less than it did, and that if Tasmania had levied State taxes on the same basis we could have raised an additional £167,000. For those reasons the Commission has imposed on us an unfavorable adjustment of £109,000.
One of the items included in this consideration of State taxes is racing taxation.
At this stage let me say that I consider it is wrong that the Commission, in drawing comparisons with other States and making adjustments, attempts to influence the financial policy of any sovereign State. I do not propose to enter into a discussion of the relative merits of the Totalisator Agency Board or off course bookmakers. I merely want to state the facts. We have had a Labour Government in Tasmania for 32 years. This is the longest period in office of a Socialist government anywhere in the English speaking world. Sweden holds the record for the world. The Tasmanian Labour Government was returned in May last year for a five year term with its best majority since 1 946. Shortly before the election the Labour Party decided in favour of off course bookmakers, but Press articles are now inviting speculation as to whether, according to the Hobart “Mercury” of 23rd October 1965, “ possible pressure by the Grants Commission could force a change of attitude on the part of the State Government “.
Much as I admire the work of the Grants Commission and pay tribute to it for the job that it has done in the past, I believe it must never be in a position to dictate financial policy to a State. The determination of financial policy is the right and duty of the popularly elected government of the State. However - I appreciate the opportunity to make this point today - if the Grants Commission persists in its attitude of comparing taxation levied on bookies in Tasmania with the T.A.B. in Victoria, the Tasmanian authorities estimate that Tasmania could be faced with an unfavourable adjustment of over £100,000 in 1963-64 and over £200,000 in 1965-66. The Premier of Tasmania, Mr. Reece, expressed concern at this in his Budget Speech on 31st August 1965. He said -
There is one aspect of the Commission’s decisions which gives the Government some concern. This is the approach which the Commission has proposed so far as the measurement of relative severity of racing tax is concerned, and arises from the introduction of off course totalisators in New South Wales and Victoria. The Commission is disposed to feel that revenue derived from taxation on off course bookmakers should be comparable with revenue derived from off course totalisators in the standard States. I feel that the Commission may not yet fully appreciate the nature of racing taxation and the particular problems of racing in Tasmania.
Living in an island State, we have our problems. Many people subscribe to the view that the introduction of the T.A.B. would not be a sound financial proposition because we have so many small centres of population that the overhead costs would be excessive. At any rate, no adjustments were made for this new year of review, 1963-64, because of the absence of an off course totalisator, and the whole question will come under review next year when the Commission again takes up this matter.
The Tasmanian Government was concerned that racing taxation in Tasmania had fallen behind the relative severity in the two standard States. However, it has taken action to correct this position. The rate of tax on betting with off course bookmakers was increased from 2 per cent, to 2i per cent, as from January this year, and this year’s Budget increases the stamp duty on bookmakers’ tickets by 20 per cent. This will yield an additional £16,000 a year.
At this point I pay tribute to the research section in the Parliamentary Library for the excellent job it did in supplying me with a table showing the severity of racing taxation in each State. I point out that this is the basis on which the Commission estimates the adjustments, favorable or otherwise, in the two claimant States of Western Australia and Tasmania. With the concurrence of honorable members, I incorporate the table in “Hansard”.
The table indicates clearly that the tax in Tasmania is more severe than the tax in any other State. As I have said, stamp duty in Tasmania is to be further increased by 20 per cent.
The Commission acknowledges this severity in Tasmania but states, in paragraph 151 of its report for the year 1965, that it has decided to make no favorable adjustment for this fact. However, it imposed an unfavorable adjustment in regard to school transport because we in Tasmania are not severe enough in making parents pay for this service as much as they pay in New South Wales. This appears to me to be inconsistent. Tasmania has claimed that the true measure of severity of taxation should be the rate of taxation imposed upon the taxpaying public. I do not think anyone would disagree with that statement. Our argument on this aspect is contained in paragraph 149 of the Commission’s report in these terras -
For this purpose, it was claimed that the relative severity of the taxation on off course betting with bookmakers in Tasmania should be compared with that on on course betting with bookmakers in the standard States, and not with the off course totalisators.
In other words, we claim that the severity of taxation on off course bookmakers should be compared with the severity of taxation on bookmakers who operate on course in other States. We claim it is entirely unjust that the severity should be linked with T.A.B. operations in Victoria and New South Wales. If this view is upheld we will receive a favorable adjustment, not the unfavorable adjustment we expect to receive next year and the years following.
This week the Chairman of the Totalisator Agency Board in Victoria and New Zealand, and the Manager of the Australian Capital Territory Branch of the Board visited Tasmania. They agreed with the contention that if the T.A.B. were introduced in Tasmania the betting turnover would decline and the revenue received by the State would be less than that now raised by taxing the bookies. The turnover of the bookmakers last year was £9 million. We could not hope to see a turnover of even £3i million with a T.A.B. this year. This estimate is borne out by extensive investigations by the Tasmanian Racing Commission and is supported by T.A.B. chiefs in other States. There are many reasons for this inflated turnover figure for the bookmakers as against a T.A.B. - £9 million as against £3) million - but time does not permit me to canvass them. It is sufficient to say that if a person goes to a bookmaker’s club and bets 5s. and has a win that turns it into 15s., he then has the larger sum in his pocket to bet with. Money is turned over at a far greater rate with the bookmakers than it is on the T.A.B., where there is a time limit within which bets must be lodged and with which credit must be established the day before betting is to take place if a bettor wishes to bet on credit. This is the reason why I say that we could not expect any more than £3) million or £4 million from a T.A.B. compared with the bookmakers’ turnover of £9 million last year.
It is proposed, Mr. Deputy Speaker, that Tasmania be linked with the Victorian T.A.B., which would levy a charge of 1 per cent. This would leave Hi per cent., with State taxation taking 4i per cent, and the Totalisator Control Board taking the remaining 7 per cent. It is expected that administration costs would amount to 5 per cent, or 6 per cent, and that the racing clubs would receive about 1 per cent. I point out that at present in Tasmania the clubs receive all of the 2 per cent, collected on bets wagered on the course. Because of this, Tasmania receives an unfavorable financial adjustment. In other words, all the money collected at the rate of 2i per cent, on bookmakers’ turnover on the racecourses in Tasmania goes to the clubs. This does not happen in Victoria. There, the clubs do not get all of this money. Because of the action of the State Government in fostering racing by this means, the State receives an unfavorable financial adjustment on the recommendation of the Commonwealth Grants Commission. In addition, the clubs will receive £20,000 a year for the next five years from the revenue received from the tax on the off-course transactions of the bookmakers. The Tasmanian Premier stated in his last Budget speech that he believes that the Grants Commission may not yet fully appreciate the nature of racing taxation and the particular problems of racing in Tasmania. I only hope that the Commission recognises at all times the sovereign rights of the States. As bookmakers are the recognised thing in Tasmania, the severity of taxation on them compared with their on-course counterparts in Victoria and New South Wales should be the yardstick for making any adjustments to the grants for Tasmania recommended by the Commission.
As I have already pointed out, the limitations of time will deny me the opportunity to discuss fully the change made this year in the method of determining adjustments for expenditure on education and hospital services. The Grants Commission has stuck to one particular principle in determining the financial needs of the claimant States, but it has from time to time varied the method of calculating the grants that it recommends. This year, it has adopted a unit cost system instead of the per capita system that it adhered to previously. We in Tasmania, as I pointed out last year, are concerned about the unfavorable adjustment that we receive in respect of school transport costs. When education costs in Tasmania are studied, it is recognised that certain topographical difficulties exist. In respect of Western Australia, account is taken of the long distances travelled. For these reasons, school transport costs in these two States - the two claimant States - are much higher than costs in the other States. The cost per head of population for the transportation of school children is 13s. 8d. in New South Wales, 18s. Id. in Victoria, 13s. 2d. in Queensland, 12s. 5d. in South Australia, 30s. 3d. in Western Australia and 36s. 6d. in Tasmania. The average for all States is 16s. 8d. So we in Tasmania pay more than twice as much as the average for all States, about twice as much as Victorians and almost three times as much as the people of New South Wales.
I point out that in New South Wales the Department of Education levies a charge on pupils for school transport. Because school transport in Tasmania is free to the pupils, certain costs have been disallowed. The Grants Commission considers that although Tasmania has higher costs in relation to school transport, it has made certain economies by its policy of consolidation in what are now known as area schools. I disagree with this view and I outlined my reasons for disagreeing when the States Grants Bill for last year was being debated.
For the year under review, the Commission has disallowed £136,000 for Tasmania. This is made up of £76,000 for the economies we were supposed to have made in the process of consolidation and £60,000 which we could have extracted from parents if we had made them pay as is done in New South Wales. The amount disallowed for Western Australia for much the same reasons totals £242,000.
In connection with school transport, I should point out that the Commonwealth Treasury holds the view that the full cost of the transport of children should not be allowed, because, if the full bill were met, there would be no incentive for States such as Tasmania to economise in this matter. From my own experience in this field before I came into this Parliament, I know that the Education Department does not need any spur such as is envisaged by the Commonwealth Treasury. It does an excellent job with school transport. Despite costs of about £1 a head more than the State average for the Commonwealth, we are still subjected to criticism by parents for not extending bus routes or for cancelling them where the average number of children collected falls below departmental requirements. The Department does not need any spur to make it continuously strive to reduce the cost of school transport, which is much above that of other States because of the topographical difficulties encountered in Tasmania. I am certain that this is one aspect that the Grants Commission could investigate more carefully.
I am concerned also about the adjustments made to the grants to take account of State expenditure on hospitals, and the way in which hospital costs and standards in the claimant States of Tasmania and Western Australia are compared with those of the States such as Victoria and New South Wales. As I have said, time will not permit me to put before the House all the material I have. But I pay tribute to the Grants Commission. The reports that it presents are a mine of information. The report presented this year is a very valuable document.
– I believe that the reports of the Commission are the best documents presented here.
– This is an excellent report, as the honorable member suggests. The Grants Commission, in its 32 years of operation, has made an invaluable contribution to Commonwealth and State financial relations. It is a tribute to the Commission’s work that the National Parliament, without exception, has adopted the recommendations that it makes annually. As a representative of a claimant State, I pay tribute also to this Parliament. Members representing other States have never questioned Tasmania’s receiving the grants recommended by the Commission. However, this afternoon, I want to raise the question of the severity of State taxation and of the sovereign rights of the States. I hope that the Grants Commission will never think that it is in a position to exert undue influence on the financial policies of any State. Yet, wherever one looks, newspapers and others are trying to use the Commission to put undue pressure on State Governments that are popularly elected and carry out the wishes of the people by implementing certain measures that are for the time being considered opportune and by not adopting other measures that are not for the time being considered opportune. In conclusion, I repeat that I pay tribute to the Grants Commission for the very fine work that it does in the field of Commonwealth and State financial relations.
.- This measure authorises the payment of special assistance grants to the two remaining claimant States - Western Australia and Tasmania. The grants for the financial year 1965-66 total £20,885,000. Of that sum, Tasmania is to receive £8,866,000 and Western Australia is to receive £12,019,000. This legislation comes before the Parliament annually. The amounts of the grants are recommended each year by the Commonwealth Grants Commission. It is an unbiased body. Whilst I may not always agree with the grants that it recommends, it does carry out its responsibilities very competently. It is to be complimented on the very close examination that it makes of the needs and requirements of Western Australia and Tasmania. Unfortunately, it is limited, to some extent, in how far it can go. The total amount recommended this year is £5,025,000 more than last year’s grants. Western Australia will receive an additional £3,459,000 and Tasmania will receive an additional £1,566,000.
These special grants with which we are dealing may be regarded as the other part of the general assistance grants that are paid by the Commonwealth. But these special grants are paid only to the States that are considered to be entitled to receive them under the principles on which the grants are made. Only Tasmania and Western Australia are now considered to be in that category. The report of the Commonwealth Grants Commission again this year directs attention to the principle that has been adopted in determining which States should receive special assistance grants. It would seem that the same principle has been applied since 1936, although the methods of applying that principle may have changed from time to time. Referring to the principle, the report says at page 39 -
In its Third Report (1936) the Commission finally rejected the principle of compensation for disabilities arising from Federation, and chose in place thereof the principle of financial need, which it expressed in the following terms - “ Special grants are justified when a State through financial stress from any cause is unable efficiently to discharge its functions as a member of the Federation and should be determined by the amount of help found necessary to make it possible for that State by reasonable effort to function at a standard not appreciably below that of other States.”
This principle has remained unaltered as the basis on which the Commission’s recommendations have been made but, from time to time, methods of applying the principle have been adapted to changing circumstances.
The report goes on to point out the method of assessment as follows -
Basically the financial need of a claimant State is assessed by a comparison of its budget result with the average budget results of those nonclaimant States which the Commission decides to regard as standard States.
Today the States which are termed the standard States and with which comparisons are made are Victoria and New South Wales. So the Western Australian Budget and the Tasmamian Budget are compared with the average Budget results of Victoria and New South Wales. One comparison that is made is of the efforts or lack of efforts of the claimant States and the standard States to gather revenue by their own activities. Another comparison is between the relative failure or success - or logic, I suppose - of the States in controlling the expenditure of the money that they have at their disposal. Adjustments to the Budgets of the claimant States are made accordingly. With regard to the possible adjustments, the report states -
These adjustments may be either favourable or unfavourable to a claimant State according to whether they indicate greater or lesser economy in expenditure or greater ot lesser effort in raising revenue as compared with the standard States. The “net” balance of adjustments will represent the result of a series of adjustments, some of which may be favourable and some unfavourable. In this respect a State may, for example, offset the effect of expenditure on social services at a higher level than in the standard States by a level of taxation above that prevailing in the standard States. Conversely an upward movement in the level of taxation effort in the standard States will call for a similar effort in the claimant States, or some economy in expenditure, or an increase in the net unfavourable adjustment.
That means that if a claimant State is applying to its citizens certain taxes, fees or charges which do not compare favourably with the charges made in the standard States of New South Wales and Victoria - when I say “ favourably “ I mean from the standpoint of revenue collection and not from the standpoint of the taxpayers - then the Commission will make an unfavourable adjustment in the amount of special assistance for the State concerned.
This has the effect of forcing the State Government to adopt one of two attitudes: Either it must be prepared to receive a smaller special assistance grant from the Commonwealth than it actually requires, or it must take the very unpopular action of increasing taxes and other charges on its people. Unfortunately, in this regard many State charges apply equally to poor people and rich people. I refer to such charges as freights, fares and licence fees. In my opinion Commonwealth direct taxation should gather in more revenue from the richer sources in the community or from companies, so that higher grants - I am talking about not only special grants but also other grants - can be made available to the States, so making it unnecessary for them to impose additional local charges on their poorer people.
With regard to imposing higher charges, Western Australia appears to be in a rather difficult position - particularly over latter years and, perhaps even more so, during the next three or four years - especially because of the increased activity over a very large area of the north of the State which has a very small population and from which, considering its size and requirements, very little revenue can be gathered. We want development to continue at a rapid pace. The north is not growing just gradually; it is rapidly requiring increased and much better services, such as housing, hospitals, electricity, water supplies, schools, roads and departmental offices. These services are required in growing areas. In many cases it means not simply an extension of existing services, such as exist in the more developed States of Victoria and New South Wales, but the provision of initial services or the establishment of services in areas where previously there was nothing at all.
Whilst the population in these areas is increasing, it is not a stay-put population or one that will settle down for a long time. Therefore, it is one from which revenue cannot be expected to be collected to the same extent, on an averge, as in the more settled parts of the State. For instance, quite a number of these people come from other States or even from other countries. They are in these areas only for the purpose of saving money and not of spending it, and they do not intend to remain there for more than a few months, or perhaps a couple of years at the very most. Therefore, the only revenue that many of them will contribute is Commonwealth revenue in the form of income tax on their earnings, sales tax on a few purchases and certain other indirect taxes such as those on tobacco, cigarettes and beer. Western Australia will not and cannot collect much from them by ordinary means of taxation.
Consequently, if the Western Australian Government is forced to collect further revenue by its own activities in order to meet the requirements of the Commonwealth Grants Commission for obtaining further special assistance, it is obliged either to increase charges in the north or on the people in the north and as a result, place a further obstacle - such as increases in the cost of living, the cost of construction or the cost of transport - in the way of the development of the north and a further burden on the people of the north, or to impose higher charges - much higher than otherwise would be necessary- on the people in the other parts of the State. That is what is happening today and what has happened over the last three or four years in Western Australia. The State Government is increasing charges to such an extent that the increases must have an adverse effect. The Government is placing an almost unbearable burden on people who cannot afford to pay the charges themselves or the general increases in costs that those increased charges are causing. This year, for instance, the State Government has budgeted for an increase over last year of £10,919,000. For the first time the Budget of Western Australia has reached a figure of £100 million, which is double the figure of 10 years ago. As the Taxation Bulletin has said, that illustrates the spectacular increase in Government spending. I do not always agree with the manner in which the money is spent or as to the areas where it is spent. Nevertheless, I draw attention to the increased amount of revenue being collected from the people of Western Australia.
Two moves were made by the Western Australian Government this year to increase revenue. The first was to impose higher freight rates on goods transported to or from the north by the State Shipping Service, and the other was to impose a road maintenance fee on road hauliers. Both of these charges will increase the cost of transporting goods to the north and, in the case of road hauliers, will also increase the costs to most outback areas. This, in turn, will mean increases in the cost of living and in the cost of development. It will also mean increased costs to industry generally, because the fees charged against the road hauliers and upon freights will not be absorbed by the operators but will be passed on to the consumers. These increases or new fees, so the Premier of Western Australia claims and as would appear from the report of the Grants Commission, are necessary to meet the requirements of the Commission or the Commonwealth if the State does not wish to suffer an unfavorable adjustment in respect of special grants from the Commonwealth next year. In other words, the increases are imposed so that the charges on road hauliers will compare favorably with the charges in the standard States of Victoria and New South Wales, and, with regard to shipping freights, to meet the views of the Commission. A Press report on what the Premier of
Western Australia said on this subject states -
Mr. Brand said his new road funds measures might appear to be severe, but they did no more than call on motorists and road hauliers to make a contribution equal to that being made in other Stales for the construction and maintenance of roads.
I cannot say whether, in considering those things, the conditions of the roads were considered. But we could expect some latitude in relation to the roads in the north, which are certainly not in a very good condition in many places. The need referred to by Mr. Brand, to bring the hauliers in Western Australia into line with those in other States purely for the purpose of contributing to road construction and maintenance, would carry a great deal more weight and have more logic if there were a provision whereby the hauliers made the contribution themselves and were not allowed to pass the charge on to the consumers or the users of the goods transported. As it is at present, it will be the consumers who will actually make the contribution to road construction and maintenance, for the hauliers have already said that the charges will be passed on to the consumers. This will be done either directly or indirectly, depending on the nature of the goods. But whatever happens, inevitably the costs in those areas where the hauliers operate will increase. At this time particularly, in many of those areas we do not want costs to rise if a rise can possibly be avoided.
With regard to the State shipping service and its operations on the north and north west coast, I appreciate the difficult position in which the Grants Commission found itself when trying to arrive at an assessment on the stand that should be taken or on how the losses of the service should be considered in relation to an adjustment of the State Budget for the purpose of determining what amount of special grant should be paid or reduced in that regard. Of course, the State shipping service has been a problem to the Grants Commission for some time. The Commission referred to the service in its 1963 report at paragraph 280, where it said -
The loss borne by the State budget of Western Australia in respect of the State Shipping Service was £857,000, which was £26,000 more than in 1960-61. The operations of this service have been the subject of discussion between the Commission, the Western Australian Treasury and the Commonwealth Treasury in recent years and the Commonwealth Treasury submitted that the Commission should consider making an unfavourable adjustment in respect of the heavy loss of this service. An independent authority was engaged by the State government to report on the operations of this service. As a result of the recommendations of that authority the Western Australian State Government took action to increase fares and freights as from 1st November, 1962.
It will be noted that in the view of the Commonwealth Treasury an unfavorable adjustment should have been made at that time, apparently with the object of forcing up freight rates and fares and to reduce costs. Although the Commission did not make the unfavorable adjustment on that occasion, fares and freights were increased at the end of 1962. In the 1965 report, the matter of the Western Australian State shipping service caused the Commission so much concern, deliberation and consideration that it devoted no less than six pages of the report to comments upon that service alone. The Commission started at page 74 and went through to page 80 on this subject, and then at page 144 released its finding, which was an unfavorable adjustment. This meant that Western Australia suffered a reduction in what it needed to cover its deficits.
I wish to quote some paragraphs of the report relating to the State Shipping Service because I feel they support the views that I have expressed in this place before. I have said that, because of the nature and the purpose of the Service, it should not be considered in relation to adjustments of the State Budget for special grant finance such as we are now discussing, but that the Commonwealth should treat it as being in a special position. It should be regarded as a service which is necessary for the development, progress and population of the north and north-west of Western Australia. Further, as a result of that consideration, additional special purpose grants should be made available for the specific purpose of allowing the Service to operate on the basis of providing a service which will not increase the costs of transport or at least not increase them unduly, and so that it will not have to be run as a business proposition which must show a profit. This, of course, would cost something above what is being provided at present by special grants for the purpose, and I am not able to say accurately, or even approximately, what the annual cost would be. If we are going to treat the development of the north seriously and to make sufficient finance available, the method I have suggested might cost a substantial amount but would be worth while. As the saying goes, what was lost on the swings would be gained on the roundabout. I intended to read some paragraphs of the 1965 report, but as o”he or two other speakers wish to contribute to the debate I shall, with the concurrence of honorable members, incorporate the paragraphs in “Hansard”. They are paragraphs 160, 161, 166, 167, 168 and 169. 160. It is convenient at this stage to set out some of the difficulties which arise in fitting the normal principles and procedures adopted by the Commission in calculating the Special Grant to the facts relating to the financial operations of the State Shipping Service. The operation, as a whole, cannot be judged by comparison with similar operations in other States in the Commonwealth, as can be done to some extent with regard to other business operations, such, for example, as the State railway systems. No comparable activities are carried out in the standard States, or for that matter in any other States of the Commonwealth. It is not possible therefore, to test the efficiency of the service or the level of charges imposed by any direct method of comparisons. Moreover, even if comparisons could be made the value of such comparisons would be still matter for debate. It is clear enough from the pronouncements made on behalf of the State Government that the primary purpose of this service at the present time is the provision of convenient and cheap transport, rather than the operation of a business. 161. This situation presents problems to the Commission in the determination of the Special Grant which are dissimilar from those arising in other parts of the Commission’s activities. In the view of the Commission, some allowance must be made for the particular circumstances of the region, the desire to promote settlement, and the hardships which settlers suffer before determining what ultimate loss should be included in the calculation of the Special Grant. If this is done some portion of the Special Grant will represent a payment for the development of the North-West of the State. It was clear, from the evidence of the Minister that it was the view of the Government, that the annual loss was to be viewed as a reasonable contribution by the Commonwealth for this purpose, lt is important that the Commission should make clear its understanding of the evidence upon this point. It was put, and the suggestion is clear and comprehensible enough, that the Commonwealth as part of its policy of northern development of the continent should make a contribution in regard to this service. 166. It is necessary, therefore, to determine at what level the Commission will, as it were, draw a line at the present time and invite consideration by the appropriate authorities of either continuation or decrease in the concessions to be made in the north-west. The year of review now before the Commission is fiscal 1963-64. During that year the losses in respect of the State Shipping Service amounted to £1,226,000. The Commission has therefore decided to fix an adverse adjustment in respect of the operation of the State Shipping Service for the year 1963-64 at the sum of £26,000. It has fixed this sum upon the basis that there is room for some economy in operation, including some modification of the services rendered which would enable this reduction in costs to be achieved, and some increase in the level of charges. 167. In the result a loss of £1,200,000 will be an element in the Special Grant. It is clear that a certain portion of this sum represents concessions made to the settlers in the North-West, both in providing services which would be considered uneconomic by commercial operators and in providing a lower level of freights and fares than would be charged by commercial operators. 168. It is important to make clear what is the policy of the Commission in fixing the adverse adjustment for the year in question in this way. If as a matter of considered policy by either the Western Australian Government or the Commonwealth Government is it desired to increase the amount of financial assistance given to settlers in the North-West through the State Shipping Service, this can be done as a deliberate step. Such a step will not be concealed by the inclusion of a larger amount of loss from the State Shipping Service in the calculation of the Special Grant. The Commission is aware that some portion of the loss now being allowed represents an expenditure on development in the region in question. It thinks it not improper to allow this expenditure in the calculation of the Special Grant. In the same way, the Commission allows special expenditure in respect of schools and hospitals in this region as part of the cost of development. 169. The Commission, however, is impressed with the fact’ that the amount of the loss on this service, has been continuously increasing. This represents a continually increasing contribution to the cost of settlement. If this increasing contribution is to be made, in the opinion of the Commission it should be made as a deliberate act of policy by those who are in a position to determine this policy.
Those paragraphs contain a clear recommendation to the Commonwealth to carry an additional and more direct responsiblity for the running of the State shipping service. I go further than that and say that the Commonwealth should take more direct responsibility for the provision of financial assistance to the north of Australia generally. I know there have been specific grants for certain projects, and no doubt there will be further grants. In some respects, I hope it will not be too long before further grants are made. However, I feel that the Commonwealth should take a greater responsibility and ensure that the development and progress of the north is not retarded through lack of finance. Costs in the north must be kept within reason, to encourage people to go there. We must not allow a position wherein costs are forced up and, as a result, become a further obstacle to permanent residence in the north and deter people from going into the area. The Commonwealth Grants Commission is continually called upon to make recommendations in relation to special grants, and the position in the north of the State is reflected in the State Budget results. It is obvious, from the comments made, in the report, that the effect will always be an unfavorable adjustment and a reduction in the grant, which in turn will have a very adverse effect not only on the north of Western Australia but on Western Australia generally.
I suggest that while taking this great responsibility for the north of Australia, the Commonwealth should have a greater say in how the money will be spent. It should have a greater say in relation to priorities. But whatever happens in this regard, the Commonwealth must accept much more financial responsibility than it has at present. All methods or types of transport and services to the northern areas must be kept as cheap as possible and must not at this stage be expected to pay their way. It is just not possible for them to do so, and any attempt in that direction just to save a few million pounds will, I believe, in the long run result in a further loss of a few million pounds.
.- I should like to say just a few words about a point that has been raised by my friend, the honorable member for Kalgoorlie (Mr. Collard). It is brought out to some extent in a little argument that apparently took place between the Commonwealth Grants Commission and the Commonwealth Treasury as to what the philosophy of the Commission should be. The Commission, of course, operates in terms of section 96 of the Constitution. It was established in recognition of the fact that in a Federal system there are disparities in economic strength and resources between one part and another. The purpose of the Commission is to equalise the performances of the States ag a whole in relation to their total commitments. There are, I suppose, three interests that have to be looked at here, including the interests of the States. One of my colleagues from Tasmania suggested this afternoon that the Commission was standing over the State of Tasmania in some respects. That may be. I suggest, however, that in many respects the Commonwealth Treasury is standing over the Commission. That occasionally comes out in some of the asides in the report.
I draw the attention of the House, in particular, to pages 61 and 62 of the report, whereon there is reference to an argument between the Commission and the Commonwealth Treasury as to the meaning of the term “ the national interest “. Paragraph 114 contains a quotation from the submission of the Commonwealth Treasury to the Commission in these terms -
If we follow correctly the report of the Commission, the exercise of broad judgment is now to be made against an additional criterion in some cases - that is “ national objectives “ and/or “ national interest “.
These are the remarks that I suggest should be noted. These are the observations of the Commonwealth Treasury in its submission -
We strongly reject the implication that it is in any sense the role of the Commission to assess what is in the “ national interest “ and what is not “ in the national interest “.
The Commission goes on, in the subsequent paragraphs, to contest that. It says that alter all its existence is in a sense in the national interest. The Commission states, in paragraph 116 -
In a very general way it is clear that the raison d’etre . . .
Reason for being, in other words - of the Commission is to be found in the determination of the “ national interest “, in the particular sphere in which it is authorised to operate.
The Commission goes on to point out - this is something that we mentioned last night in the debate - that whilst technically and constitutionally some functions fall to be performed by the States rather than the Commonwealth, nevertheless it is surely to put a narrow view for the Commonwealth to try to maintain that it is the only level of government that serves the national interest. What takes place at the level of the States is or may be just as much in the national interest as though it were performed by the Commonwealth itself. The
Commission goes on to state, in paragraph 117 -
In each claimant State developmental activities are undertaken by the Government which would remain largely unattempted if those States were limited by their own resources.
In other words, many things could not be performed by the States unless some additional resources were given to them by the Commonwealth. The fact that these functions are performed by States does not mean that when performed they do not serve the national interest. The Commission goes on to illustrate further a point that was made by the honorable member for Kalgoorlie -
The settlement and growth of the North Western Region of Western Australia is one example. Others are exploitation of the mineral resources of the Pilbara region of Western Australia; the research and study devoted to the expansion of the export crop of apples and pears from the Huon Valley in Tasmania; the extension of some of the wheat growing areas in Western Australia. In quite a different way the care for, protection and advancement of the Aborigine population of Western Australia is a further example. The claimant States readily admit their “ need “ for financial assistance to enable these tasks to be effectively performed by them. They seek to justify these demands by asserting that the tasks are of great and relatively direct benefit to the whole Commonwealth.
I suggest that the Commission is right in its assertion, as against the narrow view of the Treasury. As has been suggested, the State Shipping Service in Western Australia is an example of northern development. It is being subsidised, in effect, to the level of £1,200,000 by this machinery. Nobody surely would deny that that sort of scheme is in the national interest. The Commonwealth Treasury is, I suppose, bound to protect as well as it can, in terms of its overall commitments, the financial position of the Commonwealth. Nevertheless, it seems to me that at times it raises financial arguments without much vision, rather than looking, as it ought to look, at the perspective of the nation as a whole.
I suggest to honorable members that they read pages 61 and 62 of the 1965 report of the Commonwealth Grants Commission on which is to be found this little philosophic discussion on the view of the Treasury and the view of the Commission. I am glad that the Commission has asserted what it regards as its rights in this matter as against the Treasury. I hope that in future the Treasury may not be quite as obstructive to the purposes of the Commission as that seems to indicate. I cited an example of the same sort of thing last year. It seemed to me that the Treasury was being unduly restrictive purely in a financial context and overlooking the broader national picture. I leave it at that. I rose in this debate merely to note that point. I commend the Commonwealth Grants Commission for the job that it has done over the years. I commend it for the very informative and readable reports which it presents year by year. They represent a comprehensive assessment of the financial relationships between the Commonwealth and the States and are presented in such a form as to make them easy of comprehension. I hope that, with its new personnel, the Commission will continue to measure up to its performances of the past.
Question resolved in the affirmative.
Bill read a second time.
Message from the Governor-General recommending appropriation announced.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Barnes) read a third time.
House adjourned at 4.6 p.m.
The following answer to a question upon notice was circulated -
When consideration was given to raising or removing the statutory ceiling on the amount of annual recreation leave which can be granted administratively or awarded by arbitration to public servants, was consideration also given to the statutory limits on annual home service or recrea tion leave for members of the Forces, in accordance with the Minister’s answer to me on 2 1st May 1965 (“Hansard”, page 189).
The factors affecting leave entitlements for the Services are essentially the same as those affecting the Public Service. In the light of the decision announced by the Prime Minister on 14th October on leave for public servants no consideration has been given to amending the leave entitlements of members of the Forces.
Cite as: Australia, House of Representatives, Debates, 12 November 1965, viewed 22 October 2017, <http://historichansard.net/hofreps/1965/19651112_reps_25_hor48/>.