House of Representatives
25 November 1965

25th Parliament · 1st Session

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

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– My question is directed to the Minister for External Affairs. I ask: Is it true that criticism has been levelled at the United States Administration for suppressing news about the war in Vietnam, particularly for suppression of the statement made by the Prime Minister of South Vietnam, Air Vice-Marshal Ky? Does the Minister agree with the view held by the South Vietnamese Prime Minister, who indicated that he was not anxious for any peace negotiations to take place until his regime had won the confidence of the peasants? Will the Minister say when it is expected that the confidence of the peasants will be won and when peace negotiations will take place?

Minister for External Affairs · CURTIN, WESTERN AUSTRALIA · LP

– Matters between the President of the United States of America and the people of that country, of course, do not come under my administration. We have noted with interest a revival of discussion regarding events in Vietnam. It is a matter for satisfaction in both the United States and Australia that discussion in both countries is still free and that, unlike the situation in some other countries, it is possible for the people to express opinions about the policy of their Government and that the Government justifies its policy to the people. All the reports that we have received are to the effect that an overwhelming majority of the population of the United States supports the Johnson Administration in its policy in Vietnam. The Australian Government is confident that the overwhelming majority of the people of Australia support our policy.

Mr Reynolds:

– What about Air ViceMarshal Ky’s statement?


– Regarding Air ViceMarshal Ky’s statement, I am informed that when he was in South Korea he said something to the effect that if the Communists wanted peace they had only to leave South Vietnam and that talking was unnecessary. That is the sense of what he said. One can readily sympathise with the leader of the South Vietnamese people, whose country has been under occupation by hostile forces for many years, when he says in effect: “ If these people want peace let them shown their earnest desire for it by getting out of our country “. Surely one can understand Air Vice-Marshal Ky’s having those sentiments. We are not called on either to endorse them or to disagree with them. Surely we can understand that that is a view that a South Vietnamese patriot might well take.

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– My question is addressed to the Postmaster-General. I have been most impressed by the standard of the interviews conducted by Dr. Peter Pockley of the Australian Broadcasting Commission on both radio and television. Will the Minister assure me that enough resources of staff and money will be available to ensure the continued expansion and improvement of science programmes on radio and television?

Postmaster-General · PETRIE, QUEENSLAND · LP

– I know that the Australian Broadcasting Commission regards very highly these programmes which deal with scientific matters and that it would be the desire of the Commission to continue them so far as it is able to do so. But from time to time in all its programmes there must be consideration of the availability of resources.

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– My question is addressed to the Minister for Labour and National Service. Is it a fact that there is an acute shortage of certified marine engineers in some Australian ports and, in particular, do those conditions apply in the port of Newcastle? Is it true that examination facilities at Newcastle are not being fully utilised simply because the examiner is required to carry out surveys on vessels and he is able to examine only 4 candidates at a time whereas facilities are available for 12 candidates? Will the Minister confer with his colleague, the Minister for Shipping and Transport, to ascertain whether it would be practicable to obtain further surveyors at those ports where shortages of marine engineers exist?

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

– I just cannot remember the facts relating to the problem raised by the honorable gentleman. Nevertheless, I will have discussions with my colleague, the Minister for Shipping and Transport, and if the statements turn out to be correct we will see whether we can do something.

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– I address a question to the Postmaster-General. In view of the extensive areas being opened up in many parts of Australia, what arrangements, if any, has the Postmaster-General’s Department made with land and area developers to ensure that facilities for telephones are available when required? As most municipal councils require roads, drainage, electricity and other services to be available, is it possible to do likewise so far as the telephone system is concerned?


– There are constant consultations between my Department and the various councils throughout Australia and in some cases requirements arising from developmental projects are known as far ahead as perhaps 20 years. Arrangements are made within the Department to provide telephone services to these areas at the point of time when they would be actually developed. I think it is unnecessary for me to speak any further in relation to this. It is a very complex operation, but I think it is one that is very clearly understood by all councils throughout Australia. If there is any alteration to road works or other services, there is always consultation, either from the Post Office to the council or from the council to the Post Office.

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– I ask the Leader of the House a question. Is it the intention of the Government to allow a debate and a vote on the constitutional proposals of the honorable member for Mackellar to amend section 51 (xxvi) of the Constitution and to add a new section after section 117?


– I gather that there has already been some discussion on this matter. There has been no decision by the Government. Indeed, I can imagine that this decision would be affected by the course of the business which has yet to be pursued through the remainder of the session. However, I will give consideration to what the honorable gentleman has said and, if necessary, confer with the honorable member for Mackellar on the matter.

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– My question is addressed to the Acting Minister for Primary Industry. I ask: Does the Minister know that the Commonwealth Government has provided large sums of money to combat skeleton weed, but that there is still a prolific growth of this weed within 200 yards of this Parliament House? As a means of setting an example, will the Acting Minister for Primary Industry confer with the Minister for the Interior and ask him to have this weed cleared from the land adjacent to Parliament House?

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

– I do not think I need to refer the question to the Minister for the Interior. I know exactly how he feels about this matter and I can reply for him. I know the honorable member will not be pleased when I tell him that skeleton weed has not been declared a noxious weed in the Australian Capital Territory.

Mr Turnbull:

– Shame.


– Weeds do not have the same significance all over Australia. It depends upon the degree of infestation and the interference caused to crops. I do know that in New South Wales, for example, skeleton weed is welcomed as a green summer feed, although I know that in the honorable member’s electorate it is indeed a very noxious weed and does interfere with the crops. I am pleased to tell the honorable member that in the National Capital, Canberra, which we try to make a garden city, one of our objectives is to eradicate skeleton weed. We have carried out extensive work with weedicides and the honorable member might be very interested to know that some of the latest weedicides we have used have been very successful in controlling this weed. If he would like further information I shall certainly get it for him.

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– I ask the Treasurer whether he is aware of the excellent work carried out amongst the youth of the community in New South Wales by the Federation of Police-Citizens Boys’ Clubs. Is he also aware that the buildings and equipment provided for the police-citizens boys’ clubs are the result of the voluntary work of many parents who spend years in accumulating the necessary funds? Has he been advised of the opening of. a policecitizens boys’ club at Glebe in my electorate last Saturday? Is he aware that this building and the equipment provided for it cost £100,000 and that approximately £33,000 is still owing on the project? In view of the good work performed by the police-citizens boys’ clubs, will he consider making a Commonwealth grant towards paying the outstanding debt?


– The honorable member raises a matter of policy. I have been very interested in what he has said about this worthy cause and congratulate those who have contributed to the success so far achieved. Whether it is a matter that should attract Commonwealth financial assistance, or whether that kind of assistance is more appropriately within the jurisdiction of the State Government are questions to which I shall give consideration.

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– Can the Minister for Labour and National Service inform the House whether the International Labour Organisation has yet made a request to the appropriate authorities in Tanzania that trade unionists now under detention for political crimes be released? If not, would the honorable gentleman seek some information on the matter for me?


– It is, of course, contrary to our objective and abhorrent to us that trade unionists should be put in gaol because of legitimate and responsible trade union activities. That is our view as applied to Australia. I have not had drawn to my attention any action that might have been taken in Tanzania, nor do I know of any representations made by the International Labour Organisation about this problem. However, I shall ask my Department whether it knows anything about the matter and I shall let the honorable gentleman know.

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– I ask the PostmasterGeneral whether he is aware that certain business firms commencing operations in new premises in the Botany area of my electorate have to wait long periods - sometimes 12 months or more - before having telephones installed. Will the honorable gentleman look into this matter with a view to expediting the necessary work connected with the cables?


– I know that in some parts of Sydney there are delays in the installation of telephones due substantially to lack of cables within the particular areas concerned. This is a problem which the Department has under its notice constantly and which it is endeavouring to solve. Many business people apply to the Department for information as to whether telephones will be available if they establish a factory, and some do not establish their factories until phones are available. Nothing more can be done beyond what is being done at present.

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– Is the Minister representing the Minister for Civil Aviation aware of the existence of a report on air fatigue encountered by jet pilots, emanating from a recent survey? Can the Minister make a copy of the report available?

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

– I understand that an interim report has been produced on jet fatigue. However, it was not made by the Department of Civil Aviation but by the Aeronautical Research Laboratories which come under the control of my colleague, the Minister for Supply. If the honorable member applies to the Minister for Supply the Minister may be able to make the report available to him.

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– I direct a question to the Minister for Territories. Is he aware that the Arbitrator in Papua and New Guinea recently made an award for magistrates in the Territory based on the principle of parity with officers performing similar functions in the Commonwealth Public Service and stated that he considered the principle should apply to all Territory officers? As the Administration in the Territory is refusing to apply this principle and is forcing all groups of officers to go to expensive and delaying arbitration, will the Minister direct the Administration to apply the principle to all officers without delay? There is much unrest in the Territory on this salaries question among both local and overseas officers.

Minister for Territories · MCPHERSON, QUEENSLAND · CP

– I am aware of the decision in respect of magistrates, but 1 point out to the honorable member that the other matters are now being arbitrated so there is no purpose in my intervening. These matters are going through the proper channels and the whole situation in relation to the magistrates’ case is being analysed.

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– I ask the Acting Minister for Defence a question. Is it correct that young men who volunteer - and I emphasise the word “ volunteer “ - for service with the Navy, Army or Air Force, if under the age of 21 years require the written consent of their parents or guardians? As the appropriate Act passed by this Parliament permits the calling up for service of youths of 20 years of age, with or without their parents’ consent, to put this matter on a consistent basis will consideration be given to an administrative change whereby those enlisting voluntarily shall require their parent’s consent only if they are under the age of 20 years?


– As I understand the situation, there is no legal requirement for youths under the age of 21 years enlisting in the Services to obtain their parents’ consent. Actually, youths can enlist in any of the three Services at the age of 17 years, but the Government believes that the consent of parents is desirable so that the parents know what their sons are doing. It may be that in respect of plans parents may have for the future of a son they should be in possession of the facts about what he is doing. National service is, of course, covered by legislation. Not only is the call-up covered by legislation, but the national serviceman’s civil employment is protected as is his rehabilitation into civil life. Parents know of these circumstances and therefore we believe there is no need to alter the administrative procedures that are applied at present, but we still think it desirable in the case of voluntary enlistment that parents* consent be obtained.

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– I ask the PostmasterGeneral a question. Did he earlier this year say that if areas such as Mount lsa, Kalgoolie and Geraldton are to be provided with a television service it could only be on the basis of the provision of national stations? Has the Minister also said that he will not recommend the expenditure of the finance required to set up conventional high powered national stations in these areas? Did he say also that translators did not appear to be the solution to the problem because of the distance from the nearest high powered station? If so, does it follow that television by means of package stations is the best that may be expected from this Government? If so, why should there be any further delay in providing such a service to the areas I have mentioned?


– 1 am not aware that I said earlier in the year that the only means by which television could be provided in the areas referred to was by national stations. As to the problem associated with the provision of television in an area such as Kalgoorlie, the microwave or coaxial cable system, which will eventually be installed between east and west, may provide the opportunity for the establishment of a station there on a relay basis. This would be some years ahead as yet. There has been no enthusiasm by commercial interests to establish stations in the areas to which the honorable member referred or in similar areas. I am not sure what is involved in the use of package stations. I have asked the Australian Broadcasting Control Board to investigate this matter and to offer me advice in relation to it. Until I receive that advice I will not make any comment on the suitability of package stations for the provision of television services in these areas. I did say earlier in the year that the cost of installing a high powered station in an area such as Kalgoorlie, or Geraldton, might be of the order of £1 million. I was not prepared to recommend to the Government an expenditure of this nature in order to provide this type of station.

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– Has the Treasurer’s attention been drawn to Commonwealth Ranking Corporation figures for loans to building societies, which indicate that while the savings bank loans increased during the last financial year by about £11 million, loans by trading banks declined in aggregate? As home building finance needs stimulation I ask whether the Banking Corporation may be encouraged to assist the Australian building societies with more substantial and regular advances.


– I believe that the trend to which the honorable gentleman has referred reflects increasing tightness of liquidity on the part of the banking system with the run down which has occurred in our overseas reserves. But as was pointed out by me yesterday and by other Ministers, including the Minister for Housing, the matter of the current level of housing and the adequacy of finance for sufficient housing activity in accordance with the state of the economy that we desire to see maintained are currently under review. When we are in a position to make a statement on the matter we will do so.

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– Has the Prime Minister received recently from the Premier of Queensland, or, in his absence overseas, from the Deputy Premier, a request for drought relief, indicating ways in which the Commonwealth could assist the Queensland Government to relieve the present predicament of primary producers and enable them to return to production as soon as relief rains fall?

Prime Minister · KOOYONG, VICTORIA · LP

– I cannot speak accurately about communications we have had from the Queensland Government, but we have had them. As I said yesterday, I have, on behalf of the Government, explained to the Queensland Government, as I have to the New South Wales Government, the lines we are willing to follow in helping them to give drought relief. I will refresh my memory on the nature of the requests that have been made and see whether I can add anything to what I have already told the Premiers of New South Wales and Queensland.

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– Has the Minister for Trade and Industry read a statement made by Mr. Wilson of Fibremakers Ltd., a sub*sidiary of Imperial Chemical Industries of Australia and N.Z. Ltd., in public evidence to the Tariff Board on 9th August, in which Mr. Wilson gave the impression that his company regards a return of 20 per cent, on total funds as a reasonable return on capital? What particular attributes does Fibremakers Ltd., which makes artificial fibre yarn, possess that necessitate a return of 20 per cent, on total funds, while its competitors, the wool growers, who produce natural fibres, are expected to manage on very much less, if on anything at all?

Minister for Trade and Industry · MURRAY, VICTORIA · CP

– Normally I would not be familiar with evidence given before the Tariff Board, as it is beyond my capacity to keep abreast of all that evidence, but the honorable member was good enough to let me know that he proposed to ask this question and this led me to ask for a copy of the evidence which was given. I find that Mr. Wilson of Fibremakers Ltd. was asked, amongst other things, what return on capital he thought was proper for his company, and he said repeatedly in reply to the Deputy Chairman of the Tariff Board that he was not prepared to give an answer to that question in public but that he was prepared to advise the Tariff Board confidentially. Under further questioning he then appears - I am speaking from memory - to have said: “ Well, similar companies in the United Kingdom and other countries secure a return of 20 per cent, on their funds.” I cannot really read that as indicating that Mr. Wilson was saying that his company should get that return. Indeed, one needs to know whether the 20 per cent, referred to was obtained before tax or after tax. We should bear in mind that in recent times the rate of tax imposed on company earnings in the United Kingdom has been in excess of 10s. in the £1, so that a gross return or a return before tax of 20 per cent, could lead to a return after tax - the significant return from the point of view of- the shareholders of the company - of less than 10 per cent. I feel therefore that there is no basis on which I could reply to the honorable member’s second question.

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– I also ask the Minister for Trade and Industry a question. I refer him to his answer to the honorable member for Lalor on Tuesday last on the subject of the coming referendum on the wool reserve prices plan, in the course of which he defended his neutral attitude towards the scheme by saying -

My attitude is that neither the Australian Country Party nor its parliamentary members should decide what is the correct policy for a primary industry. It has always been the policy of my Party that those who produce, own and sell a product are the best judges of the way in which their own property should be treated.

How does the Minister reconcile that statement and his neutral attitude with his actions in 1951 when he publicly supported a campaign for a “ yes “ vote in the wool reserve prices plan referendum held at that time?


– In 1951 all the woolgrowers’ organisations in Australia - the Australian Woolgrowers and Graziers Council, the Australian Wool and Meat Producers Federation and the Australian Primary Producers Union - jointly interviewed the Prime Minister, myself and other senior Ministers in the Cabinet room, and asked for the introduction of a reserve prices plan for wool. This seemed to me to indicate quite clearly at that time a unanimous desire on the part of the chosen representatives of and spokesmen for the wool industry. Pursuant to that my Government, the Prime Minister’s Government, our Government, said at that time that if this was the view -

Mr Bryant:

– Make up your mind.


– Order!


– They are all right. If this was the consistent view of the wool industry we would certainly pursue the policy that I indicated when I spoke here a couple of days ago. Indeed, this request of the industry led me to go to London accompanied by representatives of these three great organisations to negotiate with 28 other countries at a meeting on whether they would find such a scheme acceptable and not believe that it represented a cartel against their interests as buyers. The answer was completely satisfactory. The governments represented there said they would accept such a scheme, and the history of the scheme can now be read by anybody. I repeat that whether it is the wool, meat; butter or sugar industry that is concerned I do not believe there should be outside interference.

I do not believe that representatives of the dairy industry should decide what is good for the wool industry or that representatives of manufacturing industries should decide what is good for the butter industry. I think that, the people who have their money invested in these primary industries are the only people who ought, in the first place, to reach a decision on what is good for their industry. Then the Government must form an opinion, as this Government has consistently done, on whether the proposal advanced to the Government is in the public interest. This Government has done that. This is its record in respect of every primary industry, and this is what distinguishes this side of politics from the side of politics represented by honorable members opposite. The fundamental difference between the two sides in politics is that the Socialist believes that he knows what is good for everybody, whether doctor or wool grower. Not only do the Socialists know what is good for everybody, but they are prepared to impose their views on everybody. I am very happy to say that that is not this Government’s attitude.

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– My question is addressed to the Minister for External Affairs. Has the Minister been informed of the concern of the Zionist Federation of Australia and New Zealand over the attempt made at the United Nations to bracket Zionism with Nazism, neo-Nazism and anti-Semitism? Will he assist to remove the dismay of the Federation by making an appropriate statement regarding the circumstances at the United Nations and the high esteem in which this national movement of the Jewish people is held in Australia?


– Honorable members of this House who have taken part in delegations to the General Assembly of the United Nations will, I think, be fully aware of the skirmishing that goes on in and around the sessions of the General Assembly before resolutions are carried. In this year’s

General Assembly there were various proposals for the carrying of resolutions condemning discrimination in various forms. I think it would be completely fair to say that as part of the process of skirmishing persons holding different views try to work into draft resolutions the sort of words that would cause embarrassment or difficulty to their opponents, and exclude from the resolution any words that would cause difficulty or embarrassment to themselves. This, of course, was being done on many fronts. It was in those circumstances that a succession of words such as anti-Semitism, racism, Zionism and Nazism gradually found their way into successive drafts. I do not want to canvass the decision made eventually in the General Assembly but I assure the honorable member that so far as the Australian Government is concerned it does not look at Zionism in association with other terms such as racism and Nazism. Zionism is a legitimate aspiration of people of the Jewish race wishing to restore the Jewish nation.

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– I ask the Treasurer whether he is aware that the Australian manufacturing industry has been showing increasing signs of a general slowing down. This trend appears to be noticeable particularly in the industries producing consumer goods, building materials, construction equipment and automotive parts. I therefore ask the Minister: What action is the Government taking to implement corrective action to stimulate demand for locally manufactured goods? Is it the intention of the Government to reduce our import bill by deflationary methods by further reducing industrial activity?


- Mr. Speaker, I think the question invites the kind of comment which normally you would not wish to hear made in answer to a question without notice. Therefore, I propose to comment in very general terms only to this effect: As I said publicly yesterday, there are some soft spots in the economy. I think the honorable gentleman has placed his finger on several of them. At the same time, the economy generally is sufficiently buoyant to absorb nearly all the labour offering at the present time. My recollection is that at the end of October the number of persons in receipt of unemployment benefit was the lowest figure since 1956. So, there is not any great availability of resources.

The honorable gentleman has pointed to the construction industry. Here, again, the figures for the three months ending October showed a rise of 34 per cent, in the non-residential building approvals which is probably the highest figure we have obtained in any similar period in the history of this country. So the picture is not found to be identical throughout the various parts of the economy. The drought has affected some areas. The Government periodically makes a review of the way in which the economy is functioning and takes such corrective action as it deems to be necessary. That kind of review is in our minds periodically. When we come to the next review we shall be making a survey embracing what I have termed the “ soft spots” and we shall be looking to the corrective action that may be necessary to meet the situation.

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– I ask the Minister for Housing a question. As the Parliament has passed legislation which enabled the setting up of the Housing Loans Insurance Corporation and the Minister has appointed either a director or a general manager of the Corporation, can the Minister say when the Corporation will be operative? Will the Corporation be effective in all States in the immediate future?

Minister for Housing · WENTWORTH, NEW SOUTH WALES · LP

– If all goes well and certain formalities are completed today the Housing Loans Insurance Corporation will open its doors for business tomorrow. I propose to make a short statement on the subject, by leave, this afternoon. I can assure the honorable member that it will not be long before the Corporation is operative in all States. It has not been possible for various reasons to get all forms of loans approved in time. As the honorable member knows, one of the commodities in shortest supply to the Government is parliamentary draftsmen. It has been difficult, in view of the burden of legislation coming through, to get all the formalities completed but, I think, sufficient will have been done to enable operations to begin, as planned, tomorrow:

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– I address my question to the Treasurer. Does the amount of a Commonwealth scholarship reduce the allowable income tax deduction for a student child? As young people regard the Commonwealth scholarship as a reward for their own merit and industry, will the Treasurer look into the questiion of paying the scholarship to a student without penalising the parent by depriving him of the income tax deduction for the student child?


– The principle behind the income tax deduction relates to the maintenance of a child by the parent. I will get a full answer for the honorable gentleman and set out the reasoning behind the present policy, while giving consideration to what he has put to me.

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– My question, which is addressed to the Minister for Labour and National Service, refers to the call up for national service. I ask the Minister: If a young man has been granted deferment for six months, or even less, by the court set up for the purpose, must he enter camp at the end of this period or is he entitled then to apply to the court for further deferment?


– Under the Act, a young man who has had his national service training deferred because of exceptional hardship may, if he wishes to do so and if the exceptional hardship still exists, make an application for the deferment to be continued.

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– My question is directed to the Minister for Immigration. Has his attention been drawn to a statement made in London by the New South Wales AgentGeneral that homes can be purchased in that State for a deposit of £50 after a wait of two years? As the waiting period for homes under these conditions is between four and five years, will he inform immigration officials in London of the facts so that intending migrants will not be misled?

Minister for Immigration · CORIO, VICTORIA · LP

– The honorable member said that the statement was made in London by the Agent-General for New

South Wales. It has not been brought to my attention, but I will make inquiries about it. The honorable member referred to housing. We like migrants to know the facts. In some States, houses are available at short notice.

Mr Calwell:

– Where?


– Houses are available at short notice in South Australia where a Liberal Government, which was in office for a long time, had a housing scheme that operated to the benefit of South Australia and of migrants. A Labour Government was in office in New South Wales for a long time and this has made it extremely difficult for migrants to obtain housing there as quickly as they can in other States. I will make inquiries into the statement that the honorable member mentioned. I am sure that there is some good foundation for it. However, migrants should know the truth about housing and I will go into the matter as soon as possible.

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Mr Kevin Cairns:

– I address my question to the Minister for External Affairs. I refer to some recent observations on the Indonesian Communist Party in a Queensland journal. In the spring issue published in October, the journal maintained that the Indonesian Communist Party, the P.K.I., is a nationalist organisation and is not basically the militant pro-Peking organisation that the Western Press says it is. The journal also claimed that if the Indonesian Communist Party came to power it would surely reject Peking domination. Are these statements correct? Are they significant, especially as they are made in the latest issue of the official journal of the Queensland Branch of the Australian Labour Party?


– It is a well known device of Communist parties to disguise themselves and to try to gain recognition as national liberation movements, peasants’ reform movements or something of the sort and to appear in any guise other than that of a Communist party. To describe the Communist Party of Indonesia simply as a nationalist movement would be to fly in the face of the record of its activities. It has not behaved simply as a nationalist movement.

Nor is there any ground for anyone to nurse the illusion that if the Communist Party came to power in Indonesia it would act purely as a nationalist movement without any affiliations with Communist parties in other lands. Its orientation is towards Peking. I believe that the final verdict on i* is that of the Indonesian people themselves. In recent months, in changed circumstances, they have had an opportunity to demonstrate to the world very plainly that they themselves do not regard the Communist Party as voicing a nationalist aspiration for them.

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Motion (by Mr. Fairhall) agreed to -

That the House, at its rising adjourn until tomorrow at 9.30 a.m.

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Discharge of Motions

Motion (by Mr. Fairhall) - by leave - agreed to -

That the following Orders of the Day, Government Business, be discharged -

No. 18. - Superannuation Fund - Distribution of Surplus - Ministerial Statement, 26th August 1965 - Motion to take note of paper - Resumption of debate upon the motion, That the House take note of the Paper.

No. 24. - Commonwealth Superannuation Fund - Disposal of Surplus - Ministerial Statement, 25th March 1965 - Motion to take note of paper - Resumption of debate upon the motion, That the House take note of the Paper.

No. 26. - Defence Forces Retirement Benefits Scheme - Ministerial Statement - Motion to take note of paper - Resumption of debate upon the motion, That the House take note of the Paper.

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Shipping - Communism - Decentralisation - Telephone Services - Employment of Handicapped Persons - Defence - Water Conservation - Taxation - Plight of Immigrant Farmer - Christmas Parties

Question proposed -

That grievances be noted.


.- Mr. Speaker, I rise on this occasion to bring before the notice of honorable members a very important question concerning shipping along the east coast of Queensland and between ports on that coast and New Guinea. This matter should concern every member of this House. We have heard speeches about the development of the north from the Prime Minister (Sir Robert Menzies) down on the Government side and from the Leader of the Opposition (Mr. Calwell) down to the back bench members on this side, particularly from the Deputy Leader of the Opposition (Mr. Whitlam). This problem concerns business people and firms who are already established in the north and who are trying to keep their staff fully occupied and to expand their enterprises. It particularly affects a firm of steel constructional engineers based in Cairns which is trying to keep its staff fully occupied and to expand its business. In order to do so it wishes to tender for Commonwealth works in the Territory of’ Papua and New Guinea.

Tenders are at present being called for the construction, mainly of steel, of a bridge in the Territory and this firm wished to tender for the job. It inquired from the shipping companies what notice they would require for steel to be shipped from Cairns or Townsville to New Guinea for the project. The firm was informed that even if it gave the shipping companies five months’ notice they could not guarantee that any ship would call to lift the steel. This meant that the firm would have to rail prefabricated material to Brisbane and load it on ship there for transport to New Guinea. Honorable members can see the problems with which the firm is confronted by such a situation. But this applies not only to the firm that I have mentioned. It applies also to primary producers and to businesses that are thinking of establishing branches or subsidiaries in the north. This situation represents a handicap and a hindrance. The steel firm that I have mentioned has already to rail steel to the north for prefabrication. Having met the cost of doing that it is now faced with the prospect of transporting prefabricated material back to Brisbane by rail for loading on ship for transport to New Guinea. This represents a considerable added cost and therefore the firm cannot compete against southern firms.

I have brought this matter before the notice of the House, Mr. Speaker, because I do not know which department would deal with the problem. The Queensland Government has no shipping line and owns no ships and the Australian National Line does not run regular services along the east coast of Queensland or between ports on that coast and New Guinea. I am sure that if we are sincere about trying to develop the northern part of Australia we should encourage those people who are prepared to invest their money in ventures such as this. We should ensure that a shipping service of some kind provides a link between Townsville or Cairns and New Guinea. This would obviate heavy transport costs incurred in railing goods from the north to Brisbane for shipping to the Territory. This handicap applies also to vegetable products. They cannot be shipped from Townsville or Cairns to the market in New Guinea, but have to be railed to Brisbane and loaded on ship there. This sort of situation represents a great hindrance to anybody who wishes to establish himself in the north. This is a real problem that will have to be dealt with. How can we encourage anybody to establish an industry in the north if in every instance this problem is encountered?

The firm of steel constructional engineers of whose circumstances I have spoken approached the Queensland Government for a reduction in rail freights on prefabricated steel material railed from Cairns to Brisbane for shipping to New Guinea. It receives no concession whatsoever at present, and even if it is lucky enough to obtain concessions from the State Government the burden of transport costs will still be so heavy as to make competition with steel constructional engineering concerns in the Brisbane and Sydney areas extremely difficult. Cairns and Townsville are about 1.000 miles from Brisbane. Ships that could provide a service between those ports and New Guinea already pass by and the ports are quite capable of accommodating the vessels but they will not call. I do not know of any way in which the shipping companies can be induced to provide the required service unless the Minister for Shipping and Transport (Mr. Freeth) can use his influence to prevail on them to do so.

Such a service would encourage the establishment of new enterprises in the north. New industries are needed to increase production and to help develop the north. The Commonwealth Department of Works also would derive considerable advantage, as would the Commonwealth Government generally, if firms in northern Queensland could tender for projects in New Guinea. Obviously with suitable shipping services such firms could submit tenders lower than those that would be submitted by concerns in Brisbane or Sydney. The establishment of additional industries in the north by southern firms would be encouraged by the provision of better shipping services. There is plenty of room for new industries there. We in the north need them to provide employment in off seasons for our seasonal workers. As I have said, additional industries in the north would be of advantage to Australia generally and particularly to the Federal Government in respect of its works projects in New Guinea. I appeal to Ministers who are present in the chamber or who are listening to the broadcast of the proceedings to consider the matter seriously and to advise me so that I may tell business people in northern Queensland how to overcome the problem of having to rail goods to Brisbane for shipping to New Guinea. I and the firms concerned would be thankful for any helpful advice. As I have said, any worthwhile action that can be taken in this matter would encourage more southern firms to establish subsidiaries in northern Queensland because they would have prospects of doing well.

La Trobe

.- Mr. Speaker, this is the first occasion on which 1 have taken part in a Grievance debate in this House. I consider that I must rise on this occasion. For a fortnight I have waited for somebody in this chamber to direct attention to certain remarks that were made at a Communist front meeting by a leading and distinguished member of the Parliament who sits on the other side of the House, but so far I have heard no mention of the matter. I realise that this could perhaps be taken by people outside this place as an indication that the Government parties accept this sort of thing as quite normal and as something about which they should not be concerned. The remarks that I wish to refer to were reported in the “ Age “ of Monday, 15th November, and in the “ Sun “ of that day. They were reported also in the “ Guardian “, the Communist Newspaper, of 18th November. I have waited for a fortnight to see whether the remarks would be denied and to see whether any question of misrepresentation would be raised in this House, but there has been silence.

The remarks to which I take exception, and to which I think the country should take exception, were passed by the honorable member for Yarra (Dr. J. F. Cairns) at a meeting at the Richmond Town Hall where he spoke on 14th November. The report states that at that meeting, at which was discussed Australia’s involvement in the Vietnam war, the honorable member for Yarra said -

If freedom in Australia was lost, it would be the result of the anti-Communists . . .

If that means that those who defend Australia and the freedoms in Australia are pro-Communist, I should like to know whether this is also the view of honorable members on the other side of the chamber. The honorable member stated clearly that the freedom of Australia would be lost by the anti-Communists and, therefore, if one opposes Communism in Australia one is placing the freedom of Australia in jeopardy. A little later he said that the Returned Servicemens League, the wealthy, the conservatives and the established were those who formed the threat to Australia. I do not mind him talking about the Liberal Party of Australia and I do not mind him having these views of the Liberal Party, but when he attacks the R.S.L. I think he should be answered. I should think that the R.S.L., far from having a majority in favour of the conservative Liberal Party in Australia, would have a majority of genuine Labour men; but when a man like the honorable member for Yarra, who is on the executive of the Australian Labour Party, can come forward and say these things I think they should be denied in this House, at least by some.

I do not deny to the honorable member for Yarra the right to oppose the Government’s policy. This is a right that we have in Australia. This we can do and this should be allowed to continue in circumstances when we are not officially at declared war. But I want to ask: Is it necessary to go to Communist front organisations on every occasion? Is it necessary for these meetings to be advertised in the Communist dailies throughout Australia? Furthermore, is it necessary to attack always those people whom the Communists are most assuredly against? I may well be asked how I can say that this organisation is a Communist front organisation. I have not time to read it, because ten minutes is very short, but honorable members know of an article in a pamphlet called “The Melbourne Peace Movement “ which was sent to them. The article sets out information about the Communist front technique of the Australian and New Zealand Peace Corps. The article was written by an honours graduate in political science of the Melbourne University, a member of the A.L.P. and a member of the “ Dissent “ editorial board.

Mr Cleaver:

– Who published it?


– The pamphlet was published by the “ Dissent “ Trust in January 1964. A further meeting has just been advertised in the “ Guardian “. For this meeting they will be taking the Sidney Myer Music Bowl in Melbourne and folk singers will provide entertainment. They are now going for the young people. This meeting will be under the guise of a folk singers’ festival; but it is being sponsored by the Victorian Branch of the Labour Party and Communist front organisations. I offer 10 dollars to the person who can guess who will be the main speaker at this meeting on Vietnam. It is to be the honorable member for Yarra. In another place the Minister for Works (Senator Gorton) listed that from 1948-


– Order! I remind the honorable member that a reference to a debate or proceedings of the current session in another place would be out of order.


– Very good, Sir. It was reported in the newspapers that a Minister of this Government listed dates for a period from 1948 until 1964 on which Communists were on the same platform with the honorable member for Yarra and with whom the honorable member associated in all matters which the Communists were representing. I do not wish to spend my time referring only to this honorable member; I think most people in Australia know where he stands.

I should like to read to honorable members opposite what other members of the Labour movement have said about co-operation with Communists and Communist fronts. I have not time to read what the Deputy Leader of the Opposition (Mr. Whitlam) said about the Victorian executive -this was quite interesting - and I have no time to say what Mr. Bob Holt, the former President of the Victorian Executive of the Labour Party, said when he resigned because of the co-operation with Communism. But let me read an article from a book “The Peaceful Revolution” written by Herbert Morrison, a member of the Attlee Labour Government, and presented to the Labour Party Conference at Bournemouth. There had been a suggestion that the United Kingdom Labour Party should cooperate with Communism. Mr. Morrison said -

First of all, there are fundamental differences between the political conceptions of the Labour Parly and the political conceptions of the Communist Party. We believe in constitutional government. We believe in Parliamentary democracy. We have every reason to believe, both by their doctrines as set out from time to time and by their practice, that the Communist. Party believes neither in constitutional government nor in Parliamentary democracy. The Parliamentary institution, based upon a majority forming the Government and a minority conducting what are really essential tasks of criticism and opposition, is something in which they do not believe.

Yet members of the Labour Party here appear on the same platform with them. He continued - I suggest that honorable members in this place and the public should read this -

Next we affirm that the Communist Party is not only a political party, but it is a conspiracy. Indeed, it is a little doubtful as to whether it is not more of a conspiracy than a political party. The Communists have their party members open and avowed, they have their secret members unavowed and undeclared but functioning in various Labour organisations and elsewhere, and they have their recognised “ fellow travellers “. They organise their fractions and nuclei in the Trade Union Movement and the Trades Councils as far as they can. They issue secret instructions to their people as to what they are to do, and the considerable amount of money they get hold of is itself a matter of mystery.

I have heard it said that this concerns honorable members on both sides of the House, yet we have leaders of the Parliament giving these people the forum of the Parliament to express their views, appearing on platforms with them and acting against the interests of the working class of Australia and, indeed, the people of Australia. In talking about the United Kingdom, Mr. Morrison went on to say that in the event of a Labour Government, these people would have to be considered for Cabinet posts. I note with interest that in Victoria the Labour newspaper “Fact” lists the executive delegates to the various committees for defence and foreign affairs. I will bet 20 dollars that honorable members cannot guess who is the representative responsible as the Victorian delegate for defence and foreign affairs. This is a matter on which Labour men have spoken, but nothing has been said in this House. We have reports of a meeting yesterday where one member had the courage to suggest that this matter of cooperation with Communists should be discussed and implemented, but he was ruled out on the voices. If this is the position in Australia and if this is what the people of Australia can look forward to, I can assure them that our day could well be coming close. I would not be overconfident that these people, with their agility, prowess, devotion and organisation, could not affect the security of Australia.


.- Once again we have listened to a McCarthy-like speech by one of the young Fascists of the Liberal Party. If they had their way, we would be erecting the concentration camps for which one Mr. Adolf Hitler was famous. But I wish to deal with something that is of national importance, and here I express my appreciation to the Minister for National Development (Mr. Fairbairn) for being present in the House. I advised him earlier this morning that I proposed to speak. The matter to which I wish to refer is the over-centralisation of industry and development in the metropolis of Sydney and the failure of the New South Wales Government and this Commonwealth Government to give some assistance towards the completion of the railway line from Sandy Hollow to Maryvale.

One of the things which have prompted me to speak this morning is the number of reports appearing in the Sydney Press. I refer in particular to a report that appeared in the “Sydney Morning Herald” and all the other Sydney newspapers on 9th November of a speech delivered by the Chief Planner of the New South Wales State Planning Authority, Mr. C. E. Ferrier. Amongst other things, this gentleman is reported as having said -

Sydney was almost at the limit of its present rail transport, water and sewerage services. Extension of all services would cost an extra £1,000 million every seven years for the expected population increase of 200,000 in that period.

Let me emphasise that. The extension of all services will cost an extra £1,000 million every seven years. Mr. Ferrier went on to say -

Overtaxed public transport systems would soon be incapable of moving peak-hour traffic without staggered working hours.

Road and expressway systems now planned, designed for a population of only three million, would have to carry five million people by the end of the century.

I remind honorable members that this statement was made by the Chief Planner of the New South Wales State Planning Authority. Therefore I assume that it is made with some authority and some knowledge of what we can expect in Sydney in the very near future.

I refer also to a statement by the former Premier of New South Wales, Mr. J. B. Renshaw, M.L.A., on 11th March of this year when he outlined what his party proposed to do about the development of transport in Sydney. His proposal has been accepted and adopted by the present Government led by Mr. Askin. It provides for an expenditure of £80.5 million in six years on the development of the Sydney rail- way system. It also envisages the expenditure of £32 million in the next six years on expressway construction. Yet, when State and Federal parliamentary representatives of the Hunter Valley and adjoining electorates asked the State Government to make approximately £10 million available for the completion of the railway line from Sandy Hollow to Maryvale, they received an unfavourable reply. They were told that there was no money available for this work. Yet, as I have pointed out, £112 million is to be made available in the next six years for the development of the rail and road systems of Sydney.

Mr. Ferrier has stated that the State Government will have to find £1,000 million every seven years for the development of roads, railways, sewerage and other community services and amenities. This can mean only a continuation of the present trend of over-centralisation. The present populations of Sydney and Melbourne represent 39.2 per cent, of the total Australian population. Members of the Country Party talk about decentralisation. They have five Ministers in the Common wealth Government and they have substantial representation in the New South Wales Government. How much money do the Governments supported by these men make available for the decentralisation of industry?

I believe that if the money were made available to complete the railway between Sandy Hollow and Maryvale - I have spoken on this subject previously in this chamber - it would help to bring about some decentralisation. Not satisfied with proposing to spend a huge sum of money on roads and other facilities in Sydney, the State Government has asked the New South Wales Maritime Services Board to investigate the siting of new terminals in Sydney Harbour for containerised cargoes, and it is now talking about developing Botany Bay as a satellite harbour for Sydney. All these things are helping to concentrate an excessive number of people in the Sydney metropolitan area. If the Government were genuine in its desire for decentralisation, the adoption of my suggestion would go a long way towards achieving that objective.

It has been stated by the bureaucrats of the New South Wales railways that the line from Sandy Hollow to Maryvale would not be a paying proposition. But I remind honorable members that a former Minister for Transport in New South Wales had this to say about the eastern suburbs railway project -

The railway is not expected to pay, but no railway in the world that I know of pays.

Apparently it is quite all right to develop new non-paying railway lines in Sydney, but it is not good policy to apply that principle to non-metropolitan railways. This Parliament can be expected to make a reasonable grant towards meeting our defence commitments. Nobody can deny that to have only one railway line connecting the southwestern, central western and north western areas of New South Wales with the seaboard - that which passes through Lithgow - is not in the best interests of the defence of this country. That this is unwise was clearly demonstrated in the recent air exercise carried out by the Royal Australian Air Force when aircraft theoretically destroyed a number of road and rail bridges in the Sydney and Newcastle areas.

For defence reasons, this Government has a responsibility in this matter. It should offer the New South Wales Government a reasonable grant to encourage it 10 help meet our defence commitments by completing this alternative route from the inland areas of New South Wales to the coast. Just as the Commonwealth Government made £20 million available to the Queensland Government for the modernisation of the railway line between Townsville and Mount lsa, so should it indicate to the New South Wales Government that it is prepared to make available special loan moneys - apart from normal loan allocations - to enable this work to be completed. It is almost completed now. The provision of a grant would enable the State Government to proceed with the work. I am not making an unreasonable request.

The Government realised about three years ago that there was urgent need to modernise three New South Wales ports - Sydney, Newcastle and Port Kembla. It made grants plus loan allocations for deepening work and certain other improvements. There are a number of precedents to support the claim that this Government has a responsibility to help. Therefore I emphasise that as a defence measure the Commonwealth Government must make available special loan funds for the completion of the Sandy Hollow-Maryvale railway line, just as it has made funds available for other works.

There is an urgent need for the completion of this line. This must be admitted when I point out that Newcastle’s secondary industries alone import from the western part of New South Wales 275,750 tons of ore for the steel works and the Sulphide Corporation Pty. Ltd. If the line were constructed, products such as wool, wheat and other cereals, meat and other rural products, which we export could be shipped through the port of Newcastle and thus relieve much of the present congestion in Sydney Harbour. Backloading comprising 72,000 tons of fertiliser and other general rural requirements such as steel, pipes, wire, fence posts, masonite, machinery and general merchandise, is all passing through Sydney at the present time and adding to the congestion on the already overloaded railway system of the Sydney metropolitan area. Completion of the Sandy HollowMaryvale line at a cost of only £10 million, compared to the proposed expenditure of over £112 million in the Sydney area, would do much to meet the problems of defence and decentralisation.


.- On Grievance Day my thoughts go to people in country towns and country areas. On nearly every occasion I have risen on this debate in this House I have referred to the lack of proper telephone facilities, a disability from which country people suffer. I believe this lack is caused because planning has not kept pace with the great demand for telephones. We must remember that the Postmaster-General’s Department is a monopoly. As a matter of fact it is interesting to speculate whether it will be examined under the legislation that has been introduced and which will shortly be debated here. However, it is evident that this is a monopoly because quite recently when people complained about having the cost of itemised accounts debited to them in their telephone accounts they were told that the cost associated with preparing the accounts had to be paid by them.

This monopoly in its planning should have regard for the people it serves and their needs, so I want to refer briefly to rural automatic exchanges to replace manual exchanges and to draw the attention of the House to the fact that this can be related to the desire to provide fully automatic services extensively. At present people in Canberra can dial Sydney automatically, but ibis is no consolation to the man in Dubbo who has no automatic telephone exchange and even if he had he still would not be able to dial Sydney direct. At present when the Dubbo businessman wants to speak to his customers who live out of town - or when those customers want to ring him - dependence must be had on the manual system. Recently the PostmasterGeneral told us that this year 126 more country automatic exchanges would be installed. He said that 38 would be provided in New South Wales, another 40 would replace existing small automatic exchanges and further 34 small automatic exchanges would be commenced in country areas but would not be completed until the financial year 1966-67. This is all very confusing, so let me try to put the problem in a nutshell. Automatic telephone exchanges are necessary in country areas in times of drought when people do not want to travel long distances to towns. They want to be able to telephone the town and arrange to have sent to them quickly the goods they require.

At present country residents suffer from many disabilities. Some have subscribers’ lines prepared for automatic telephone exchanges that have not eventuated. How can they eventuate when we have one or two only in each electorate? Mudgee has the only automatic telephone exchange in a country town in my electorate. The Burrendong Dam has at times been a threat to some subscribers. Instead of their being provided with automatic exchanges they have been placed on party lines. In 1956 the people of Dubbo were given the choice of a fully automatic exchange or a central battery exchange. They chose the central battery exchange because they knew it could be provided straight away, but now that exchange, which was intended to supply needs for 20 years, has been completely taken up and a portable exchange is being installed to serve a further 1,000 subscribers. Admittedly the portable exchange is automatic. While it can serve 1,000 subscribers, 800 will be connected immediately, leaving a reserve of 200 which, it is suggested, will be sufficient to meet requirements for the next five years. The central battery exchange that was intended to meet requirements for 20 years was fully loaded within nine years, so can it be expected that a reserve of 200 lines will be sufficient to cope with demand for the next five years? I suggest that this is an instance of insufficient planning in view of the increasing demand for telephone services in country areas. Dubbo is a place that demands an automatic exchange immediately. It has waited 10 years for this facility. It is a big town of some 14,000 to 15,000 people yet it has no automatic telephone exchange. How can it be said that our telephone services are growing with the times?

Narromine is another large town in my electroate. A new post office was built in 1959 and provision was made for a changeover to an automatic telephone service. The old post office was retained and converted into a telephone exchange pending the changeover. At about that time people from the Department visited Narromine and said they expected that it would not be long before the transfer to automatic working could be made and that Narromine would have the latest equipment, including the new crossbar equipment. 1 do not criticise these men who came and in good faith expressed their hopes, but no automatic exchange has appeared in Narromine and I think its residents are justified in claiming that the expressed expectation - interpreted by some as a promise - should be carried out. We do not know why the sudden change in plans was made. Whereas at that time the new crossbar equipment was expected within a few years it is no longer even on the drawing boards and, as far as I can find out, is not contemplated in the current year. I want to know whether it will be on the Estimates for next year.

Wellington has for a number of years sought a new building because it believes the building constructed for the telephone exchange is inadequate and out of date and should be replaced. I ask that when this happens it be replaced by a building to take an automatic service. Country people could be helped by the holding of conferences with top level representatives from the Department. The local telephone managers and engineers have been extremely good in meeting subscribers and explaining difficulties, but they lack authority to say when things will be done. If country areas could have visits from men who speak with authority, who could explain the problems and how they hope to overcome them and who could indicate when automatic services could be provided not only in rural areas but in country towns, we would be much further ahead. I do not suggest that this be treated as a substitute for the provision of the services to which country people are entitled, but it could be a step further in the programme the Postmaster-General has put to the people of Australia.


.- I wish to spend my time speaking of the disadvantages that people with disabilities experience in obtaining employment. It is perfectly true that the situation is far better now than it was 30 years ago when, generally speaking, the person with a disability did not get beyond an interview for employment. If he concealed his disability, when it manifested itself subsequently he was immediately discharged from employment. With the coming of the war and the necessity to utilise all available manpower these strictures were in many instances lifted. As a result of the experience gained during the war years many of the prejudices that formerly prevailed against handicapped people getting jobs disappeared. The position is better today than it used to be but unfortunately there is still in the community a great deal of prejudice and indifference towards the employment of handicapped people.

Following the war a report was presented to the Government by what was known as the Boyer Committee. That Committee investigated this problem. The Committee’s recommendations received the consideration of the Government. The purpose of the Committee’s inquiry was to enable handicapped people to be placed in employment in the Public Service. I do not know to what extent the Committee’s recommendations are being implemented but I feel that the approach of government medical officers to this problem leaves a lot to be desired. Those people who watched “ Four Corners “ at the weekend could not fail to be impressed but also a little distressed by the circumstances of an epileptic who found his job in jeopardy. The programme should have removed completely from the minds of people any idea that epileptics have no trouble obtaining and holding a job. Many people have been deeply moved by the plight of these people. What can be said about epileptics may also be said about many other people who suffer physical disabilities and who as a consequence are handicapped in their efforts to obtain employment. As was pointed out during question time this week, the Government has one policy regarding the payment of unemployment or sickness benefits to epileptics and its departments are bound by such a rigid code that they are almost prevented from offering employment to these people. The attitude of government medical officers to this problem, as well as to others, needs a little tidying up. We are not impressed by Ministers coming into this House and giving us the advice they have received from medical officers. When Ministers do this they are virtually abdicating in favour of such officers. If this is the attitude of Ministers they might as well hand over to their medical officers.

Other matters also in this field call for greater ministerial direction and authority. Take the case of a government employee who has contracted tuberculosis, been treated by the State authorities and subsequently discharged by those authorities as being cured and as representing no risk to the public. The authorities virtually say: “You are now well. You may go out into the world and lead your usual life.” But this is not sufficient for the Commonwealth’s medical officers. They say that before that man may return to his work he must wait another six months. It is highly contradictory to have on the one hand the State health authorities saying that the man represents no risk through contact with the public and on the other hand the Commonwealth’s medical officers saying that he must wait another six months before returning to work. This contradictory state of affairs can react only to the detriment of handicapped people.

I feel there may be greater opportunities for handicapped people in government service than in private industry. It is true that in some instances private industry makes a contribution by providing employment for such people, but I regret to say that there is still in the community far too much prejudice and indifference which operates to the hardship and detriment of these people. Perhaps public reaction to this problem is a little more enlightened than it was a few years ago. However, a great deal of prejudice still remains to be banished. A person with a disability or a handicap of some kind who is trying to keep the home front going faces tremendous problems, particularly if he is married. I appeal for a more compassionate, understanding and tolerant approach to the employment needs of these people. The provision of some kind of work for these people has been left principally to religious organisations and to some types of commercial organisations.

As I have said, experience has shown conclusively that when these people are given an opportunity to work they have proved themselves as reliable and as capable as other people. There must be many industries where more of these people could be employed than are employed at the moment. All that is needed is that a little more consideration and understanding be extended to these people. All we want is a more compassionate approach to their problems and more tolerance extended to them. If the community adopted such an approach to this problem, many of these unfortunate people, who are today denied jobs simply because there is a lack of understanding on the part of employers or even an attitude of indifference and prejudice, would have removed from their shoulders the tremendous responsibility of continually seeking jobs. At present they invariably come up against brick walls.


– Honorable members may recall that a few weeks ago in a Grievance Day debate I referred to the priorities to which I thought the Government should give consideration. The first priority was defence. The second was water conservation, and the third - a natural corollary of the second - was decentralisation. I dealt to some extent with the first priority but I did not have time to refer to the other two. Probably I will not have time to complete my arguments this morning, because I may speak for only 10 minutes. These are very big subjects encompassing the whole of Australia and all Australians. Defence has No. 1 priority in this country. We all know that. No matter how good your water supply, your social services, your decentralisation schemes or anything else that makes for congenial living may be, if your defence is not good and an enemy can come in and take charge, everything is lost. I do not think any honorable member will disagree with me when I say that defence is our No. 1 priority.

When I spoke on a previous occasion I directed attention to the presence of our forces in Vietnam. I believe that our men there should have the wholehearted support of the Australian people. Since I spoke this cry has been taken up by a New South Wales clergyman. His remarks have received some publicity in the Press. Of course, when I spoke in this Parliament nothing was said in the Press about my remarks.

Our soldiers have fought in two great world wars and in numerous small wars in an effort to rid the world of would-be tyrants. On this occasion they are doing exactly the same thing. The Government of the day has decided, in its wisdom, that we should co-operate fully with our ally, the United States of America. If we did not, how could we expect that great power to co-operate with us if such co-operation became necessary for our defence? Therefore I say very definitely that as the Australian Government has seen fit to intervene in Vietnam and as our kinsmen are fighting there at the present time, every Australian should be wholeheartedly behind those men who are helping to prevent the spread of Communism across Asia.

Throughout this country we hear people saying that our men should not be in Vietnam. We hear all kinds of speeches about the subject, and they must be very discouraging to our men who are fighting on foreign soil. I know from experience that this must be so. I remember the feelings of those in Changi prison and such places at the darkest hours of the period when so many of our men were prisoners of war. When they heard on the secret wireless that people working on the wharves or the ships in Sydney Harbour - I forget the exact details - were getting extra money for the risks they were taking, this had a most depressing influence on them.

I know that nothing can be done about this matter unless the people of Australia themselves decide to give our men serving overseas every support, and from this Commonwealth Parliament I appeal to every citizen to realise that men are dying overseas so that we may continue in peaceful occupation of this country. I repeat that there are people in Australia saying that our men should not be in Vietnam and other countries’, but I remind the House that our men have served overseas before. Australians have gone abroad on many occasions and made sacrifices; they have given their lives so that their fellow Australians may live. This will happen again because there will always be men willing and able to take risks when even small things connected with our way of living are challenged.

I hope that people throughout this country will realise the seriousness of the situation. The majority do, because a Gallup Poll has shown that they do. We must realise that there is really a war in progress, even though we have not declared war. Our men are dying, and I appeal to the people of Australia to give our soldiers serving overseas their wholehearted support, as they have given it in the past.

Let me move on to the second subject about which I wished to speak. It is the subject of water conservation. Some people may say that social services should be given a high priority by the Australian Government, but I remind them that social services can be provided only when a country is prosperous. Unless a country earns a lot of money it cannot pay social service benefits. I believe that the best way to increase our productivity, ensure for our people more congenial living and perhaps increase pensions for those who we know need them is by implementing a vigorous programme of water conservation. The Government should inaugurate a major plan for the conservation of more and more water. It should also make sure that the water that is conserved is used to the best advantage.

In previous speeches I have made advocating greater efforts in water conservation I have stressed the need for taking stored water by pipeline to country districts far removed from the storages. It has been stated by an eminent expert on the subject that in some cases the wastage of water between storage and point of use is as much as 90 per cent. Some of it is lost through evaporation but most through seepage. This is a national calamity. An efficient pipeline system for water distribution would be equivalent to increasing existing storages by 50 or 100 per cent. The provision of storages is a very expensive business. The provision of pipelines is also expensive, but it is only a single expense that is incurred. There is only a limited amount of water available in Australia and if we concentrate on building more and more storages we will eventually reach the limit and find that any further storages provided cannot be filled. If, however, we concentrated on using the stored water to the best advantage we could double the amount of water that is at present available for pastoral and agricultural pursuits.

I do urge the Government to consider seriously the implementation of a plan for conserving more water and distributing it by pipeline. I know that some people will tell me that the States should do this kind of job. I know that the States have their obligations and I know that the Federal Government distributes large amounts of money to the States so that they may fulfil those obligations. What I have been trying to arrange through my efforts in this House over a long period is a conference between representatives of Commonwealth and State Governments and interested pastoral and agricultural organisations, so that we may find out exactly what is required.

I live in an electorate which has a very large frontage on the River Murray, which is, of course, Australia’s greatest waterway. The amount of produce directly attributable to irrigation from the River Murray is tremendous. Country like that around Mildura would be carrying perhaps one sheep to 40 or 50 acres if the benefits of irrigation were not available, but today, as everyone knows, Mildura is one of the show places of Australia. The district produces as much as £12,000,000 worth of dried fruits per annum. The dried fruits industry is an important export industry and it must be. maintained. Many other commodities, such as cotton, could be grown in the district if more water was available. Therefore I appeal, on behalf of all the people of Australia, because all would ultimately benefit, for greater efforts in the field of water conservation and also for the provision of pipelines for distribution of stored water.

In conclusion I return to my original point and urge the people of Australia to give their full support to our servicemen overseas.


.- I wish to talk about the Government’s failure to accept its proper responsibilities in respect of Australian volunteers serving abroad. It is true that Australia has assisted in many ways, mostly economically, the underprivileged countries, but in respect of Australian volunteers serving abroad the Australian Government has been found wanting. This fact was highlighted on 7th November when two of our Ministers made a joint statement that the Government had decided to give some assistance to the Overseas Service Bureau in its programme involving sending overseas Australian volunteers. This assistance is very belated, of course, but it is a small step in the right direction. But a more important fact emerging from the statement was that the Government is running away from its responsibility and saying that private agencies can do the job better than the Government can. Obviously the Government has not given the question proper consideration. It has not given it the consideration that many other developed countries have given it. It was only after a good deal of pressure had been brought to bear by private agencies that the Government belatedly agreed to make some financial contribution to a private agency doing valuable work abroad. Over an article in the “ Canberra Times” of the 9th November the heading “Hasluck calls for effective aid abroad “ appeared. I ask: To whom does he call? Where does he call? This rather wordy report that the Minister has given contains very little substance in respect to aiding Volunteers Abroad - that is on the Government level. It is true that the Government recognises what private agencies have done, but it is doing nothing effective itself. The Government could take a very good pattern from the American administration which in 1961 extablished a Government instrumentality to pursue the great ideal of getting Americans not only to volunteer for overseas service but first to be trained intensively in their own country before going overseas to assist underprivileged countries with the skills and know-how that will give them the opportunity to overcome the lack of knowledge that has been bede veiling them down through the years.

I was talking to administrators of the Peace Corps in Washington quite recently. One of the first things they said to me was: “ Your Australian Government does not appear to be very interested in this cause. It will not even allow donations given to assist the Australian Volunteers Abroad scheme to be claimed as tax deductions. I had no answer to this statement other than that if they knew the kind of government we had in Australia they might fully understand. Here is the real test: If this Government were sincere in its desire to assist the Australian Volunteers Abroad scheme it would long before now have allowed donations to the scheme to be claimed as tax deductions. Because it has not done so, donations go into other channels. Potential donors to this project, because they cannot obtain a tax concession, make their donations to other causes. It is the responsibility of this Government to allow donations to this cause to be claimed as taxation deductions. The Government has a greater responsibility to follow the lead of America and to set up a government sponsored peace corps in Australia. This could be complementary to the work being done by private agencies in this field. 1 believe that a peace corps could be a powerful instrument in obtaining world peace, because it would operate on a person to person basis. Its members would volunteer to serve in the underprivileged countries in order to help raise their standards of living to those that obtain in the developed countries. If that objective could be achieved the causes of, and the desire for, war would melt away very quickly. It is only because of the misery that surrounds poverty, illiteracy, suffering and malnutrition that people turn to war in desperation. If these ills of society could be cured we would go a long way towards attaining world peace.

I hope that the Government will consider this matter and decide to set up a government sponsored peace corps, as has been done not only in America but also in many other countries. Today there are working abroad volunteers from the following countries: Canada, Belgium, Denmark, the Netherlands, France, West Germany, New Zealand, Norway, Switzerland, Israel, the United Kingdom and Japan. In most cases members of government sponsored peace corps go to underprivileged countries to assist them to achieve a better standard of living and a better way of life. If these other countries can do this why cannot the Australian Government follow suit?

This scheme was initiated in 1960 under the sponsorship of the late President of America, John F. Kennedy. Tt was carried on after his assassination by President Johnson and his Administration. When other countries saw the benefits that were flowing and accruing from this work their governments came in behind the Americans and established peace corps of their own. I believe that if the Government gave this matter the serious consideration it warrants it too would follow the lead that has been given. By doing this it would, as I have said, be making a powerful contribution to the peace of the world because it would be helping to abolish the causes that breed war. I ask the Minister and the Government to have another look at this matter and not just say, as the Minister for External Affairs (Mr. Hasluck) has said, that private agencies can do the work completely and satisfactorily. They can do it to the limit of their resources, and all credit to them, but they cannot do it on the great scale that is needed. Only a government that has the necessary resources can do the job that should be done. For these reasons I hope that the Government will heed what I have said and give this matter the consideration that it deserves.


.- I want to speak on a matter which concerns the Department of Immigration. I apologize to the Minister for Immigration (Mr. Opperman) for not discussing this matter with him prior to raising it on the floor of the House, but I had not the opportunity to do so. It has only just come to my notice and I think it is a matter in which the Department of Immigration might be able to give some help and advice. A Mr. and Mrs. W. Philippzig, of Ringwood Road, near Medowie, New South Wales, came to Australia from Germany and established a pig farm on 20 acres of land. These people are acknowledged to be the type of migrants we want in this country. They are well respected and well liked in the area. The Hunter District Water Board resumed 14 acres of their 20 acres of land and left them without access to water. Unfortunately these people find themselves caught between the requirements of the Hunter District Water Board and the Health Department of the Port Stephens Shire Council. The latter department is trying to prevent them from carrying on their piggery and is threatening them with prosecution. They will no longer be able to operate and there is no hope of their obtaining proper compensation. My colleague in the State Parliament, Mr. Leon Punch, who is the State member for Gloucester, has taken this matter up with the New South Wales Health Department. It is a complex and difficult problem. The Hunter District Water Board having resumed 14 acres of their original 20 acres, Mr. and Mrs. Philippzig are endeavouring to continue their piggery on the remaining 6 acres. Unfortunately this has bought them under the criticism of the Health Department because of the proximity of the piggery to the land resumed by the Hunter District Water Board. As these people have not a great deal of appreciation of what is required I wonder whether it would be possible for the Department of Immigration to send somebody to Medowie to talk with Mr. and Mrs. Philippzig and see what assistance can be given to them.

Mr Opperman:

– How long have they been in Australia?


– For eleven years. They are well respected and well liked in the area and according to reports from everybody in the district they are good citizens. Their difficulty is that they find themselves caught between these two authorities. The Hunter District Water Board does not require the six acres which it has left them, and the Health Department says that Mr. and Mrs. Philippzig can no longer conduct a piggery on those six acres. Under the circumstances I should be grateful if the Department of Immigration could see what assistance could be given to these people.


.- Mr. Speaker, in recent months I have made several references to the very serious problems of erosion and siltation along the foreshores of Botany Bay particularly between the Brighton-le-Sands and Kyeemagh areas in my electorate and in the adjacent electorate of St. George. I have drawn the attention of the House to this matter in speeches I have made here and I have directed the attention of the Minister for Works (Senator Gorton) to this matter in letters I have written to him regarding the seriousness of this problem. I have made representations on behalf of the Council of the Municipality of Rockdale and the various other interested bodies and individuals in the locality.

The first instance of this serious erosion took place in the week between 1 7th and 24th July of this year. Since then another quite substantial amount of damage has been caused. This arose out of a storm on 8th October, I think. The residents of this area and the Council of the Municipality of Rockdale particularly are very deeply concerned about the fact that no public authority, either State or Commonwealth, is prepared to take responsibility at this stage for the damage that has occurred or to make provision for the prevention of further damage in the area. To give honorable members some indication of what I am complaining about, I will read a short extract from a letter I wrote to the Minister for Works (Senator Gorton), on 23rd July 1965. In this letter I said -

The point of referring this matter to your notice is that it is strongly suspected that the erected part of the Kingsford-Smith Airport north-south runway extension into Botany Bay has so influenced tidal direction and action as to be an important factor in the unusually severe erosion. Additionally the deepening of the Bay bed in the immediate vicinity through dredging operations to supply sand for the Airport works is also suspected as a major factor.

Local residents claim that during the stormy weather on this occasion the waves rolling onto the beach seemed to be larger than usual. A prominent local engineer suggests that the deepening of the Bay in the immediate area would tend to aggravate the scouring action of the water on the beach under such circumstances.

On inspection yesterday I found most of the beach had disappeared and erosion had undermined a considerable yardage of a corrugated iron wall erected some years ago to protect residents and homes from sand blasts. An amount of this structure has collapsed and been carted off on the tide. Residents estimate that the beach floor has been lowered by about three feet and erosion has eaten into the adjacent parkland to a depth of six or more feet in places.

Mr. Speaker, not only has the erosion eaten away the beach in this area but also it has eaten into the beach wall at the back of the beach to the extent of approximately 12 or 15 feet. There is only a narrow parkland between this area and important roadways in the municipality. It will be no time at all, If storms of this nature continue to have this effect, before the erosion will be encroaching onto the roadway itself. On the other side of the roadway is a number of residences. This erosion, of course, is giving the owners of those residences grave concern. After all, this happened five months ago. Despite all the entreaties I have made and despite entreaties by other organisations in the community, the Commonwealth has not given any indication that it intends to do anything about the problem. The Commonwealth has referred the matter, 1 believe, to the Wallingford Hydraulics Research Station of the Department of Scientific and Industrial Research in England for further investigation. This body was asked to investigate what could be the problems when the whole business of the runway extension was first mooted. All of that research work took place before the dredging operations began and before the runway extensions were commenced. It ls now a matter of going into further research to look at the effects which have occurred, unpredictably apparently, since these works have taken place.

The Minister for Works in a letter to me on 6th September 1965 did acknowledge that these dredging operations could have had some effect in the Kyeemagh area. I quote very briefly from his letter to me on this subject. The Minister for Works said -

At Kyeemagh the possibility that the presence of the dredged area intensified the effect of the storm waves on the beach cannot be dismissed. The direction of the wind during the storm of the 17-18th July was such that waves would traverse diagonally across the dredged area towards the corner of the beach.

Then there are some theoretical remarks to the effect that officers of the Maritime Services Board believe that this could have caused a concentration of wave energy on the beach. The situation is much more serious than 1 have described it. Not only has the beach been taken away, and not only has the erosion encroached on the narrow parkland in front of the homes in the area and approached the roadway but in another part of this area there is heavy siltation. The Kyeemagh baths have been rendered completely useless. I inspected the Kyeemagh baths a little while ago and at low tide there is hardly any water in these baths which were constructed at considerable expense to local residents by the local municipal council. Additionally, river access to an important boating club - the Kyeemagh Amateur Fishermen’s Club - has been silted up. This club has made representations to the Minister for Works, through me, suggesting that the siltation of the mouth of Cook’s River where it enters Botany Bay presents a serious danger to human life. I have described that danger in full to the Minister for Works and to the House before. I have not time to repeat it now.

On 28th September 1965 the Town Clerk of the Council of the Municipality of Rockdale wrote to me and mentioned the seriousness of this matter. The Council asked me further, to draw to the attention of the Minister for Works the urgency of this matter. As I say, that was on 28th September, nearly two months ago. We still have no indication of action by the Commonwealth. It is obvious to anybody who is versed at all in the matter that the dredging operations and the runway extensions have been the prime cause of the serious damage that has occurred in the area. I have not spoken about the damage to the property values. People who own residences in the area would suffer a severe loss of value through the existence of this problem and the continued delay of the Commonwealth to make any kind of decision as to what it intends to do about the matter if they tried to sell their properties at this stage.

One of the matters to which I want to refer in the few minutes left to me is this: The research which has been carried out has been undertaken by the Wallingford Hydraulics Research Station in England. It has been drawn to my notice that we have perfectly adequate facilities for research in this field in Australia. One organisation which could undertake this work is the Water Research Laboratory of the University of New South Wales which has its headquarters at Manly Vale, 12 miles from the scene of this damage. This authority assures me it has complete facilities to carry out all the research that is necessary. As a matter of fact, members of the Water Research Laboratory could be at this area within an hour or so of the onset of a storm to make an on the spot inspection of what is going on. But instead of patronising a local organisation, the Commonwealth Government has given the whole of this job to research laboratories in England. The Water Research Laboratory is not the only local body that could carry out this work. What about the research facilities of the Snowy Mountains Hydro-electric Authority at Cooma which, I suppose, have been seen by every member of this House? These facilities are quite adequate to carry out the research work I have mentioned. Then there is the Commonwealth Scientific and Industrial Research Organisation which has carried out similar research, I understand, in the Portland area in Victoria.

Of course, not only is there extra cost involved in employing an overseas laboratory to carry out this research, but also time and delay are involved. With regard to the matter of extra cost, I understand that officers will have to be sent out from England to make inspections of the damage that has been caused. The Water Research Laboratory of the University of New South Wales tells me that it has even been asked by the Wallingford Hydraulics Research Station in England for some advice on the matter. The Water Research Laboratory assures me that it could have carried out all the research work that was necessary for the extension of the runway and for the ancillary facilities that might be needed. It is wondering why the Commonwealth had to go outside Australia to the laboratory in England for this kind of research. As it turned out, the research done in England did not produce very accurate predictions about the collateral effects of the extension of the runway and the dredging of Botany Bay. I ask the Commonwealth Government, for goodness sake, to hurry up and make up its mind about what it intends to do and so relieve the people in this area of worry about damage to their homes.


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


.- The honorable member for Adelaide (Mr. Sexton) a short time ago made a typically thoughtful speech of the kind that you, Mr. Speaker, would expect from an honorable member from South Australia. He made several points which I think we should bear in mind. His chief plea was that the Government should grant income tax deductions for donations to charities and other organisations that help with the development of other countries. I have previously asked the Government to do this. I realise that there are difficulties in the way of implementing this suggestion, but I join with the honorable member in asking the Government to consider favorably permitting these donations to be deducted from taxable income.

This brings me to the point I really want to make. We are approaching the festive season. I - I suppose in common with many others - am rather grimly aware of the ordeal that awaits me. I will proceed unwillingly from one party to another. I will stand uncomfortably first on one foot and then the other, changing my glass from one hand to the other. I will eat food that is not good for me and generally I will not really enjoy the parties. I find that almost all the people who attend these parties feel as I do. Recently, there has been a tendency for some companies - especially big companies - to dispense with this unnecessary punishment of both their pockets and their frames. Instead of holding parties, they are giving the money directly to charities. I think I can properly mention one company. I was in Melbourne last year at about this time and I was told that the Repco organisation had made such a donation. I have publicly criticised this organisation in the House for some of its activities and for that reason I think it is all the more appropriate that I should now pay a tribute to it. The organisation believed that it had to choose between giving the money or giving a party and it decided to give, I think, £700 to Community Aid Abroad, which is one of the organisations engaged in the excellent overseas aid exercise.

I hope, to a limited extent for my sake and for your sake, Sir - I presume that you engage in this rather dreary procession - but chiefly for the sake of people overseas and the organisations that are helping so manfully in this exercise to aid other countries, that other firms will follow the example of the Repco company and, instead of giving parties, will give the money they would spend to these overseas aid organisations.


– I endorse everything that the honorable member for Mallee (Mr. Turnbull) said this morning, especially his comments on water conservation. My electorate is now vying with that of the Minister for Trade and Industry (Mr. McEwen) for the right to say that it has the largest area of irrigation of any electorate in Australia. When all the works that are now proceeding in the Blowering area on the Murrumbidgee River and the Talbingo dam above it are finalised, over 90 per cent, of the available water in the present Snowy Mountains Authority area will be trapped. However, nearly half the flow of the Murray River will remain unused. Before the Snowy Mountains Authority is dispersed and used elsewhere, I would like it to devise means of using the remaining waters of the Murray River. I do not want to make comparisons between works, as we are prone to do. Some people do not want to see work undertaken in other areas because it may deprive the area in which they are interested of the opportunity of having work done there. This is a narrow, parochial viewpoint and not a national one. I do not want to put that viewpoint forward, but I think it would be a waste of talent if we did not use the great administrative and planning ability of the Snowy Mountains Authority in the area where it is now situated before it is dispersed for use in other regions.

Two areas above the Hume Weir could be developed. One is known as Murray Gaps and the other is the Jingellic area. Both have been surveyed and a good deal of basic work has been done, but for the moment further work is not proceeding. This matter also concerns the River Murray Commission. It is not a matter solely for the Commonwealth Government; it is a matter for the Governments of three States as well. It is a matter of such national importance that work should be undertaken at the earliest opportunity so that water that is not now being used could be put to proper use. The Murray River, of course, is Australia’s greatest waterway and conservation of water at the source of this river would not only result in greater productivity but would also create diversity of production and so produce greater wealth for the whole of the community. Another aspect that should not be forgotten is that the tourist industry along the Murray Valley is developing. It is already a minor industry. Work on the Murray River would, in addition, give more security to those people who pump from the river at no cost to any government. It is interesting to note in passing that I saw the Murray River at Swan Hill in July of this year and in the mid regions of the stream it was just as low as it was in 1914.

I want to get away from the Murray River for a moment and refer to the Murrumbidgee River. Along the Murrumbidgee River, between Darlington Point and Balranald, large numbers of people have implemented private irrigation schemes of an elaborate nature. They are creating employment and are adding considerably to production. At the moment, they do not have any firm basis for this activity, and I think that they should be given some security. This is a matter, of course, for the State Water Conservation and Irrigation Commission of New South Wales. The pumping licences on which these people operate at the moment can be revoked at very short notice. This is a matter for overall planning. I would urge, therefore, that every effort be made to allow these people to have some continuity in their pumping. Considerable attention has been focused on the value of irrigation by the intensity of the drought that now prevails.


– Order! It is now fifteen minutes to one o’clock and in accordance with Standing Order 106 the debate is interrupted and I put the question -

That grievances be noted.

Question resolved in the affirmative.

Sitting suspended from 12.45 to 2.15 p.m.

page 3190


Bill presented by Mr. Harold Holt, and read a first time.

Second Reading

Treasurer · Higgins · LP

, - I move

That the Bill be now read a second time.

The principal purpose of this measure is to amend provisions of the Pay-roll Tax Assessment Act that provide rebates of payroll tax related to increases in export sales. These rebates were, of course, introduced to provide an incentive to Australian producers to increase their export sales. The proposed amendments will affect the rebate entitlements of motor vehicle manufacturers who export motor vehicles in what is known in the trade as a completely knocked down condition. As the legislation stands, a vehicle manufacturing firm that exports motor vehicles in a knocked down condition may not be entitled to receive as large a rebate as it would be entitled to receive if it exported the vehicles fully assembled. Exporters of vehicles in a knocked down condition are generally unable to count in the value of export sales so much of the sale price of the vehicles as is attributable to components purchased from Australian suppliers and exported without the exporter making any change in their condition. This applies also to components that have been imported from overseas. The Government regards this situation as inappropriate and the purpose of this Bill is to alter it.

Under the existing legislation, a rebate entitlement rests primarily with a person who by manufacture, production, assembling, processing, grading and sorting, or by packing in an original container, brings goods into the form or condition in which they are exported from Australia. This person is referred to in the law as a producer for export of the goods. Where a vehicle manufacturing firm manufactures a vehicle in

Australia and exports it as a finished product the firm is, of course, a producer for export of the vehicle. In manufacturing the vehicle it will ordinarily have used com* ponents that fall into three broad categories, These are components manufactured by the firm itself, components that it has bought in from Australian suppliers and components that it has imported from overseas. I would mention, however, that the imported components represent a diminishing factor because of the Government’s policy of increasing the local content in vehicle production. Vehicle manufacturers in Australia have, however, found it necessary to make motor vehicle exports other than in an assembled form. What happens is that to a considerable extent vehicles are exported not as complete units but in a knocked down condition - that is, in an unassembled form. The principal reason for this is the policy of overseas governments that vehicles for use in the particular country should at least be assembled there. Another contributing factor is the higher freight rates on assembled vehicles compared with those on unassembled vehicles. Preliminary figures for 1964-65 illustrate the level of our exports of these products. Exports of cars, commercial road transport vehicles and certain other motor vehicles amounted in that year to some £8,300,000 and exports of components for use as original equipment in the manufacture of these vehicles totalled £7,700,000. These are not insubstantial figures.

In broad terms, the Bill provides that as from the commencement of the current financial year a vehicle manufacturing firm that exports motor vehicle components for use in the original manufacture or assembly of a motor vehicle in the country to which the components are exported is to become, to the extent that it would not otherwise be, a producer for export of the components. As I have already mentioned, this will mean that the firm may include the value of all these components in its export sales. A vehicle manufacturing firm will, however, become a producer for export of the components only if the level of Australian content in its local production and in its exports is satisfactory. In other words, just as we seek an increasing Australian content. in vehicles produced here so we shall require that there be an appropriate level of local content in exports of components if the manufacturer is to qualify for the extended rebate. This level will rise in stages with the level of Australian content in local vehicle production. The Bill does not set out what the particular levels of Australian content are to be for this purpose. These will change from time to time with changing conditions and are matters for administrative arrangement. I would mention, however, that motor vehicle manufacturers will be informed in advance of the basis on which they may qualify under the new provisions.

To avoid the situation of a vehicle manufacturer and his component supplier both being entitled to treat the same components as their own export sales, the Bill provides that if a vehicle manufacturer becomes a producer for export of components, no other person is to be regarded as a producer for export of the same components. The system of export certificates already provided for in the law will, however, permit a vehicle manufacturing firm, if it so desires, to transfer a rebate entitlement hack to its supplier of components.

The provisions in the Bill will apply in relation to rebate claims for the financial year 1965-66 and subsequent years. The Bill also proposes a formal amendment of the payroll tax law arising from the change in name of the Imperial War Graves Commission to the Commonwealth War Graves Commission. This body is exempt from payroll tax and the Bill will insert its present title in the exempting provision. An explanatory memorandum containing explanations of the technical provisions of the measure will be made available to honorable members within a few days. I commend the Bill to the House.

Debate (on motion by Mr. Crean) adjourned.

page 3191


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

Second Reading

PostmasterGeneral · Petrie · LP

Mr. Speaker, I move -

That the Bill be now read a second time. This is a short measure, the purpose of which is to clear up certain doubts and diffi culties that have arisen in the application of section 92c of the principal Act, which relates to directorships in companies controlling licences for television stations. Honorable members will recall that the amending Act passed earlier this year imposed certain restrictions on the interests that may be held by one person in licences for television stations. The central provision, which is contained in section 92, is that a person is not to have “ a prescribed interest “, as defined, in three or more licences. A further provision, which is contained in section 92c, is that a person is not to be a director of two or more companies that control between them three or more licences.

The Act makes an exception from the provisions of section 92, relating to holding interests in licences, in the case of interests that were lawfully held prior to 17th December 1964. As acorollary of this exception, section 92c (2.) provides that, where a person, including a company, having a prescribed interest in three or more licences has the benefit of the special exception as regards interests held prior to 17th December 1964, that person, or a nominee of that person, is not prevented from being a director of any companies merely because those companies control those same licences. The policy accepted in enacting this provision was that if a person was permitted to retain existing interests in licences it was logical that he should also be permitted to be represented on the boards of companies controlling those licences. It has been represented to the Government, however, that the legal advisers of some of the persons affected have raised doubts as to whether this policy is fully carried out by the provision. The doubts arise mainly from a construction of the word “ nominee “ which would cover only directors formally nominated to the board of a company under the articles of association of the company and would not cover a director elected by the shareholders although in fact and in substance representing the company or other person holding the prescribed interests. The Bill therefore proposes to debate the references to a nominee and to refer instead to a person designated by notice in writing to the PostmasterGeneral by the person or company having the prescribed interests. Further, the Bill provides that a director of a company having the prescribed interests may in turn be a director of other companies concerned with the control of the licences without being specially designated by notice to the Minister, as his connection with the first mentioned company is obvious. This measure does not involve any change at all in policy but is merely intended to clarify what was always the intention of section 92c. I commend the Bill to the House.

Debate (on motion by Mr. Crean) adjourned.

page 3192


Minister for Housing · Wentworth · LP

– I present a report by the Tariff Board on the following subject -

Sulphuric Acid and Pyrites Bounty Acts.

Ordered to be printed.

page 3192


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

Second Reading

Minister for Housing · Wentworth · LP

– I move -

That the Bill be now read a second time.

It is proposed to extend the period of operation of the Sulphuric Acid Bounty Act 1954-1965 to 30th June 1969. The present expiry date of this Act is 31st December 1965. Following upon the Tariff Board report which I have just tabled, the Government has decided that assistance should continue to both the sulphuric acid and pyrites industries. Presently I will be introducing a bill to extend the Pyrites Bounty Act 1960- 1965 also to 30th June 1969, and as the reasons for both this and the Sulphuric Acid Bounty Bill are closely allied, I will deal with the position as a whole in this speech.

These bounties are being paid on sulphuric acid and pyrites as an acknowledgement by the Government of an obligation to manufacturers who participate in the former policy of encouraging the use of local sulphur bearing materials in the manufacture of sulphuric acid. In the early 1950’s, during a world shortage of brimstone, the Government actively encouraged the use of these local materials and introduced a bounty scheme to compensate for the consequent cost disadvantages. In 1959, however, when the overseas supply position of brimstone improved, the Government varied its policy but acknowledged an obligation to those manufacturers who had installed plant and equipment for handling the local materials; hence the introduction of the original Acts. No change in the rate of bounty on pyrites or on sulphuric acid produced from lead sinter gas is proposed, but in accordance with the Board’s recommendations it is intended that the rate of £3 per ton on 100 per cent. sulphuric acid produced from iron pyrites be reduced to £2 10s. per ton. The reason for this reduction is that, since the previous Tariff Board inquiry, the cost of converting pyrites to sulphuric acid has fallen by approximately 10s. per ton more than the conversion costs for brimstone have fallen.

In accordance with the provisions of the Sulphuric Acid Bounty Bill, the variation in the rate of sulphuric acid bounty will take effect from tomorrow, 26th November. It is proposed that a further Tariff Board inquiry be conducted before the end of the new bounty periods. In preparing this legislation, the opportunity has been taken to clarify the treatment of the profit limitation provision in those cases where the financial years of the claimants do not coincide exactly with the bounty periods, so that the claimant’s financial year may be taken as the bounty year. Also, provision has been made for the payment of advances of bounty, delegation of powers by the Minister or the Comptroller-General and that the returns to Parliament, under the Act, are to be in respect of years ending on 30th June. These amendments are to bring the Act into line with present practice followed in other bounty legislation. I commend the Bill to honorable members.

Debate (on motion by Mr. Pollard) adjourned.

page 3192


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

Second Reading

Minister for Housing · Wentworth · LP

.- I move-

That the Bill be now read a second time. In my speech introducing the Sulphurio Acid Bounty Bill, I mentioned that it is intended to extend the period of operation of the Pyrites Bounty Act 1960-1965. The extension is to be to 30th June 1969. I have already outlined the reasons for the proposed continuation. To conform with present practice followed in bounty legislation, the Bill proposes several amendments to the Act. First, the treatment of the profit limitation provision has been clarified in those cases where the financial years of the claimants do not coincide exactly with the bounty periods so that the claimant’s financial year may be taken as the bounty year. Also, provision has been made for the delegation of powers by the Minister or the Comptroller-General and that returns to Parliament, under the Act, are to be in respect of years ending on 30th June. I commend the Bill to honorable members.

Debate (on motion by Mr. Pollard) adjourned.

page 3193


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

Second Reading

Minister for Air · Fawkner · LP

– I move -

That the Bill be now read a second time.

Honorable members will see that the Bill is designed to extend the classes of persons who may benefit from the Royal Australian Air Force Veterans’ Residences Fund established under the Act of 1953.

I think I should give honorable members a short account of the history of the Fund and how the money became available to establish it. The 1953 Act was passed to make provision for the application of the share of the proceeds of prize captured during World War II and made available for the benefit of members of the Royal Australian Air Force. The terms “ prize “ and “ prize money “ referred to in that Act have a history which links them closely with the wars in which England has been engaged down the centuries. “ Prize money “ is the sum paid in respect of any enemy ship or goods captured by a maritime force of a belligerent at sea.

Until the First World War it had been the custom for a grant to be made to the actual captors of the ship or goods which had been captured or seized. But, in 1918, by an Act of the British Parliament the proceeds of prize were paid into a Naval Prize Fund which was divided between officers and men of the Navy generally, distribution continuing, however, to be made in accordance with the royal prerogative. During the Second World War, many enemy merchant ships were captured by the navies of the British Empire, often with the assistance of the Air Force. In December 1945, the British Government, with the agreement of the dominion governments, announced that it had been decided that prize money in respect of the proceeds derived from the sale of captured enemy merchant ships and cargoes should again be granted. But, instead of granting the whole of the prize money to the Navy, which had traditionally been the case, on this occasion it was decided that a proportion of the proceeds should be allocated for the benefit of Air Force personnel. The British Government also announced its intention that this would be the last occasion on which prize moneys would be paid.

Subsequently, the British Government decided that the portion of the prize money attributable to the Royal Navy would be distributed in accordance with precedent to individual members of the fleet but the portion attributable to the Royal Air Force would be paid to certain Air Force charities and not to individuals.

The British Government allocated the sum of £478,000 to the Australian Government for distribution to the Royal Australian Navy and Royal Australian Air Force. This was divided between the two on the basis of £249,000 to the Navy and £229,000 to the Air Force. The Government approved individual distribution to members of the Navy on the basis of six months’ sea service in the war, an arrangement similar to that followed in the Royal Navy. Distribution was made equally, irrespective or rank or rating. Thirty thousand members of the Royal Australian Navy participated in this distribution. When considering the R.A.A.F. share, the Australian Government was faced with the same problem which confronted the British Government in deciding on a formula for distribution of prize money to members of the Royal Air Force. Distribution to individual members was considered but the question of eligibility became so complex that equitable distribution would have been virtually impossible. Distribution on the same basis as the Navy would have meant insignificant shares to each participant with all the administrative difficulties and cost. It would have involved the investigation of the claims of about 200,000 personnel who served in the Royal Australian Air Force between 1939 and 1945. Thus, it was decided to allocate the Air Force share to a charitable purpose, which was to provide residences for ex-Air Force male personnel in necessitous circumstances. For this purpose a trust fund was established to which the £229,000 was applied and the Act was passed in 1953.

Three trustees were appointed to administer the Fund, the purpose of which, as contained in the present Act, is to provide residences in which former male members of the R.A.A.F. in necessitous circumstances and, if the Trust so approves, the wives of those members, may be accommodated. Preference in the allocation of accommodation was to be given to members who served during World War II while the trustees had power to provide accommodation and support to the widow of a former member who had been in occupation of a residence.

The trustees also had the usual power to invest funds, purchase land and erect buildings. During the years subsequent to their appointment, the trustees invested the funds while they were exploring ways and means of devoting them to the principal purpose of the Fund as set out in section 4 of the principal Act. The trustees were required by the Act to comply with the State trust laws in the investment of the funds. Investments were made in government and semigovernment loans and other deposits. Moneys were also made available for mortgage loans to former members of the Air Force who were buying homes either under the War Service Homes Act or through private purchase. Through the good offices of the Council of the Municipality of Sandringham in Victoria, several blocks of land were made available to the trust. It took some years for title difficulties to be cleared up. After that operation had been satisfactorily concluded, the trustees embarked on the erection of ten home units.

Prior to this, the trustees had been exploring the best means by which they could apply the funds to meet the purposes of the principal Act. Their inquiries from charit able and ex-servicemen’s organisations had elicited the happy information that there were practically no cases of Air Force veterans being in such necessitous circumstances as to require accommodation and support in the type of residence which the Act had contemplated. These investigations led the trustees to the conclusion that there was a greater need for the provision of home units for the accommodation of families rather than the provision of residences on the Darby and Joan principle. To 30th June 1965, the Fund had accumulated to an amount of £376,693. This of course included the asset at Sandringham.

The purpose of the Bill is to extend the classes of persons who may be eligible for accommodation in residences provided by the trustees. It will be noted from the definition to be inserted in the principal Act by clause 3 that, in addition to former male members, the following persons will be eligible for accommodation in the residences -

  1. widows of deceased members;
  2. mothers of deceased former unmarried members, and
  3. former female members so long as they can also be classified as eligible for benefits under the War Service Homes Act.

In each case, eligible persons must satisfy the trustees that they are in necessitous circumstances and have dependants for whom they require accommodation as well as for themselves. Section 4 of the Act is proposed to be amended by this Bill to enable dependants of eligible persons to be accommodated in the residences. Such dependants would be those approved by the trustees who would have regard to relationship to or dependence upon eligible persons.

An important amendment which is proposed in the Bill is the insertion of a section requiring the submission by the trustees to the Minister of an annual report for presentation to the Parliament. In the past, the trustees have not been required to submit such a report although their accounts have been subject to audit by the AuditorGeneral. The report on the finance of the trust is included in the Auditor-General’s Supplementary Report which is presented by my colleague the Treasurer.

I consider that opportunity should be provided to the Parliament to examine the activities of the trust and determine whether the Fund is being applied to the most worthy objects. The presentation of an annual teport will achieve this purpose. I commend the Bill to honorable members.

Debate (on motion by Mr. Pollard) adjourned.

page 3195


Ministerial Statement

Minister for Housing · Wentworth · LP

– by leave - I am now in a position to confirm that the Housing Loans Insurance Corporation will commence its business operations tomorrow in all States. Housing Loans Insurance Regulations that have been made today prescribe six classes pf insurable loans which embrace loans to enable a borrower to obtain a single unit of accommodation that he intends to occupy continuously as his home. An insurable loan may be made to acquire a home by buying land and building on it, by building a house on land already owned by the borrower, by buying a completed house or by buying a home unit or similar dwelling.

The Chairman of the Housing Loans Insurance Corporation will be making a statement later today to announce the maximum insurable amount, the maximum percentage of valuation and the maximum permissible period for repayment that will apply to each class of insurable loans. He will also announce the premium rate that will be charged by the Corporation. I wish to point out that the classes of insurable loans prescribed by the regulations made today cover all of the types of loans that are likely to be made to enable a person to obtain his own home. They represent, therefore, the kinds of loans that the Corporation was established primarily to insure.

I emphasise, however, that the insurance operations of the Corporation will not be confined to the classes of loans that have been prescribed today. I assure the House that steps are being taken to have the classes of insurable loans increased substantially within a few weeks. Some of the kinds of loans that we wish to see included in the scope of the Corporation’s activities have presented drafting problems that may take a further week or two to solve. In the circumstances, we have chosen to allow the Corporation to open tomorrow with its present range of facilities rather than to postpone the opening until a comprehensive array of classes of insurable loans has been drafted.

Honorable members will be aware that the Housing Loans Insurance Act empowers the Minister for Housing to limit the operations of the Corporation to the prescribed classes of loans that he specifies. In view of the nature of the classes of loans that have been prescribed. I propose to permit the Corporation to insure loans in all of the six prescribed classes. I also wish to mention that the “ Gazette “ that was issued today to notify the making of the Housing Loans Insurance Regulations includes a list of the organisations that have been approved so far by the Corporation as lenders for the purposes of the Housing Loans Insurance Scheme.

page 3195


Second Reading

Debate resumed from 24th November (vide page 3162), on motion by Mr. Harold Holt-

That the Bill be now read a second time.


.- This Bill amends the Income Tax and Social Services Contribution Assessment Act. I was hopeful that at long last, as a result of the many requests made over several years, the Treasurer (Mr. Harold Holt) would see fit to amend section 79a. of the Act to remove anomalies, but once again the Treasurer has failed or has refused to do so and consequently many people will continue to be denied a taxation relief that is properly theirs. Section 79a. allows a reduction in the taxable incomes of taxpayers in certain areas of the Commonwealth who have resided there for periods of more than six months of the income year. As I have pointed out previously, the words “of the income year “ have caused the anomaly. Taxpayers can be resident in one of these areas for nearly 12 months and yet not qualify for any zone allowance.

There are two zones in which the reduction is allowed. In zone A a reduction in taxable income of £270 is allowed plus onehalf of the deductions allowed under sections 82b. and 82d., which relate to deductions for a spouse, children and so forth. In zone b a reduction of £45 is allowed plus one-twelfth of the deductions allowed under sections 82b. and 82d. The provisions relating to zone allowances were inserted in the legislation in 1945 by a Labour Government. They were provided as a recognition of the disabilities suffered by taxpayers in certain areas of the Commonwealth, such as uncongenial climatic conditions, isolation and high costs of living. It was felt that these disadvantages were such that a taxation concession was warranted. It is a great pity - and certainly most unfortunate for many people living in those zones - that a Labour Government was not returned long before now and given the opportunity to pursue the purposes of the allowances.

The late Mr. Chifley introduced the zone allowances when he was Treasurer in the Labour Government in April 1945. He said -

The Bill also contains special concessions for taxpayers who live in the remote parts of Australia. Honorable members will recall the discussion last session regarding the taxation of district and regional allowances. These allowances are paid to employees as compensation for the disabilities of uncongenial climatic conditions, isolation, or relatively high living costs. They are taxable in full; consequently, the absorption by taxation of a substantial portion largely defeats the purpose for which they are paid. If complete exemption were granted, serious anomalies would arise as between taxpayers living in the same district. However, it is considered that some measure of relief should be granted not only to employees but also to all other taxpayers who live in the remote parts of the Commonwealth.

Then Mr. Chifley stated the areas to which the allowances were to apply. He continued -

In prescribing the areas of the respective zones, the factors taken into consideration in determining “climatic conditions, isolation and high cost of living “ were rainfall, latitude, distance from centres of population, density of population, predominant industries, rail and road service, and cost of food and groceries. These factors gave a general pictures of the areas in respect of which the allowance should be granted.

I suggest it is clear from the remarks of Mr. Chifley that a very close study had been made of the needs of the people and the conditions under which they had to work and live. Even so, it was still realised that anomalies might arise, that boundaries might require alteration or that amendments might be necessary to ensure that justice was done to people living within or close to the boundaries first determined. I suggest this was made quite clear by Mr. Chifley when he said -

In general, the zones contain only those areas for which the justice of the allowance can be demonstrated. Some areas of doubt occur along the boundary lines, but, looked at broadly, I think it will be acknowledged that a genuine attempt has been made to provide a reasonable concession for residents of the more remote areas of the Commonwealth.

Surely those words can mean only that if it were found that the amount of the allowance was not sufficient, or the boundaries did not include areas that should be included, or that people within the boundaries were not receiving justice, it was the intention of the Labour Government to take necessary action. And why not? Surely that is the only proper way to handle this sort of thing. Surely anomalies should be removed wherever and whenever they appear. There are anomalies in relation to section 79a as it now stands, and the Treasurer has for some time admitted that the anomalies exist. But he continually refuses to do anything about them. On 10th September 1963 - more than two years ago - in reply to a question on notice about zone allowances, he said -

Yes, it is possible for a taxpayer to reside in a zone area for almost 12 months in a period covering part of two succesive years of income without residing in that area for more than onehalf of one or either year of income.

The requirement that persons seeking entitlement to the zone allowance reside in or be actually in a zone area for more than one-half of the year of income has existed since the allowance was first introduced by the previous Government in 1945. Consideration has been given on a number of occasions to amending this requirement to meet particular anomalies but to the present no alternative has been found which would not either produce further anomalies or open the way to exploitation of the allowance by persons visiting zone areas for brief periods for holiday and similar purposes. The question will, however, continue to be examined.

So the Treasurer admits that anomalies occur. The Bill now before us covers 47 pages and contains 42 clauses so it would appear that a thorough examination has been made of the existing Act. We find that it is proposed to amend sections 79 and 79b. One would, have thought that if the Government was in any way concerned about the anomalies that flow from section 79a or if it had any intention to correct those anomalies, now would surely be the appropriate time to do so. We on this side of the House have always had some doubt whether the Government is at all interested in examining the boundaries of zone areas or in correcting anomalies. I would go so far as to say that the Government would rather do away with zone allowances altogether. I say that because in the 16 years this Government has been in office it has done nothing to remove existing anomalies, and also because members of the Liberal Party and the Country Party were against the provision of zone allowances of any description in 1945. They were very critical of the measure that was introduced in 1945 by the Labour Treasurer, the late Mr. Chifley.

In 1945 the present Prime Minister (Sir Robert Menzies) was Leader of the Opposition. He led for the Liberal-Country Party Opposition in the debate on the Income Tax Assessment Bill, which provided for inserting into the Act for the first time provisions in relation to zone allowances. The right honorable gentleman spoke on that occasion for 37 minutes. The report of his speech covers 6i pages of “Hansard”. Of those 6i pages more than five are devoted to opposition and criticism of the zone allowance. The right honorable gentleman did not argue that the amount of the allowance should be more or less, that the boundaries of the zone areas should be extended or reduced or that the Bill was badly drawn. He was completely opposed to and critical of any zone allowance at all. Early in his speech, referring to the estimated amounts that would apply, he said -

A glance at those figures will show that easily the largest, and probably the most contentious, is in relation to the proposal to grant a special deduction to all taxpayers resident within particular zones marked out on the map which has been distributed to honorable members.

He gave notice at the start that the legislation would not go through without opposition. He then referred to other aspects of the Bill and launched an attack on the zone allowance. His attack, as I said earlier, covered about 5i pages of “ Hansard “. He said -

The major item in the bill is that of £1,000,000 taken up by the proposed zone allowances - a flat rate deduction from income of £40 in zone A and of £20 in zone B, with no deduction of the rates in the rest of Australia. However interesting this proposal is as a novelty, it seems to me to be fundamentally unsound as a taxing method.

So the present Prime Minister made it clear from the outset that he did not like the proposition. He further said -

The second objection I offer to it is that it will open the door, for the first time so far as I know, to the activities of pressure groups in Australia, organised upon a geographical basis.

As far as I am aware there have not been any pressure tactics brought to bear, unless the Prime Minister suggests that the respectful and genuine requests made in this House for the removal of anomalies are pressure tactics. I am sure he would not suggest that. Speaking in the debate on 2nd May 1945 the right honorable gentleman continued -

My third objection to the zoning principle as a matter of policy is -

He went on to make it known that the Country Party and Liberal Party could not support the proposition as a matter of policy. He continued his speech by saying -

On the matter to which I have drawn particular attention, I have thought it proper to put the House in possession of my views in some degree of fullness, because I believe that if we at this stage adopt a system of taxation based on geographical lines we shall make the most retrograde step that any national parliament could make.

So there is no doubt where the present Prime Minister stood on this issue. Now let us see what the present Treasurer (Mr. Harold Holt) had to say in 1945 when speaking in the debate on the Income Tax Assessment Bill. He said -

There is only one point in relation to the details of the measure to which I desire to address myself at this stage, and that is the zoning system embodied in the bill. I question whether a more unsound principle has ever been introduced into our taxation legislation.

Regarding the high cost of living, most honorable members who have travelled widely in Australia find it very difficult to believe that the cost of living is higher in the areas indicated as zone A and zone B than in some other places. At various times I have been in each of the zones, and I am convinced that the cost of living is higher in Sydney than in any other part of the Commonwealth which I have visited. The third reason was uncongenial climate. Honorable members who, like myself, come from Victoria, and particularly those of us who live in Melbourne, will take a lot of convincing that Melbourne has not the most uncongenial climate in the Commonwealth.

According to the Treasurer it is more pleasant to live in the Kimberleys, near the iron ore deposits or on the gold fields than in Melbourne. All I can say is that the Treasurer must have been in zone A during the winter months. He certainly could not have been there during the wet season.

There is no doubt that in 1945 members of the Liberal Party and the Country Party were completely opposed to the provision of zone allowances. This has been their attitude ever since the Government which they support came to office. The fact that they have refused to do anything to remove the anomalies that flow from section 79a, which they admit exist and which they concede react unfairly against many people, shows that they still hold the views that they expressed in 1945. If the Government is still opposed to the principle of zone allowances and is not disposed to amend the existing provisions to correct the anomalies with regard to residence and boundaries, the Treasurer should say so rather than continue with the pretence that the matter will be examined at a later stage. If these provisions are unconsitutional, as the Prime Minister suggested they were in 1945, and if they represent a most retrograde step, the Government should have the courage of its convictions and should remove the provisions from the legislation. If, on the other hand, the Government’s views have changed since 1945 and it now supports the principle of zone allowances, the Treasurer should take immediate action to correct existing anomalies and to grant justice to the people concerned.

I would like the Treasurer or some other honorable member opposite to avail himself of the opportunity in this debate to tell the House what is the Government’s attitude in relation to this matter. Let us clear the air once and for all. I point out that as the Act stands a single taxpayer who resides in zone A for 6i months, all of that time being within the year of income, and whose taxable income before application of the zone allowance was £1,500, is allowed a tax deduction of about £70. A married man in the same circumstances would be allowed a tax deduction of about £85. But a taxpayer, whether single or married, whether he has half a dozen children or none at all, who remains in the same area and perhaps on the same job for a period of up to 12 months receives no tax relief at all by way of zone allowance if that period does not include more than six months of the particular income year. Surely such a ridiculous position should not be allowed to continue.

I understand that we would be out of order in moving an amendment to make the necessary alterations to the section of the Act because while it would not increase expenditure it would reduce revenue, which amounts to practically the same thing. Therefore I suggest to the Treasurer (MrHarold Holt) that if he and his Government now support the principle of zone allowances he should arrange for the necessary correction to be made when the Bill is presented in another place. If it is claimed that an amendment in relation to boundaries requires further consideration, that is O.K., but no such further consideration should be required before removing the anomalies in relation to the length of time a taxpayer must reside in a zone area. If, of course, the Treasurer is not prepared to take this action we can only conclude that he stills holds the views expressed in 1945, and that while this Government remains in office nothing will be done.

Now I wish to refer to the proposed new section 26ba, the purpose of which, according to the Treasurer, is to provide a measure of relief to wool growers whose assessable income in the 1964-65 year of income includes the proceeds of the sale of two wool, clips as a result of advanced shearing made necessary by the drought that has occurred in certain areas of Australia. This proposal apparently will allow such wool growers to decide whether they wish the profit from the second shearing to be assessed as income for 1964-65 or 1965-66. They can please themselves. I fully support the idea, but I cannot understand why the Treasurer should deem it necessary to restrict the provision to the 1964-65 income year or to conditions brought about by this one drought. It seems quite certain that the proposal is purely for the purpose of meeting the unusual conditions which have resulted from the very rare circumstance of a severe drought over a particular area of Australia. These circumstances and conditions are not expected to occur again for at least several years, and because they are not expected to occur for some time the Government believes, apparently, that it is not necessary to extend this provision to cover anything but the 1964-65 income year.

I believe that this measure should have application at all times and not just in respect of this one year, because while it may be unusual to have a general drought condition over the pastoral areas of Australia as a whole, or even over one State, or even over a large portion of one State, it is certainly not unusual to have pockets of drought areas in some parts of Australia practically every year. Certainly this is so in Western Australia. It was so last year and this year and no doubt it will again be so next year and the year after that. Drought will occur perhaps not in the same areas each year but certainly in some areas. Sometimes perhaps only two or three pastoralists will be affected, particularly in places where the holdings are large. At other times numerous pastoralists may be involved. I should imagine that these conditions would occur also in the other large States.

Surely a provision such as the one now proposed should be extended to cover any wool grower who is affected, not just this year but in any year. Certainly it should not be one which applies only on odd occasions or only when a large number of wool growers are affected in some particular area. The effect on a wool grower whose holding is situated in a drought pocket in a particular year can be just as severe as the effect on wool growers in large drought stricken areas where many growers are involved or where drought occurs only on rare occasions. 1 agree that it is proper for a wool grower who is obliged to shear twice in one income year and who does not shear in the following year, or at best has only a short period clip, to be allowed to carry over the profit of the advanced shearing and include it in the income of the following year if he so desires. But if it is proper to give this choice to those affected by drought last year, then surely it is proper to extend it to those who happen to be affected in a similar way this year or next year or in some future year. If there are no provisions for this concession in future years - and it appears that there are not - then I suggest that the Treasurer should recognise the need for them and have the measure amended accordingly in another place. Surely it would be better to do this than to have to insert a provision whenever it becomes necessary for a particular area or a particular year. It must be obvious that if only two or three wool growers are affected in a particular drought pocket, they would experience considerable difficulty in convincing the Treasurer that a special Bill should be brought down to insert a special provision in the Act to meet their particular circumstances. It would be much easier to do the job now, and there seems no reason why it should not be done.

I wish to raise another point which I suggest is closely related to the proposal we have before us with regard to advanced shearing in the case of drought. I refer to conditions that arise as a result of fire. A wool grower can, of course, insure against loss of sheep or wool by fire. There is also a legislative provision covering circumstances in which it is necessary to over-sell stock as a result of fire or certain other causes, allowing the income from that overselling to be spread over the next four or five years. But as far as I can ascertain there is no provision at all for carrying over the profit from an advanced shearing which results from fire. Advanced shearing may be obligatory when sheep have to be sold after a fire. For instance, a fire in a burr or other noxious weed area may, because of the resultant loss of feed, cause a wool grower to sell all or a large portion of his flock. The sheep must, because of laws relating to burrs, etc., be shorn before sale. The sale must be off shears. If the area involved happens to be a dry area, or the following season is dry, the sheep may not be replaced, or at least not to anything like full capacity, for a couple of years or more. In the year following the fire, therefore, the profit from wool is well down and the wool grower is in a position similar to that of wool growers in a drought area and he should have the right to carry forward his income from the advanced shearing into the next year.

The only other matter I wish to refer to at this stage is that of the taxing of district allowance payments made to workers in certain areas of the Commonwealth in respect of which the Conciliation and Arbitration Court or Commissioners have decided that some extra payment is warranted because of certain disabilities and disadvantages, such as a high cost of living as compared with metropolitan areas. Of course the Treasurer, if he still holds the views he expressed in 1945, would not agree that district allowance should be paid at all, because he claimed at that time that living costs were highest in Sydney and that Melbourne had the most uncongenial climate. Apparently he would consider those two cities to be less desirable places of residence than the Kimberleys, the Northern Territory or north Queensland. Fortunately for the workers, however, the courts have other ideas and have in their wisdom awarded varying amounts as district allowances to workers in outback areas to compensate them for what we considered to be conditions worse than those in the capital cities.

To illustrate my point I will take a case in which a district allowance of £2 a week has been granted. Under our present tax laws that £2 is fully taxable. If a worker had a taxable income of £1,400 without any district allowance, his income tax would be increased by 10s. a week after the district allowance was added. Looking at the position from another angle, this means that the £2, which the court decided was a reasonable amount to make up for the disabilities, is reduced to 30s. As a result the action of the Commonwealth Conciliation and Arbitration Commission in compensating the worker for the conditions in which he works and lives is largely defeated. It seems to me to be wrong that part of the worker’s allowance should be lost purely as a result of taxation. If a tribunal finds that a worker in the city should receive £20 but that a man doing the same job in the north or north west of Australia should receive an additional £2 a week, surely the worker in the latter category should receive the full benefit of the allowance. If he does not he is not actually receiving compensation for the conditions in which he works.

The wage tribunals in their decisions cannot make provision for taxation by adding some further amount to the allowances they award. In the first place, that would be a payment by the employer and not related to the conditions of the job; secondly, the tribunal would not know what each worker’s income was going to be; thirdly, it would not know when the Government was going to amend the taxation rates or whether it was going to move them up or down. I appreciate the difficulties of this matter, and I appreciate that all taxpayers in these areas, employee and employer alike, are entitled to compensation for what they have to suffer in relation to climate, costs and such things. I suggest therefore that the action of the Labour Government in 1945 in granting zone allowances was the correct move. If this Government will not correct the anomalies arising from the zone allowance provision in relation to residence and also will not give consideration to zone boundaries it simply means that many workers in receipt of a district allowance component in their wages are paying out in tax part of their allowance. Unlike other workers in receipt of a similar allowance they are not receiving any compensatory relief by way of taxation zone allowances. I suggest that because of that we have a further anomaly flowing from this matter of zone allowances. I put it to the Government that there are very good reasons why the section of the Act relating to zone allowances should be amended, and I respectfully suggest that the Government take immediate action to do so.


.- I do not propose to follow the honorable member for Kalgoorlie (Mr. Collard) into the realm of zone allowances, for the simple reason that they are not included in this Bill. The honorable member spent much of his time quoting what certain people said 20 years ago. I think that the Australian citizens of today are more interested in the future than they are in what happened 20 years ago. I propose to deal with that portion of the Bill before the House which deals with superannuation funds. The purpose of the Bill, in relation to superannuation funds, when coupled with the taxation bill dealing with rates with which we dealt last night, is to impose a penalty tax of 10s. in the £1 upon private superannuation funds which do not comply with the directions of the Commissioner for Taxation as set out in the

Act and upon those funds which the Commissioner does not, in the exercise of his discretion exempt from compliance with the Act. The definition of a superannuation fund exempts superannuation funds established by the Commonwealth, the States or local governing bodies. Commonwealth public servants can therefore rest comfortably in their beds tonight knowing that their superannuation fund is not being attacked by this Bill. I can assure honorable members of this House that likewise they can sleep peacefully, because the Parliamentary Retiring Allowances Fund is also exempted by this definition.

The people who need to be concerned are the hundreds of thousands of white collar and blue collar workers who are members of superannuation funds. They can see this Bill as a threat to their savings. In many cases these people have for 20 years or more been contributing part of their wages to these funds. In some cases their employer on their behalf has contributed portion of the company’s profits to these private funds so that his employees on their retirement can receive either a lump sum payment or a pension. As far as I can gather from published statistics there appear to be about 250,000 employees covered by funds operated by insurance companies and another 300,000 by funds operated by private trustees. The latest figures available are those for 1963, so I think we could say that there would now be at least 600,000 wage and salary earners who have an interest in superannuation funds directly affected by this Bill.

The Bill provides that superannuation funds, which have had an exemption from taxation in the past, are now to be taxed at the rate of 10s. in the £1 unless they submit themselves to the dictation of the Commissioner of Taxation or unless he sees fit to exempt them from compliance with the Act. One cannot but wonder why members of the Labour Party who protest so often that they represent the workers are not rising in their places to protest against this provision in this Bill. Instead, last night the honorable member for Melbourne Ports (Mr. Crean) told us in effect that he is - and no doubt, as he is the shadow Treasurer, the Labour Party is, too - opposed to contributions to superannuation funds being allowed as deductions for income tax purposes. The honorable member said - . . that means that by allowing premiums paid to life insurance companies and amounts paid to superannuation funds as deductions for income tax purposes the Government collected £40 million less than it might otherwise have done.

The honorable member thinks that this Government is acting very foolishly in allowing amounts paid to superannuation funds as deductions for income tax purposes because, he said, the Government is losing £40 million by doing so. He went on to say -

It is possible to claim as deductions payments on life insurance premiums and payments to a superannuation fund amounting to £400 a year. . . That works out at £8 a week. How many people can afford to save £8 a week? Why should they be reimbursed by the Treasury if they do save that much?

That, Sir, makes the attitude of the Labour Party perfectly clear. It thinks that the Government has been wrong in giving encouragement to the establishment of superannuation funds and in encouraging people to make provision for their old age. The Labour Party thinks that the Government has been wrong in providing tax incentives to those who contribute to superannuation funds or insurance. I wholeheartedly support the establishment of superannuation funds because I believe they provide capital for the development of the country and also enable people to provide for their own old age. Therefore, up to the present time I have wholeheartedly supported the principle of tax incentives for those who are willing to save and invest through the medium of superannuation funds. Therefore, I find it particularly hard to understand why after 15 years of encouragement of superannuation funds we now have a bill which proposes a penalty upon superannuation funds unless they comply with certain tests which no superannuation fund in operation can comply with or unless they are prepared to alter their trust deeds to suit the directions of the Commissioner of Taxation or unless they are the beneficiaries of his goodwill by being exempted.

We can see why the Australian Labour Party is silent. First, the Labour Party thinks it is wrong that these incentives should be given. Secondly, we know that their policy advocates the nationalisation of insurance. What better means is there to achieve that than this? Here is the perfect pattern for the nationalisation of insurance and superannuation. By this means private superannuation funds can be wiped out. Why leave the penalty tax at 10s. in the £1? Why not make it 19s. in the £1 and say, in effect, to these funds: “ The quicker you close up, stop all this nonsense of saving and put your contributors on to the age pension, the better it will be.” So, the Labour Party can say: “ Here is the perfect pattern for nationalisation of insurance.” Having carried out their objective of nationalisation of insurance through penalty taxation, there, too, is the pattern for nationalisation of banking. This would be achieved by simply proposing a penalty tax on the private banks which would force them out of existence because the penalty tax would make it unprofitable for them to carry on. There is nationalisation of banking just as the late Mr. Chifley wanted it. So we can understand why members of the Australian Labour Party are not rising to their feet to protect the 600,000 wage and salary earners who are affected by the provisions of this Bill.

I now want to get down to the details of the Bill. This legislation makes the Commissioner of Taxation the manager of all these trustee funds rather than the trustees themselves. If the funds wish to avoid payment of the penalty tax of 10s. in the £1 they must alter their deed to suit whom? They must alter their deeds, not to suit the beneficiaries of the funds for whom the funds were established, but to suit the Commissioner of Taxation. They have to fit into the type of pattern of fund that he says he is prepared to exempt. Already, in the last month, the Commissioner of Taxation has sent out, I should imagine, hundreds if not thousands of notifications or letters to trustees of superannuation funds. I am sure these will be very polite and courteous letters. The trustees of every superannuation fund will be most obliged to the Commissioner of Taxation for warning them of the danger that their friends are now in. The Commissioner has pointed to the provisions of this Bill. He has said: “ If you want to avail yourself of the opportunity of being exempted from this penalty tax, then you will have to alter your deed “. Of course the trustees will have no alternative but to comply with the demands, requests, or whatever you like to call them, Sir, of the Commissioner of Taxation, whether they like it or not. Therefore I say that in future it will be the Commissioner of Taxation who substantially will be the manager of these employee funds, not the trustees themselves who are the persons appointed by the beneficiaries or the company or other employer who has created the fund for the benefit of the employees.

Of course, this is going to provide fees for the lawyers. The articles of these trust deeds, many of which run into 20 or 30 pages, will have to be altered. I do not know what the cost will be to have the articles altered. It may be £10; it may be £50. The costs of the alteration will have to be borne by the fund. It will come out of the profits of the employees who are the beneficiaries of the fund. So, these people will bear this huge expense to alter the deeds that have worked satisfactorily for the last 20 years because the funds have either to comply with the provisions of this Bill or else pay the penalty tax of 10s. in the £1.

Let us now look at the specific requirements as set out in the Bill. First, to avoid payment of this penalty tax, proposed new section 23f (2.) (a) of clause 9 says that the fund must be altered to make sure that it goes on forever. The laws of several States prohibit perpetuities. So what this Bill requires will be contrary to the law, anyway, in some of the States. That is an indication of what this Bill insists must be done if the penalty tax is to be avoided. I understand that the Treasurer (Mr. Harold Holt) has realised that this Bill would compel something to be done which is illegal under the legislation of certain States. Therefore, I understand that an amendment is to be brought in to correct this matter.

Let us look at the next requirement. Proposed new section 23f (2.) (b) compels an employer to make a payment to the fund for each employee in each year. In other words, an employer who may have been contributing thousands of pounds each year for the benefit of his employees is not permitted to say. “ This year I am not going to make any contribution for employee A because he has been loafing on the job.” The Commissioner of Taxation, for whom I have the highest regard - I am talking of him now in his corporate status only - is going to say: “You face a 10s. in the £1 penalty for every year because you have to make a contribution for each employee.” I understand that the fallacy of that provision has been realised now. The words “ each employee “ are to be cut out in a proposed amendment. But why should an employer be compelled to contribute every year? In one year he might say: “ This is a year in which we should give our employees more cash in hand to spend. Things are in a little bit of a recession. It is better that we should give our employees cash in hand in the way of a bonus to spend rather than to pay that money into the superannuation fund.” So the employer pays the money out by way of a bonus and makes no contribution in that year to the superannuation fund. What is the result? The employer is not penalised, although he has done nothing wrong, anyway. The people who are penalised are the employees who are in the superannuation fund - the white collar workers and the blue collar workers who have contributed for years. They are to be mulct 10s. in the £1 penalty tax. Why? It is because their employer has not contributed for the year concerned. Once again I ask: Who is running the superannuation funds? The trustees of the funds have to ask themselves: “ Are we going to wait on the economy and tell it that it has to contribute or are we going to face the employees and say: ‘ Sorry boys, but this year you are penalised 10s. in the £1 because your employer has not contributed to the fund ‘?”

That, of course, would not be very good public relations. Proposed new section 23f (2.)(c) limits the persons who can make contributions to the employer, the employee or an associate company. A man who has worked up from nothing to be the owner of a big business, who has received the help and services of his faithful employees and who has become wealthy, may, a few years after his retirement from the business, feel that he would like to pay, say, £10,000 into the company’s superannuation fund. But if he does, the employees will be penalised because they will lose their exemption from the tax of 10s. in the £1. The provision in the Bill says that the Com missioner of Taxation and not the generous company, or the generous people who have derived a benefit from the company, will say how much can be contributed and who can contribute to the fund. I suppose the trustees would have to say to a generous benefactor who wanted to help the employees: “ Sorry, old boy; we appreciate your generosity but we just cannot accept it “. This does not seem to make sense to me. I do not think it is the judgment that private trustees would exercise unless they were virtually compelled to do so by the provisions of the Bill.

Then we come to proposed section 23 f (2.) (d), which states that the rights of employees to receive benefits from the fund must be fully secured. On the face of it, that appears to be most reasonable. But an explanatory note states -

  1. . an employee’s right would not be fully secured if, having fulfilled the conditions of the fund, his right could be withdrawn or reduced under a discretionary power granted to the employer, the trustees of the fund or any other person.

I would like the Minister to explain this point, because I simply do not understand it. I know that many funds that have been established for 20 years or more provide that, if an employee embezzles the funds of an employer, the employer has the right to recoup himself out of the amount allocated to the employee in the fund. Because the rights of an employee to payment from the fund can be taken away in those circumstances, does that mean that the other employees, and this employee also, must pay 10s. in the £1 on the income of the fund? I do not know what the answer is and I ask the Minister to deal with this aspect.

We now come to proposed new section 23f (2.) (e), which requires the employee to be notified in writing of his rights before or at the time the contributions are first made to the fund on his behalf. I cannot understand why anyone would want to include this provision. Anyone with any knowledge of superannuation would know that this has never been done. A person joins a company, perhaps as office boy, and he is asked whether he would like to join the superannuation fund. He discusses the matter with his cobbers, they tell him it is a pretty good idea and he decides to join the fund. He agrees to pay his ls. a week or 5 per cent, of his salary and the company contributes on an agreed basis. If he wants to look at the deed, he asks to see it and it is readily shown to him. But an employee seldom asks to see the deed, because, being a legal document, he probably would not understand it anyway. But the employees have faith in the trust deeds that are set up for their benefit. Many funds have 5,000 contributors, and this provision requires that they all be notified in writing of their rights. I imagine that an employer could comply with this provision only by sending each employee a copy of the full deed, because if he left out some vital part it could be said that he had not notified his employees in writing of the whole of their rights. I understand that this is to be amended and that it will not be necessary to notify every employee in writing. A general notification displayed on the notice board or in some other place will be sufficient. Of course, that is as it should have been from the beginning.

Then we come to proposed new section 23f (2.) (f). Honorable members will probably realise that I have not yet found a good part in this egg. Every one of the paragraphs of this proposed sub-section is bad and should never have been included. Paragraph (f) provides that forfeited benefits must be reapplied in a manner acceptable to the Commissioner. For example, if an employee who is entitled to a benefit at the age of 65 years resigns before reaching that age, he will, under most deeds, get back his own contribution; but the trustees have a discretion as to whether they will pay him the employer’s contribution or the interest on the fund. In some cases, when an employee has stayed for only a short period and has not rendered long and faithful service, the amount contributed to the fund by the company is forfeited when he leaves. If the trustees or the company says: “We will give these forfeited benefits to our most trusted servants, to those who have given us the best and longest service “, the income of the fund becomes taxable at the rate of 10s. in the £1, because the Commissioner of Taxation can say that the forfeited benefit should have been distributed according to the amount standing to the credit of each person in the fund. Why do we have this extraordinary provision which says, in effect, that forfeited benefits must be reapplied in a manner acceptable to the Commissioner? Again it is the Commissioner who is running the fund and not the people entrusted by the workers and the employer to run it.

Then we find that forefeited benefits must be reapportioned in the year in which they are forfeited. Frequently, of course, these benefits would be too small to warrant a ratable distribution amongst the other beneficiaries, and sensible trustees would say: “We will hold these forfeited benefits for a year or a couple of years until there is a worthwhile amount to reallocate amongst the other beneficiaries.” But that probably would not suit the Commissioner of Taxation. The provision compels the trustees to allocate the forfeited benefits not as they think reasonable but as the Commissioner of Taxation thinks fit.

Then we come to proposed new section 23f (2.) (g). This paragraph deals with the cessation of benefits. Again the Commissioner of Taxation and not the trustees must be satisfied about the disposition of funds relating to the cessation of benefits. Proposed new section 23f (2.) (h) provides that the benefits must not be excessive. In other words, the Commissioner of Taxation is saying to employers: “Now, you must not be too generous with your employees. You must not give them too much. If you do, the fund will be penalised by having to pay income tax at the rate of 10s. in the £1.” I would have thought that the policy of the Government and of every member of this House would be to encourage employers to give as much benefit as possible to employees. Anyway, I have no doubt that the Commissioner will exercise his discretion very sensibly. But why should funds and trustees be subject to the Commissioner’s whim, for future Commissioners may not always be as wise and sensible as is the present one? Why should funds and trustees be subject to the possibility of the Commissioner of the day saying: “Because you have paid too much to your workers you are to be penalised “? Proposed new section 23f (2.) (i) deals with the excessive capital of funds. In other words, the Commissioner of Taxation reserves to himself the right to say to the trustees of a fund: “ You have been too conservative. You have too much capital in this fund. Therefore, as a penalty, you will pay tax at the rate of 10s. in the £1.”

Mr Irwin:

– On what - the income?


– On the income of the fund. That deals with the requirements in paragraphs (a) to (i) of proposed new section 23f (2), which set out what we may say are the norms - the standards laid down by the Commissioner.

I see that my time has almost expired, Sir. So I simply say what I said yesterday: This measure is based on the report of the Commonwealth Committee on Taxation - the Ligertwood Committee. But its effects will be the very opposite of the objects envisaged in the Committee’s report, which stated, at paragraph 742 -

Remedial action, whilst necessary, should not prejudice the operation of bona fide superannuation funds.

This measure will prejudice the operation of every private superannuation fund.


.- Mr. Deputy Speaker, this afternoon we are dealing with a very important measure related to the assessment of income tax. I am delighted that the honorable member for Melbourne Ports (Mr. Crean) is now supported in this debate by the presence in the chamber of a few of his colleagues. I cannot help recalling that Opposition members in recent days, in their friendly fashion, have accused Government supporters of not supporting certain proposals that have been discussed. A few minutes ago the honorable member for Melbourne Ports had only one supporter, but I am pleased to say that some of his colleagues have now joined him in the chamber. The Income Tax Assessment Bill is a very important measure indeed. We realise that it will amend only a few sections of the principal Act. But I want to place on record the fact that this measure represents only the first attack by amendment of the existing law which unfortunately is not in a very tidy state. As a matter of fact, some of us consider that the income tax legislation has become so complex as to make it easy for the Government to allow it to be amended in the way in which it was amended last year. Well have we been criticised for this. Today there are some who would say that the ta legislation is in quite a mess. Indeed, some honorable members on this side of the House are encouraging the Government to put the situation in order with a minimum of delay. Those of us who suggest that this be done have accepted a fairly firm assurance by the Treasurer (Mr. Harold Holt) that because the present Bill goes only part of the way we shall be given an opportunity early in the first sessional period of 1966 to rectify other defects in the law. We shall bear that assurance in mind. We are quite sure that it will be honoured.

I remind honorable members and myself that if we look back into recent history we can see that various Commonwealth governments have periodically called in experts in the tax field. I emphasise the need to call in the experts, Mr. Deputy Speaker. I am one who believes that study of the tax laws, with all their complexity, is not the sole right and prerogative of the highly trained and devoted officers of the Taxation Branch. A responsibility Falls also on the elected representatives of the people in this Parliament. But a representative of the people, whether he be a member of this House or of the other House, or whether he be a member of the Ministry or of the Cabinet, is simply not sufficiently in touch with the day to day activities of commerce and the complexity of the tax laws as it is seen in the commercial world to be qualified to sit on specialist committees such as a select committee or some standing committee concerned with the tax field. While we can make a helpful contribution through our Government or Opposition members committees I firmly believe that not one of us is in a position to grapple with these complexities and to- guide the Government to satisfactory decisions on any major feature of the tax laws. In saying that, I do not write down my own ability or the dedication and ability of my colleagues. We, as representatives of the people, must give our attention to 101 things. I believe that we need the guidance and assistance of men who are employed virtually full time in the tax field, whether on the legal, the accountancy or the advisory side.

In the past governments have appointed ad hoc commissions or committees to report on specific aspects of our tax laws. They were considered from 1932 to 1934 by the

Federal Royal Commission on Taxation - the Ferguson Commission. In 1954 there was appointed the Commonwealth Committee on Income Tax Allowances for Depreciation, which met under the chairmanship of our present Postmaster-General (Mr. Hulme). In 1950 the first Commonwealth Committee on Taxation was appointed. Then, as we well know, in 1959 and 1960 the second Commonwealth Committee on Taxation met under the chairmanship of Mr. Justice Ligertwood and in 1961 presented a most comprehensive and valuable report. Each of these inquiries, which usually involved the part time services of accepted authorities on tax matters, as we recall, produced useful reports after receiving evidence from representatives of both those who administered the tax laws and the taxpaying groups in the community. I point out that the methods adopted in Australia have provided no constant or regular review. So again today I ask in this House for the appointment of a standing review committee on taxation. This committee should be appointed under the Act and the burden of resolving tax problems should not be placed on the shoulders of members of the Parliament. The members of the committee should be drawn from the ranks of those concerned with the legal, accounting and advisory aspects of taxation in the commercial world. This field includes men who have been members of bodies that conducted earlier inquiries. In addition there are highly qualified men, some of whose names come to my mind now, who are associated with the writings that today represent the reference books for those who are concerned with the operation of our tax laws. These are men whom, I believe, the Government might well call to take their places on a standing review committee on taxation.

I have made my point. As I have said, I believe that my parliamentary colleagues and I are simply unable to give sufficient time, and have not sufficient up to date experience to give, to this task. No doubt many honorable members are aware that in recent months the Taxpayers Association of Australia has advocated a statutory committee, but has emphasised that in its view such a committee should he modelled op the Tariff Board. When the Treasurer replied to the Association’s representations and rejected the proposal he based his objections largely on the suggestion that the proposed committee be modelled on the Tariff Board. I believe that the proposal that I make again today for the appointment of an advisory committee to review each item of the tax laws falls into a category altogether different from that into which the committee recommended by the Taxpayers Association would fall. I believe that such a review committee, in setting its own programme, could move progressively through the various classes of taxation legislation, such as estate duty, gift duty, pay roll tax and sales tax, and of course keep under constant review the now massive document that we know as the Income Tax and Social Services Contribution Assessment Act, which is to become the Income Tax Assessment Act.

The major headaches of the departmental officers might well be transferred to the review committee for deep and fundamental research. From the Government there could be remitted to the review committee items that the parliamentary members from time to time might highlight. But do not let it be thought that my advocacy here is that the Government has everything to do in this field in the interests of the taxpayer. I admit that we have much that we should and must do for the taxpayer, but I believe that the taxpayer himself must be challenged to do more for the business community and for himself. In making that assertion I am well reminded of the deep impressions that I gained on my visit to Toronto, Canada, just 12 months ago. I was in that great city for only a few days, but one of the purposes of my going there was to make contact with the Canadian Tax Foundation. My session with the Director of the Foundation was valuable. I have here the letters patent and by-laws of this organisation. I should like to point out that its objects are -

To encourage study, research and investigation in the field of taxation and economics insofar as the various laws and Statutes of the Dominion of Canada, or any of the Provinces thereof, and regulations passed thereunder may affect the enterprise of its citizens or in any way hinder the expansion of Canadian industry and trade; and

To make reports and suggestions to Governmental authorities for changes in the various laws and regulations which in the opinion of the directors of the Corporation may in any way interfere with the growth of Canada.

They are, indeed, very commendable objects. But then in the other documents that I brought home from the Canadian Tax Foundation I find that there are points of distinct interest, I am sure, to my friend the honorable member for Melbourne Ports during whose very good speech last night I interjected about this aspect of review committees.

Dealing with research, the Foundation in Canada emphasised that tax research is not unlike any other form of organised investigation. The basic assumption is that there are suitable and unsuitable ways of arranging the fiscal structure of a country and of imposing taxes and that these ways may be determined by the establishment of the facts and the consideration of those facts in an objective fashion. The Foundation further suggested that it involves the continuous study of tax problems by persons trained in the relevant principles, policies, laws and practices; but to be effective this type of tax research must be carried on independently of either taxpayers or tax authorities. That is why I would not be a party to the establishment just within our own estimable Taxation Branch of a research organisation. It must be practical and work towards practical objectives, and it must be conducted by a permanent, full time, well qualified staff of experts. That is what the Canadian Tax Foundation has. We note with interest that the Foundation in Canada receives no financial assistance whatever from governments. It is selfsupporting.

Going further on the important aspect of research, I want to point out to the House that comprehensive studies are carried on by the staff and outside experts in the major fields of Federal, provincial and municipal taxation, from those at the top level down to those at the municipal level, and the subjects covered include income tax, capital gains, computation of business income, undistributed income, double taxation of corporate income, taxation of international investment, the problem of co-operatives, regional taxation incentives, appeal procedures and so on. They do not neglect the other avenues which I have mentioned today - sales tax, succession duties, estate tax and natural resources taxation, which evidently find a place in their prgramme, and municipal taxes. As in any voluntary organisation of this kind, the life of the Foundation in Canada depends upon the financial support given by its members. Its revenues come solely from the contributions of corporations and individuals since it receives, as 1 have said, no contribution whatever from government sources. About four fifths of the present revenues today are coming from corporations with the balance coming largely from individual memberships. For those who may be interested I should be happy to share the interesting contents of the last report, which is the 18th annual report of the Foundation in Canada. The contributions in the last financial year continued at a high level, both in numbers and amounts, and the total subscription income was 176.000 dollars. Time does not permit me to amplify that further but I suggest that people in Australia who are thoughtful and constructive in this field of taxation should recognise that business and individuals in a corporate fashion, like this Foundation in Canada, can do much to help themselves as well as the Government.

Let me comment now on the Bill. Several of my colleagues have dealt with important aspects in detail. I hope, therefore, that I do not need to take very many moments. I do not desire to be repetitive, but some of the points “are so important that they should be underlined. This Bill makes certain provisions relating to superannuation funds, among other items. The 1964 amendment to the Income Tax and Social Services Contribution Assessment Act severely affected these funds which we regard so highly. My colleague the honorable member for Sturt (Mr. Wilson) has again and again pointed out the value of superannuation in preparation for one’s retirement and, apart from that, the amount that is so saved and invested is in the interests of this growing country. We know that the Association which has made representations to the Government represents a vast number of these traditional funds controlling investment today well in excess of £300 million. The legislation put through hurriedly at the end of last year did the very thing which the Ligertwood Committee warned against. It presented an impossible situation for genuine superannuation funds.

I have mentioned the importance of the funds and I go on to say that the outcry against the amendments of last year brought during the course of this year the announcement by the Government of certain new amendments and the issue from the Taxation Commissioner of his Public Information Bulletin. These booklets represent a very estimable procedure which has been adopted this year to make known the views of the Commissioner and his officers on current legislation. This particular Bulletin, which was No. 6, dealt particularly with the impact of last year’s amendments upon the superannuation funds and the rethinking that had been given to the problem. The Association of Superannuation and Provident Funds of Australia has indicated clearly to the Government its gratitude for its co-operative spirit displayed this year. It indicated that some of the amendments which have been agreed to, and which now find a place in the Bill before the House, are very acceptable. Unfortunately the Association had to point out to us as Government supporters and members of the House that the amendments did not go far enough.

Influenced by the reports and proposals from the Association, private members on the Government side have worked assiduously under the chairmanship of the honorable member for Parramatta (Mr. Bowen) who spoke in the debate at an earlier stage. We have worked to unravel the complexity of the law and have tried to influence the Government to bring the legislation back to the concept of the Ligertwood Committee. The Association of Superannuation and Provident Funds of Australia pointed out that the nine tests mentioned in section 23F were probably beyond fulfilment by every genuine fund and that this placed the matter under the discretionary power of the Commissioner of Taxation.

I turn now to section 23f (2). As my colleagues have indicated, it is felt that a distinct improvement to this section would be the omission of the words, “ the Commissioner is satisfied that”. The Commissioner now has a discretion. He is required to be satisfied that the nine tests mentioned are met by the funds. At present, if the trustees find themselves in conflict with the opinion of the Commissioner, they have access only to a Board of Review. If the words. “ the Commissioner is satisfied that”, were deleted, the situation would depend upon a question of fact - was each of the tests met by the fund? In that case, the trustees not only could take the dispute to a Board of Review but they would also have the option of taking it further, either to the Supreme Court of a State, or the High Court. Because of the negotiations which have taken place subsequent to those very helpful representations by the Association of Superannuation and Provident Funds of Australia, I expect the Government to accept an amendment along these lines.

There are other matters connected with section 23f which require attention, as has been mentioned by my colleagues. For example, the trustees of a fund are required to show that an employer had contributed to the fund in the year of income in respect of every employee. We understand that the Government is prepared to accept an amendment designed to modify this requirement. Under the Act as it stands, a breach of this condition would attract, as the honorable member for Sturt - the chairman of the Government Members’ Committee on Taxation and Finance - has said, a penalty tax of 10s. in the £1 on the whole of the income of the particular fund. We believe that if the words, “ in respect of that employee” are removed from paragraph (b) of section 23f (2) the relief that is desired will be achieved.

My colleague from Sturt pointed out a few moments ago in a very strong fashion, how other requirements which we now expect to be amended place upon the trustees of funds a quite impossible task. They virtually call for a procedure which has never before been known in the long history of some of the funds and which would come to some of the workers in large organisations as quite surprising and novel.

I acknowledge that the Bill includes provisions other than those about superannuation funds about which I have spoken in a general manner. A number of them have been mentioned by previous speakers. One which I feel that I, too, should comment on in particular is the recognition that a fundamental change in accountancy approach was introduced in connection with machine conversion costs which will be faced by industry and commerce with the introduction of decimal currency in February next year. There were some of us who looked in complete dismay at the relevant provision in this Bill. The Taxpayers Association of Victoria, recognising that this was fundamentally unsound, made its representations. My friend and colleague the honorable member for Henty (Mr. Fox) has had quite an influence in pointing this out to the Government, and we are glad to know that an amendment which will apply the traditional practice in relation to depreciation and involuntary expenses will be accepted. We understand that when the conversion costs are faced by industry the compensation received from the Decimal Currency Board will be taken, in the year in which it is received, as a direct deduction from the written down value of the machines in question, and then the full cost of the repairs will be allowed as normal expenses again in the year in which they are incurred. So we find a rectification of something which was fundamentally wrong. What surprised me in respect to this was the original adoption of such a principle. Now, fortunately, we expect it to be corrected.

The only other item that I want to comment on is covered by clause 20 which deals with the beneficial ownership of, or rights attached to shares. This is linked with the vexed question of the acquisition of a loss company. Well do we recall that the Ligertwood Committee pointed out that probably the avoidance of tax was costing the Consolidated Revenue Fund something in the region of £14 million per annum. We recognise that there are devices that some organisations have adopted for tax avoidance or evasion. Any honorable member who knows anything about the importance of taxation laws will carry no brief for a continuance of those conditions. However, there are certain things which have become traditional in taxation and there are certain things which may, for a limited time at least, find a place in the law. What concerns some of us is that as amendments were brought down last year, and as people were informed that they had become law, we ought to be fair when another quick amendment is introduced some months later.

On page 59 of the explanatory memorandum may be found an explanation of why the current amendments contained in clause 20 are required. I suggest that the explanation cannot be easily reconciled with the wording of the Bill. It seems to me that the intention of the Government was to relieve the taxpayers of some of the severity of the legislation of last October and November. But the very reverse seems to have occurred. The taxpayer who acted in good faith under the 1964 Bill is now put in a much worse position. I suggest, therefore, that the amendment which we propose to clause 20 should be accepted by the Government. Representations to the Treasurer have been made accordingly. I believe it to be essential that the clause should expressly exclude contracts completed between the time when the Act was last amended in 1964 and the time of introduction on this Bill. In other words, I do not think we can justify any retrospectivity. If this amendment is not accepted, I believe that the Government could well be accused of leading the taxpayers up what I might well term a tortuous and expensive path over a period of 12 months, only to compel them - not just invite them - to go back to the commencement of the trail and begin their exercise again.

I am pleased to make these comments upon a Bill which I think goes part of the way - perhaps a very small part of the way - towards eliminating the difficulties caused by the amending legislation of 1964.

I commend the Government for many of the provisions that are in the Bill. I point out that the Government is not yet attempting, in the field of partnerships and trusts, to correct some of the anomalies, some of the errors of judgment, and some of the unjustified severity against which Mr. Justice Ligertwood and his Committee warned by drawing particular attention to the need for genuine funds and genuine people not guilty of evasion or avoidance of tax to be protected.

As amendments are brought in to shut the door on the avoidance of such an alarming amount as £14 million, which by right should find its place in the Treasury of the Commonwealth, we should take extra steps in accordance with the suggestion of the Ligertwood Committee to see that other honest taxpayers are not injured. We must keep this in mind and I, and my colleagues on this side, will be assiduous in the months ahead to do further research to try to locate the defects and to recommend strongly to the Government the type of action required. We accept gladly the assurance of our colleague, the Treasurer, that we will be given every consideration when our report is presented. It is my hope that as we come into the new parliamentary year of 1966 we will see further amendments that will put at rest the minds of so many people in the community. I commend the Bill and look forward during the Committee stage to being associated with some of these commendable amendments that my colleagues and I have mentioned.


.- I have listened with much interest this afternoon to the comments of the honorable member for Sturt (Mr. Wilson) and the honorable member for Swan (Mr. Cleaver). The honorable member for Sturt dealt almost exclusively with superannuation and the effect this Bill will have on some types of superannuation payments in this country. 1 have no doubt there is much substance in what he said, but I do not regard myself as an expert on taxation matters nor on the way this Bill will affect superannuation payments and whether some injustice is incorporated in it. No doubt it would be better if the position were stated clearly by people with knowledge of these matters. I refer to people outside the Parliament who would be able to comment on the effects of this legislation on the type of superannuation payments referred to by the honorable member for Sturt.

The honorable member for Swan made a very constructive contribution to this debate and I listened to it with interest. He referred to the great need for a review committee to consider taxation measures. He said the committee should comprise people from outside the Parliament who were engaged in various professions and who would be able to contribute to the work of such a committee. He may be right in his assertion and it may be that a committee should comprise persons from outside the Parliament, but I think that if the Parliament should ever consider establishing a committee of review there are sufficient honorable members with a knowledge of taxation matters to form such a committee. I instance the honorable member for Melbourne Ports (Mr. Crean) who has for a long period in this Parliament dealt with taxation matters. I am sure that all members opposite, whether they agree with our policy or not, appreciate that whenever he speaks on these matters there is usually much substance in his statements.

This legislation has been debated by a limited number of speakers. Government supporters have confined themselves primarily to the machinery of the legislation and to its effect on superannuation payments. There is a great need to overhaul our taxation legislation and a need to establish a committee for this purpose. Yesterday afternoon the honorable member for Melbourne Ports pointed out anomalies in the legislation. However, no Government supporter has discussed taxation as it affects the majority of people. They have not discussed the rates of taxation now to be applied or the deductions available to those who claim taxation concessions. I join with the honorable member for Kalgoorlie (Mr. Collard) who commented on the question of zone allowances. I do not want to deal exclusively with the matters he mentioned. He was concerned with the amount a person could claim as a deduction under the zone A allowance or under the zone B allowance, but I am concerned with extending zone B. However, before discussing this in detail I should make one or two general comments.

According to the Treasurer almost £900 million will be raised this financial year from income taxation on individuals and about £400 million from company taxation. Together these amounts total almost £1,300 million and therefore represent the biggest part of taxation that will be raised from revenue this financial year. Total taxation is raised from three main sources - from taxes levied on individuals, from taxes levied on companies and from sales tax. I know that honorable members do not have an opportunity at this stage to refer to sales tax, because the legislation now before us has nothing to do with that tax. There is a great deal I should like to say about sales tax. Its incidence has increased greatly during this Government’s period of office. But I will confine myself to remarks about taxes levied on individuals.

As the honorable member for Melbourne. Ports pointed out last night the tax levied on individuals has increased considerably during the term of office of this Government. The legislation that we now have before us provides for a fiat rate increase of 2i per cent, in income tax during the current financial year. This Government has been responsible during its term of office for a number of flat rate increases of income tax. It has provided also for a number of flat rate decreases. A short time ago the Government granted a flat rate rebate of 5 per cent, of income tax. That rebate has since been removed and in this financial year the Government proposes to increase the amount of tax paid by individuals by a flat 2.i per cent. As a result of this increase revenue will benefit by an additional £17f million.

During this Government’s term of office we have seen a great deal of inflation. If the basis on which taxation is levied is considered by the Government to be equitable, one would expect the Government to consider factors such as price increases, inflation and other matters which affect wage and salary earners. Income tax is levied on a progressive basis. The Opposition has always contended that individual taxation, which provides the greater proportion of revenue available each year to the Government, should be levied on the basis of an individual’s ability to pay. Unfortunately this principle has not always been followed by the Government. The present scale of taxation was introduced by the Government in 1954. It is still applied in 1965. Having regard to the inflation that has taken place in this country in recent years one must agree that the £1 in 1965 is worth considerably less than it was worth in 1954 when the Government decided upon a basis for levying personal taxation. There has been no alteration of the scale since 1954. This means that the wage or salary earner must today be substantially worse off than he was in 1954. This matter has not been considered by honorable members on the Government side who have taken part in the debate, but they must have some understanding of the situation as it affects wage and salary earners.

There has been a decline in living conditions in Australia. Honorable members on this side of the chamber, including the honorable member for Melbourne Ports, who led for the Opposition in the debate, have suggested that the scale according to which taxation is levied should be revised. If the value of the £1 was taken into consideration in 1954 when the existing scale was fixed, that scale would not be equitable today, having regard to the decline in the purchasing power of money in the last 10 years. The taxpayer most severely affected in these circumstances is the man in the lower income group. In a very constructive speech the honorable member for Melbourne Ports yesterday pointed out how those people in the lower income group had been seriously affected by the decline in the purchasing power of money and by the refusal of this Government to provide a greater measure of relief in its taxation legislation. The honorable member pointed out that the basic wage was about £1 5 1 5s. a week. A single man earning the basic wage would pay £1 9s. a week in tax. If he had a wife his tax would be reduced to £1 a week. In other words, he would have a saving of 9s. a week if he was able to claim a deduction in respect of a wife. If the wage earner had a wife and one child he would pay, on a wage of £15 15s. a week, 15s. a week. If he had a wife and two children his tax would be reduced to lis. 6d. a week.

Those figures highlight the Government’s failure to recognise the burdens on the family man in this country. The Government’s tax scale is not in keeping with the principle of levying taxes according to one’s ability to pay. Surely the Government does not think that a saving of 9s. a week in tax sufficiently offsets the expense involved in maintaining a wife. The comparison is even worse when one considers the amount of tax paid by a taxpayer with a wife and two children and the amount paid by a single taxpayer. A careful analysis of these figures will show that they compare most unfavorably with the figures that applied when Labour was last in office. During the term of office of the Chifley Government a person earning only the basic wage did not pay any tax. I know that honorable members opposite may argue that in giving these figures I have not taken into consideration the fact that other deductions may be available to the taxpayer; but the fact remains that the Government has failed to pay due regard to the expenses incurred by a taxpayer who accepts family responsibilities.

I commenced my speech by saying that there were only one or two matters I wished to refer to. One of them is the matter of zone allowances, with which the honorable member for Kalgoorlie dealt very extensively this afternoon. He pointed out that in 1945, as a result of legislation introduced by the Labour government of that time, certain taxation concessions were extended to taxpayers living in certain areas of Australia which .were defined and designated as zone A and zone B. I have no doubt that these allowances were introduced to encourage people to live in isolated areas. From time to time since the legislation was introduced representations have been made to the Government by honorable members on both sides of the House for an extension of the areas in both zone A and zone B. I pointed out during another debate some years ago that the Government was most unjust in failing to include the Bass Strait islands, King Island and the islands of the Furneaux Group, in zone B.

I have already pointed out that the zone areas were set out by a Labour government in 1945. 1 think the deductions then allowed for income tax purposes amounted to £20 for zone B and £120 for zone A. In 1956 the amounts were increased to £30 and £180 respectively and, if I can rely on my memory, the area covered by zone A was increased. I think it was in that year also that representations were made to have the islands I have mentioned included in zone B for tax purposes. 1 believe that a case has been made out, not only by honorable members in this Parliament but also by residents of both these islands who appeared before a COm.mitte appointed by this Government in 1952 to consider the representations of the residents of these islands to have the islands included in zone B for tax purposes. So far as I am aware, no information has ever been given to this Parliament or the people concerned as to the decision arrived at by the Committee. I take the opportunity this afternoon of restating the case on behalf of these people and requesting the Government to consider again including these islands in zone B.

I am sure that the geographical situation of the islands is well known to honorable members. They may not, however, appreciate the climatic conditions, although I am sure they understand the great disadvantages for people living in these remote and isolated areas. All the commodities that they require have to be brought from the mainland or from Tasmania and all the goods they produce have to be sent to other parts of the country. Freight rates are very high and for this reason alone I believe these people have a valid case for having their islands included in zone B.

It is not within my province to question the decision that was originally made to define the areas of zones A and B. I must, however, remind the House that included in zone B in Queensland are the cities of Townsville, Mackay and Cairns. I am not suggesting that when the Government gave effect to this legislation there was not a very good reason for the inclusion of those towns in zone B. No doubt areas adjacent to the towns would also be included and the Government would have felt it was necessary to provide an incentive for people to live in those localities. But I submit that if it was felt advisable in 1945 to include such areas in zone B then obviously there should be a reconsideration today of the representations that have been made over a long period to have King Island and the islands of the Furneaux Group included in zone B for tax purposes. I see no reason at all why the Government should not give earnest consideration to this matter.

Honorable members should appreciate the conditions under which the people of these islands have to live. Even if their amenities are considered adequate, there is always the great disadvantage of freight charges. In the case of Flinders Island anyone who wishes to leave the island or return to it must travel by air and must meet the high costs involved. All commodities brought to Flinders Island are brought either by air or by sea, so that transport costs generally are much higher than they are in other places. It is on this basis that the people of the islands have time after time requested the Government to include the islands in zone B.

I have already said that this matter has been raised in the House on a number of occasions. Honorable members have suggested the inclusion in zone B or zone A of various areas other than the islands to which I have referred. I believe this is one of the questions that might be considered by a committee of the kind referred to by the honorable member for Swan this afternoon. There is a need to revise the areas defined by a previous government and amended only once since then, to my knowledge, by this Parliament. I do not want to deal in detail with the areas that have been placed in the two zones; I merely ask that the Government consider the representations that have been made and the points I have put forward this afternoon in favour of a reconsideration of claims to have these islands included in zone B. I have referred to the parts of Queensland that are in zone B, and if the Government believes that people in those areas should have a tax concession then I see no reason why it should not extend a similar concession to the people of King Island and the islands of the Furneaux Group.

The honorable member for Braddon (Mr. Davies) has referred in this House on a number of occasions to the problems of the people of King Island. I merely point out that this Government has invested a considerable amount of money in both King Island and Flinders Island in war service land settlement development and that therefore it must have some knowledge of the costs in which people living in these areas are involved in their daily living. The honorable member for Braddon has from time to time highlighted the difficulties of those who have war service land settlement properties on King Island. No doubt in many cases their difficulties are due to high freight costs. Indeed, this Government has already provided a subsidy to help reduce the effect of freight costs between King Island and the mainland of Australia. That shows that the Government has already acknowledged that additional costs have to be borne by the people who reside on these islands.

I suggest that the Government consider seriously the submissions that have been made on a number of occasions for concessions which I believe ought to be granted as a matter of justice to the people who reside in these areas. The Government should seriously consider including King Island and the Furneaux Group in zone B for taxation purposes.


.- I am bound to say that I agree with the contention of the honorable member for Bass (Mr. Barnard) that the people living on the islands in Bass Strait should be considered for zone allowances. I think the honorable member will remember that I have myself on occasions spoken in favour of this, and recently I have been conducting a round of correspondence with the Treasurer (Mr. Harold Holt) in relation to fishermen who more or less live permanently on the west coast and the north west coast of Tasmania who, I believe, ought to be treated in the same way. I propose to speak quite briefly on this Bill because the honorable member for Sturt (Mr. Wilson) and the honorable member for Swan (Mr. Cleaver) have already spoken on the very subject to which I wish to direct my attention. The honorable member for Sturt ably went into considerable detail on the subject of superannuation funds which will be affected by this tax Bill. As he has done that, and as the honorable member for Swan has also dealt with the matter, I do not propose to recapitulate the details. I am one of those who believe that there is far too much tedious repetition in this House, and I have no doubt, Mr. Speaker, that you have been tempted on occasions to apply Standing Order No. 85 which deals with tedious repetition.

I want to express a very firm view on this matter of taxation as it affects superannuation funds because there are aspects of the matter that I do not like. The Bill itself is very complex and because of that I wish to devote my attention to the one aspect of superannuation. The Bill provides for a tax of 10s. in the £1 on all superannuation funds unless certain conditions are complied with. These conditions, as the honorable member for Sturt clearly told the House in detail, are set out in section 23f. The point arises: Can the various funds meet the requirements of this section? The association which represents these organisations says that the funds cannot fulfil all of these conditions and that they will have to rely on the discretion of the Commissioner of Taxation to grant them exemption. It is on this question of discretion that I disagree with the general trend that is obviously taking place in taxation legislation. I believe that too much power is being put into the hands of the Commissioner. This is a trend not only in this Bill but in other bills which we will be discussing during the present sessional period. 1 have always held the view that politically we have propounded the philosophy that we believe very much in the encouragement of the establishment of superannuation funds and similar forms of saving, but I cannot regard this Bill, as it is presently framed, as giving any encouragement to the various superannuation bodies. The Ligertwood Commonwealth Committee on Taxation said that action should not prejudice the operation of bona fide superannuation funds. I say quite plainly that in my view this Bill scarcely seems to carry out that recommendation. For instance employers are compelled to make a payment to the fund for each employee and this, as the honorable member for Sturt said, is a new provision. What I object to is that the Bill appears to go much too far into the domestic matters of private enterprise. This already is, I believe, a general trend in legislation. Sir Winston Churchill once said -

We must beware of building a society in which nobody counts for anything but the politician and the official.

Those are words that we ought not to forget. 1 am not suggesting that taxation commissioners are a race apart or have an avidity for power. My experience over not a few years now in acting on behalf of my constituents is that taxation commissioners and their deputies are very much more human than some people seem to think. We can liken our attitude to them to that of a person going to the dentist. A lot of people are afraid of going to the dentist, but they find in the long run that with modern equipment, dental treatment is almost a painless operation. As I have said, the trustees of these funds, if they cannot comply with the necessary conditions, will have to pay a tax of 10s. in the £1. So it is almost a question of asking the Commissioner for Taxation to establish policies for the funds, and this puts the funds into what one could only call a rather unpleasant state of uncertainty.

There appears to me to be one other aspect of this Bill which should be commented upon. It may well be that the Bill will induce a lot of additional paper work. If there is one thing that is becoming more and more evident in commerce and industry right throughout the whole structure of life in Australia it is the ever increasing paper work which ought to be discouraged and not encouraged. I propose to state the views of the study group of the Association of Superannuation and Provident Funds of Australia. Although I realise that this is a body interested in this matter I think that anybody who considers this document will come to the conclusion that it is not biased. The Association states -

Saving is usually accepted as) a desirable requirement in any modern community but where there is a continuing shortage of capital funds as in Australia it is necessary to consider the reasons for and the method of achieving this.

If the social economy is to have the necessary capital available for its enormous development requirements then the appeal to save must be made to the little man. Superannuation funds provide the most valuable medium because they involve regular deduction from the employee’s remuneration before he receives it and they represent an effective manner of consolidating the fund of many personnel into one group.

Past history has shown a deficiency rather than an excess of available capital so that from a savings aspect only a compelling argument can be sustained for an extension of the encouragement rather than any reduction.

Recent taxation amendments have required many amendments to deeds but it is a matter for concern that the best interests of superannuation provision have become secondary to the necessity to avoid the punitive penalty which is involved in not meeting the Commissioner’s taxation requirements.

The Federal President of the Association in a letter to the Treasurer said -

We would like to stress how unreasonable we regard this section in relation to 23F Funds. Its requirements involve obtaining information from ali employees of their private affairs each year and the supply of this information to the Commissioner followed by subsequent correspondence when queries arise.

I said that I would be brief in dealing with this matter, but I want to emphasise that I have a very firm opinion. I clearly protest against the tendency of Government legislation to interfere in the domestic affairs of private enterprise. This is a trend that the Government should rake care to alter.


.- Mr. Speaker, the honorable member for Bass (Mr. Barnard), said that you must sometimes be very bored by listening to continual repetition in this House on certain bills. I propose to introduce quite a new aspect in regard to taxation, compared to the other approaches introduced into this debate today. I propose to deal with the effect of taxation on development, progress and growth which are so vital to this country. It has an effect on our export income because I believe taxation can be used more wisely, perhaps, as incentive rather than a deterrent to expansion and development. This applies particularly to the development of our export industries because 1 think we are all agreed that it is vital that we develop this country if we are to hold -it and if we are to survive at all. It is important that we greatly increase the population of Australia. If we are going to bring large numbers of people here from overseas we must expand our secondary industry to a greater extent than it is today. lt follows that, if we are going to expand secondary industry, we must have funds to develop it. This brings us back again to the amount of export income we receive and the importance of primary industry. When I speak of primary industry I am talking not only of agricultural industry. I am talking of the great timber industry, for instance. What a tremendous development there is in that field. The timber industry is increasing production every day and providing more and more employment. What is more important, it is providing that employment away from the great centres where our population is concentrated at the present time. I think of the development of the mining industry which, again, is a primary industry particularly in Western Australia and Queensland. It may well be that within the foreseeable future the income from some of our mineral products could exceed the income from wool and even meat. I think of our fishing industry which is growing day by day. It opens up tremendous possibilities for export.

One thing with which I should like to deal and which has a severe effect on primary industry, particularly agricultural industries, is probate duty. Probate duty is something that hits very severely at rural industry. I believe that in the total the Government may be the loser. It has been ascertained in the United States where a survey was carried out into the loss of taxation income because of the application of probate duty that the Government really was the loser. Tremendous cost is involved in probate duty. Tremendous losses are sustained in income tax and sales tax. Great costs are involved in assessing and reassessing probate duty. I think we all agree that the fairest tax of all is income tax. If the incidence of probate duty were reduced, I am sure a great deal more money would be returned to the Government in the way of higher income tax contributions. I do not think the severity of the effect of probate duty on rural industry is realised. Those of us who are familiar with the effects of probate duty know how it has broken up family estates. It has reduced efficient, well run properties to uneconomic units. Very often, the breadwinner dies and his widow is left with a family. She is Unable to carry on the property because she must pay probate duty in cash at a time when she needs all the liquid funds she can lay her hands on. The payment of probate duty must have a disastrous effect on the ultimate income tax received by the Government from such sources. There is always a time limit on the payment of probate duty which means that if assets have to be realised - and very often they have to be realised - one cannot choose the market. The assets must be cashed and the person concerned must suffer the loss. The funds available for development are reduced. No funds are available for the improvement of pastures, water supply, fencing and all those things which help so definitely to build up production. The payment of probate duty prevents essential maintenance. Here, again, the Government is the loser because improvements deteriorate, buildings fall apart and plant deteriorates and has to be replaced. Eventually, the Government is the loser because when plant has to be replaced we have a depreciation allowance of 20 per cent, per annum over 5 years plus a 20 per cent, investment allowance. The plant could have gone on deteriorating over a period of years because of the shortage of liquid funds.

Life insurance is another costly item to the man on the land. The agriculturalist must pay, perforce, very large sums in life insurance to protect his family. Again, this reduces the money available for development. I believe probate duty is one of the most iniquitous taxes we have. It is a tax on thrift. It is a tax which very definitely discourages production and development. It reduces export income. It is a capital tax. We as a free enterprise Government should not countenance the incidence of such a severe capital tax. Let us not think that it hits the big land holder only. In actual practice, it hits much more severely the small farmer, the soldier settler or the man who has never sufficient liquid funds to do all that he would care to do in developing his property and lifting his production. I have often quoted the case of the soldier settler whose capital involvement was approximately £50,000 to £60,000 and who found difficulty in earning the equivalent of the basic wage. A man who owns a grocery shop in a small town paying £5 or £10 a week in rent and having a stock of £2,000 or £3,000 would have an income double that of the soldier settler. The man owning the grocery store would escape with the payment of little or no probate duty. Yet the man in rural enterprise is very heavily hit by it. I believe there is a very strong case for the abolition or, if not that, the scaling down of probate which I think would be of considerable benefit to the nation.

There is another aspect of the matter. If we were to abolish or reduce probate duty, we would attract to this country people who were prepared to bring their capital here and not send their earnings out. There would be a very definite incentive to people with substantial capital to come to Australia to live in order to escape from socialist States such as the United Kingdom is very quickly becoming. What we need in this country more desperately than anything else if we are to develop it is men with money. I believe this country is on the threshhold of the greatest development it has ever seen. We must develop or perish. I believe the Government could use taxation concessions to a much greater extent than it has as an incentive. The Government has recognised this to a large extent by what it has done in New Guinea. The Government has granted freedom from income tax for five years to encourage people to become established in pioneering industries in New Guinea. The Government has created a precedent in the development of the brigalow country. It has aided the States by providing long term finance over 25 years to 30 years to develop the brigalow country and bring it into production. I believe it is the province of the Government to provide road and rail communication, water supply, power and those sort of things. But I am convinced that the individual with drive, enterprise and vision, given the opportunity and encouragement, will do more to develop this country than any government institution or national development organisation. Again, the incidence of taxation has been one of the main reasons why we are suffering such great losses of stock in the present drought. There has been no incentive to provide fodder or to put away funds because of the incidence of taxation. This is not just loss to the individual. It does pay the individual in many cases to let his stock die, but it does not pay the nation to have this happen. This becomes a national problem. We have to make it attractive for the primary producer to take steps to save his stock. When the drought breaks he can then get back into production and earn export income very quickly. I believe that it is very much sounder to give the people engaged in primary production, mining and the timber industry incentives in the way of taxation concessions rather than assistance in the form of subsidies. Subsidies tend to encourage the inefficient man and to promote the inefficient industry; but tax incentives tend to encourage the enterprising man, the man who is prepared to go out and do what he can to develop the country. There is a very strong case for double taxation concessions on plant and equipment that is being used to alleviate the effects of drought. Drought poses a big problem, especially for the young man who is developing his property. He needs every penny that he can raise to improve the land. If some form of tax concession can be used to encourage him, he will prepare himself for drought and the whole nation will benefit.

The Bill provides for the spread of income from two wool clips in one year, where drought conditions have compelled a woolgrower to shear his sheep. This is an excellent provision, but it does not provide effectively for the forced sale of stock in a drought. I know that the Commissioner of Taxation is very reasonable in these matters, but the decision does depend very largely on the state of his liver when a proposition is put to him. I do not think that this is satisfactory. When a man has been forced by drought to sell his stock, he should be allowed to put the money into a non-taxable fund to be used later for the replacement of his income, earning livestock. There is a case for a non-taxable reserve for drought. In the good years, a man should be able to put aside funds on which taxation is not levied. For that matter, the Government could have th use of the funds without payment of interest, provided money was available to the farmer at the time it was needed. Of course, it would not always be practicable or economical for a farmer to put money aside in this way. However, I think a very strong case can be made for a non-taxable reserve so that money can be put to one side and used when drought really strikes.

A case can also be made for a tax incentive to encourage farmers to purchase fodder. Every time we have a major drought, fodder is carted right across Australia. It comes from Victoria to southern Queensland. The price is exorbitant and very often the fodder is of poor quality. The States, assisted by the Commonwealth, give a 75 per cent, reduction of rail freights on fodder that is being transported for starving stock. If a tax inducement were given during good seasons, the fodder in most cases could be bought from sources close at hand. The railways could be used after the wheat crop had been harvested and moved and at other times when they were not busy. If the efficient and progressive primary producer is given a tax inducement, he will store fodder when it is available close at hand and when it is relatively cheap. As I have said before-I cannot give too much emphasis to this point - the Government should look upon taxation as an investment. By the careful use of taxation measures, the Government can build up the export earning capacity of the nation. Having done this, its returns from income tax will be far greater than they are now. The Government must build for the future.

Taxation can play a tremendous part in fostering decentralisation. I think we have fallen down very badly on this matter over the years. Other countries have used taxation as a means of fostering decentralisation with considerable success. They have allowed a scaled down rate of tax - a zoning of taxation, if that expression is preferred - not only on individual incomes but on company incomes as well. When a factory is established more than a certain distance from the capital cities or the concentrations of population, the rate of taxation applied to it should be lower than the rate applied to factories in the city. The rate should become progressively lower as the distance from the concentrations of population increases. We must face the need to encourage decentralisation, because it has been estimated reliably that, if we allow our capital cities to continue thenpresent rate of growth, many millions of pounds will be needed for new roads, bridges and so on. A new bridge across Sydney Harbour will be required. It has been estimated that the provision of water and sewerage alone will cost six times as much per head of population in Sydney and Melbourne as it costs now. This is not a theory; this has been proved by the experience in the older capital cities of Europe. European countries now are willing to spend vast sums in encouraging people to move out of the capital cities. Large taxation concessions are given to industries to encourage them to become established in country areas. Someone must make the move. At a recent seminar at Orange, it was interesting to see the attitude of many big manufacturers towards the possibility of receiving taxation benefits if they moved out to country areas. They were definitely interested in the prospect of receiving concessions and they are becoming more interested every day. But someone must give the lead and I believe it is the duty of governments at all levels - Commonwealth, State and local - to assist industry to decentralise in the interests of this nation.

Taxation allowances to secondary industries that are willing to move into country areas, on the lines of allowances already provided to agricultural industries, would be a tremendous help. I have discussed this matter with many manufacturers and I know that taxation allowances would be a tremendous inducement to them. Depreciation allowances on plant and equipment and on buildings, on the same lines as allowances provided for primary producers, should be given to manufacturers in country areas. These are matters of national importance. As I said in my opening remarks, the secondary industries are vital to the future of this country. I believe the Government should use taxation to assist the man with vision, the man with enterprise and the man with courage. This nation was built by men of this type. Men with courage were willing to go out and conquer the wilderness and to make this nation what it is today. I believe that we tend too often to cater for the mediocre rather than to encourage the individual who has that extra initiative, greater ability and drive and who will build the nation and make it safe for this generation and future generations.


.- I think it is probably true to say that the Australian income tax legisation, in common with the taxation legislation of other countries, is the most complex legislation on the statute book. I do not think that any member of this Parliament, unless he be a genius, could become familiar with all the provisions of the legislation. I propose to deal with five specific subjects. They are lease premiums, legal expenses, age allowance, uncontrolled partnership income and the cost of converting business machines for use with decimal currency. I will deal with lease premiums first. The income tax legislation, prior to its amendment in October of last year, permitted a good deal of tax evasion in connection with the payment of lease premiums. However, in my opinion, the Government took the easy way out by entirely disregarding lease premiums for taxation purposes. At present, a businessman who pays a lease premium is not entitled to a deduction for that amount. At the same time, the premium in the hands of the recipient is also disregarded for taxation purposes. I have been told that this applies not only to premiums paid on the lease of land and buildings but also in certain circumstances to premiums paid on the lease of some types of machinery and equipment. I am told that computer equipment is one kind of equipment on which lease premiums frequently are paid.

The person or business paying the premium is not entitled to a deduction and the person or business owning the equipment and receiving the premium does not have to account for it in a tax return. I understand that this policy is based on a view laid down judicially that a true premium is capital income and not revenue income. I believe that the present provisions of the law are loose enough to encourage unscrupulous people - particularly landlords - to try to accumulate tax free income while their tenants, who aTe compelled to pay premiums, are not able to claim those premiums as deductions. I am well aware that if this view is sustained it may perhaps result in some tenants being a little worse off financially.

But I want to make it clear, Mr. Speaker, that I am not speaking for any body of taxpayers. I am concerned with the principle involved. In my view it is entirely wrong for one section of the community to be allowed to accumulate tax free income - in many instances at the expense of persons or businesses worse placed financially - while the privilege is denied to others. The important concern is the principle that is involved.

The Treasurer (Mr. Harold Holt) has said that the tax laws will be further reviewed and I hope that between now and the autumn sessional period the Government will seriously consider amending the provisions of the Act concerned with lease premiums. I believe that this is one instance in which the business community would agree to the discretion of the Commissioner of Taxation being exercised. If he believes that a business or a businessman is entitled to a deduction for a lease premium he should allow the deduction. If he allows a deduction to the person or business that pays the premium, he should tax the person or business that receives it.

The second matter that I want to discuss relates to section 64a of the principal Act. This was inserted in 1963. Sub-section (2.) allows as deductions legal expenses incurred in the year of income in carrying on a business for the purpose of gaining or producing assessable income except to the extent to which they are expenses of a private or domestic nature. Sub-section (3.) states -

The deduction allowable under this section shall not be greater than the amount (if any) by which Twenty-five pounds exceeds any amount allowable as a deduction under sub-section (1.) of section fifty-one of this Act in respect of legal expenses.

For the benefit of those honorable members who may not be aware of the fact, I point out that section 51 permits the deduction of certain legal expenses incurred by a business that are not of a capital nature. I understand that the official view is that because it is sometimes difficult to determine whether expenses are of a capital nature the Taxation Branch considered that it would not be economical to spend the time that would be entailed on trying to determine whether the expenses should be allowed as deductions if the amount involved was £25 or less. Consequently section 64a was inserted. Put in another way, I believe that section was designed to permit the deduction of up to £25 in respect of legal expenses incurred by business people where those expenses formerly were not deductible under section 51 because of their capital nature.

My quarrel with the new provision is that it confers no benefit whatsoever on business people who previously have been able to claim legal expenses in excess of £25 under section 51. Here I refer to legal expenses completely unrelated to those covered by section 64a. There are some businesses which by their very nature regularly incur each year legal expenses which exceed £25 and which have been allowed as deductions. This applies to many estate agents and builders, for instance. They incur legal expenses that they are able to deduct under section 51. I know that they have been able to deduct some of their other expenses under other sections also. Where their deductions under section 51 exceed £25 they receive no benefit whatsoever from section 64a. I suggest to the Treasurer that it should be possible to word an amendment in such a way as to prevent a taxpayer from claiming a double deduction of £25 in respect of the same legal expenses. I believe that one of the fears of the Taxation Branch is that such double deductions will occur. J should like the Government to consider this matter also before the tax laws are reviewed next year.

The third matter that I wish to raise relates to the age allowance. At present a couple of pensionable age - a man of 65 years or more with a wife of 60 or more - are allowed tax free income of up to £18 a week. When the Government introduced the age allowance it was designed to place in a position in no way inferior with respect to taxation to that of pensioner couples, persons of pensionable age who received no pension because they had been able to provide for themselves by their own savings, whether by investment or superannuation or because they were prepared to continue working. As I have said, the permissible income for a pensioner couple is up to £18 a week tax free. It was decided, in order to achieve the purpose for which the age allowance was introduced, that persons of pensionable age who claimed the age allowance on their tax returns would be given tax freedom up to the equivalent of £18 a week, the excess to be assessed at 9s. in the £1. The income to which I refer is gross. No deductions are allowed to couples claiming the age allowance for, say, medical expenses, contributions to life assurance, council rates or the other normal concessional deductions. However, if the Commissioner of Taxation finds that the age allowance reacts to the detriment of a couple he does not apply it. In other words, he makes two assessments. He makes an assessment taking into account the age allowance and reckons tax at 9s. in the £1 on the amount by which the income shown in the return exceeds the equivalent of £18 a week. He then makes another assessment in the normal way, disregarding the age allowance and taking into account the normal concessional deductions. If he then finds that the age allowance works to the disadvantage of the taxpayer it is not applied.

But there are many persons of pensionable age who have provided for themselves and who consider that the age allowance does not go far enough. I agree with them. I do not think it is right to say that the benefit received by a pensioner couple is the allowance of income up to only £18 a week tax free. Under the terms of a measure that was passed by this House last week pensioners, whether receiving full or part pension, will be entitled to free medical service. I agree with this. I believe that pensioners are fully entitled to it. But couples who have saved to provide for themselves and who are not a burden on the taxpayers not only have to meet these medical expenses out of their own pockets but also are not permitted to claim them as deductions if the age allowance is to be applied. Not only do they receive no deduction, but if their income exceeds the equivalent of £18 a week they have to pay tax that goes towards the provision of a benefit that they will never receive. In addition to concessions for medical treatment there are other concessions that pensioner couples receive. I want to make it quite clear, lest any honorable member opposite think that I am suggesting that pensioners should not be entitled to free medical treatment and other concessions, that I believe they are entitled to them. They receive under the terms of legislation enacted by this Parliament concessions with respect to telephone rentals and radio and television licences.

Mr Cope:

– Some of them do. The honorable member should know that there is a means test on those concessions.


– When the honorable member says that there is a means test in respect of them, I remind him that it depends upon how much income is coming into the house. I am referring specifically to pensioners who are living alone or pensioners who have children who are bringing in only a limited amount. Most State Governments also give concessions with respect to tram and train fares. So I would say that the pensioner couple is substantially better off for income tax purposes than a couple whose income is £18 a week. For that reason I support the contention of those persons who have provided for themselves. Perhaps they have been more fortunately placed, have been able to subscribe to a superannuation fund or have been able to save and invest, but the fact of the matter is that they do not cost the National Welfare Fund anything. I should like to see an increase in the age allowance.

One suggestion that was made to me was that the assessable income should be reduced in the case of a married couple by the amount of the joint pensions. I have discussed this with a number of people and I believe that there are two very simple suggestions which would be well worthy of consideration by the Government. One suggestion is that after a couple reach pensionable age - the husband reaches 65 years and the wife 60 years - their gross income could be reduced by £5 for each year of their lives. In other words, a man of 65 would obtain a deduction of £65, multiplied by five, which is £325, and his wife at the age of 60 would get a deduction of £300. The effect would be that the gross income of that couple would be reduced by £625 before applying the age allowance. The second alternative is to go ahead and calculate the income for this couple and to give them a reduction in the amount of tax of £2 for each year of their life over 65. When the husband is 66 and his wife is 61, their assessment should be reduced by £4. When he has reached 67 years and his wife is 62 years, there would be a £8 reduction on the assessment. I believe that this relief would be given to them at a time when they are getting older and when it is logical to assume that their medical expenses would be higher. It would also come at a time when the husband would have less ability to earn for himself, as so many do at the present time. That is why so many do not receive a pension - because their income is in excess of £18 a week. In many cases the husband who has turned 65 and is entitled to retire prefers to work. I believe that people in those circumstances should get a greater entitlement than they are getting at the present time and I would commend to the Government either of the suggestions that I have stated.

The fourth section to which I refer is uncontrolled income. I refer to the speech of the Treasurer (Mr. Harold Holt) when introducing the income tax amendments last October. He said -

The Ligertwood Committee also made recommendations concerning the taxation of a share of partnership income which a partner docs not control. The Bill proposes measures arising out of these recommendations. In broad terms, the Committee proposed that uncontrolled partnership income should be taxed to the partnership as though each of the other partners had received a share of it relative to his agreed share in partnership profits. It is not proposed to adopt this recommendation, principally for the reason that it could bear inequitably on some partners. Instead, it is proposed that the partner lacking control of the income shall be liable for income tax on it. The income is to be taxed at the partner’s personal rate of tax or 10s. in the £1, whichever is the higher.

As I said last year, I cannot quite follow the reasoning which says that we will not tax the partnership which we really think has incurred the income, but we will levy a tax on the man who we say did not receive it. But that is not the point I want to raise now. I am trying to point out that the application of this amending section is different, in my opinion, from what was intended by the Treasurer when he introduced the legislation. The Taxation Branch believes - I think quite rightly - that in many cases high incomes were written down by including in the income of some other person with a lower taxable income a certain proportion of the first person’s income so that taxation could be avoided. But the effect of the provision is that the Taxation Branch says to the taxpayer who has been accused of having uncontrolled income - I take the instance of a taxpayer with an income of £4,000: “ We do not think this is a genuine income. We think your income is only £2,000 and that you have no control of the other £2,000.” Having said: “We do not think that £4,000 is your income; we think that you have earned only £2,000 “, it then states: “ Because you claim to have earned another £2,000 you must pay 10s. in the £1 on the second £2,000, although your rate on the income which we concede that you earned is less than 4s. in the £1.”

Let me make this clear. If the taxpayer had earned only £2,000 his income tax would have been £376 5s., which is at the rate of less than 4s. in the £1. I do not quarrel with the idea which says: We do not think that you earned the other £2,000 and therefore you must pay 10s. in the £1 on it. But I do quarrel with what actually happens. The Taxation Branch claims that a partner’s personal rate, to which the Treasurer referred, is the rate which applies to £4,000. In other words it applies the £4,000 tax rates to that part of the income which it agrees he really earned and the penalty rate of 10s. in the £1 to that part of the income which the Branch claims the partner has not received. I believe that much depends on the definition of what is the partner’s personal rate. I think that rate is the rate which applies to that part of the income which the Branch says he did earn; but the Branch applies the higher rate to the whole of the £4,000 by claiming that he did not earn it. The effect is that the rate on the £4,000 is not 4s. in the £1, which is the proper rate, but about 12s. in the £1, which is three times as much.

Let me give an example of how this applies. The Branch’s thinking is that uncontrolled income is part of the taxpayer’s taxable income and each taxpayer is taxed on his taxable income. In my opinion, the proper method of calculating tax for a person who claims to have an income of £4,000, of which the Branch says it concedes that he earned £2,000 but does not think he earned the remainder, would result in an assessment of £376 5s. with respect to that half of the income, which is the tax payable on £2,000. That is the amount that the Branch says he earned; and on the £2,000 which the Branch says he did not earn he should pay a penalty tax of 10s. in the £1, so his total tax would be £1,376 5s. Let me make it quite clear. He pays a substantial penalty because if he had earned the £4,000 legitimately, his tax would have been £1,196 5s. In this case someone who has resorted to this subterfuge has been penalised by £180. I do not quarrel with that. But the Branch assesses the income by saying that it will tax the £2,000 at the rate which is applicable to £4,000, although it does not think that he earned £4,000, and on that basis he pays £598 2s. 6d. But he still pays £1,000 on the £2,000 which the Branch says he did not earn. Therefore, he pays a total tax of £1,598 2s. 6d., compared with the ordinary taxable rate on £4,000 of £1,196 5s. His penalty in that case is more than £400. I do not believe that that is in the spirit of what was introduced by the Treasurer when he brought in the legislation. I referred a little while ago to the age allowance. There is on the front page of income tax return form “S”, and no doubt also on form “ A “, a section dealing with the age allowance. It sets out the birth dates of taxpayers who are entitled to claim the age allowance, and then has a line reading: “ See notes for guidance, page 3 “. On page 3, the form sets out what shall be regarded as taxable income. In relation to a married couple it states that if the taxpayer contributed to the maintenance of his or her spouse, who was a resident of Australia for the full year, no tax is payable where the combined income of the couple was not more than £936. That figure may be subject to the 2£ per cent, by which the recent Bill changes the provision. The form also sets out the figure at which the age allowance confers no benefit. That figure is £1,350. It goes on to state that the tax payable on income between £936 and £1,350 shall not exceed nine-twentieths of the excess of income over £936.

It has been suggested to me that the next note on the form may be confusing to some elderly people and may lead to their being denied benefits to which they are entitled. The note reads -

Income means the amount shown in item 10-

Item 10 refers to virtually all income - plus exempt income and exempt pensions and less only deductions claimed under item 28.

On turning to item 28, one finds that it refers only to “ any other deductions “. It does not point out to a taxpayer of pensionable age who is going to work that he is legitimately entitled to a deduction of expenses incurred in earning that income.

He is not told, for instance, that he is entitled to a deduction for car allowance, or for any fees he may have to pay to belong to a union in order to earn his income. Therefore he may not claim these deductions. The amount involved might not be great, but I do ask the Government to look at that aspect and see whether the form can be altered to permit the entitlement to be more clearly understood. 1 come now to the cost of converting business machines for use with decimal currency. The business machines I have in mind are accounting machines, adding machines and cash registers. Here the Treasurer (Mr. Harold Holt) has been good enough to say that the Government has agreed to accept an amendment which I shall move tomorrow. I shall say more about this matter then. As the Bill stands, that portion of the cost of conversion which is to be borne by the owner of the machine is to be claimed as a depreciation allowance, spread over 10 years. In other words, if a businessman pays £200 to convert a machine, not because the machine needs conversion but because the Government has introduced decimal currency, he will have to claim that £200 at the rate of £20 a year for the next 10 years. The strange part of the whole matter is that if a businessman owns a motor car which is used in the business and the motor car requires a new engine during the year, he can claim the full cost of the engine as repairs. Again, many other expenses incurred by business people in connection with the introduction of decimal currency - expenses such as the cost of changing price lists, new printing, new price tickets, overtime that has to be worked by the staff close to conversion day and money expended in training staff - may be claimed in the year in which the expenditure is incurred. For some reason, the Government chose to regard the cost of conversion as a capital cost rather than a revenue cost and decided that depreciation should be claimed over the life of the machine. Fortunately, the Government has now agreed to allow the businessman to write off the full cost of conversion in the year in which he spends the money.

This is reasonable because, in my opinion, the cost of conversion adds nothing at all to the value of the equipment. In effect, the present provision penalises the man who has looked after his machine. If he had not looked after it he could easily have said: “ I propose to buy a new machine.” Then, instead of spending £200 to have the old machine repaired, he would spend £800 on a new one. If a business man buys an accounting machine, he may have to spend £1,500. He can then immediately claim at least £ 1 50. If he decides to adopt the reducing method of charging depreciation, he can claim up to 15 per cent, of the £1,500, or £225. He can also claim as a legitimate deduction any interest commitment which he incurs in financing the purchase of the new machine, yet smaller amounts spent on conversion have to be depreciated over a number oi” years. I am very glad that the Government has agreed to the alteration I have suggested to allow this expenditure to be deducted in the year in which it is incurred.

I might say that the cost to revenue over the period is nothing, for it balances itself out. It will not even be felt in the first year because, although C day is 14th February, that does not mean that every business machine in Australia will be converted by 1 5th February. I am told that it may be two years before the last of the machines is converted for use for decimal currency. Therefore, the cost of adopting my suggestion will be spread over three income years and in the long run will amount to nothing at all.

The last matter to which I wish to refer is perhaps only a minor one. It relates to proposed section 80b which deals with loss companies. In his explanatory memorandum, the Treasurer states -

One amendment proposed is the provision of a “ continuing business “ test as an alternative to the “ percentage of shareholding “ tests now in the law. This amendment is being effected by the insertion of a new section - section 80e - in the Principal Act. Under the new section, a company will retain its entitlement to deductions for losses of previous years notwithstanding a substantial or total change in the identity of the owners of the. shares in the company if -

it carries on during the whole of the year of income the same business as it carried on immediately prior to the change in shareholdings.

The actual wording of proposed new section 80e (c) is- the first-mentioned company carried on at all times during the year of income the same business as it carried on immediately before the change took place.

It has been suggested to me that whilst it is still open to the discretion of the Commissioner, there may be some little doubt as to the meaning of the words “ at all times “. There may be some circumstances in which a business is not carried on for, say, one day of the income tax year - perhaps at the time of take-over. Subject to the discretion of the Commissioner, this may be sufficient to deny the benefit of the proposed new section to the company concerned. I do not know whether this gives rise to any real worry, but I suggest that the Treasurer have a look at it and that, if he believes there is any real substance in the argument, he take the opportunity of rectifying the position in the new legislation to come forward next year.

Debate (on motion by Mr. Kelly) adjourned.

page 3223


The following Bills were returned from the Senate without amendment -

States Grants (Special Assistance) Bill 196S.

Currency Bill 1965.

Decimal Currency Board Bill 1965.

Reserve Bank Bill 1965.

Foot and Mouth Disease Bill 1965.

Judiciary Bill 196S.

Judges Remuneration Bill 196S.

page 3223


Suspension of Standing Orders.

Motion (by Dr. Forbes) proposed -

That so much of the Standing Orders be suspended as would prevent thirty Bills relating to decimal currency (a) being presented and read a first time together and one motion being moved without delay and one question being put in regard to, respectively, the second readings, the committee’s report stage, and the third readings of all the Bills together; and (b) the consideration of the Bills separately in one committee of the whole.

Melbourne Ports

.- I have no objection to the proposal but I think that some information ought to be given to the House before it is asked to agree to this unusual procedure. We have not been told that these Bills contain only machinery rather than fundamental amendments. I would have thought that this would have been explained to the House before asking it to agree to discuss 30 bills together.

Before we agree to this unusual procedure, I would like an assurance that the amendments involved are only consequential.


– Order! Before the Minister for the Army replies to this question from the honorable member for Melbourne Ports I point out that, strictly speaking, if the Minister answers the question he closes the debate on the motion for the suspension of Standing Orders.

Leader of the Opposition · Melbourne

– I support the remarks of the honorable member for Melbourne Ports (Mr. Crean). What we want to know is whether a second reading debate can take place on any of these Bills if the Opposition desires it. Would the passage of this motion necessitate only one debate on the whole of these 30 Bills or could we debate them at the Committee stage or in any other way? We want to co-operate with the Government but we do not want to prevent ourselves from making whatever contributions we wish to make in respect of any of these Bills. I leave it to the honorable member for Melbourne Ports, who is handling these Bills for the Opposition, to make the decision, but we should like to hear more from the Minister.

Mr Crean:

Mr. Deputy Speaker, can not the Minister ask for leave to make a statement?


– No other honorable member is rising. I think that if the Minister replies to the honorable member for Melbourne Ports and it then becomes necessary the honorable member can seek leave to make a statement if he wants further information.

Mr Crean:

– All I want is an assurance that only minor matters are involved in these Bills. If I get that assurance I am prepared to agree to the 30 Bills being considered as one, but I am not going to agree if these are Bills of substance.


– I think it would fit the situation if the Minister replied. We can take the next step from there if another step is necessary.

Minister for the Army · Barker · LP

– in reply - In the view of the Government the Bills are of the nature understood by the honorable member for Melbourne Ports.

Mr Crean:

– I will accept that assurance.


– The honorable member will have to come to his own conclusion on this. . However, I point out that there is still the opportunity of debating each Bill separately at the Committee stage.

Question resolved in the affirmative.

Air Navigation (Charges) Bill (No. 2) 1965.

Audit Bill 1965.

Banking Bill 1965.

Bankruptcy (Decimal Currency) Bill 1965.

Butter Fat Levy Bill (No. 2) 1965.

Canned Fruits Export Charges Bill 1965.

Christmas Island Bill 1965.

Commonwealth Banks Bill 1965.

Customs Bill (No. 3) 1965.

Dried Fruits Export Charges Bill 1965.

Egg Export Charges Bill 1965.

Estate Duty Assessment Bill (No. 2) 1965.

Excise Bill 1965.

Excise Tariff Bill (No. 2) 1965.

Honey Levy Bill (No. 1A) 1965.

Honey Levy Bill (No. 2A) 1965.

Income Tax Assessment Bill (No. 2) 1965.

Insurance Bill 1965.

Life Insurance Bill 1965.

National Health Bill (No. 2) 1965.

Parliamentary Retiring Allowances (Decimal Currency Bill 1965.

Pay-Roll Tax Assessment Bill (No. 2) 1965.

Post and Telegraph Bill 1965.

Post and Telegraph Rates Bill 1965.

Pyrites Bounty Bill (No. 3) 1965.

Social Services Bill (No. 2) 1965.

States Grants (Petroleum Products) Bill (No. 2) 1965.

Taxation Administration Bill 1965.

Wheat Industry Stabilization Bill 1965.

Customs Tariff Bill 1966.

Bills presented by Dr. Forbes, and together read a first time.

Second Readings

Minister for the Army and Minister Assisting the Treasurer · Barker · LP

.- I move-

That the Bills be now read a second time.

All of the Bills excepting that dealing with the customs tariff are bound in one pamphlet. The Customs Tariff Bill is separate because of its bulk. When introducing the Currency Bill 1965 the Treasurer (Mr. Harold Holt) informed the House that the provisions of that Bill would enable most references to £ s. d. amounts in Commonwealth legislation to be construed after C Day as references to dollars and cents. He added that there were, however, a number of acts in which money references in £ s. d. needed to be specifically amended. A large number of amendments are made in the 30 Bills to which I have referred but all of them - and this is the point made by the honorable member for Melbourne Ports (Mr. Crean) - are of a machinery nature and they do not involve changes of policy. It would not, I believe, be a profitable use of the time of the House if I were to attempt to explain each one of these amendments. However, I shall, of course, be very willing during the committee stage of the debate to explain any of them on which honorable members may wish to have further information.

Perhaps I could give some idea of the changes proposed if I said that there are in a number of cases references in acts to returns or figures being submitted to the nearest £1 or the nearest £1,000. The amendments would change these to references to the nearest dollar or 1,000 dollars rather than to the nearest 2 dollars or 2,000 dollars as the case may be. There are a number of other amendments in respect of acts which specify amounts for fees, charges, rates and so on which will not convert exactly to dollars and cents. In these instances, and in conformity with the previously announced intention not to profit from the changeover, the Government has decided that the amounts should be rounded down wherever this is appropriate. There are other cases which relate to payments by the Government where amounts have been rounded upwards. The amounts concerned are in no case greater than a fraction of a cent. Similarly, the changes proposed in the conversion of the customs tariff are consistent with the Government’s stated intention to minimise increases in rates of duty as a result of the introduction of decimal currency. The general method used was to convert old currency amounts of less than 5s. to the nearest three decimal places of a dollar and amounts exceeding 5s. to two decimal places of a dollar. In respect of certain high duty goods such as tobacco, gasoline and various petroleum products, a more exact conversion has been made, in some cases to four decimals of a dollar.

The Bills have been prepared specifically to effect the change to decimal currency and to exclude other matters. This is why these provisions have not been included in some bills which have been before the House recently to amend some of the legislation which I mentioned at the commencement of this speech. I believe that the procedure proposed for dealing with these Bills will facilitate their speedy consideration by the House and I commend them to honorable members.

Debate (on motion by Mr. Crean) adjourned.

Sitting suspended from 5.54 to 8 p.m.

page 3225


Second Reading

Debate resumed from 19th May (vide page 1661), on motion by Mr. Snedden -

That the Bill be now read a second time.


.- Mr. Deputy Speaker, it has proved most difficult to conceive and deliver restrictive practices legislation in the Liberal Party. The period of gestation has been so excessive that the father of the legislation has left the House to become Chief Justice of Australia. The foster father - the present AttorneyGeneral (Mr. Snedden) - has had to accept responsibility for a much more puny child than numerous progress bulletins had led members of the Parliament and the community to expect.

The Government’s intentions in this matter were announced in these terms in the Governor-General’s Speech at the opening of Parliament in March 1960 -

The development of tendencies to monopoly and restrictive practices in commerce and industry has engaged the attention of the Government which will give consideration to legislation to protect and strengthen free enterprise against such a development.

Even then there would have been no promise of restrictive practices legislation had it not been for the unanimous recommendation of the Joint Committee on Constitutional Review in 1958 and again in 1959. The Attorney-General found two proposals at least by that Committee to be irresistible. The arguments were unanswerable. There was need in Australia for a national and comprehensive law on companies and on restrictive practices. When the Government made its announcement people were reassured. Nobody knew better than Sir Garfield Barwick the loopholes and the subterfuges of big business. No-one was better qualified to plug those loopholes and to ban those subterfuges. The best poachers, it was thought, often proved to be the best gamekeepers.

It was at this stage that Sir Garfield Barwick made his first mistake. The Committee had recommended referendums to give the Commonwealth Parliament powers to pass complete laws on companies and restrictive practices. Sir Garfield determined to introduce Federal laws and to ask the States to pass complementary laws. In aiming to by-pass an expresssion of the popular wishes at a referendum he delivered himself into the hands of his Cabinet rivals and their backers, who have been unable to withstand six years lobbying in this and the State Parliaments.

It should not have been difficult to frame restrictive practices legislation or monopolies legislation. This Bill does not refer to monopolies in its title. It refers merely to trade practices. There have been restrictive trade practices laws in the greatest - oldest - federation - the United States of America - since the Sherman Act of 1890. Since the Second World War such laws have been passed in Britain in 1948, in Canada in 1951, in New Zealand in 1958, in the European Coal and Steel Community in 1951 and in the European Economic Community in 1957.

Mr Snedden:

– The legislation in Canada preceded that of the United States.


– Not the Sherman Act.

Mr Snedden:

– The Deputy Leader of the Opposition should look at the history of this matter.


– The Attorney-General says that there has been even older legislation in the Canadian federation than in the United States. In that case there has been more than three-quarters of a century of experience of this form of legislation in federal systems.

But to return to the period after the last war, apart from the countries and communities I have listed, such legislation has been enacted in Denmark, France, Japan, the Netherlands, Norway, South Africa, Sweden and West Germany. Since 1906 there has been an Australian Industries Preservation Act, modelled on the Sherman Act. Last year and this year the High Court gave several decisions which show that the Act has much more force than was usually thought. It is to be deplored that the Bill we are now debating should now repeal the relevant sections of the Australian Industries Preservation Act. Let me refer to section 4 of the Act, which has been declared valid by the High Court. It reads - 4(1.) Any person who, either as principal or as agent, makes or enters into any contract, or is or continues to be a member of or engages in any combination, in relation to trade or commerce with other countries or among the States -

  1. in restraint of or with intent to restrain trade or commerce; or
  2. to the destruction or injury of or with the intent to destroy or injure by means of unfair competition any Australian industry the preservation of which is advantageous to the Commonwealth, having due regard to the interests of producers, workers and consumers, is guilty of an offence. (2.) Every contract made or entered into in contravention of this section shall be absolutely illegal and void.

Apart from creating offences and nullifying contracts the Act gives individuals affected by such illegal practices the right to sue for and recover treble damages for the injury. In February last year the High Court unanimously held that this section was a valid exercise of this Parliament’s powers. Many people say - and it is not too cynical to believe - that it was from this stage, February last year, that the Government’s interest in restrictive practices was galvanised. From that stage it was determined that this Act would have to be repealed. That is, an Act which admittedly had been thought to have defects was found to be perfectly valid - to have teeth. Thereupon the Government decided to repeal it.

The Bill we have before us is not yet established. At least, one would think that the Australian Industries Preservation Act should not be repealed until it has been established that the Bill we are debating is equally effective. But, even so, the Australian Industries Preservation Act gives individuals and companies rights which this Bill does not give them. Parliaments must augment the common law ban on restraints of trade and monopolies. In a federation it is more than ever necessary that the people should have statutory rights. Individuals will lose their rights under the Australian Industries Preservation Act.

The Bill is designed, according to the long title, “ to preserve competition “. In the first 4 of the 1 8 roneoed pages of his second reading speech the Attorney-General used the word “ competition “17 times and the words “ free enterprise “ 6 times. He has worked on the simple supposition that if you say a thing often enough you begin to believe it yourself. This is part of Liberal folk lore, so one can pardon the Liberal Minister this self-hypnosis. I hope he does not expect this Liberal litany to lull too many others into as much gullibility about free enterprise and competition. This very Bill is testimony to the fact that business does not like competition. Business wants protection against insecurity and instability. The object of competition is to destroy competition. There is little competition over a very wide range of Australian industry and commerce. Prices are determined, not by competition in the market place, but by management in the board rooms. Although claiming to be a free enterprise Government - honorable members will pardon me if I give somewhat the same space to free enterprise as the Attorney-General gave - no government in Australian history has promoted government expenditure quite so much as this Government. The proportion of the annual gross national expenditure controlled by government has risen from 14.9 per cent. to 19.4 per cent., an increase of 41/2 per cent. during this Government’s life, as against a rise of 1.9 per cent. - from 13 per cent. to 14.9 per cent. - under the Labour governments during the war and in the post-war period of the 1940’s.

Those who benefit most from government regulation are the keenest to promote the myth of free enterprise. No man has profited more than R. M. Ansett from that regulation. To assist him the Government has destroyed almost all competition in the air, whether it be in routes, aircraft, fares or timetables. Yet Mr. Ansett is always to the fore in proclaiming the virtues of his private enterprise or free enterprise airline.

One of the fiercest opponents of this Bill has been the .Associated Chambers of Manufactures of Australia, but when the benefits of government regulation through the tariff are under discussion A.C.M.A. will be the first to hold out its hand. The tariff is a powerful instrument in regulating output, investment and prices. Between 55 per cent, and 60 per cent, of the 1,200,000 men and women engaged in secondary industry in Australia work in industries in which economic viability depends in varying degrees on tariffs. To give another, although I suppose, a minor instance, the drug industry preaches private enterprise in saving lives yet it depends for 90 per cent, of its ethical income on governments.

The Government has created and condoned restrictions of trade in many fields. The trading and savings banks are regulated and underwritten. We are urged to support the free enterprise banks. A free enterprise government has done a pretty thorough job on the free enterprise banks. There is no section of industry or commerce so regulated or so underwritten.

No industry is more highly regulated than most of the primary industries. The Australian Country Party thinks that competition and organised marketing are the same things. Thus we find embargoes on imports of dairy products, sugar and rice. We find quotas on the production of sugar and margarine. We have home price schemes, subsidies and numerous tax advantages. We do not have a free enterprise economy at all. In the major sectors there is no competition.

I have mentioned the extent of government regulation not to criticise particular regulations but to demonstrate three main things. First, the Government should come to grips with the real economy rather than the mythical economy of Liberal folklore. Secondly, those who benefit from government regulations should tone down their protestations about private enterprise. Thirdly, we must replace the vices of a regulated economy with the virtues of a planned one.

I have mentioned monopoly and the former Attorney-General mentioned monopoly, although, of course, the title of this Bill does not mention it. Manufacturing industry in Australia shows a greater incidence of monopoly than in most other countries. In one study it was found that one-third of manufacturing industry in Australia is highly concentrated and at least one-half is fairly concentrated. About 32 industries altogether were identified as highly concentrated. Among those in which only one company was producing the total Australian production were the refined zinc, pig iron, ball and rubber bearings, linoleum, industrial gases, sheet glass and writing paper industries. Those industries in which there were only two companies producing the whole output were the steel making and rolling, steel sheet and sugar refining industries. Industries in which there were three companies producing the total output were the matches, alkalis and chlorine, electric lamps, radio valves and television tubes and glass containers industries.

These monopolies are among the longer established of Australian industries and they are mainly Australian owned. The remainder of the 32 highly concentrated industries are oligopolised rather than monopolised. A small number are Australian owned, such as the brewing industry, the newspaper industry and the shipbuilding industry. The majority of our oligopolies, however, are subsidiaries of overseas firms. The most notable examples are the motor vehicle industry, the chemical industry, the tobacco, paint, soap, petroleum, agricultural equipment, electrical equipment, food processing and office machine industries. The large overseas firm has experienced little difficulty during the postwar expansion in establishing itself as one of the few dominating producers in these industries. Australia has twice the degree of concentration that exists in Britain and three times as much as in the United States of America, ft has a greater degree of concentration than there is in Canada.

If we are to promote the virtues of competition we have to envisage an extension of government enterprise. Public enterprise is one means, the chief means, of staving off or counteracting private monopoly in Australia and providing continued competition. Where we already have a monopoly in the field - and we have them in more fields than any other considerable trading or industrialised country has - there will be no competition unless the Government enters the field and provides the competition. Government enterprise is essential in such fields as shipping, drugs, steel and oil search. In some cases the Commonwealth Government could initiate the government enterprise by itself. In others it could establish an enterprise in co-operation with the States. In yet others it could do so in a consortium with a private corporation. The Commonwealth can do these things where it is so minded. There will be no increase in competition in many fields until there is more public enterprise or publicly sponsored competition.

The Government has failed to publicise sufficiently the extent and harm of restrictive practices. The present Attorney-General has been very reticent. Far from assisting public awareness of the problem be has discouraged public interest. Sir Garfield Barwick took the Parliament into his confidence and described the practices to a very considerable extent. He made many speeches outside the Parliament. He printed brochures which are available to members. He proposed that the register of agreements and practices should cover many more things than are covered by the present Bill - practices as well as agreements, services as well as goods and land. He proposed that it should be open to everybody with a legitimate interest. The present AttorneyGeneral has been forced to close the register to the public, even if people have a legitimate interest. There is no court which can make the register available to any company or any citizen, however gravely such a company or citizen is affected. The public has been left largely to make its own assessment.

We have one of the most highly monopolised economies in the world. There is no reason to believe that restrictive trade practices are not similarly extensive. As Sir Garfield Barwick pointed out, a ready measuring rod of the extent to which restrictive trade practices exist is the number of trade associations. It is estimated that we have 500 or 600 of them. A document prepared by the former Attorney-General and given to us in August 1963 detailed restrictive practices which had come directly under his notice or been reported by the Tariff Board and other official bodies of inquiry. The restrictive practices listed were extensive and serious. On 14th September I asked the present Attorney-General to bring the list up to date, and just over an hour ago he gave me the list. I am unable to present an extensive analysis of it. Since the former Attorney-General prepared his document there have been several Tariff Board inquiries and Professor Grant’s Royal Commission of inquiry on restrictive trade practices in Tasmania. Professor Grant listed 22 practices of which seven will not be covered by this Bill except where they come within the monopolisation clause and four other practices which will not be affected by this Bill in any circumstances.

The Attorney-General also told me which of the practices listed by Sir Garfield Barwick were intended to come within the scope of his bill if there was or was not complementary State legislation. Of 18 practices which had come to his predecessor’s notice the Attorney-General has told me that one will not come within the scope of this Bill and four are not intended to come within it except insofar as they come within the monopolisation provisions. Of the 14 practices which Sir Garfield Barwick pointed out had been reported on by public bodies, one is not intended to come within the scope of this Bill and three others come within it only in a minor way. So honorable members will see that insofar as we were informed of restrictive practices as distinct from monopolies in Australia there will be a very wide range which will not be covered by this Bill at all.

One of Sir Garfield Barwick’s hopes was that the States would co-operate. He always emphasised the necessity of State legislation to complement the Commonwealth legislation. He was confident, he said, of securing it. There were a couple of urgency discussions introduced by members of the Labour Party in 1960. In each instance Sir Garfield Barwick either stressed that the States could deal with the matter themselves or that this Parliament could deal with it only if the States were to pass complementary legislation. When it was decided to bring in the Commonwealth legislation there was still the same emphasis on complementary State legislation. As Sir Garfield Barwick said himself on 27th October 1960 in this country, with only six States as distinct from 50 American States intrastate trade - that is, State jurisdiction - by far occupies the field. Accordingly, at that time he was thinking that if we could not have State complementary laws most of the field could not be covered by the Commonwealth at all. In March 1961 the Administrator when opening the Parliament said -

The Attorney-General has so far progressed in his investigation of this matter, and the Government has developed its thinking to the stage that consultation with the States will now be advantageous. Accordingly, the Government has commenced discussions with the governments of the States and will continue these discussions in an endeavour to evolve suitable legislation to operate over the whole area of trade and commerce in Australia.

The Prime Minister (Sir Robert Menzies) in his policy speech of November 1961 said -

We desire, in co-operation with State Governments, to do something to protect and strengthen free productive and business enterprise against monopoly or restrictive practices.

The Prime Minister made no such reference to the States in the policy speech that he made at the end of 1963. He has not carried out the policy that he put to the people at the end of 1961. The Governor-General told us in February 1962: “Discussions with the States are continuing “. The fact is that the Co-operation of the major States in the plan is certainly desirable, and if the Commonwealth cannot control horizontal restrictive trading agreements through the application of the corporations power, then the participation of the major States will be essential if the plan is to be fully effective. The volume of intrastate trade is far greater than the volume of interstate trade and moreover some restrictive agreements entered into in connection with interstate trade or foreign trade could be converted to a series of intrastate arrangements.

Sir Garfield Barwick said when he outlined his proposals to the Parliament in December 1962 -

As a result of my discussions with the State Attorneys I have reason to believe that at least a clear majority of the State Attorneys would recommend to their governments the introduction of complementary State legislation to implement the scheme of legislation I describe.

In the question I asked the AttorneyGeneral, to which I have referred earlier, I asked him what consultations there had been with the States, what were the means and what were the results? He told me that these consultations were confidential. I therefore have to rely on statements made by State Attorneys-General. On the 9th of this month in the Victorian Legislative Council the Minister introducing the Collusive Practices Bill said -

It might have been expected that the Federal Government would have sought in advance the co-operation of the States on its legislation . I am quite sure that it was the intention of Sir Garfield Barwick, when he was Attorney-General, to seek the co-operation of the States. I was present at a meeting of Attorneys-General late in 1962 when Sir Garfield Barwick said he proposed that when the Federal Bill had been drafted he would show it to the State Attorneys-General so that action could be co-ordinated. Unfortunately, that has not happened as yet. The States did not see the Federal Bill before it was introduced into the Federal Parliament in May. In July, at a meeting of Attorneys-General, a request was made that the States either pass complementary legislation or refer their powers to the Commonwealth under the Constitution.

It is quite clear that the Government never thought there could be effective restrictive practices legislation unless there was complementary State legislation, and the only public statement that any AttorneyGeneral has made is that there has been no consultation to that end. Accordingly, if the Government is still of the same view as Sir Garfield Barwick expressed, and the Prime Minister, the Governor-General and the Administrator expressed, the fact is that there will not be effective restrictive practices legislation in respect of most trade in this country. Federal legislation will only cover a part of the field.

Quite apart from the matters which require complementary Federal and State legislation there are many fields of restriction in which the Commonwealth has complete constitutional power. It has power over trade with other countries. I shall refer to three fields of overseas trade in which restrictions occur. There are export franchises; there are shipping conferences; and there is the well known but small instance of the book boycott. The Minister for Trade and industry (Mr. McEwen) has stated that 700 Australian companies are parties to HOO agreements which restrict exports. Estimates have been made that 40 per cent, of Australian manufacturing industry is controlled overseas and most of it is postwar industry. We know from general observation that in Australia the motor vehicle, chemical, petroleum and aluminium industries are almost wholly owned overseas. Others in this group, although not so important industrially, are tobacco, paint, soap, industrial gases, rubber, ferrous pipes and tubes, lead, zinc and copper processing, wireless and television manufacture, cotton and synthetics spinning and weaving. In other industries the overseas component is less but is still quite significant. These are electric wires and cables, pharmaceuticals, office machinery, agricultural machinery, industrial equipment and certain lines of food processing. The only really major industries that are Australian owned are steel, paper, cement, glass and sugar refining. Only the steel industry ranks industrially with the most important foreign owned Australian industries. In the small Australian market the large overseas companies very effectively hold the commanding heights of the economy. In these circumstances, where our newest and biggest industries are owned overseas, the question of export franchises is a continuing burden to the Australian economy. It is a restrictive practice which should be curbed and it is within the Commonwealth’s constitutional power.

Trie next example concerns the shipping conferences. I quote now from a publication brought out in April last year by the Department of Shipping and Transport in which it is stated - a conference is usually defined as an association of competing liner owners engaged on a particular trade route who have agreed to limit the competition amongst themselves. As a minimum they agree to charge freight rates or passenger fares for each class of traffic according to an agreed schedule of charges. To the agreement renouncing all forms of price competition is usually added an agreement to regulate sailings according to a predetermined pattern. A further step may be to add a full pooling agreement under which profits and losses on the trade covered by the conference are shared between members. . . .

In addition to internal arrangements, each conference may have agreements with shippers, that is, with its customers. Such agreements may take two forms, both designed to secure the continued custom of the shipper and to prevent the entry of outside competition. The first is known as the “loyalty rebate” or rather the deferred rebate system. Under this system the shipper who has not employed a non-conference ship for 6 to 12 months receives a refund at the end of the period of a percentage of his freight payments. In most cases the deferred rebate system constitutes a more substantial tie because the deferment of the rebate makes the entry of new shipping lines almost impossible. In the United States this system was outlawed by the Shipping Act of 1916. . . .

The second and newer type of tie is the contract or the dual rate system. Under this system the shipper enters into a contract with the conference, under which he agrees to send all his shipments by the conference lines. There is a difference between the contract and non-contract rates and in the U.K.-Australia trade, for example, it amounts to about 10 per cent., the contract rate being, of course, the lower. For shippers who do not enter into such contracts, the net contract rate is charged plus 10 per cent., less 10 per cent., six months deferred, if shippers have not sent cargoes by tramps during that period.

I quote the document at length because it has not been quoted by the present or the former Attorney-General. It is a Government document and presumably authentic. We are an island and one of the largest trading countries in the world. We do not operate a single scheduled overseas ship. Most of our trade with Britain, Europe, Japan, Malaysia, either coast of North America and to New Zealand goes by conference lines. The conferences engage in a restrictive practice which comes within Commonwealth constitutional power. There is no need for complementary State legislation to deal with this matter. 1 conclude with a well known example which is not very significant economically but which is significant to all people who write and perform in Australia. That is the book boycott. There has been a boycott since 1938. In that year, the Publishers Association of the United Kingdom decided to boycott any American books whose British Empire rights were not intact. The British Empire Market Agreement effectively restricts the entry of American books into Australia, as Australia is still regarded as part of the British Empire as at January 1947. We are a captive British market - a subject people - as far as Britain is concerned.

Mr Clyde Cameron:

– Does the honorable member mean to say that that position still applies?


– Yes. It still applies. Not only was the entry of American books to Australia restricted, but also the United States, in effect, reciprocated by limiting Australian sales to the United States. It is time that in this, as in other fields, Australia asserted its rights to buy and sell in any market. The Federal Government possesses and should exercise the constitutional power to put an end to such restrictive practices imposed from overseas.

I come now to the abandonment of many of the proposals that Sir Garfield Barwick put to us in 1962. Up to this stage, I have dealt with the gaps in this Bill. It does not deal with monopolies which are so prevalent in Australia. It does not deal with these forms of restrictive practices in which the Government has condoned or created restrictions. It has not achieved or sought State co-operation to secure comprehensive national laws. It has not exercised the international constitutional powers of this Parliament. Quite apart from these gaps, however, which the Bill makes no attempt to cover, there is an abandonment of the proposals which Sir Garfield Barwick put forward. Not only has the Government failed to .secure the State laws which Sir Garfield said were essential and to exercise its own overseas trade powers, but it has also abandoned Sir Garfield’s proposal to Parliament to ban monopolisation and destructive price cutting and to investigate mergers and resale price maintenance. This is all the more deplorable since the British Conservatives themselves have dealt with these matters. Sir Garfield stated his intentions quite clearly. The public was intended to believe that these would be carried out. Members of Parliament were entitled to believe that a law would be introduced in the terms which Sir Garfield outlined. The Attorney-General, in fact, has not adequately explained why these matters have been abandoned.

First, there is the abandonment of Sir Garfield’s proposal to make inexcusably unlawful the practice of persistent price cutting to drive out a competitor. This was to be prohibited by Sir Garfield. It is merely examinable now. The Attorney-General has not given any explanation for the change. Large companies, particularly Australiawide companies, can easily destroy a small local company through price cutting. This has been described as a big business Bill. The only qualifications one needs to make is that big business, after reading the Bill, does not think that the Government means business. Very much solicitude has been shown in the Bill for large firms. Very little solicitude has been shown for the small firms. This Bill will do very little to preserve their service to the public or to keep them alive. Again, there is the question of monopolisation. The Attorney-General is no longer making this, as Sir Garfield Barwick intended to make it, inexcusably unlawful. It is merely to be examinable.

I come, now, to the two proposals which are not even mentioned in the Bill. The two earlier matters I have mentioned as being abandoned have been taken from the inexcusably unlawful list and placed on the examinable list. But the other two matters have been taken out altogether. I refer to resale price maintenance and mergers. Resale price maintenance prevents price competition in the branded goods to which it applies. In general, it raises the level of prices and profits. It is one of the most common forms of price fixing. It is designed principally by retailers to protect their margins from competition. Manufacturers also have an interest in resale price maintenance, particularly if they feel that price cutting will reduce the status of their goods. In Great Britain, a survey has shown that 40 per cent, of consumer goods were subject to some form of resale price maintenance. The percentage in Australia could well be greater. Earlier this year, Professor Grant reported to the Tasmanian Government as a royal commissioner on prices and restrictive trade practices. Two royal commissions have been held in recent years into restrictive practices. One was appointed about seven years ago by the Labour Government of Western Australia and the other reported this year to the Labour Government of Tasmania. Professor Grant reported as follows -

Resale price maintenance applies to the salp of bread, malt liquors, electric lamps, tyres and tubes, automobile parts and accessories, books, sports goods, hot water systems, cartridges, paint, cement, steel pipe, sheet steel, hard board, plywood and most hardware products, cigarettes and tobacco, pharmaceutical goods and toilet preparations, branded footwear and many clothing and drapery items. This list is far from exhaustive, but it indicates clearly that in a significant segment of wholesale and retail trade the seller is not free to set his own prices and hence price competition is non existent.

The Attorney-General gave no reason at all for withdrawing this matter from the proposed restrictive trade practices legislation proposed by his predecessor three years ago. It is not impossible or even difficult to draft such legislation. The Conservative Government in Britain did it a year ago. Mr. Heath, the present Leader of the Opposition in the British House of Commons, introduced the legislation. While there were redoubtable efforts made to thwart it in Great Britain, the Conservatives sat firm. It is now established. It is now operating satisfactorily. Sir Garfield Barwick promised this provision to us three years ago. The Attorney-General has abandoned it. Why?

Provisions relating to mergers have also been abandoned. Sir Garfield Barwick stated very properly in 1963 in the G. C. Wood Memorial Lecture -

Size does not always bring efficiency. Not infrequently it tends to destroy it.

He was countering the argument that mergers will necessarily bring about economies of scale. We are not dogmatic that this is so or that the contrary is so. But quite clearly Sir Garfield Barwick’s proposal that mergers should be investigated and that they should be held up for a certain period of time if more than £250,000 is involved should still be carried out. The AttorneyGeneral referred to this in a very brief form in his speech. Mergers are a daily occurrence. They are often a substitute for an agreement. Control of such practices could be an invaluable way of regulating the structure of the economy, which is already highly monopolistic. Some company take overs have desirable effects; some are unavoidable - for instance, taking over an ailing company in times of high share prices. The incentive for takeovers increases as share prices increase, as shown in 1.959 and 1960. In 1959, 75 public companies were absorbed. They included companies dealing with coal, hardboard, radiators and constructional steel. The concentration of control through mergers can lead to profiteering, but more probably it leads to a laxity of organisation and technique.

The Government has introduced legislation, and amended it on several occasions, to prevent mergers in the television field.

Merger controls have operated successfully in Canada and the United States. They were introduced this year by the Wilson Government in Great Britain and the Conservative Opposition did not oppose the legislation. It is perfectly feasible to have such control. Sir Garfield Barwick promised it in his statement to the House in December 1962. He said -

It will be obvious enough, and, indeed, experience abroad has demonstrated, that where two. or more may not lawfully agree to engage in restrictive practices) they may, by merger so as to become one entity, do the very thing that was forbidden to be done by agreement . . . But it would, in many instances, be preferable to intercept an intended aggregation, whether of assets or of proprietorship, where it was but a substitute for an agreement to carry out a restrictive practice or where it was itself a mechanism to reduce competition or to take a step towards ultimate monopoly whether of supply or of demand.

The scheme I propose would seek to deal with the situation by providing an opportunity for intervention by the commission, established under the act, through the registrar, before the merger took place.

The present Attorney-General says that the problem of mergers is too difficult. In August, the British Parliament brought into operation such an Act. Sir G –field was keen on this proposal. In a paper he circulated and a speech he made at the Hobart Legal Convention in January 1963, he reiterated that he proposed to bring in legislation to investigate mergers. They have been investigated by the British - ‘actually, by the Conservatives. Lord Poole, their chairman, presided over a committee that inquired into mergers and about that inquiry Professor Brunt has had this to say -

An advance clearance procedure is therefore advocated with the authorities given the right to hold up a merger for, let us say, six months. This in itself is not especially shocking.

As the Poole Report of the British Conservative Party observed, “most mergers are in fact under discussion for some time.” Thus advance notice of all mergers above a certain value could be lodged with the Registrar.

She added -

The collection and presentation of evidence on these matters should not take an inordinate amount of time. Quoting again the pithy Poole Report: “ If it were really impossible to tell the probable results of a merger, mergers would never take place. We cannot accept the argument that those concerned can estimate the commercial consequences but nobody can forecast the consequences to the public interest

The effects on the public are largely determined by the commercial consequences”.

Mr Cope:

– Is Lord Poole a left winger?


– Among Australian Conservatives, he would be. The British Conservatives accept the need for control of mergers; but the Attorney-General has abandoned his predecessor’s promise to us and to the public three years ago. Mr. Speaker, I move -

That all words after “That” be omitted with a view to inserting the following words in place thereof: - “ this House notes with approval that, in response to public pressure, the Government has introduced this limited Bill but deplores: -

the Government’s failure to hold a referendum, as unanimously recommended by the Joint Committee on Constitutional Review in its reports presented to the House on 1st October 1958 and 26th November 1959 to give the Parliament power to make comprehensive national laws with respect to restrictive trade practices; and

its abandonment of a substantial part of the proposals of the former AttorneyGeneral, for legislation on restrictive trade practices and monopolies, as outlined to the House on 6th December 1962 particularly with respect to resale price maintenance, persistent price cutting, monopolisation and mergers.”


– Is the amendment seconded?

Mr Crean:

– I second the amendment and reserve my right to speak.


.- I support the Bill and oppose the amendment. At the outset, I would like to say that the Deputy Leader of the Opposition (Mr. Whitlam) has been less than fair - perhaps that is not altogether unusual - in the strictures and criticisms he has addressed to the AttorneyGeneral (Mr. Snedden). I am sure my honorable and learned friend, the AttorneyGeneral, can take it, but members of the public are entitled to know that an unfair criticism has been made. I wish to make that point. The Deputy Leader of the Opposition at the beginning of his speech to the House tonight said that the Government chose to introduce this Bill because it became frightened when, within the last year or so, it was discovered that section 4 of the Australian Industries Preservation Act was within constitutional power. The impression that the Deputy Leader of the Opposition sought to convey was that this discovery was made quite recently as a result of the decision of the High Court of Australia and that it came, as it were, as a surprise to the legal profession and to the public. That is entirely false.

Mr Whitlam:

– I said that big business woke up to the menace of it.


– That is not what the Deputy Leader of the Opposition said, Mr. Speaker. I took a very careful note of what he said.

Mr Pollard:

– He would know better than the honorable member would.


– Having listened to some parts of the honorable gentleman’s schoolmasterish and pedantic speech about industry, I rather doubt whether he did know what he was talking about. The point that should be made in fairness to members of the public who may be listening to this debate-

Mr Whitlam:

– They are no longer listening.


– I doubt whether that is right. The point that should be made in fairness to members of the public who are listening to this debate is that in the Redfern case, which is the case about which the Deputy Leader of the Opposition spoke, there was no serious question at all as to the constitutional validity of the Australian Industries Preservation Act. That point is made abundantly clear when one reads the judgment of Sir Owen Dixon who was Chief Justice of High Court of Australia at the time. In two short lines in his judgment he said that there could be no question of the validity, in the constitutional sense, of section 4. So this was not a discovery that was made late in the day nor a discovery that, as the honorable gentleman sought to insinuate, prompted the Government to bring in some other less drastic form of measure.

I come now to the next point that I want to make. The Deputy Leader of the Opposition tonight propounded an argument to the effect that the Australian Industries Preservation Act should be preserved alongside, he would imply, this measure or something like it. I would meet that argument by saying that if that were done nothing would be more calculated to cause confusion and uncertainty in the law. We must have one system or another of controlling restrictive trade practices in this country. It is of no use to try to run two systems in tandem. Not very much imagination is required to work out the effects that would result from such an endeavour. It would not be of any good to anyone, and most importantly to the consuming public, and certainly it would not be of any good to business, because business would not know where it stood. But despite what those on the other side of the House say it is very important that there be an element of certainty in the system of investigating and controlling restrictive trade practices.

It seems to me that the great argument which supports the proposal to repeal the Australian Industries Preservation Act rather than keep it on foot and which supports the proposal to substitute a new system for the control of restrictive trade practices can be stated in this way: Bearing In mind the need for reasonable certainty in commerce and trade, is it not much better to have a system of regulation and control under which the businessman knows that after he has registered a registrable agreement, and at all times thereafter until, as a result of investigation by the Trade Practices Tribunal, it is declared unenforceable, he is acting perfectly safely in pursuing the particular course of activity on which he is engaged? As I see the situation the objection to the sort of principles that we see enshrined in the Australian Industries Preservation Act is that they lead to uncertainty in matters related to the enforcement of restrictions on trade practices because commerce will not know, until the particular businesssman concerned has been either prosecuted or proceeded against in a civil action, whether what he was doing was legal or illegal. That sort of situation would be no good for the community. At whatever level of the community one lives, whether inside or outside commerce, it is in the interests of all of us that there shall be reasonable certainty in commercial activities.

The other objection to the retention of the Australian Industries Preservation Act which I have in point of principle and which I state in meeting this part of the argument put forward by the Deputy

Leader of the Opposition is that outright prohibition of a particular form of contract or arrangement without allowance for any inquiry about whether or not it serves the public interest is not well adapted to the needs of a country like ours with a relatively small scale economy. I will yield to none in asserting the importance of controlling restrictive trade practices that are contrary to the public interest. But we must bear in mind that important as it is to do that it is important also to realise that in our economy it is sometimes desirable to allow size to develop - always subject to the public interest - because thereby economies of large scale operation with consequent benefit to consumers may ensue. T think it will be found, if one looks at this matter and balances the pros and cons, that in our type of economy there is danger in preserving legislation such as the Australian Industries Preservation Act, firstly because of uncertainty and secondly because the prohibition imposed by it is too general and too widespread. This Act, of course, is modelled on the Sherman Act in the United States of America. I venture to say that the only reason why the Sherman Act has worked in the United States is that the economy of that country is so vast at to be able to stand the impact of the absolute outlawing of all types of contract’s or arrangements - and, as has just been said close to me here, the cost.

The next matter with which I want to deal is the less than fair criticism of the Attorney-General by the Deputy Leader of the Opposition who said that the Minister had done everything in his power to discourage public interest in this legislative proposal. I read the newspapers, I suppose, with as much regularity and frequency as do most members of this place. My recollection is that almost every time I have picked up a newspaper over the last six months or so I have read of the AttorneyGeneral addressing some large gathering and explaining the legislative proposals of which he has charge. Reference to any reliable record will demonstrate beyond doubt that, contrary to what the Deputy Leader of the Opposition said here tonight, the Minister has done everything in his power to make the public aware, and fairly aware, of these proposals. He is to be commended on the great energy that he has expended and the industry with which he has pursued this aim.

I now turn to the next matter with which I want to deal. The Deputy Leader of the Opposition sought to attack the provision in this Bill for secrecy of the register of examinable agreements. It seems to me, Sir, that when one is assessing whether the Register of Trade Agreements should be secret one must make up one’s mind in the first place on a vital and inter-related question. That is the question whether the system of examination of practices and agreements should be committed exclusively to the Commissioner of Trade Practices or whether, on the other hand, members of the public who claim to be injured by a particular agreement or practice should be given the right themselves to take proceedings without recourse to the Commissioner. That being the choice, I have no hesitation whatever in opting in favour of the principle that is enshrined in this Bill, namely that examination should be committed entirely to the hands of the Commissioner.

I say that because I want to see, as 1 think everyone in this House wants to see, a system of examination and restriction of restrictive trade practices which will be conducted in an orderly way and which will work. I have no hesitation in concluding that it is only by committing the task of examination of agreements and practices to the Commissioner that one will introduce any element of orderliness into this most important new field of law. I do not think the public interest will be well served if individual members of the community who claim to be injured by a particular practice are allowed to enter proceedings in their own name.

Mr Pollard:

– Keep them in the outer darkness. Leave them by the way.


– I ask the honorable member to stop mumbling because he is not saying much. The important thing is that the Commissioner should have a free hand to pursue the examination of the restraints on competition that are the really important restraints. If there is a fragmentation and diversification of activity, some being carried out by the Commissioner and some being carried out by individual members of the public who would have a right of access to the courts, I do not think the real purpose of this legislation will be quickly or adequately served. This task is one which is of considerable complication. It is a task to be entrusted to one man in whom the Government will have, no doubt, great confidence, and rightly so. It seems to me that if we allow individuals to bring proceedings in their own name, there will be no reasonable order of priorities in the carrying out of the work of the Tribunal. If that view is correct, it seems to me that there is no question as to what should be done about the register. We should reject out of hand any notion that the register should be open to people for the purpose of gratifying their curiosity or their desire for information. The only purpose of opening the register, it seems to me, would be-

Mr Pollard:

– The honorable member wants to create a gigantic secret society.


– The honorable member is becoming less intelligible as he goes muttering on.

Mr Pollard:

– Secrecy for the big fellow; the open court for the wage earner.


– Order! I ask the honorable member not to interject.


– I go back for a moment to say that the only purpose of opening the register would be in aid of enabling persons to obtain information for the purpose of bringing proceedings in their own name and to act in their own right. Once one reaches the conclusion to entrust the job to the Commissioner, the need for opening the register to public inspection disappears. That is the way I would seek to answer that part of the criticism of this measure made by the Deputy Leader of the Opposition.

I come now to the next matter. The Government has been criticised by the Deputy Leader of the Opposition for not placing an absolute ban on monopolisation and for not placing an absolute ban on price cutting at a loss. The first matter to which I refer in dealing with this branch of the criticism offered by the Deputy Leader of the Opposition is this: Does he seriously think, on reflection - it should be borne in mind that reflection is a very good thing when one is embarking on a new system of legal enforcement - that the elimination of monopolisation will be promoted by imposing upon the people who seek to eliminate it in proceedings that may be taken an onus of proof such as would apply in a criminal case? It seems to me that if we were to place an absolute ban on monopolisation and make it a criminal offence, as was once proposed, we would not be serving a really useful purpose.

Once we brought that sort of activity within the field of the criminal law and subjected the prosecution to the necessity of making out the onus of proof to the standard required in a criminal matter - proof beyond reasonable doubt - we would get to a situation in which the successes of the prosecutor would be likely to be rather few and far between because an essential ingredient of monopolisation is the proof of a specific intent. That is not altogether or always easy. It seems to me, therefore, that the elimination of undesirable monopolistic activities is more likely to be achieved by the process of inquiry, investigation and examination before a tribunal, preceded as it will be, of course, by the very valuable provision for consultation before any proceedings take place. That provision is to be found in one of the clauses of the Bill. If one follows through the scheme of this Bill, one sees that the tribunal, acting in the informal way in which it is supposed to act, will have much wider scope and much freer scope for making findings adverse to monopolistic activities than a prosecutor would have if he had to take criminal proceedings against an alleged monopolist under some system of legislation which imposed an absolute prohibition on monopolisation.

The Deputy Leader of the Opposition then criticised this measure inasmuch as it did not deal with resale price maintenance. Of course, the Deputy Leader of the Opposition spoke only half the truth in that respect. I would like to be charitable and believe that he spoke only half the truth because he had not properly read clause 35 of the Bill. If one reads clause 35 one sees quite clearly that collective resale price maintenance is made an examinable arrangement if it is done pursuant to an agreement. It seems to me that there is both wisdom and common sense in the proposal which was adumbrated in the second reading speech of the AttorneyGeneral. He said that the legislation should first of all, in its reach, go out to the horizontal agreements - the multilateral agreements, as they are called- before embarking on the field of the vertical agreements. I venture to say that in this Bill we have a provision that collective resale price maintenance is examinable and a provision that an agreement providing for collective resale price maintenance may be declared unenforceable.

We may well get to a result - it is to be hoped that we do - in the course of a relatively short time, that it would become unnecessary to embark upon a complicated course of examining and investigating the vertical types of restrictive trade practice agreement. I see nothing of any force in the criticism that this Bill does not deal with resale price maintenance. As I say, it does do so. It deals with a most important part and it leaves the rest for future consideration, if it should be necessary. It may well be that it will not be necessary. Another interesting thing that the Deputy Leader of the Opposition did tonight - he did it in the earlier part of his speech was to serve upon the public due notice that, despite all the vicissitudes of the last generation, the Australian Labour Party still cannot learn the lesson of history. No doubt in some quarters this is thought to be a pity. I say this because the Deputy Leader of the Opposition said in unmistakable terms that it was and remains the policy of his party to extend the area of public enterprise at the expense of private enterprise.

It may be thought that the reason why this Bill is not being really opposed by the Labour Party - there is a sort of sham opposition as evidenced by the Opposition’s amendment - is not quite the same reason as the reason why we on the Government side are supporting it.

Mr Whittorn:

– Speak for yourself.


– I speak for the great majority when I say that we on the Government side support it. I certainly do, and I am very glad to. This Bill may be thought by some - I know this is thought by many outside - to be a rather radical measure. Frankly, I am in favour of radical measures when they are necessary, and I think that if the day comes when this side of politics forgets - I do not think it ever will - that a bit of radicalism is a good thing in particular circumstances it will be a bad day. This may be in some respects a radical measure; but it is a truly liberal measure, too, because its primary objective is to preserve fair competition, reasonable competition, where this is consistent with the public interest.

I feel that on the other side of the House the attitude towards this Bill is that there is really no harm in the measure because, in the opinion of the Opposition, it will tend to weaken private enterprise. Honorable members opposite are so wrong. In truth, it will help to strengthen private enterprise - private enterprise in the best and proper sense of the term and private enterprise according to the sensible concepts of the latter part of the twentieth century. Some people outside may not agree with me, but in the course of time they will come to do so.

The thing that we as a Government party ought to bear in mind is that a fundamental part of our political philosophy is that we should act to preserve the small man from oppressive competition by cartels or large groups of people who, by acting in concert when such action is not shown to be in the public interest, deprive the small trader of the opportunity of running the competition race, or deprive the public of a wide freedom of choice in the availability of products.

Some of the criticism that has been levelled against this Bill outside this House seems to me to depend upon a fundamental fallacy. It is said that this measure is restrictive of the freedom of people to bargain; that it strikes at freedom of contract. Let it be remembered that the common law never recognised an untrammelled right in people to contract as they wish. Historically and traditionally, freedom of contract has always been limited by consideration of the public interest, and it is right that it should have been so. Such restraints as this Bill contains upon the freedom of contract are restraints imposed having regard to the wide public interest -

Mr Uren:

– It sounds as though you believe this.


– Order!


– A public interest, let me tell my honorable friend who interjects, which depends upon reasonable freedom of people, big and small but particularly small, to carry on a fair trade without undue let or hindrance, without being subjected to blacklisting or to deprivation of supplies, and without being forced into circumstances in which they can get no supplies on the local market and therefore have to resort to imports. Having resorted to imports they then find that the people who have deprived them of local supplies are applying to the Tariff Board to bump up tariffs.

Mr Whitlam:

– And succeeding.


– Yes; succeeding in their application. That is not very good for freedom of competition which I have always understood to be one of the great planks of the platform of the Government parties.

Mr Uren:

– It does not exist under this Government.


– Order! I will not warn the honorable member for Reid again.


– He is beyond redemption. This Bill is truly consistent with a great political philosophy and I think any member on the Government side of the House should be proud to support its principle.


.- I rise to support the amendment moved by the Deputy Leader of the Opposition (Mr. Whitlam). The history of restrictive trade practices is as old as commercial enterprise and the exercise of man’s business ingenuity and acquisitiveness in the market place. The earliest records of restrictive trade practices - that is, price rigging - date back to the year 3000 B.C. in Egypt. In India, in order to control price rigging, decrees existed prior to the Christian era, and in Rome legislation was introduced in the fifth century A.D.

The earliest English legislation of this type was the Statute of Monopolies of 1624 which regulated the granting by the Crown of monopolies in commodities. Modern legislation can be said to have commenced with the Combines Investigation Act of 1 889 in Canada. The Attorney-General (Mr. Snedden) was correct on that point. That was closely followed in the United States of America by the Sherman Act in 1890, the Clayton Act, the Federal Trade Commission Act and subsequent legislation such as the Robinson Patman Act, all of which together inspired and determined the principles and philosophy of a whole series of similar enactments in other parts of the world.

Restrictive legislation against such practices has been enacted in Denmark, France, Holland, Japan, Norway, Sweden and Western Germany. The United Kingdom came later into the field with the Monopolies and Restrictive Practices (Inquiry and Control) Act of 1948. That Act set up the Monopolies Commission to inquire into monopolies and restrictive trade practices. On the Commission’s findings were based the Restrictive Practices Act of 1956, the Resale Prices Act of 1964 and the Monopolies and Mergers Act of 1965. This latter Act deals with mergers of companies with total capital of over £5 million operating against the public interest.

Our sister dominion of New Zealand introduced trade practices legislation in 1958 largely modelled on the principle of registration of contracts embodied in the United Kingdom legislation. In contrast to the worldwide range of such legislation, the control of restrictive practices and monopolies in Australia has had a distinctly dismal history. We lag 50 years behind general world trends. If this legislation is passed, we will lag even further behind. The Australian Industries Preservation Act was passed in 1906 in the first flood of Australian nationalism after Federation. It was modelled on the Sherman Act and, as the Deputy Leader of the Opposition (Mr. Whitlam) has said, it is still sound law. There has been a spate of spasmodic State legislation purporting to restrict monopolies and subject, of course, to the constitutional limitations of section 92 of the Constitution. Australia has indeed a problem of some magnitude which has been intensified by the sloth and the lethargy of this Government and its tender solicitude for the susceptibilities and interests of its major supporters. The further amendments notified by the Attorney-General yesterday are additional proof of this. His reluctant dragons wish to make assurance doubly sure and take a bond of fate, judging by the extreme precautions that have been introduced into the Bill by proposed amendments.

Many of our major problems and practices flow from the wartime emergency controls and the marked expansion of industry in the post war period. The Australian economy no longer consists of six separate State economies plus one superimposed area of Federal economic control. When our Constitution was drafted no Government in Australia was responsible for the general state of the economy. The National Government has now to discharge a responsibility which did not exist when the Constitution was originally framed, namely to safeguard and promote the economic welfare of the Australian community. The activities of modern public companies cover a wide range of goods and services, and their spheres of interstate operations are increasing enormously, consequently both national and complementary State legislation are necessary. Although there is still a larger volume of intrastate trade, interstate commerce is of ever increasing volume and importance. The Bill is based primarily on the commerce power contained in placitum (i.) of section 51 of the Constitution. As a supplementary power, clause 7 (2) of the Bill also purports to invoke the corporations power under placitum (xx.) of the same section of the Constitution. The use of this latter power undoubtedly will be challenged in the High Court, and a favourable decision would revolutionise the operation of section 92 in relation to limited companies. A favourable decision could provide a palladium for future legislation to control the Australian economy. The situation could be best summarised in the words of Mr. Walker, a lecturer in law at the University of Sydney. He said -

With the introduction of the Trade Practices Bill the Australian Parliament has taken a hesitant step into the field of 20th Century trade regulation. The Australian economy is perhaps the most cartelised and monopoly ridden outside the banana republics of Latin America. From its diffidence one might almost think that no other country had ever enacted an anti-trust law, and that no empirical evidence was available for the legislature to use and select the more serious varieties of restrictive practices for prohibition.

What legal academic, I might ask in passing, has supported this Bill? The Australian manner of dealing with distortion of the market mechanism under this Act will be to conduct a case by case investigation. The method of registration of agreements is based broadly on the United Kingdom registration procedures, and is the pragmatic approach in contradistinction to the dogmatic approach of the Sherman legislation which is embodied in the Australian Industries Preservation Act whose repeal is proposed in this measure. The method of registration and investigation is an approach which has been found in the United Kingdom to have caused little appreciable improvement in business practices, and is one which the recent Conservative Government considered inadequate and amended by the Restrictive Prices Act of 1964, dealing generally with resale price maintenance.

The Australian approach rests on the assumption that all examinable agreements, in practice, are likely to be innocuous in a substantial percentage of cases. Where, in only isolated circumstances, it can be said that a practice works no mischief there is a strong justification indeed for legislation generally prohibiting such a practice. The Government proffers legislation which is even more backward, innocuous and anaemic than the 1956 English Restrictive Practices Act. It chooses to ignore the successive amendments made in the United Kingdom in 1964 and 1965. I refer, of course, to the Resale Prices Act and the Monopolies and Mergers Act. It asks this House to abandon a substantial Act - the Australian Industries Preservation Act - with positive prohibitions and specific penalties for identifiable offences, and to substitute for it tortuous, procrastinating, bureaucratic and time wasting procedures. The right of an injured party to sue for treble damages is, of course, abolished as abhorrent to the principles of this Government and the substituted remedy under section 88 is specious. Worse still, it has even bowdlerised the title and emasculated the contents of proposals promulgated by its own Attorney-General some three years ago.

Five years have elapsed since this Government first announced its intention to consider the enactment of suitable legislation. The former Attorney-General stated his wish to develop - and I quote him - an Australian approach which would be singularly appropriate to the Australian economy in its developing stage.

The present proposals are, in fact, only singularly appropriate to the demands of the Liberal Party supporters who have done a magnificent job of white-anting the Barwick proposals as presented to this House by the present Minister for Shipping and Transport (Mr. Freeth) on his behalf in December 1962. That process has continued even since the introduction of this Bill last May in a grand remonstrance by the various assorted supporters of this Government. If this legislation is not put through very quickly the shell that remains will collapse and nothing will be left. After five years of discussion and three years of sharp controversy the Government’s guide lines for its proposed tribunal are virtually nonexistent. This tribunal will make a case by case examination of a defined category of horizontal restrictive agreements and certain monopolistic and restrictive practices to determine whether they are in the public interest as loosely defined. Only certain restrictive agreements and four minor practices are to be registered. The Commissioner’s register is still to be secret - not open for public investigation and kept for his sole use. Cases before the trade practices tribunal are to be conducted solely by the Commissioner of Trade Practices who is given the most sweeping powers. Through him is to be channelled all preliminary procedural and investigating activity. A grand inquisitor is being interposed between the tribunal and the object of its statutory, functions. He will be the great bottleneck.

The remedy proposed for conduct contrary to the public interest is a cease and desist order. All agreements supporting such conduct are subsequently unenforceable, and the tribunal, at the termination of the lengthy procedures, may make such cease and desist orders, or accept such undertakings, as it thinks proper. The orders and undertakings of the tribunal are to be enforced by the Commonwealth Industrial Court through contempt proceedings. One of the most fundamental defects of the Bill is the absence of an exact definition of public interest. Clause 50 purports to spell out such a criteria. Examination reveals that it consists of such vague and evasive language as to delegate to the tribunal virtually all the legislative power of Parliament, together with administrative functions. There is no loading of the various categories under clause 50 with preponderance in favour of the consumer public interest. In effect the tribunal is to use a balance sheet procedure, weighing and evaluating any of the categories at its unfettered discretion. Consumers are just another interest group and competition is just another end. The words of Professor Richardson, Professor of Law at the Australian National University, are appropriate at this point. He said -

The Government is placing the determination of vital questions of policy affecting the structure of the Australian economy in the hands of the tribunal and abdicating its legislative functions.

The Commissioner has been given tremendous discretionary powers under this Bill. He alone can initiate proceedings before the tribunal. There is no provision for the Attorney-General or a member of the public to institute proceedings before the tribunal, as proposed by Barwick. There is no provision for a formal public complaint procedure. It is hot possible for a member of the public to examine the Commissioner’s register or even to know what use the Commissioner is making of it. Whilst the Attorney-General only may direct the Commissioner to investigate possible cases and to report to him, there is no other control over the Commissioner’s actions. The contents of the Commissioner’s annual reports to the Attorney-General need exact definition. The deterrent effect of public criticism is deliberately removed by secrecy. The open register of the English legislation is in healthy contrast to this.

Clause 50 of the measure provides that the Commissioner may take action if he is of opinion that an agreement is contrary to the public interest as described. In these respects, the Bill departs markedly from the Barwick proposals. In other respects, the Bill shows a general retreat from even the Barwick competitive philosophy, lt claims to be comprehensive in covering restrictive agreements and practices, yet it contains no proposals for the control of mergers and take-overs or for the control of individual as distinct from collective resale price maintenance.

Australia is the last frontier of uncontrolled capital investment and virtually unregulated trade and commerce. Just as the advancing frontiers of settlement in the United States of America attracted lawless and unscrupulous elements and ruthless and unprincipled individuals, so the backwardness and laissez-faire attitude of current Australian Government policy in respect of monopoly and restrictive practices have created commercial lawlessness, exploitation, monopoly and oligopoly in this nation. Recently, major publicity has been given to the scandals of such company failures as those of the Latec, Reid Murray, Stanhill and H. G. Palmer organisations and Sydney Guarantee Corporation. The losses of investors, large and small, have been spectacular and the absence of commercial morality and worse has been the subject of scathing public criticism. Ten times as much as those losses has been plucked from the pockets of honest Australian consumers and firms by uncontrolled restrictive trade agreements and practices, a selective few of which this Bill piously hopes ultimately to control.

The degree of market concentration which prevails throughout the Australian economy is unusually high and particularly so in comparison with the American, British and Canadian economies. The various rackets and practices of Australian monopolies, oligopolies and cartels are lumped together under the general euphemism of orderly marketing. The latest estimate available is that of some 1,250 trade associations in Australia, at least twothirds - more than 800 - have as some part of their functions the organisation of restrictive agreements. The Barwick brochure published in 1962 estimated that there were at that time between 500 and 600 such associations.

Just about every restrictive practice known to man and quite a few known only to the devil are used in Australia. Price control agreements, both horizontal and vertical, are undoubtedly the most common. Not only is there an unusually high incidence of restrictive agreements but these have an unusual stability clearly associated with a high degree of market concentration, Other consequences of high industrial concentration are commercial unilateral vertical practices, such as tying clauses and requirements contracts, whch are fairly common. The term “ orderly marketing “ in Australia is one which comprehends restrictive practices of the extreme kind, such as level tendering, collusive bidding, collective boycotts, full line forcing and reciprocal trading. Some high degree ot concentration is inevitable in this country on the grounds of technical economies of scale. A large firm may be the most efficient instrument for securing in certain cases overseas capital, management and know-how. There is, of course, a real scarcity of managerial talent and know-how in Australia. Despite all these deficiencies, the case for firm and speedy controls and prohibition of inexcusable practices by legislation is unanswerable. To this should be added the estimate made in 1964 by Mr. Heath of the former Conservative British Government and to which the Deputy Leader of the Opposition has already referred, namely that in the United Kingdom about 8s. in every £1 of consumer expenditure was spent on goods and services supplied at identical prices for individual items for all consumers wherever they lived and that about 5s. of the 8s. was accounted for by vertical resale price maintenance.

Of course, there is no control whatever for these things provided in the present legislation. The English legislation has resulted in some astounding reductions in living costs. Accurate statistics are not available in Australia but it is certain that the figure of 5s. would be too low for this country. The United Kingdom Resale Prices Act of 1964 has brought this type of resale price maintenance under full control. The present Bill is notably deficient in this regard.

In another field, the researches of Professor Hunter of the University of New South Wales show that in an amazing range of industries the degree of concentration of control is fantastically in excess of that which prevails in both the United States of America and the United Kingdom. Professor Hunter’s conclusion was -

The concentration of control in monopolised industries in Australia, is, on an average, twice as great as in the United Kingdom and three times greater than in the United States of America. Altogether we can state with precision that the concentration of industry in Australia has gone much further than in most countries and, perhaps more significantly, very much further than in certain countries that have found it desirable to institute legislative control of big business.

To deal with the situation we are asked to repeal our own effective Australian Industries Preservation Act. We are asked to abandon the body of case law, administrative experience and legislation available from major industrial countries and to commit ourselves to the delays, uncertainties and obscurity of the case by case examination of the United Kingdom legislation, which has been notorious for its tardiness in dealing with registered agreements. In 1959-60 the Restrictive Practices Court in the United Kingdom examined and delivered judgment in some 25 cases. True, some of those were test cases which affected substantially other registered agreements. The latest statistics given by Stevens and Yamey in their 1965 publication “ The Restrictive Practices Court “ show that almost 3,000 such agreement’s have been registered. In their book they say -

Another virtue claimed for the 1956 Act was speed. It was said that this would distinguish the Court from its predecessor, the Monopolies Commission, but even this has become increasingly less obvious; none of the recent cases has lasted less than 30 days.

What a feast for the lawyers. The extract continues -

This has meant not only heavy expenses but inevitably that very few cases can be disposed of. In 1962 there were three decisions - in 1963 there were six. The wheel has come full circle, for the Monopolies Commission at its’ peak was capable of producing almost the same number of reports.

Professor Brunt suggests classifications which would conceivably expedite the approach to known and potentially restrictive trade agreements and practices within this country, namely to divide them into three categories. I think these are worthy of close examination. The first category includes such restrictive agreements or practices as are reasonably common, which usually have strong anticompetitive effects, which are rarely associated with good economic performance, and for which prohibition is a useful remedy. Such agreements and practices can be identifiable in advance and there is a strong case for the use of incisive per se prohibitions for some or all members of this group. Included in these would be collective boycotts, collective enforcement and resale price maintenance, tying clauses, requirements contracts, predatory price cutting and collusive tendering and bidding. In a highly concentrated economy the exclusionary practices of large firms should receive as much attention as those of trade associations. The other extreme, of course, from per se prohibition ls pure examination with a case by case scrutiny in accordance with some criteria of public interest. In a third or middle group is a compromise method of combining elements of each, namely general prohibition subject to examination of particular cases upon application.

This Bill is a desiccated, emasculated and vitiated version of the Barwick proposals. A perfect job of white-anting has been performed by some of the best brains available to Australian monopoly. The Bill is full of escape hatches, cul-de-sacs and obfuscations. One of the most glaring of all its omissions is the elimination of any provision for the control of mergers and take-overs. The reduction of the Barwick list of prohibited practices is obnoxious and retrogade. The definition of “agreement” in clause 91 of the Bill is futile in the light of the chain of decisions under the present English legislation as to the classification of registrable agreements. Professor Richardson has said -

The real difficulty arises because parties to restrictive agreements may, instead of having a formal or informal agreement between themselves, tacitly follow the trading arrangements, such as the pricing lists, of the leading firm in the restrictive group. The definition of agreement in the Bill does not seem to be wide enough to prohibit this practice, known in the U.S. as “conscious parallelism “. One way of dealing with this situation would be to extend the definition so as to allow the tribunal to infer from the facts that a situation exists which is a substitute for an agreement and then to deal with it as though it were an agreement containing a restriction.

In this regard the comments of Mr. Justice Schaefer on 25th January 1963 at the Legal Convention of the Law Council of Australia were revealing. He said -

More recently there has been a spectacular situation with tremendous conspiracy between companies such as General Electric and Westinghouse. These men, not in most cases presidents but vicepresidents and sales managers, would meet incognito and would use codes and communicate with one another but not on stationery of the Company, and would alter their expense accounts to conceal the place where they met, and they would telephone one another from public telephone booths to the home of each other instead of the office, and they had codes which dealt with the allocation of contracts referred to under the code title of “ Phases of the Moon “ - it would be the phase of this company or that company.

When the phase of a company was mentioned, that company would secure the next contract. There were 39 companies indicted in this conspiracy and 49 executives of those companies. Total fines amounted to two million dollars. Seven executives were sentenced to 30 days imprisonment and the damages claims may reach 200 million dollars. The provision for such damages under the United States law should be contrasted with clause 88 of the Bill before us, which confers no right of damages until the final cease-and-desist order of the tribunal. Then damages are calculated solely on acts subsequent to the cease-and-desist order and in disobedience of it.

The crowning farce of the whole Bill is that any major company can be fined £1,000 only on one occasion for failing to register a restrictive agreement if it chooses to take a calculated risk in this regard. The former Attorney-General proposed that the carrying out of the practice itself without registration should be an offence separate and distinct from the offence of failing to register the agreement or practice. Should, however, the agreement be registered, with all the tortuous procedures and delays provided under this Bill, it could be years before a final decision was reached - if, indeed, one was ever reached. In the meantime the competitor of the offending company could be wrecked, or irremediable havoc could be inflicted on the economy or a sector of it.

The opponents of this Bill have been crying wolf for the last three years. In actual fact the Bill is not a wolf but merely a sheep in sheep’s clothing and is as innocuous, docile and ineffectual as it is obviously designed to be. Sir Garfield Barwick has said that the bold foresight of the men who drafted the Sherman Act has been rewarded, because in the 1890’s the penalty for national inefficiency was less swift and severe than it is today. Yet the Trade Practices Bill contains few signs of the same bold foresight in our policy makers.


.- The first question to be answered in this debate must surely be: “Why do we need this Bill? “ There has been no great public clamour for it, and I am not much impressed with the information that many of the advanced countries of the world have legislation such as this. We are a developing country. We need size in business. Economies of scale are a necessity if we are to become a large exporter of manufactured products. The fact that highly developed countries such as the United Kingdom, the United States of America, the European Common Market countries and Japan have legislation of this kind does not necessarily provide a reliable guide for us. I think that all these are matters which emphasise how careful we need to be not to interfere unnecessarily with business in our free enterprise economy.

It is clear, however, that there are in operation in this country restrictive agreements and restrictive practices which are contrary to the public interest. They bear harshly on the small and independent trader who is one of the most important and valuable sections of our community. Most of us have knowledge of such agreements and practices. Sir Garfield Barwick, when he was Attorney-General, prepared a list of them which he had published. Honorable members will be aware of those agreements and practices. In these circumstances the Government had an obligation to give a lead. It had to step in to prevent these restrictions and practices from hampering our free enterprise economy. I suggest that this is what the Bill before the House seeks to do. It seeks to free our economy from restrictions and practices which are wrong, but it does not seek simply to interfere with business needlessly. It is true that we already have in operation in this country the Australian Industries Preservation Act of 1906, but this has proved largely ineffective. Since the war there has been a number of cases brought under this legislation, but I believe that it lacks sufficient force to do what is required in modern times.

Is this Bill appropriate in its form? Before suggesting an answer to that question it may be useful to consider the two lines which have been followed in the world with this type of legislation. On the one hand there is the American Sherman Act of 1890. It may perhaps be instructive to read part of the short and simple provisions of that Act. Section 1 provides -

Every contract, combination in the form of trust or otherwise or conspiracy in restraint of trade or commerce among the several States or with foreign nations is hereby declared to be illegal . . .

Section 2 says-

Every person who shall monopolise or attempt to monopolise any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a misdemeanour . . .

The basic principle adopted is that a contract or combination in restraint of trade is, per se, bad and illegal. Under section 2, size of itself is deemed to be bad. This approach provides a narrow issue in any particular case. It is an issue appropriate to be tried before the ordinary courts. Under that Act a breach leads to criminal proceedings and carries criminal consequences. It is no defence for a person charged under that Act to say: “Wait. This practice in which I am engaged is in the public interest “. If he could prove that, the practice would still be a breach of the law. This Act is not concerned with economics; it is concerned with those matters per se. The American courts, faced with this rather drastic provision, introduced a degree of modification by the rules they laid down. They introduced what has come to be called the “ rule of reason “. They thought that no legislature could have intended to make criminal offences certain things which were clearly good. They modified the provisions, by judicial reasoning, to a degree, but only to a small degree. In 1914 the Clayton Act was passed creating more specific offences and the Federal Trade Commission was established as a regulatory agency independent of the Department of Justice which brought the prosecutions under the other Act. But the principle remained the same. Should we adopt that kind of law? Contrasted with it is the procedure followed in the United Kingdom. There the Monopolies and restrictive Practices (Inquiry and Control) Act was passed in 1948 and reveals an entirely different approach. Under this Act restraint, or size, is not per se bad, and each case must be decided on its merits after a full inquiry. It is only if it is found to be against the public interest that the statutory consequences follow. As honorable members no doubt know, since then there has been a separation between the restrictive practices side and the monopoly side, and in 1956 a restrictive practices court was established and then a monopolies commission, but the principles remained the same. In the United Kingdom the system is still administered in that way. When restraint of excessive size is challenged there, the businessman has an opportunity to show, if he can, that what he is doing is sound, efficient and not against the public interest.

In a choice between these two approaches it is necessary to consider what would be appropriate to our situation. The Australian Industries Preservation Act, which was based on the American thinking, has not proved effective here. The Government has chosen to follow mainly the ‘ second approach, and this- I suggest to honorable members, is the wise course. In business, as in life, things are not generally black or white. There is an infinite number of shades in between. Only an inquiry can determine whether a particular restraint or large size is bad. It must be determined not only in the interests of the individual person or company whose conduct is challenged but in the interests also of the nation. We do not wish officiously to prevent agreements or practices which lead to efficiency or to strength in our economy and which are good.

Mr. Speaker, may I say a word or two about the structure of the Bill but first perhaps digress to express my appreciation of the. procedure which the Government has followed in this case by introducing the Bill on 19th May and allowing time for representations to be made by everyone interested in the matter? I know that the Government has received a great many representations from responsible bodies, private citizens and companies and also quite a few from Government back benchers. These representations have undoubtedly all been carefully considered. The fact that the Attorney-General has announced that he will introduce no fewer than 45 amendments to the Bill shows that many of the representations have been adopted. In the case of those suggestions which have been rejected, I know that those who submitted them will appreciate that the ultimate decision in this matter must rest with the Government. But it is my belief that the 45 amendments which have been circulated amongst honorable members, and which the Attorney-General has foreshadowed, will greatly improve this Bill.

If this Bill is passed, in my opinion it should provide a workable system for controlling bad agreements and practices with a minimum of interference with business provided it is wisely and efficiently administered. That means that -great importance must attach to the selection of the commissioner and members of the tribunal whose duty it will be to carry the provisions of the Bill into effect. Undoubtedly if a sound commissioner and competent members are appointed to the tribunal the provisions of this Bill are adequate to deal with the field which it seeks to reach. I am not one of those who believe that the Bill in its present form has been watered down to a point where it will not have force. That is not the position.

The second-reading debate on this Bill is not the occasion to speak in detail on the provisions of the Bill or on the amendments which have been proposed. That is a matter better left to the Committee stage. But perhaps I might remind honorable members that the Bill makes only two types of practice illegal - collusive bidding and collusive tendering. It makes five types of agreements and four types of practices examinable. Examinable agreements must be registered unless broadly they relate simply to the provision of services, but no examinable practices need be registered. There has been some criticism from honorable members on the other side of the House because examinable practices need not now be registered. Under the proposals put forward by Sir Garfield Barwick in 1962 examinable practices would have had to be registered. Undoubtedly businessmen were fearful that this would lay upon them an immense administrative burden, as they would be required to reduce their practices to written form in an adequate manner and then register them. That feature has been eliminated in this Bill. Only the agreements need be registered, but it is apparent that, if in the course of time it is found by experience that examinable practices are escaping scrutiny, because they are not registered and because citizens who are affected adversely by them are not calling them to the attention of the Commissioner, it might become necessary to make them registerable. I doubt whether that situation will arise, but if it does, undoubtedly the Act could be amended.

If the Act is amended to make practices registerable, it is of some significance to consider that this will occur at a time when we have the scheme in actual operation.

We will then have a commissioner with experience behind him; we will have an experienced tribunal and a business community which I hope by then will have sufficient confidence in the system and its administration to have no fear of excessive or unwise interference. At that stage if practices are made examinable I would not expect the hampering or disturbance of business that might occur if the whole thing were done at this one stage. I should mention that one of the examinable practices is that of monopolisation. In all of the systems around the world this has been found to be a difficult subject with which to deal adequately and fairly. I myself had serious misgivings about clause 37 - the monopoly provision - as it appeared in the original bill. I believe that the new clause 37, which the Attorney-General proposes to introduce as an amendment, will be found to be a considerable improvement on the original form of the clause. It will rest with the Commissioner to examine agreements and practices and to determine whether in his opinion they are contrary to public interest. If he finds that they are, it becomes his responsibility to refer them to the tribunal. But before he does this, he is obliged by the Bill to hold a consultation with the parties, if they wish to have it, to see whether they are prepared to modify their agreement or practice so as to eliminate those elements which the Commissioner considers are contrary to the public interest.

This is a useful provision which we have copied from the American system. This presupposes an informal consultation with “ cards on the table “. I believe that businessmen will find that this type of inquiry will be one which they are prepared to adopt, one to which they are prepared to come with a frank disclosure of their position, and one which will save them from the cost and trouble of a formal inquiry before the tribunal. Under the Bill as it was introduced in May, what took place at this consultation no doubt could have been recorded and the transcript tendered later against the parties concerned as constituting admissions, if the matter still came before the tribunal. This seemed to be an undesirable feature. I was pleased to see in the amendments the Attorney-General has provided that, if the parties so wish, this consultation may be conducted without pre judice. No doubt, the Commissioner will have information in his mind after he has consulted with the parties. But he will not be able to tender simply a transcript of what they say in the consultation to use as evidence against them. This is a desirable amendment.

Those matters which are referred to the tribunal will be investigated to see whether they are against public interest. Clearly, two things are important at this point: First, the constitution of the tribunal, and, secondly, the guide lines for determining whether a particular agreement or practice is contrary to public interest. As to the first of these matters, I commend the Government for its decision, reflected in the proposed amendments, that it will appoint as presidents persons who are judges and will have as lay members of the tribunal persons who are on a panel and who do not have to give up all other activities for a period of appointment of seven years simply to serve on a tribunal. It would seem probable that better lay members will be obtained from the business community if they do not have to leave entirely their business for a period of seven years.

Mr Clyde Cameron:

– Should not the consumers have representatives on the tribunal?


– Well, everybody cannot be represented - exporters, producers, distributors, consumers. Indeed, I think everybody is a consumer in one way or another. It is obvious that those qualifications which are specified in the Bill are appropriate with one possible exception. I would not, myself, have favoured including persons from public administration. However, I suggest to honorable members that the other qualifications specified in the Bill are correct for lay members.

If we come to the question of guide lines as to what is in the public interest, this is set out in clause 50 of the Bill. Honorable members will be familiar with the general structure of that clause. The tribunal is to take as the basis of its consideration the principle that the preservation and encouragement of competition are desirable in the public interest. But the tribunal is directed then to weigh against that the matters set out in sub-clause (2.) A very wide variety of matters is set out in sub-clause (2.) in six lettered paragraphs. To take the first of them, we find that the matters that are to be taken into account in accordance with this provision include -

  1. the needs and interests of consumers, employees, producers, distributors, importers, exporters, proprietors and investors.

That is only the first of the six categories. Without going into the others, it is apparent that if the tribunal is obliged to consider the weight of all the interests specified in clause 50 (2.) the inquiry will be an extremely long and wide ranging one.

Mr Whittorn:

– Costly, too.


– Yes. It will be costly. I think this will prove a weakness in the Bill by requiring too wide an inquiry. I would have preferred to see a provision that the tribunal should consider only those matters in clause 50 (2.) which the defendant nominated in writing filed with the tribunal and served on the appropriate parties. This, at least, would have provided clear issues and would have confined the inquiry within reasonable limits. However, the Government has decided to leave clause 50 in its present form. No doubt experience will show whether in the course of time any amendment to this clause is necessary.

There is provision for ari appeal from the tribunal to a review division consisting of three presidential members. It is easy to see that these will be persons who are, in fact, judges. So far, so good. But it will be seen when one looks at the section relating to appeals that the review division cannot give a decision on the case. It can consider it only. If it thinks it is wrong in relation to any one of the three specified heads, it may send the case back to the tribunal for further consideration and decision. The modern trend is against preventing an appeal tribunal from giving whatever decision would have been correct in the circumstances. To send a case up to a review division and then send it back to a tribunal means three hearings. They may be of different lengths but there are certainly three hearings instead of one. It is a matter for serious consideration whether the review division should not be empowered to deal with the matter and to give the decision which it thinks appropriate.

May I say a word about the constitutional position? The power to enact this Bill is found in three provisions in the Commonwealth Constitution. The first is to be found in placitum (i) of section 51 which gives the Commonwealth power to legislate with respect to trade and commerce with other countries and among the States. Placitum (xx.) of section 51 gives the Commonwealth power to legislate with respect to foreign corporations and trading or financial corporations formed within the limits of the Commonwealth. Finally, there is section 122 which gives the Commonwealth power to legislate with respect to Territories. The power with respect to Territories is a plenary power. It is clear that the Bill when passed will operate with full force in the Territories. The power with respect to corporations appears to be used in an endeavour to enable the Commonwealth to control the operations of those corporations in purely intrastate trade and commerce. Certainly, all corporations would be covered already without reference to that head of power in relation to interstate activities. It was held in the case of Huddart, Parker and Co. Pty. Ltd. v. Moorehead, in 1909. as reported in Volume VIII of “ Commonwealth Law Reports” at page 330 in a matter, which arose under the Australian Industries Preservation Act, that this power in placitum (xx.) did not enable the Commonwealth Parliament to govern corporations in respect of intrastate agreements or restraints. The ambit of the operation of this law is a matter that causes some concern. The power under paragraph (i.) of section 51 is well known and covers fully the interstate trade position; but we know from the operations of the Australian Industries Preservation Act that there is a risk that persons, whose agreements and restraints are intended to be reached by this law, may seek to organise their agreements and restraints on a purely intrastate basis and so escape its operation.

Honorable members will recall that Sir Garfield Barwick had the idea of seeking complementary legislation, which was to be passed by the various States and the Commonwealth, to cover this situation. The appropriate provisions appear in the Bill. I think it is a matter for regret that none of the States so far appears to have indicated that it will pass such complementary legislation. A question on the notice paper seeks to ascertain how far there was consultation on the form of this Bill with the various

States before it was introduced on 19th May. The practical operation of the Bill may be affected, if it is not supported by legislation passed by the States. If, as has been announced, Victoria will not pass such legislation, it is difficult to see how New South Wales, for instance, could do so without suffering at least some damage from the resulting flight of business across the border. This is a matter that may limit the practical operation of the law.

I believe that the Bill, insofar as it does operate, will achieve three purposes. First, it will protect the smaller, independent trader, who is undoubtedly important for Australia’s future. Secondly, it will set standards and these will be standards for business that may be expected to deter people from activities which, although highly profitable to them, would be damaging to other traders and to Australia. The success of the law may be judged not only by the number of cases that are brought under it and concluded but also by the extent to which it is found to be unnecessary to invoke its provisions. The mere presence of an effective law of this type on the statute book leads people to refrain to a great extent from engaging in wrong agreements and practices. Thirdly, I believe that if these practices and these agreements are not subjected to controls of the type set forth in this Bill events might ultimately force the Parliament to adopt much less desirable methods of dealing with them, such as price control or other socialistic measures. In accordance with liberal principles, the Bill seeks to restrain agreements or practices that are contrary to the public interest but otherwise to leave business free to exert under the spur of competition its very great power for the development of this country.


.- I would like to make some observations about the Bill. I have watched reactions to the measure with a great deal of interest since it was first introduced into the House. There has been considerable debate about the proposals, but until tonight it has all been outside the House. I oppose the amendment moved by the Deputy Leader of the Opposition (Mr. Whitlam), but I take a critical view of the Bill. What I propose to say will be followed more readily if I define my position. I would not wish anything I say in criticism of the measure to lead the House to believe that I would condone deliberate or damaging restriction of competition or such practices as collusive tendering or bidding. I have a view about the extent of these practices in Australia and I propose to discuss them in a moment. Before I do so, let me say that there are at least 20 other points of interest in this Bill that I would like to raise, and they are in addition to the 49 amendments that have been proposed by the Attorney-General (Mr. Snedden). They are matters of great substance, but I will not deal with them now. The Committee stage is the appropriate time for that type of discussion.

In the first place, I am very uneasy about the approach used here to create a whole new system of administrative law for Australia in an area that is at the moment not regulated. In the second place, I am uneasy that this new system of law appears to be largely outside the safety control of the ordinary courts. But chiefly I strongly object to the general approach set out in Part V of the Bill, which provides for a system of registration of a wide range of business contracts of which most by far will be inoffensive. Finally, I will point out to the House that a perfectly practical scheme remains if this section is removed from the Bill and the necessary consequential amendments are made.

First, allow me to say that it is regretted that the Government has not prepared the ground for this far reaching legislation in a more deliberate and meaningful way. The Attorney-General will forgive me when I say I believe that in his opening remarks, when establishing the grounds for this new field of law that he is creating, he did this House less than justice. If he seriously believes that he can bustle Australia into a kind of legal strait jacket by offering the type of analysis that he placed before this House, he must hold us in contempt. In fact, it seems to me that he has put Australian business and industry into the dock in a very rough type of court and is prepared to call them guilty before he can even say “monopoly”. Sir, you will remember the wide sweep of the Minister’s remarks in his second reading speech. He made such comments as -

Australian businesses had become accustomed to non-competitive conditions, and they have been reluctant in many circumstances to change their ways. . . .

This sort of remark is a dangerous overgeneralisation, not only for inside this country but particularly for outside our shores. I repeat that to say Australian businesses have become accustomed to noncompetitive conditions is just not true.

Mr Clyde Cameron:

– It is true.


– If the Minister’s description is true, I would say that every businessman is suspect. He is either a knave or a fool, and the development of this country in the past 20 years proves that he is neither.

Mr Clyde Cameron:

– I can introduce the honorable member to some of Palmer’s-


– I can understand the continuous interjections of the honorable member; he is a Socialist and he does not want private enterprise. We would all have a great deal less difficulty with this measure if the Government had arranged some suitable public inquiry or commission or a White Paper to enable the nature and extent of the evil to be much more clearly identified than it has been. As it is, there is a certain undergraduate quality about the description of the evil placed before the House. This would be a matter for wry amusement, were it not for the heavy consequences that follow. Let me therefore say this for the record: I reject the Minister’s unqualified implication that Australian business actually replaced wartime government regulation with trade restrictions either as a whole or in substantial degree. If that statement represents the view of the Government it is perfectly apparent that the Cabinet is seriously out of touch with reality. If the Minister speaks from his personal knowledge it is apparent that his experience of business is very limited. That, I believe, is disappointing, because his experience will be no better than that of the Commissioner of Trade Practices whom he is to appoint and who may even have no text book knowledge of industry and no experience either.

Let us now look at the considerable apparatus that is to be erected on these shaky foundations. This Bill will provide us with a new, eminent public official in the person of a Commissioner of Trade

Practices. He will have a staff that will no doubt be considerable. The Bill will provide us also with a new administrative tribunal - the Trade Practices Tribunal - composed of members supported by officials. None of these need have any experience of industry. All they require is knowledge. I believe that knowledge is no substitute for experience in industry today. I note in passing that we in this Parliament are asked to cloak these people with power, arm them with authority and gird them about in public interest. Doubtless we shall hear from them once a year in a very perfunctory way. Another little sliver of the citizen’s freedom of action will be cut away, but we in this House will be able to give these officials our typical careful and detailed scrutiny only when we, at customary length, I hope, debate the departmental estimates.

Now- we come to the provisions of the Bill. Certain classes of agreements, which are defined in five paragraphs in clause 35, stand out as ones that must be registered with the Commissioner of Trade Practices. These agreements and also certain practices defined under four heads in clause 39 which do not have to be registered, may form the basis of proceedings taken by the Commissioner before the Tribunal. The only form of proceedings before the Tribunal will be those instituted by the Commissioner, either on his own initiative or by direction of the Minister. Other clauses of the measure provide for review of the Tribunal’s decisions, the total banning of collusive tendering and bidding, enforcement and so on.

Let me now narrow my argument to that portion of this scheme which is in my view most objectionable, Sir. Clause 42 of the Bill provides that the classes of agreements defined earlier in clause 35 must be registered and that any changes in these agreements also must be registered. The clause also sets out the considerable detail that is required and provides a nice opportunity for commercial doublecrossing by coyly noting that any one party to an agreement may register. What this clause amounts to is that we are being asked to order business to give this public official - the Commissioner of Trade Practices - power to require business information to be delivered to his doorstep, under pain of heavy penalty not exceeding £1,000, so that he may consider whether to use this information in proceedings against those who delivered it. This approach, Sir, I find rather impertinent and obnoxious, for three reasons - one of principle, one of administration and one pragmatic.

First, we are here requiring enterprises throughout Australia to deliver up to Crown scrutiny what amounts to a report on their total conduct, this material to be the possible basis of Crown proceedings against them. I am not so naive as to suggest that this is a new principle. Such an approach is implicit in income tax administration, particularly. We all know that. But in all cases in the past the public interest involved has been clear, and capable of clear definition. The duty on the citizen is uncompromising. Whatever one may think of the level of income tax it is clearly wrong that any one individual escapes his obligation, and the concept of the wrongdoer is perfectly clear. The judgments involved are objective. We are not being asked to extend this doctrine to an area in which the concept of the wrong is very much less clear. There is an extremely great lack of clarity, if I may say so. The judgments involved here are very subjective indeed.

The Bill, in Part VI, makes a gallant effort to define the public interest. I am no lawyer, but I would be very much surprised if I could not drive a horse and dray through this section with greater ease than I could drive down Bourke Street or Martin Place. I particularly dislike the suggestion that because the powerful group of public officials who will be appointed will be answerable to a Minister we can safely leave everything in their hands. There is too much deception involved - too much by far, if I may stress the point. My point of principle, then, is that we are being asked to give away a little more of the rights of the citizen so that Crown officials may make a subjective judgment of individual conduct. I am very mindful of the duty of this Parliament to guard the rights of the citizen, Sir, and I cannot agree with this proposition.

Secondly, let us consider the proposal from the point of view of administration. The ground on which this measure is being given priority, according to the Minister, is that restrictive agreements are very widespread. That is what he told us. If this is 60 the day on which this measure is pro claimed, if it is passed, will mark the establishment of a brand new large scale industry throughout the country - agreement mongering, if I may describe it as such. This will amount to getting many thousands of words on to paper in the appropriate phrases so that they may be dumped on the head of this new paper tiger that is to be appointed to our service in Canberra. I believe that this will be cumbersome, unwieldy, over elaborate and, to say the least, over expensive. All over Australia we shall have people getting agreements into a form suitable for submission to the Commissioner of Trade Practices. Incidentally, it is rather odd that many assume that the parties to the agreements that will be offensive - there will undoubtedly be some such agreements - will not react. The sad truth, of course, is that really guilty parties will merely change their form and not their substance. This is the overwhelming evidence of practice in this field not only in the United Kingdom but also in the United States of America. Once this great indigestible mass of paper accumulates in the hands of the Commissioner there will be a great deal of hunting in the haystack to find the needles of restraint. I can imagine that it will be a proud day in this new bureaucratic instrumentality when one of its lesser officials is able to deliver up a needle or two and save the country from ruin.

My third objection to this Bill, Sir, is that we have here a case of lawyers attempting by legislation to behave well. The same general problems arise in connection with company legislation in the States. So there is nothing new in this idea. As a mere layman I do not wish to trespass on the technical field of the Attorney-General, but I must say that the most that one can expect to do by statute is to delineate those forms of conduct that are contrary to the public weal. This is a very different thing from defining good behaviour. I believe that there is a very marked difference between the two. The inevitable result of these attempts by the lawyers to force people to be good will be to place burdens of conformity on the law abiding and at the same time to provide a chart for the use of the ungodly so that those intent on evading the law will have their path pointed out to them. Sir, if we have many more attempts in this country to use statute law to stop malpractice by the minority - the very small minority - of our wrongdoers in business, then the great mass of our enterprises will sink slowly out of sight in the lumber of lost things. To this extent I applaud the action taken by the Government of Victoria in that its move against collusive bidding and tendering was made within the existing framework of the administration of civil justice. Summing up, I am convinced that the registration procedures of Part V of the Bill will add substantially to the cost of government without increasing the effectiveness of government. For this reason, this Part should be withdrawn. I am convinced that these procedures will add substantially in costs and inconvenience to businesses throughout Australia without discouraging those whose intention it is to thwart the law. For this reason also, the clause should be withdrawn.

The appeal of this argument is doubled when one considers the alternative approach. Leave the other clauses of the Bill very much as they are. Leave the statement of examinable agreements and practices, the prohibition of collusive bidding and tendering and the constitution of the Commissioner and the Tribunal. But - and this is the key to it - require the Commissioner to call for all documents and circumstances when he moves to examine an agreement in the same way as he will now have to move when he wishes to examine a practice. Clothe the Commissioner with the power to compel delivery of evidence and documents, subject to the usual common law remedies, for the protection of the citizen. In particular, make a path to the Commissioner’s door for use by parties who consider themselves aggrieved and who may apply to the Commissioner to have him institute proceedings on their behalf. Do these things and we bring the whole scheme within manageable limits for business and for the administration.

The arrangement that I have described is very much in line with that used in both Canada and New Zealand. I am disappointed that the Minister, in introducing the measure, did not take the House into his confidence in his assessment of those countries’ experience. He has, in fact, leant very heavily on the precedent in the United Kingdom where this idea of registration was first developed. It is not proper for us in this House to pass judgment on the techniques of government that are being adopted in the United Kingdom, but the Minister himself noted that there are differences in countries passing through a stage of considerable growth and those which have perhaps passed through this stage. Having made this point, the Minister failed to follow it up. Had he done so, he would have told us that New Zealand adopted the registration procedure in the first place and then hastily dropped it. The approach there of selective investigation, either on a complaint or on government initiative, appears to be working perfectly well. Honorable members can be grimly certain that if we have too much more of the Heath Robinson type of regulation in this Bill tying up our hands and feet then this point of argument disappears and Australia will cease to be in a state of growth. It will cease also to encourage overseas capital.

I can see that with the amended approach that I have urged, the Commissioner of Trade Practices could make a most valuable contribution to the conduct of enterprise in Australia. He would be something of a commercial ombudsman, something of a policeman of the market place, and in whichever way he was regarded his influence would be healthy: The remedy would be on a scale to the extent of the evil. If, instead, we stick to the line taken by the Minister in this measure, in all its elaboration, then we will have struck a great blow for bureaucracy and will have pushed Australia into the way of being a paradise for lawyers with a gift for semantics. The day of double talk is upon us and, more than ever, the law begins to look an ass.

I would like to summarise my remarks by once again suggesting to the AttorneyGeneral that he withdraw Part V of the Bill at the Committee stage. It will not be too late to do it then. We already have 49 amendments and by adding the one that I suggest the Bill would be helped considerably. I believe that by accepting my proposal he will accomplish much. The Commissioner will be able to act in a definite and specific manner against restrictive trade practices. The business people will be saved much irritation and needless expense and the taxpayer will be saved money, and at the same time they will get protection from restrictive trade practices, collusion and monopolies.


.- Mr. Deputy Speaker-

Mr Daly:

– Let us have a bit of Socialism now.


– It surprises me that the Socialists, who should be very anxious to have this legislation in force, cannot provide a speaker at this juncture in this debate. In his second reading speech the Attorney-General (Mr. Snedden) stated the purpose of the Bill as being - to preserve competition in Australian trade and commerce to the extent required by the public interest.

He added -

Competition is an essential ingredient of any free enterprise economy.

The Bill appears to be directed against businessmen’s concept of orderly marketing under which the terms and conditions on which businesses are conducted are determined by anti-competitive agreements or practices. It is suggested that by this means they endeavour to reduce the chill winds of competition without having regard to what is or what is not desirable in the interests of the community as a whole. Orderly marketing is a well worn phrase in this House. It is very well understood by any honorable member concerned with primary production and it can cover much more than just prices. There are uniform standards of quality, scales of discounts, zoning and many other things. These are all right for primary products, but for some reason or other they are not to be enjoyed by secondary industry. There is to be no competition in airline operations, but intense competition in chemicals.

This is the background against which the Minister proposes a series of restrictions and restraints and the introduction of a complicated set of procedures and regulations which will effectively take control of business out of the hands of management, prevent practices which will deprive the community of the benefit of free enterprise and deny the individual trader business opportunities that ought to be fairly open to him. Taken to its logical conclusion, any form of agreement between manufacturers of classes of goods or suppliers of similar services which cannot be justified as conferring a public benefit - or to put it in another way, any agreement which merely has no detrimental effect on the publicis to be prevented. If anyone thinks that this statement is overdrawn I would ask him to look at clause 50 which provides the guide lines on which the Commissioner can base his decisions. He is not required to show that a restriction constitutes a substantial reduction of competition. Just a mere tendency is all that he needs to glimpse. He is not required to prove that the restriction is also a detriment. Anyone would think there is no competition in Australia when exactly the reverse is the case.

Mr Clyde Cameron:

– Do not be silly.


– Competition flourishes more strongly here than in almost any other country, and the honorable member knows that as well as I do. It certainly flourishes more strongly here than in any of the great industrial countries for the very simple reason that Australia is a young, developing, vital country attracting to its shores the best brains and ability, with the strong capital backing of people who have proved their capacity in the larger industrial nations. They are attracted here for the very simple reason that this is a strongly competitive free enterprise country whose affairs are managed by a Government whose strongest platform, until now, has been the encouragement of free enterprise to establish new industries, to develop new markets and to bring our people a higher standard of living by building new factories, opening up new vistas of profitable buying and selling and distributing under the beneficient guidance of a Government pledged to free enterprise.

The Australian market of 11 million people is extremely small in comparison with countries like the United States of America, Great Britain, Germany and Japan. Manufacturers here suffer great disabilities owing to the small size of the local market, and for this reason it is imperative that every one of them who can possibly do so be encouraged to get out after export trade. Modern business calls for large throughput or output to achieve economy in the face of world marketing. This legislation might be all right in a self-contained economy, but we are not self-contained; we are very much an emerging economy when it comes to industrialisation. Many of our new factories are capital intensive, and it is essential to install capacity in advance of immediate requirements. The cost of production of goods from large scale plant is lower than from smaller plants. As an example, let us examine the sulphuric acid industry, as I am interested in it and as the fertiliser industry is so dependent upon it. It is an industry to which we must give every encouragement if we are vo produce the greatly increased quantities of fertiliser that are essential to the development of our grazing and agricultural potential.

A plant that’ would produce 25,000 tons of sulphuric acid per annum might give a cost of £25 a ton. With a plant producing 100,000 tons, the cost could get down to £15 a ton. Doubling of that production again could result in a cost of £11 a ton. This is the sort of scale of production of which we have to think. A plant 10 times as large may cost only four times as much and so greatly reduce labour costs. If we are to encourage this sort of investment we must give investors the opportunity to operate in a stable price structure. We must give management the right to decide its own destiny. We must create the conditions under which it can flourish and make a contribution to growth and expansion. We must not hover over it with restraints and restrictions that remove the opportunity to grow up with Australia’s growth.

At the present moment we have some problems in the wool industry. Growers are dissatisfied with the fluctuations in prices and are seeking some form of stability. Manufacturers of textiles would appreciate stability of prices. A small section of the growers has asked in a half-hearted, frightened sort of way, for legislation for this purpose that will not have the effect it requires. The Government has agreed to give it legislation if it wants it, but has shirked the responsibility of pointing out the course that should be taken to achieve the very evident improvements needed in wool marketing and promotion. It is claimed that if an industry wants legislation we should grant it. This was said by the Minister for Trade and Industry (Mr.

McEwen) this morning. Yet, for secondary industry, manufacturing industry and many tertiary industries, we are now introducing legislation which the industries do not want - legislation that will remove the stability that has been such a feature of the Australian market in the past three or four years. Our policy speeches have been based on stability and growth, and for evidence that this has been achieved one has only to look around at the tremendous expansion of the industrial outer suburban areas. Noone should know this better than the Attorney-General in whose electorate of Bruce a great deal of industrialisation is taking place. In our shops we see an abundance of first class products available at prices that the great majority of people seem to be able to afford.

We have a state of overfull employment and a rash of claims for over award payments by almost every union because of what they say is the prosperous state of the economy. If one of the purposes of this Bill were to reduce prices, to bring down costs, to make Australian products more competitive on export markets as well as to make so many imported items unnecessary, then here would be a field of legislation that would have some beneficial effect on the economy; here would be something that would really help the little man for whom I am told the present legislation is meant to offer protection. But I do npt believe that this Bill will do these things.

I completely fail to see any justification for the proposals now before the House. They open the way for unjustifiable intrusion into the affairs of the business community. I have tried to find out why we are doing this. Where has the pressure come from to inspire the placing of such a sta itjacket on enterprise, initiative, courage and hard work which are so prevalent in the successful businesses that supply us with so much of the income tax revenue on which we run this country? Has there been widespread collusive tendering? Has the measure resulted from the fact that motor tyres all seem to cost the same, regardless of make, or the fact that petrol is the same price out of every bowser, or that many television receivers of the same type seem to be advertised at the same price Is the Attorney-General not aware of the fierce competition between all the companies concerned in these and other industries? Perhaps he will tell me that if these things are in the public interest, the companies have nothing to fear. How can they be sure that some commissioner who has a thing about tyres or oil companies, or who is just simply imbued with socialistic ideals and ambitions will not harass them? How do they tell the difference between a registerable agreement and an examinable practice?

I do not propose to go into any detailed examination of the many points on which, in my opinion, this Bill falls down. It is pointless to suggest amendments when I think the Bill should be withdrawn altogether. Many of the terms used are so vague as to make interpretation a joy to the legal profession but a nightmare for management. Many of the terms are far too vague while at the same time being too all-embracing. Let me give one example relating to the terms and conditions set out in proposed section 35 (1.) (a). I refer to the words: “ whether as to prices or as to any other matter”. This can be interpreted as meaning anything the Commissioner wants it to mean. There are many other examples of these dragnet expressions. Surely management is entitled to clarity, certainty and simplicity. The Bill calls for all examinable agreements to be registered within 30 days. This might be all right for agreements made after the Bill becomes law, but for most large companies and associations it will require a superhuman effort to even decide what agreements are required to be registered. I should think that at least six months’ grace should be allowed originally.

This brings me to one of my main objections to the proposals. I have tried to find out from certain companies just how they will be affected and what their objections to the Bill are. In practically every case the answer is that they do not know. Having studied the Bill itself, read the literature available, listened to the AttorneyGeneral addressing meetings and asked him questions, they still tell me they do not really know how they will be affected when the legislation comes into force. Until the Commissioner is appointed and until they see what he wants; until the tribunal is set up and it can be seen how it intends to treat the evidence placed before it; and until someone can say what is in the public interest, they cannot tell what is going to happen. The very appointment of the tribunal is an unknown quantity. It appears now that it will have a judicial president working part time. I thought the courts were hopelessly behind in their work now. The lay members - although I realise the Attorney-General might not like that term - may be appointed because of their knowlledge of or - and I emphasise the word “ or “ - experience in industry, commerce or public administration. Again they appear to be part time positions, the remuneration for which is unknown.

What does the term “ knowledge of industry” mean? Any academic economist could qualify. The words “ experience in “ sound all right, but it does not have to be experience in industry or commerce; it could be experience in public administration. This leaves the field wide open for senior public servants who may need to be shifted from positions they hold or ex-members of Parliament who may be looking round for jobs. Surely if this type of tribunal is to be at all acceptable the members must be men who have had practical experience in industry or commerce, and not only that, but recent practical experience. The review tribunal, of course, is just a farce. It has no power, achieves nothing more than raising a query and it refers the case back to the same procedures that have been battled with before. The tribunal does not have to take any notice of it.

As for the Commissioner - the person who will put everybody on the spot for examination - he does not appear to need any qualifications other than that he must not be engaged in paid employment outside the duties of his office. Obviously he should be a person with both knowledge of and experience in business and industry or commerce. Clause 26 strongly suggests he will come from the Public Service. This could make a good job for a defeated Minister. Instead of the creation of another empire - and assuming that there are some instances in which a company or person may be able to operate at a more profitable rate than the customers feel is necessary, or there are instances of refusal to supply a certain person or deliberate price cutting - the Australian Industries Preservation Act should be strengthened to meet such contingencies and particular practices could be examined by a court in a proper manner.

The repeal of the Act is unfortunate in many ways. It removed criminal liability under Federal law for acts restraining or monopolising trade, but this Bill covers only collusive bidding and collusive tendering. It eliminates the treble damages suit and limits the damages to damages incurred after an agreement has been found to be contrary to the public interest, not from the time the contravention was first committed. The identification of specific offences under the Australian Industries Preservation Act can be a strong deterrent. If there are, in fact, any real violations of decent business ethics the penalties should be very fierce. Huge sums may be involved and the Australian Industries Preservation Act could readily be strengthened to cover such practices without raising any real opposition from legitimate traders. Irrespective of whether this is done or we have the tribunal as the arbiter of business practice, there is one very grave omission that I think should be rectified by an amendment to be added to the extraordinary number already proposed. I think it is essential - absolutely vital - to all the principles of Australian justice that a right of appeal to a court should be allowed. I do not care whether appeal is allowed to the High Court, to a supreme court, or to another court, just so long as there is a final resource to which an aggrieved person or corporation can turn for a legal finding - not an economist or layman who does not understand this legislation. I wonder how much notice the Minister has taken of what happened in Western Australia when the Government of that State sought to impose the same sort of legislation there.

Mr Snedden:

– It was not the same sort of legislation.


– It applied to restriction of trade. Prior to 1953, industry was beginning to realise the possibilities of business in Western Australia. Such enterprises as the Kwinana refinery were established. Under the Labour Government that introduced restrictive legislation and enforced it from 1953 to 1959, not a single worthwhile enterprise was prepared to establish itself in Western Australia, although strenuous efforts were made by the Western Australian Government to attract enterprises there. Since the present Liberal and Country Party Government repealed this undesirable legislation, investment of at least £1,000 million is now flowing into that State.

In spite of that experience, an attempt is being made to prevent anyone securing a monopoly, or any group of persons cornering the market in a commodity or service. An elaborate system of registration, examination and approval by an arbitrary body is to be imposed on everyone, regardless of size or importance. Presumably the cost will be added to prices, as happens with every other control, interference and legal restraint. The legislation we are debating imposes a legal restraint upon restriction of trade. I submit that a young, progressive and growing country just cannot afford the luxury of this legislation. Even if it is thought to be a good thing for the United States of America or Great Britain, in this country it is at least 25 years before its time.

Debate (on motion by Mr. Kelly) adjourned.

page 3254


The following Bills were returned from the Senate without amendment -

Matrimonial Causes Bill 1965. States Grants (Research) Bill 1965.

House adjourned at 10.58 p.m.

page 3255


The following answers to questions upon notice were circulated -

Public Service: Code of Ethics. (Question No. 1360.)

Mr L R Johnson:

son asked the Prime Minister, upon notice -

  1. Has the Government or the Commonwealth Public Service Board considered the new draft code of ethics for Commonwealth public servants as prepared and submitted by a sub-committee of the Institute of Public Administration?
  2. If the submissions have been considered, what determinations have been made as a result?
  3. Does the submission include recommendations about the procedure to be followed by a public servant should he have reason to suspect the probity of his Minister’s official actions?
  4. If so, what are the terms of these recommendations?
  5. What is the existing code of behaviour to be followed by public servants in these circumstances, and do the new proposals involve a radical departure from existing practice?
  6. Would it be necessary to amend the Public Service Regulations and the Crimes Act to give effect to the proposed code of public service ethics?
  7. Are such amendments contemplated?
  8. Will the appropriate employees’ organisation be consulted before effect is given to any of the recommendations?
Sir Robert Menzies:

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

I am informed that the Council of the Australian Capital Territory Group of the Royal Institute of Public Administration has as yet neither adopted the report of its sub-committee on a code of ethics nor submitted it for consideration by the Commonwealth Public Service Board or the Government.

Restrictive Trade Practices. (Question No. 1244.)

Mr Whitlam:

m asked the Attorney-General, upon notice -

  1. What further restrictive practices (a) have come directly under his predecessor’s or his own notice and (b) have been reported by the Tariff Board and other official bodies of inquiry since the tables compiled and published by his predecessor in August 1963?
  2. Which of the practices in his predecessor’s tables and which practices since noted and reported are intended to come within the scope of the Trade Practices Bill 1965 if there (a) is or (b) is not complementary State legislation?
  3. On what dates, by what means and with what results has the Government consulted with State Governments concerning (a) the Bill and (b) restrictive practices in general?
  4. Will he answer the foregoing questions before the resumption of the debate on the second reading of the Bill?
Mr Snedden:

– The answers to the honorable member’s questions are as follows - 1. (a) In publishing the table of practices which had come directly under his notice, my predecessor pointed out, in an introduction, that he was stating only the basic forms of the practices and that a single item in the table might cover many instances in a widespread number of industries. Since the table was published, further particular instances of practices have come under notice, but they have all been within the basic forms stated in the table.

  1. The further practices reported by the Tariff Board and other official bodies of inquiry are indicated in the following table -
  1. (a) The practices referred to in Table I are intended to come within the scope of the Bill subject to the exception and to the qualifications mentioned below.
  1. The practice referred to in item 18 is not intended to come within the scope of the Bill,
  2. The practices referred to in items 12, 13, 14 and 15 are intended to be covered only to the extent that they are within the monopolisation provisions in clause 37.

The practices referred to in Table II are intended to come within the scope of the Bill subject to the following exception and comments mentioned below.

  1. The second practice referred to in item 29 is not intended to come within the scope of the Bill,
  2. The Bill is not intended to apply to mutual self help to members of trade associations (see item 20) unless that self help involves an examinable agreement or practice as defined in clauses 35, 36 and 37,
  3. ” Level tendering “ (see item 20) is intended to come within the scope of the Bill only if it is in pursuance of an agreement between the tenderers,
  4. A practice such as the first one referred to in item 29 is intended to come within the scope of the Bill only if the sole distributorship is the result of an agreement between the manufacturers.

The extent to which it is intended that the practices referred to in the answer to part 1 (b) of this question should come within the scope of the Bill appears from the table set out in that answer.

  1. The practices within the scope of the Commonwealth Bill do not depend upon complementary State legislation. Complementary State legislation would cover practices outside the constitutional competence of the Commonwealth.

    1. My predecessor and I have consulted with the Attorneys-General of the States from time to time since 1961. The purpose of these consultations has been to induce the State Attorneys-General to propose to their governments legislation to complement the Commonwealth legislation. The consultations have all been on the confidential basis, and the particulars sought in regard to them cannot therefore be supplied.

Release of Captive Nations. (Question No. 1408.)

Mr Whitlam:

m asked the Prime Minister, upon notice -

  1. Has his attention been drawn to newspaper reports that on 24th October the Minister for Labour and National Service told a meeting arranged by the Assembly of Captive European Nations (Albania, Bulgaria, Czechoslovakia, Estonia, Hungary, Latvia, Lithuania, Poland and Romania) that it was for the free peoples like Australia to release the goaled nations of the world?
  2. If this is the policy of the Government in what way has it been or ls it to be applied in relation to these captive nations?
Sir Robert Menzies:

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

  1. I am aware of the reports.
  2. I see no reason to add to the comments made by the Minister for Labour and National Service in answer to a question without notice in the House on 26th October (see “ Hansard “ pages 2157 and 2158).

Maritime Conventions. (Question No. 1416.)

Mr Whitlam:

m asked the Minister for Shipping and Transport, upon notice -

On what dates, by what means and with what results has the Government consulted with each of the State Governments concerning (a) the Comvention relating to the Limitation of the Liability of the Owners of Sea-going Ships, 1957, (b) the Convention for the Safety of Life at Sea, 1960, (c) the Convention for the Unification of Certain Rules relating to the Carriage of Passengers by Sea, 1961, and (d) the’ amendments to the International Convention for the Prevention of the Pollution of the Sea by Oil, 1962?

Mr Freeth:
Minister for Shipping and Transport · FORREST, WESTERN AUSTRALIA · LP

– The answer to the honorable members question is as follows -

The Convention for the Unification of Certain Rules relating to the Carriage of Passengers by Sca, 1961 has attracted little international interest and there has been no consultation as yet with State Governments concerning this Convention as consideration has not yet been given to the legislation which would be necessary to enable Australia to become a party. The Convention is unlikely to enter into force in respect of the major shipping countries for some considerable time.

The information in respect of the other three Conventions is set out hereunder -

Cite as: Australia, House of Representatives, Debates, 25 November 1965, viewed 22 October 2017, <>.