House of Representatives
15 August 1967

26th Parliament · 1st Session



Mr SPEAKER (Hon. W. J. Aston) took the chair at 3 p.m., and read prayers.

page 3

CORIO ELECTORAL DIVISION

Mr SPEAKER:

-I have to announce that on 10th June 1967 I received from the Honourable Hubert Ferdinand Opperman a letter resigning his seat as member for the electoral Division of Corio. On 20th June I issued a writ for th; election of a member to serve for the electoral Division of Corio in the Slate of Victoria to fill the vacancy caused by the resignation of the honourable gentleman. I have received a return to the writ and by the endorsement thereon it is certified that Gordon Glen Denton Scholes has been elected.

New Member Sworn

Mr Gordon Glen Denton Scholes was introduced and made and subscribe i the oath of allegiance as member lor the Division of Corio, Victoria.

page 3

MINISTERIAL ARRANGEMENTS

Mr HAROLD HOLT:
Prime Minister · Higgins · LP

– I wish to inform the House that the Minister for Primary Industry (Mr Adermann) is currently engaged on an official visit to Europe and North America. Mr Adermann’s itinerary has included attendance at the opening plenary session of the International Wheat Council and discussions at the headquarters of the United Nations Food and Agriculture Organisation in Rome and the International Wool Secretariat in London. He expects to return to Australia before the end of this week - actually, on 19th August. The Minister for the Interior (Mr Anthony) is acting as Minister for Primary Industry during Mr Adermann’s absence.

Honourable members will regret to learn that the Minister for Trade and Industry (Mr McEwen) has suffered a recurrence of a dermatitis condition which he expects will keep him away from this week’s sitting of the Parliament. He expects to be back next week. In his absence the Minister for Social Services (Mr Sinclair) will deal with matters in this House relating to the Trade and Industry portfolio.

page 4

DEATH OF GEORGE HENRY GRAY, M.P

Mr HAROLD HOLT:
Prime Minister · Higgins · LP

– lt is with regret that 1 formally advise the House of the death on 2nd August of the late George Henry Gray who had represented the Division of Capricornia since 1961. At the time of his death Mr Gray was a member of the Public Accounts Committee and from March 1962 until November 1963 he was a member of the Library Committee. He was a member of parliamentary delegations that visited South East Asia in 1963 and 1966. Before entering the Federal Parliament, Mr Gray had been Secretary of the Canegrowers Executive in north Queensland and Secretary of the Rockhampton Agricultural Show Society.

George Gray enlisted in the Australian Military Forces in September 1939 and served overseas as a captain with 17th Australian Ordnance Ammunition Company and 10th Australian Advanced Ammunition Depot. As many honourable members will recall, he retained an active interest in defence matters, particularly those technical aspects that he had become familiar with during his own service, and we remember that his interest took him to the extent of producing plans for a combined tank and tank carrier.

George Gray won the respect of all honourable members of this Parliament with his quiet earnestness and his obvious sincerity. He was a champion of the many causes to which he devoted himself and he worked untiringly for the Australian Labor Party in the electorate he represented. He had a personality and character which, as we all recall so vividly, inspired friendship in all who came to know him. He will be missed and mourned by the many friends he made in both Houses of this Parliament. George Gray had a large family of children and our sympathy goes to them and to his widow in their sad loss. I move:

That this House expresses its deep regret at the death on 2nd August 1967, of George Henry Gray, a member of this House for the Division of Capricornia, places on record its appreciation of his meritorious public service and tenders its profound sympathy to his widow and family in their bereavement.

Mr WHITLAM:
Leader of the Opposition · Werriwa

– On behalf of the Australian Labor Party I support the motion the Prime

Minister (Mr Harold Holt) has moved. My colleagues and I appreciate the Prime Ministers tribute to our lal j colleague. We similarly appreciate the tribute paid to the late George Gray immediately after his death, ft was appreciated throughout the many areas and in the many organisations in which George Gray had served and in which he was deeply respected and will be long remembered.

The Prime Minister has referred to the parliamentary career and some of the public career of our late colleague. He led a very active., full and varied life indeed. At the age of nineteen George Gray joined the Chinese customs service in Shanghai. He was a very proficient sportsman, particularly in tennis and rifle shooting. He served throughout the Second World War from its first month to its end. After the war he took a reconstruction training course and obtained the Diploma of Economics at the University of Sydney. He was a qualified accountant. After the war, however, he decided to go on the land and he began dairy farming in south Queensland. He later moved to the Tully district as a cane grower. He had been a member of my Party ever since the war.

As the Prime Minister said, George Gray was elected to this House at the end of 1961. In addition to his activities on parliamentary committees and in parliamentary debates in which he was an effective speaker on an extraordinarily wide range of subjects, he was also very active in many of the affairs of the parliamentary party.

He was of course, particularly interested in matters of northern development and of defence, the defence not only of northern Australia but of the whole of Australia. The Prime Minister has very properly referred to the interest the Chiefs of Staff have taken in the tank carrier prototype which he demonstrated to many members of the House, from both sides, last year. I have never known a man who has belonged to so many organisations. At the time of his election to the Parliament he was secretary or president of twentytwo associations or societies in the Rockhampton area. I first met him ten years ago when I was a member of the Joint Committee on Constitutional Review. He gave evidence before the Committee at Rockhampton, in regard to new States. 1 think it can be said that he and a member of the Committee, the late David Drummond, were principally responsible for the recommendation which the Committee unanimously made on that subject.

In all of his very great range of interests, he was a man of creative imagination and engaging ingenuity. His family can well be proud of the manner in which he contributed to life in this country and of the manner in which he served this country. He was justly proud of the service which members of his family have given and are giving to this country. His eldest son is a member of the Regular Army and has just recently returned from service in Vietnam. His second son is at the Army’s radio electronics base at Balcombe in Victoria. His youngest son is not yet one year old. He has three daughters, the eldest being in the Department of the Navy. For six generations the Gray family has served Australia. This family dates its Australian history to 1804, when the founder of the Australian branch came here as a member of the New South Wales Corps. My colleagues and I join in the tribute that the Prime Minister paid to a very valued contributor to this institution of which we are members.

Mr ANTHONY:
Minister for the Interior · Richmond · CP

– I would like to associate the members of the Australian Country Party with the condolence motion and with the remarks of the Prime Minister (Mr Harold Holt) and the Leader of the Opposition (Mr Whitlam) concerning our late colleague and friend. George Gray was universally liked by all who had an opportunity to know him. He was a quiet, dedicated man who held very strong convictions on anything he believed was right and in the public interest. His whole life seemed to be associated with one cause or another. However, if he appeared to be an ordinary type of man his demeanour belied him. George Gray was a most unusual person. As the Leader of the Opposition said, he lived a full and varied life with a tremendous experience of different places and of different types of occupation. People who were closely associated with George would have heard htm reminisce about his experiences in China where he was a customs officer for many years. His stories, some in humorous vein, would keep his friends intrigued for many an hour.

In his capacity as a customs officer in China he was an assessor in the courts and could tell of many and varied experiences. He also had a distinguished military record and was a member of a unit which managed to hold Wau at the time of the Japanese attack in New Guinea. As honourable members are aware, Wau was held only by a thread’s breadth. George was there on that occasion. He was also a farmer and a union organiser and was associated with many organisations. He was devoted to the New State Movement. All round, he had a great knowledge of human affairs and was a most suitable person to come into this House as a member of Parliament. We will remember him with affection and we will all miss him. On behalf of the members of my Party, I would like to express our sympathy to his wife and family.

Dr PATTERSON:
Dawson

Mr Speaker, I would like to be associated with the motion proposed by the Prime Minister (Mr Harold Holt) and to express my deep sympathy to the family of George Gray. During the last two years I became very closely associated with him. Remarkable though it may seem, my electorate of Dawson completely encircles the mainland portion of the electorate of Capricornia. For this reason, many of my electoral activities were of interest to George Gray and things that he did were of interest to me. Travelling between Canberra and Rockhampton with him as frequently as I did was an experience that 1 shall never forget. I believe that few people could really appreciate his remark* able background. The number of issues and events with which he somehow or other became involved was truly astonishing. As the Leader of the Opposition (Mr Whitlam) has said, George Gray was associated with a tremendous number of organisations. This was evidenced particularly at his funeral. The number of people representing all walks at life and various religious denominations showed clearly the respect in which this man was held by the people of the area that he represented in this House.

I spoke to Mr Gray only a few hours before he died. But he did not speak of death. He spoke, with his peculiar and extraordinary enthusiasm, of how quickly this sessional period of the Parliament was drawing near and of how much he looked forward to coming back here to help solve sonic of the problems about the solution of which he enthused so much. If there is one small recompense Tot his death. I belike it is the fact that he died in a way Hu: he would have approved. 1 know that Mrs Gray also thinks this. He died in his own home, among his family, with the two babies which were his and which he loved so much close at hand. George Gray was a remarkable man. Sir. and I believe that this Parliament will miss him greatly. He was an extraordinarily good Australian.

Question resolved in the affirmative, honourable members standing in their places.

Mr Harold Holt:

Mr Speaker, 1 suggest thai, as a mark of respect to the memory of our late colleague, the sitting be suspended until 8 p.m.

Mr SPEAKER:

-I feel sure that the suggestion made by the Prime Minister meets with the concurrence of the House. As a mark of respect to the memory of the deceased member, the sitting is suspended until 8 p.m.

Silting suspended from 3.19 to 8 p.m.

page 6

APPROPRIATION BILL (No. 1) 1967-68

Message from the Governor-General recommending appropriation for proposed expenditure announced.

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

Mr SPEAKER (Hon. W. J. Aston)In accordance with Budget practice, I now call on the Chairman of Committees to take the chair as Deputy Speaker.

Second Reading (Budget Speech)

Mr McMAHON:
Treasurer · Lowe · LP

– 1 move:

That the Bill be now read a second time. In so doing, I present the Budget proposals for the financial year 1967-68.

This Budget presents the sum of many proposals, each with its own purpose. The amount involved is large and grows inevitably year by year. Total Budget outlay this year will equal about one-fourth of our Gross National Expenditure. Spending on this scale, and the measures required to finance it, must have powerful effects. The precise impact will depend on the trend and strength of many other influences running through our economic life. Therefore, 1 want to speak briefly about our recent economic experience, take stock of the economy at the moment, and then say something about our prospects.

A year ago, the effects of drought were still lingering, consumer spending was sluggish and private capital expenditure seemed to be slowing down. For these reasons, last year’s Budget was designed to he expansionary.

The economy responded much as we intended. The year 1966-67 was one of strong and varied growth. On the demand side, public authority expenditure led the way. With a much better season, rural output and incomes both increased notably. Consumer spending, comprising normally about three-fifths of all expenditure, also revived. While building and construction for commerce and industry and private spending on plant and machinery tended to fail away, there was a considerable lift in dwelling construction.

For 1966-67 as a whole, gross national product rose by 9%. After making full allowance for price increases, there was an increase of between 5 and 6% in national production in real terms. This achievement was close to the best of recent years. Plainly, there must have been some good gains in productivity.

The number in employment in 1966-67 was 2.5% greater than in the year before. This was a smaller increase than has been usual. By all accounts employers have had less difficulty in finding either skilled or unskilled labour than in recent years although overtime working has been fairly high. The lower migrant inflow has been a factor in the smaller rise in civilian employment.

Domestically, therefore, supply and demand seem to have been pretty much in balance.

Wage rates have increased strongly: over the year to June, minimum weekly wage ra>es rose by about 7%. As to prices, the consumer price index rose in the first three quarters of 1966-67 at an annual rate only a little above 2%. However, in the most recent quarter, the rise approached an annual rate of 5%. This of course is much too high.

Externally, results have been mixed. Taken as a whole, the export performance over the past year has been splendid - the best we have ever had. Imports increased little as compared with 1965-66, though the rate was rising in the later months of 1966-67. The substantial trade deficit in the preceding year thus gave place to a useful surplus of S95m. With defence and civil aid and other payments abroad increasing, the net deficit on invisible payments widened and net receipts of capital from abroad fell a long way from the record level of 1965-66. In the outcome there was a loss of SI 77m in external reserves. The offsetting increase in our drawing rights in the International Monetary Fund and the credit extended to New Zealand reduced the net adverse movement to $125m. That was a pretty good result. The financial year has in fact opened well for the balance of payments. There were good trade results in July, with shipments of wheat, wool and minerals running at a high level and with imports a little lower than they have been in recent months.

page 7

THE BUDGET AND THE ECONOMY

Let me now outline the Budget briefly in terms of total expenditure and receipts. It provides for total expenditure in 1967-68 of §6,4 83m and total revenues and similar receipts of $5, 887m. Thus the estimated gap to be financed from borrowings of various kinds is S596m. This would be $61m more than the amount borrowed last year.

On these figures, expenditures will be $56 1 m or 9.5% greater than those of last year - when the increase over the previous year was 11%. The increase in revenue will be S499m- or 9.3%: last year it was S309m Or 6% .

Statements No. 2 to 4 attached to the Budget Speech give details of these estimates.

With the concurrence of honourable members I incorporate in Hansard these statements and others to which I shall refer in the course of my speech.

These aggregates of expenditures and receipts crystallise the Government’s decisions. They reflect our judgment as to the kind of Budget the economy needs to keep it healthy during the year and beyond.

To a considerable extent the shape of the Budget is pre-determined by past commitments and by such necessities as defence. So the scope for policy adjustment lies chiefly in decisions about new expenditure proposals and on whether taxes and charges shall be increased or reduced. It is these decisions which determine whether the marginal impact of the Budget will be one of stimulus or restraint.

As I now see the prospect, we can expect another good year. The supply of labour, material and plant is adequate to sustain a good rate of growth. With normal additions to the work force from our own population and net immigration, a rise of 3% in employment seems feasible without putting much strain on the labour market. It would be normal to expect some further gain in overall productivity. Indeed, the big additions to industrial plant during recent years ought to go on boosting output per man hours for some time to come. The capacity for expansion is certainly there.

The rural industries will depend, as always, very much on seasonal conditions. For some major districts a good season is not assured as yet. But there can be no doubt that the rural industries, especially the wheat industry, are capable of greater production. Given a good season greater production will certainly be achieved.

On the side of demand there are also grounds for confidence. Consumer spending is the major component of national expenditure. It has been growing strongly and we can expect this trend to continue. Employment is bound to go on rising and so are average earnings. Generally, conditions seem set, not for a boom, but for a good steady expansion of consumer demand.

Let us now consider the prospects for the other main segment of private spending, that rs, capital expenditure. Expenditure on dwelling construction has been increasing steadily. There are no signs of slackening. The flow of finance appears to be keeping up. If anything, the year ahead might see some further increase in dwelling construction. An increase in non-residential construction also seems likely. The value of approvals for commercial, industrial and other non-residential buildings in the recent June quarter was 16% higher than a year earlier. We were aiming to achieve a figure something like this.

Increased consumer spending can be expected to make heavier demands on production and hence on plant capacity. Various big projects associated with minerals, oil and gas are in train. Bank lending and unused overdraft limits are high and monetary liquidity is adequate to support a substantial increase in business expenditure. All told, therefore, the indications are that private capital expenditure in general will gather impetus as the year goes on.

Let us turn now to public authority expenditure. The allocation of resources between the public and private sectors was the crucial question we faced when framing the Budget.

I have indicated that there is scope in the economy foi” production to rise at much the same rate as last year. Total expenditure also could increase about as fast as production without upsetting the balance of demand and supply. But if expendiure increases faster than that it must outrun the resources available with adverse effects on costs and the balance of payments. This, in fact, is what must happen if all the main segments of expenditure rise strongly together. Consumer spending has revived and we expect private capital expenditure also to do so. There could obviously be trouble if, at the same time, public spending were allowed to continue to rise at the rate of the past few years. We could quickly find ourselves over-spending, with resources over-stretched, prices rising fast and a heavy external deficit.

The Government does not want lo take the risk that these conditions will emerge. Already rising wage rates have created a cost problem, worrying for all; serious for the exporting industries and acute in the case of some sections of the wool industry. Externally our position is under some stress; it could become difficult if an excessive rise of demand led to a strong upsurge of imports. I emphasise that we are not prepared to take this risk.

While we keep the progress of the economy sure and steady, our balance of payments can be manageable. Our export prospects are certainly good and, in particular, The big mining developments now under our earnings abroad, lt seems possible that, even in the medium term, the fruits of oil discoveries will serve to replace a considerable quantity of imports. On the other side of the ledger we expect imports to increase. Additionally, we face some big external commitments in the period immediately ahead, especially for defence. Of this 1 shall say more later. Capital inflow is unpredictable. Allowing for a rate of inflow comparable with that of 1966-67, 1 think some further loss of external reserves is likely in this financial year. We do not want that loss to be aggravated by an overstimulated demand for imports.

On a balancing of these probabilities, we do not think it would be in the nation’s interest to put further restraints on consumption. The taxes imposed in 1964-65 and 1965-66 in order to shift resources to defence are still effective and new restraints could immobilise rather than divert resources.

It must be emphasised that a large part of industry and the employment it provides are geared to the needs of the consumer. If we cut back consumer demand too hard not only are living standards affected but the immediate result is more likely to be unemployment than a transfer of resources to other activities. It could also affect immigration adversely. For these reasons we do not want to reduce disposable income. Equally, however, we do not think that consumption expenditure needs any stimulus now. The tasks to be done and the demands to be made on resources are too numerous and heavy for us to be able to afford too strong an increase in consumer spending.

Nor do we wish to depress private capital expenditure. Some of it might not pass the test of high national priority but the private sector is responsible for the largest part of production and has, therefore, a critical role to play in national growth and progress.

page 8

GROWTH OF THE PUBLI1C SECTOR

One reason why we have drawn the reins on public spend ng more lightly than before is to provide room for balanced expansion of the private sector. For some years now the public sector has been setting the pace and doing so strongly. That it should have done so is in part based on historical need; that is, the need for large and rapid defence expansion coinciding with unparalleled demands for works to serve great new developments and improve facilities for education, transport, power and fuel supply - in a word, to establish the foundations for larger economic growth. In the four years from 1962-63 to 1966-67 public authority spending as a proportion of total spending has grown from 19% to 21%. In the past two years 44% of the increase in employment has gone to the public sector. A few years back 25 to 30% would have been more like the ratio. Public expenditure has also been calling more and more heavily on our overseas resources.

In the main, these necessities could not be denied and they are likely to increase. To recognise these necessities does not mean, however, that the requirements of the public sector must override everything else. Essentially, this involves the problem of choice and allocation of resources to which I referred in my Budget speech last year. Pressed hard by competing claims, we had to decide what the broad allocation of resources should be. As I said earlier, the private sector has a major part to play in growth. I add that it also has a major role to play in national security since basically defence must be built upon the growth of our manpower, our industrial capacity and our ability to pay our way abroad.

page 9

EXPENDITURE, 1967-68

These are the reasons why we have made a strong effort this year to bring the increase in expenditure within tighter limits. The goal we set was 9% and within the practical limits set by our commitments for defence, we have gone close to achieving it. I shall now explain what we propose in respect of the main expenditure groups.

Defence

Again this year defence commitments have been a dominant element in the Budget. Last year, expenditure was S950m. This was $50m below the estimate. Even so it was 27% above expenditure in the previous year.

This year we are providing $1,1 18m for defence - an increase of $168m or 18% on 1966-67.

May I recall that in 1962-63, five years ago, our defence bill was $428m, nearly $700m less than the estimate for this year.

Over the four intervening years the rate of increase has averaged 22% per year.

We have accomplished this expansion without serious distortion or disruption of our domestic economy. We have done it through fiscal and monetary means without the direct controls associated with a proclaimed state of war. In other words, the defence effort has been accommodated within our available resources. Lest any one should suppose that it has all been costless, let him reflect how much could have been done if all those additional expenditures and the resources they represent had gone into the enlargement of our industrial capacity and other basic facilities for growth.

It is not, however, the present level of defence spending so much as the rate of escalation that concerns us most. Plainly we cannot continue for long to meet anything like the rate of increase of recent years without deep impairment of the economy. As it is, estimated defence costs this year will be equivalent to 5% of what we think gross national product is likely to be, calculated at factor cost. Among the countries of the Western World, only the United States, Britain and France are at present devoting a larger proportion of their resources to defence than we are. Britain now considers that the burden of defence expenditure is more than her economy can stand and the Government is putting into effect plans to reduce the proportion of her resources that go into defence. The United Stares, with her immense productive capacity and a gross national product per head more than half as great again as ours, is finding her external defence cos Ls a heavy strain on her balance of payments.

Total defence expenditure is one aspect of the problem: our mounting external defence costs are another and more serious aspect. Five years ago, our external costs of defence were well under $100m a year. This year they could rise above §350m. At this level they would represent 1 1 % or more of our export earnings. Some of this expenditure will be met from credits arranged abroad but, though helpful in spreading payments, credits simply carry the liabilities forward. Even so the net cash outgo this year will bc well above S200m. Out. sending defence orders abroad for ships, aircraft and other equipment and supplies at 30th June last were costed at more than $600m. Further orders will have to be placed overseas this year and later for replenishment or replacement as well as to provide for new and additional requirements.

Defence must, and does, rank high in our national priorities. We must be prepared to play an effective role in our own defence and, in co-operation with our Allies, in the security and stability of this part of the world. Our effectiveness will grow as our resources develop. But we would not be helping either ourselves or our Allies were we to attempt to overreach our capacity. Defence subtracts from the resources available for growth. Seriously weaken the potential for growth and the capacity to support an expanding defence effort is whittled away.

page 10

DEFENCE FORCES RETIREMENT BENEFITS

We propose to seek an amendment of the legislation governing Defence Forces Retirement Benefits to give common entitlements to all servicemen on full-time continuous duty for periods of twelve months or more by admitting to the benefits of the scheme those now excluded because they are enlisted for periods of less than six years. This extension of the scheme will give cover to national servicemen, who are enlisted for two years. If any of the servicemen now to be covered is discharged through invalidity or dies, he or his widow and children will receive the same pensions or other benefits as permanent members of the Forces.

While serving in special areas such as Vietnam, servicemen are, in addition, covered by the Repatriation legislation. Thus, for example, a married private soldier totally and permanently incapacitated as a result of war service will receive a pension of $31.50 per week under the Defence Forces Retirement Benefits legislation, together with a basic pension of $34.55 per week under the Repatriation legislation. Additional Repatriation benefits are, of course, provided in respect of children and by way of medical and hospital treatment.

The legislation will be introduced as early as possible.

Later I shall announce proposals to improve the pensions payable to former members of the Permanent Defence Forces under the Defence Forces Retirement Benefits legislation.

International Aid

I shall refer next to the contribution we are making to the economic advancement and security of developing countries. Both in our foreign policy and our defence planning our goal is international peace. Along with this must go economic progress. These are the aims of our international aid.

The scale of our economic aid to developing countries is not as well known as it should be. Unlike other aid-giving countries, we give all our official aid in grants not in repayable, interest-bearing loans, tied or untied. Our official aid this year, estimated at $142m, will probably represent about 0.75% of our estimated national income. Only France among the countries of the West can point to a better performance than that. Australia’s aid, moreover, has grown rapidly in recent years whereas that of other donor countries has been static or declining.

This year, our expenditure under bilateral and multilateral aid programmes will increase by $9m to $50m - that is by 23%. We are providing aid these days under more than twenty separate headings. The main increases will occur in our contribution to the International Development Association and in emergency assistance for Indonesia. The IDA expenditure is a further instalment towards the second replenishment of IDA funds for which Australia has agreed to provide $ 17.7m in all. The amount of $5. 2m for Indonesia is special assistance over and above normal Colombo Plan aid to that country. We are providing $9.5m in anticipation of the coming into effect of food aid obligations under the International Grains Agreement. A gift of 1 50,000 tons of wheat to India, valued at nearly $9m, has already been arranged.

Defence aid of some $6m will be given to Malaysia and Singapore.

The grant to the Administration of Papua and New Guinea will increase this year by almost $8m to $77.6m - that is, by 11%. The Administration intends to provide additional capital for the Papua-New

Guinea Development Bank, which has now started operations. If through the year the Bank’s requirements seem likely to exceed its resources, we shall consider adding enough to the grant to permit the Bank’s needs to be met.

Over and above the grant. Commonwealth Departments will incur in the Territory expenditures of an aid character amounting to about $l4m. Other Departmental expenditure, including defence expenditure there, will run to more than $30m. Together, the outlays from this Budget in the Territory will amount to more than $120m.

In alf of this aid-giving we clearly recognise our obligation to help the needier people of the world. We do this, knowing that the transfer of resources to others must subtract from our own resources and especially our external resources. These are anything but unlimited.

Further information on Australia’s external aid is contained in Statement No. 8.

Social Services, Health and Repatriation

I turn now from international to domestic needs - those in the field of social and health services and repatriation. Overall, we expect expenditure in this field to rise this year by more than $50m to a total of about $1 ,332m.

Payments from the National Welfare Fund will rise this year by an estimated $40m to $l,071m; these relate to age, invalid and widows’ pensions, child endowment, unemployment and sickness benefits, medical and hospital benefits, other benefits and services in the field of health and the homes savings grants.

page 11

CHILD ENDOWMENT

We propose to give additional assistance to larger families by increasing child endowment for children under sixteen years by 25 cents to $1.75 a week for the fourth child in a family, by 50 cents to $2.00 a week for a fifth child and so on, with a further 25 cents being added for each successive addition to the number of children.

Mr McMAHON:
LP

– As I said at my Party meeting, it shows that I have other ambitions besides my political ones. A family including nine children under sixteen years, for example, will und.-r this proposal receive an additional S5.25 weekly. The-* new rates will apply on and from 19th September, the commencing date for the regular fourweek and twelve-week child endowment pay period.

Later 1 shall announce taxation concessions that also will give benefits to families.

BENEFITS FOR THE MODERATELY RETARDED

We propose to extend eligibility for social services benefits to intellectually handicapped persons while they are in Stale institutions when they can benefit from training specifically designed to he’p them. Other mental patients will continue to be eligible for payment of pension on discharge, together with arrears of pension for up to twelve weeks of the period spent in the institution.

HEARING AID SERVICE FOR PENSIONERS

Legislation will be introduced to authorise the Commonwealth Acoustic Laboratories to supply hearing aids on loan for a nominal hiring charge to pensioners and their dependants with defective hearing who would benefit from their use. The details will be announced when the legislation is brought clown.

RELIEF FOR DESERTED WIVES AND WIVES OF PRISONERS

We intend to open discussions with the States with the object of working out mutually acceptable arrangements for the assistance of deserted wives and wives of prisoners. At present these women are, subject to a means test and other conditions, eligible for a widow’s pension if they have been deserted, or if the husband has been in prison, for not less than six months. Meanwhile, they can approach the State authorities in most States for assistance, with assistance varying considerably from State to State. If the States can reach agreement on the principles to be followed, we will offer to meet half the cost of State assistance where the wives concerned have children.

The cost of these four proposals is estimated at $7m in 1967-68 and $(0m in a full year.

REPATRIATION

I have already referred to the decision to apply the benefits of the Defence Forces Retirement Benefits Act to national servicemen and other classes of servicemen.

As to repatriation, expenditure is estimated to increase this year by about $llm to some $26 lm.

Having carefully reviewed all repatriation benefits we have decided to increase pensions for war orphans. For children who have lost one parent through war service, the weekly pension will rise by 50 cents to $4.40 for the first child and to $3.25 for the second and other children. For those whose mother also is dead, the weekly pension will rise by $1.00 to $8.15 for every child. These increases will cost $127,000 this year and $169,000 in a full year.

Education

There can scarcely be a facet of our national affairs that attracts more widespread attention than education. A community quickly growing in numbers and in economic capacity needs continuously to raise its educational standards. The basic responsibility for education, constitutionally and in fact, still remains with the States. Nevertheless, the Commonwealth’s ro!e in this field has been growing and its financial contribution has been increasing rapidly. For example, over the past six years the increase has been almost fourfold. We have seen dramatic developments in university education-: new universities have been established, standards of buildings and equipment have been improved and enrolments have more than doubled in eight years. These achievements would have been impossible without Commonwealth support.

This support has net, however, been limited to universities; it is being extended to new tertiary institutions providing broadly-based educational opportunities for those being trained ‘for technological vocations. The Commonwealth also has recognised the needs of secondary schools in the teaching of science and has given financial assistance for this purpose. It is giving capital grants also to improve facilities in technical colleges. Now, in this Budget, we are for the first time providing grants to the States for the building of teachers colleges. All this, of course, is additional to the finan cial assistance we give to students and the educational needs we meet in full in the Commonwealth territories.

The cost to the Budget is in conseqence mounting rapidly.

Total Commonwealth expenditure on education this year is estimated to be about $194m. This is S51m or 35% more than in 1966-67.

This total includes payments to the States specifically for education. These will increase by 50% to SV 18m. Within this amount grants for universities and colleges of advanced education will account for nearly $81m. More than $29m will be for science laboratories, technical training and research grants. Provision is being made for grants of $8m for teachers colleges

Additionally, the Australian National University and ils affiliated colleges will receive just on §24m or more than $4m in excess of last year.

The cost of the various Commonwealth scholarship schemes will rise by $4.7m to nearly $29m.

Current expenditures by the Commonwealth on education will this year amount to about $107m - this includes some $3m for the Soldiers’ Children Education Scheme, which is a Repatriation item - and capital expenditures will total about $83m. Administrative expenditures associated with education amount to another $4m.

Revenue Assistance to the States

Except for expenditures on business undertakings, education accounts on the average for nearly a third of State expenditures from their revenue funds. Revenue grants to the States by the Commonwealth represent more than half of State revenues excluding business undertakings. These Commonwealth grants therefore help them in a big way to meet their education costs. In 1967-68 Commonwealth general revenue grants to the States will be about $93 6m as at present estimated or $5 8m more than last year. Other specific purpose revenue payments are estimated at $44m - about $7m less than last year, when payments related to drought were heavy. These figures do not include the Commonwealth payments specifically for education to which I have referred; these will add about S49m to Commonwealth revenue-type grants to the States. For the first time total Commonwealth revenue assistance will exceed a billion dollars - about Si, 028m in all.

Capital Expenditures

On capital account Commonwealth specific purpose payments to the States will this year be S3 19m - a 28% increase on last year’s figure. This includes S69m for capital expenditure on education to which I have referred. It includes also $160m under the Commonwealth Aid Roads arrangements and more than S6m for beef cattle roads and the Gordon River road in Tasmania. For railway standardisation projects in Western Australia, South Australia, and New South Wales, more than $37m is to be provided. Over $6m is included for Tasmanian hydroelectric development and $5m for the South Australian natural gas pipeline. Natural disaster payments of a capital nature will approach $13m. Other payments will be made for water conservation, rural development and health and welfare.

These specific purpose payments are additional to the funds the Commonwealth borrows or provides from its own resources for State works and housing programmes. These programmes will this year total $677m or 5% more than last year. When it approved this amount, the Loan Council also agreed that the borrowing programmes for S.ate semi-governmental authorities should be increased by 16% to $3llm

The effective increase was actually greater than this because the Loan Council agreed that these programmes should in future apply only to authorities seeking more than $300,000 within the financial year. Previously, the limit was $200,000. The semi-governmental authorities arrange their own borrowings. It is significant, however, that the combined borrowing programmes of the States and their authorities for capital works and housing in this financial year will be close to $ 1,000m. In addition, as I have pointed out, they will receive revenue assistance from the Commonwealth of more than one billion dollars.

Expenditure on Commonwealth capital works and services will rise this year by 9% to $5 16m. The largest single item is Post Office capital works, on which expenditure will rise by 17% to $240m. I want to refer to the Post Office in detail later. Here I point out that the net requirement from the Budget to finance this expenditure will be 5181m. The remaining S59m will be provided from internal Post Office sources, mainly depreciation funds. Most of the capital expenditure this year will be for extending and improving telephone services. In our quick-growing economy, demand for services involving new lines rose by about 12% last year. With the growth of traffic, trunk and local networks have to be extended and improved. New Post Office buildings are also needed and some existing buildings require remodelling or replacement to cope with expanding business.

Capital expenditure for civil aviation will total more than $35m - a 23% increase on last year. Most of this will be for airport development, mainly at Sydney and Tullamarine. More will be spent also on navigational aids and equipment.

Expenditure by the Snowy Mountains Hydro-electric Authority will taper off. It is estimated at less than $42m - nearly $7m less than last year’s expenditure.

For works in the Australian Capital Territory $56m is being provided - $4m more than last year. In the Northern Territory works expenditure will be $27m.

On beef cattle roads in the Northern Territory expenditure is estimated to exceed $3m. Two new projects estimated to cost $4,650,000 will be started - one, the Daly Waters to Cape Crawford road and the other, the restoration and sealing of the road from the Barkly Highway to Anthony’s Lagoon.

There are increased provisions also for the Commonwealth Railways, chiefly for rolling stock for the Sydney-Perth standard gauge service; for the Broadcasting and Television Services; and for other items such as computer equipment for the Bureau of Meteorology and the Bureau of Census and Statistics.

page 13

WAR SERVICE HOMES

Because of the number who have already taken advantage of the War Service Homes Scheme, it seems likely that there will be fewer applicants for advances this year. The provision has therefore been reduced to $45.5m, which Ls SI 3.6m less than the amount disbursed last year. We shall seek additional funds if the amount now being provided proves insufficient.

Running Costs of Business Undertakings The running costs of business undertakings - the Post Office, the Commonwealth Railways and the Broadcasting and Television Services - add heavily to Budget expenditures, though in total the outlays will be more than offset by revenues earned. Together, these costs are expected to increase by 10% to $4 1 Om.

Assistance to Industry

Expenditures on assistance to industry are estimated to rise this year by 28% to $230m. The group includes bounties and subsidies, support of industrial research and assistance to the Queensland sugar industry. With increasing sales, bounties and subsidies on phosphate and nitrogenous fertilisers are expected to rise by nearly $7m to almost $40m.

The average export price for wheat from the 1966-67 crop is expected to be above the previous year’s level and it is estimated that this will reduce the Commonwealth payment into the Wheat Prices Stabilisation Fund this year by $3m to SI 3m.

Under arrangements made last year, an amount of almost S20m is to be made available to the State of Queensland to enable it to meet interest and repayment obligations in respect of advances by the Reserve Bank to the Queensland Sugar Board in respect of 1966 season No. 1 Pool sugar. We have decided to provide further assistance to the State to enable it to provide assistance to the sugar industry in respect of the 1967 sugar crop. The provision we are making for this purpose is SI Om. Depending on prices realised for export sales we are prepared to increase this assistance up to a total amount not exceeding $15m. The assistance we are providing in respect of both the 1966 and 1967 crops will be repayable by the State in future years.

Administrative and Other Expenditures I come now to the residual group of expenditures which in ali are estimated to increase by 4% to $689m. They include the running costs of Commonwealth Departments, estimated to rise by 9 per cent to $378m. Debt charges are estimated to rise by 8% to SI 02m.

Current expenditures in the Territories other than Papua and New Guinea - that is, in the Australian Capital Territory, the Northern Territory and the minor territories - are estimated to increase by 16% to $52m. This excludes educational costs covered by the figures for education I have already mentioned. I add that we are providing SI. 4m for operational expenditure and $1.2m for capital expenditure on a programme due to come into effect at the beginning of 1968, to increase facilities for the education of aboriginal children in the Northern Territory.

These increases are substantially offset by reductions in other expenditures. Payments amounting to S27m were made last year to finance drawings in Australian currency by other countries from the International Monetary Fund. No provision has been made for similar payments this year. Expenditure on the introduction of decimal currency is expected to decrease by 50% to S8m.

Aboriginal People

I mention at this point that the action to be taken by the Commonwealth in relation to aborigines, following the approval by referendum of an amendment of Section 51 (26) of the Constitution, is now under detailed and careful consideration by the Government. The Commonwealth’s object will be to co-operate with the States to ensure that together we act in the best interests of our aboriginal people.

Immigration

Population growth is vital to our development. We are providing $25m this year for assisted passages and $5m to Commonwealth Hostels Limited as a contribution towards the accommodation costs of migrants. In addition, S3.9m is being provided for improvements at migrant hostels - $2.5m more than last year. We attach the greatest importance to maintaining our immigration programme at a high level. It is, however, becoming increasingly difficult to attract migrants to this country. Because of Europe’s increasing prosperity, interest in migration has declined there.

Moreover, British migration, until now the mainstay of the programme, has been falling off.

Special steps have already been taken to stimulate migration from Europe. Last year we offered additional assistance towards passage costs and recently, by increasing our own assistance, we eliminated the last of the arrangements requiring certain categories of migrants to take out loans to meet part of their passage costs.

The immigration target will be maintained at last year’s figure of 148,000 settlers, including 92,000 assisted migrants. This programme is designed to yield about 70,000 workers a year.

Retirement Pensions and Allowances

Retirement pensions and allowances have been reviewed by the Government.

The last adjustment to pensions payable to retired members of the Commonwealth Superannuation Fund and the Defence Forces Retirement Benefits Fund was made in 1963, when the proportion of pension payable from Consolidated Revenue was increased to the amount that would have been payable if the pensioners had retired at the end of 1959. Those who have retired since 1959 have not received any increase in their pensions despite the large increases since then in salary levels.

The Government has decided that the Consolidated Revenue proportion of existing pensions should be brought up to the the amount that would have been payable if retirement had taken place on 30th June 1967. This will be of considerable benefit to former Commonwealth officers and members of the Permanent Defence Forces, and their widows. The estimated cost is $7.7m for a full year and $5.45m in 1967-68; this will be offset to some extent by reductions in entitlement to social service benefits.

A comparable adjustment will also be made in existing pensions under the Parliamentary Retiring Allowances Act, at an estimated cost of $85,000 in a full year and $60,000 in 1967-68.

Summary of Expenditure

Before leaving expenditure, 1 think it would be helpful to indicate under broad functional groupings the proportion the main groups bear to the total amount of $6,483m:

page 15

REVENUES AND OTHER RECEIPTS

As I said earlier, we expect receipts from all sources, except borrowings, to be about $5,887m. With expenditure of S6,483m there will be a gap of S596m

Mainly because we expect economic conditions this year to be more buoyant than last year, we estimate that the rate of increase in total taxation revenues will be greater - about 8%, compared wilh last year’s 6%. Details of the Estimates of Receipts are contained in Statement No. 4 attached to the Speech.

The central objective of the Budget is to promote conditions favourable to sound and efficient growth, with consumer spending and private capital outlays rising steadily. To avoid overstraining our resources we have put a close limit on the rise in Budget expenditures We do not think the added restraint of a general increase in taxation necessary to restrain demand. Postal and some other charges will be increased; but they are directly related to the increasing costs and outlays of the Post Office and other Departments and to the necessity to provide increased and expanded services. They are not general taxation measures.

On the other hand we have not felt that general reductions in taxation are needed. We are therefore leaving the general level of taxation unchanged. What we have done is to survey the whole field of taxation in order to ensure that, as far as it was financially practicable, we would provide concessions wherever we felt there was a real need and benefits could and should be given, especially for those with, family responsibilities. I shall now ex-plain these concessions.

page 16

TAXATION PROPOSALS

Income Tax

page 16

DEPENDANTS ALLOWANCES

The allowances for maintenance of dependants have remained unchanged since the financial year 1957-58 and in that time their value to taxpayers with families has diminished a good deal. We have decided to increase the allowances by $26 a year. The increase will apply over the whole range of these allowances. To give some examples, the allowance for a wife will be increased from $286 to $312, for one child under sixteen years from $182 to $208, and for other children under sixteen years from $130 to $156.

The higher allowances will apply in assessments based on income of the current income year 1967-68. For salary and wage earners they will be taken into account in reduced tax instalment deductions expected to come into operation on or about 1st October next.

page 16

LIFE INSURANCE AND SUPERANNUATION PAYMENTS

It is proposed to raise to $ 1 ,200 the maximum allowance for payments by a taxpayer for insurance or superannuation cover for himself and his family. The limit is now S800.

page 16

AGED PERSONS

The age pension means test was liberalised last April. As a corollary to this, it is proposed to increase the amount of income that aged persons may derive free of income tax.

In the past, the age allowance has been related to an aged person’s net income from all sources, which is quite often a different amount from his taxable income and this has often been misunderstood by the taxpayers concerned. We propose to remove this complication for 1967-68 by basing the allowance on taxable income instead of net income.

For 1967-68 no tax will be payable by an aged person whose taxable income does not exceed $1,196. For a married person qualified by age no tax will be payable unless the combined taxable incomes of the husband and wife exceed $2,106. The qualifying age for the allowance is sixty years for women and sixty-five years for men.

Aged persons will benefit in two ways. The amount of the allowance is being raised by $126 and its value is being enhanced because income not taxable will be disregarded and deductions for medical and other deductible expenses wilt be allowed in the calculation of the allowance.

page 16

PRIMARY PRODUCERS

In the last two Budgets temporary measures were adopted for woolgrowers who were forced by drought to advance shearing dates and shear their sheep twice in the one year. The measures permitted the proceeds of the advanced clip to be taxed in the year in which tax would ordinarily be payable on them.

It is proposed to continue these measures for 1967-68 and future years. It is also proposed to extend them to woolgrowers who are forced to advance shearing dates by other natural disasters, such as fire or flood.

Some time ago I announced that the special 20% depreciation allowances on primary production plant would be continued beyond their present termination date of 30th June 1967. It is now proposed to continue the allowances without placing any limit of time as to their operation.

A further proposal is that the cost of erecting sub-divisional fences be allowed as a deduction in the year in which it is incurred.

The final proposal affecting primary producers relates to forced sales of livestock due to fire, drought or flood. Under the present law a primary producer may elect that the net proceeds of these sales be taxed over five years if the proceeds are used principally in replacing the stock that has been sold. An alternative method of accounting for the proceeds is proposed in relation to sales in the 1967-68 income year and subsequent years. Under this proposal, a primary producer may elect that the profits of a forced sale be applied to reduce the value of replacement stock for taxation purposes. The broad effects of an election will be to defer tax on the profits until the stock has been replaced and sales are made in the normal course of business.

Sales Tax

A review of sales tax exemptions and classifications has disclosed a need for some adjustments in the light of technological and other developments. It is proposed, in a Bill to be introduced later this evening, to effect a number of such adjustments. Some will result in the extension of present exemptions, some in their withdrawal and others will vary the classification for rating purposes.

Stamp Duties in the Austraiian Capital Territory

It is also proposed, during 1967-68, to introduce legislation to impose stamp duties in the Australian Capital Territory. The duties will become payable from a date to be announced later.

Effect on Revenue

It is estimated that these proposals will result in a net cost to revenue of $ 17.5m in 1967-68 and $37m in a full year. The cost for 1967-68 is mainly attributable to the proposed increase in allowances for dependants.

page 17

ADDITIONAL. REVENUE PROPOSALS

We are also, as I have indicated, proposing some increases in revenue charges, the most notable being those of the Post Office. These proposals are, as I have said, related to particular purposes and are not general revenue measures.

Post Office Charges and Financial Arrangements

During 1967-68, the expected higher level of business activity and of housing development will place increasingly heavy demands on the Post Office. When speaking of the capital expenditures from this Budget, I said that Post Office capital works this year would require an amount of $240m, of which $181m will be the net requirement provided from this Budget.

The Post Office also faces the problem of rising costs in running its services. It continues to install the latest technical equipment and to improve operating methods and techniques. By these means, productivity has been steadily improved, as is shown by the fact that business done has increased faster than staff numbers. For example, between 1959 and 1966 the postal staff increased by 10% but handled 31% more traffic. By their nature, however, the services provided by the Post Office require a lot of labour and labour costs have gone on rising. This year it is estimated that Post Office wage and salary costs will rise by more than $19m. Of this increase, over $13m is due to the increases awarded in the National Wage Cases and other recent arbitration decisions, including the full year cost of the Interim Margins Award. When higher prices for materials used and other cost increases are also brought to account, the Post Office will be headed for a loss of over $40m in this financial year if charges are not increased as proposed. Financing a loss of this order would pose a serious budgetary problem. Without the estimated increase in revenue of $36m to be obtained from the higher charges, the net call of the Post Office on the Budget this year would, it is estimated, rise from $181m to $2 17m. There has been no general increase in postal tariffs or telephone local call fee and trunk charges, since 1959.

With one or two minor exceptions, the increases in charges now proposed are the same as those put before Parliament towards the end of the last financial year. They are to operate from 1st October next. The adjustments proposed are expected to yield in 1967-68 an additional $36m in Post Office revenue, or $17m less than if they had been introduced from 1st July as originally planned. They will yield $64m in a full year.

Other changes of an accounting and procedural kind are proposed to help the Post Office operate as a business undertaking. The Post Office is required to conduct its operations in accordance with the best business practice. The Government is convinced that this objective would be better served if the financial machinery of the Post Office were changed from the standard Treasury and Departmental system to a commercial form more suited to business requirements. After a thorough study the Government has decided to create a Post Office Trust Account into which Post Office revenues will be paid and from which its expenditures will be met. The Department’s net requirements for capital purposes each year will be provided annually under one-line appropriations from the Budget and paid to the Trust Account.

The Department will thus operate its own trading account, but will remain subject to the control of the PostmasterGeneral and, of course, of Parliament. The new arrangements will, in fact, give Parliament greater opportunities to examine the affairs of the Post Office, its commercial accounts and annual report will, as now, be tabled in Parliament each year. An innovation will be the tabling at Budget time in Parliament of a White Paper giving estimates of commercial results and expectations, the proposed capital programme, together with the way it is to be financed, and other information on Post Office affairs.

Further information concerning the proposed new financial arrangements will be given shortly by the Postmaster-General, and legislation will be introduced during the current financial year with the objective of having the new administrative arrangements operate from 1st July 1968.

While it has important national obligations to meet, the Post Office should earn sufficient revenue to cover its operating costs over a period of years. It is reasonable also that its earnings as a business undertaking should make some contribution towards the expansion of the telecommunications network. Some retention of profit for capital purposes is standard business practice.

Against this background the Government decided to increase Post Office charges.

Air Navigation Charges and Passenger Service Charge

In accordance with the policy of progressively recovering from the air transport industry a greater proportion of the large and increasing cost of providing, maintaining and operating airports and airway facilities, the Government has decided to increase by 10% the rates of air navigation charges payable by all aircraft operators. These increases will take effect from 1st January 1968 and are estimated to bring in $257,000 additional income in 1 967-68 and $893,000 m a full year.

The rates of air navigation charges have been increased by 10% in each of the last five years. Despite this, the gap between the amount that it costs the Commonwealth annually to provide aviation facilities for the industry, and the amount of revenue received annually from the industry for the use of these facilities, has continued to widen. Thus general taxpayers, rather than the aviation industry and the users of air services, are required to meet the cost of these facilities to an increasing extent. The Government has decided that additional measures are necessary if this trend is to be arrested and further progress made towards the objective of requiring commercial aviation to meet an increasing share of the cost of facilities provided for it at public expense and properly attributable to it. lt has therefore been decided, in addition to increasing air navigation charges, to introduce a passenger service charge which will be payable by passengers on both domestic and international air services. Details of the scheme will be announced at an appropriate time by the Minister for Civil Aviation. Legislation to give effect to it will be introduced during the current financial year. The charge will be calculated to yield revenue of between $4m and $5m a year at present traffic levels.

page 19

BORROWINGS

I said earlier that estimated expenditures of §6,483m will exceed estimated receipts of $5,887m by $596m. This amount will have to be covered by net borrowings at home and abroad.

This ‘financing gap’ between expenditures and receipts is not the same as the Loan Council borrowing programmes for State works and housing which this year total $677m - 5% more than last year. In last year’s buoyant monetary conditions, the net cash proceeds of public loans in Australia totalled S646m and those of oversea loans, $52m, giving total proceeds of

S699m. With redemptions a. home and abroad of S393m the net proceeds were S306m.

Despite the relative easiness of last year’s domestic loan market, the Commonwealth had to subscribe from its own budgetary resources for the States just on $90m to complete the Loan Council borrowing programmes. We do not expect the domestic loan market to be more buoyant this year than last. We must also consider the increased semi-governmental borrowing programmes for State semi-governmental authorities which, at $31 lm, exceed last year’s programmes by $43m. It is practically certain that the State works and housing programmes will again make a heavy call on our Budget this year.

Part of the borrowing requirement arising will be met by net drawings on the credit arrangements for defence purchases in the United States - this year estimated at S123m compared with last year’s $91m. That will leave another $473m to be borrowed from other sources. The comparable figure in 1966-67 was rather less at S444m.

We will continue to borrow abroad on acceptable terms. At present, however, the European dollar market is the only source of new money we can feel reasonably sure about and I must emphasise that this is a sensitive and crowded market. We intend to maintain the good position we have established in this market and to make any other borrowings abroad that prove practicable; but it would be a delusion to suppose that great sums can readily be borrowed overseas.

There is another side to this story: the weight of maturities and repayment obligations on our external debt is now heavy and oversea capital markets being what they are, refinancing is difficult.

So far as our borrowing prospects abroad can be assessed, we would expect redemptions again to exceed new loan proceeds although to a smaller extent than last year when the excess was $82m. The amount then remaining to be covered by net borrowings in Australia should not exceed Hie net S527m borrowed locally last year.

We cannot estimate with any accuracy how much of the amount to be raised locally will come from the Australian public. We shall aim at raising as much as we can from that source. We can be sure that a considerable amount will come directly or indirectly from the banking system. In all probability, some borrowing from the Reserve Bank will be necessary. The substantial direct payments abroad financed from the Budget will, however, have offsetting monetary effects.

Here let me refer to the July cash loan against the background of the amount of about $47 3m that I said we would have to borrow locally.

July Cash Loan

Although liquidity is at a seasonal low at this time of the year, our 1966-67 borrowing programme has opened well with a very successful July cash loan. We raised $129m which was nearly 50% more than in last year’s first cash loan. It was also encouraging to see that almost three-quarters of the subscriptions to the loan were in the long or extra long term securities.

page 20

CONCLUSION

We cannot measure precisely either the monetary effects or the economic impact of the Budget. What we can do to assist interpretation is to break down the estimates into economic categories. This is done in Statement No. 6 attached to the Speech which sets out the estimates in the national accounts form.

In this form, the estimates are comparable with the national accounting statistics for the economy as a whole. Expenditure on goods and services, which adds directly to demand, is distinguished from transfers such as pensions, and loans, which add to the capacity of the recipients to spend. Direct payments abroad are separated from those that make demands on domestic resources. Receipts are analysed as between those that are likely to offset the effects of rue Budget spending and those that are not. Finally, the national accounting presentation gives a general indication of the extent to which demand-increasing outlay will exceed or fall short of demand-reducing receipts.

So presented, the estimates indicate that total Budget outlay will this year increase by 10% compared with an increase of nearly 12% last year. This outlay includes direct payments abroad. Mainly because of defence commitments, these external payments are estimated to rise to $652m or $I47m more than last year.

Outlay within Australia is estimated at $5,554m and will exceed estimated receipts by only a small margin. Receipts include an estimated $330m of revenue which is expected to result from the growth of incomes and economic activity. This revenue being itself the consequence of the economic expansion expected this year will not have offsetting effects on those Budget outlays that add to incomes and spending in Australia.

At the beginning of this Speech I said I would say something to you about the prospects - immediate and long-term. Let me say we are confident that the effects of this Budget, combined with the steady rise in private spending for both consumption and investment, will keep the economy growing at a healthy rate and will keep resources tully employed. The Budget will help us achieve our central aim, which is to strengthen the economy and give greater scope for private spending.

As the year goes on, the Government will as always be ready to meet particular needs or eventualities. Monetary policy can and will be used as necessary to help keep the economy on the right course.

In our view businessmen can with confidence make plans with the expectation that the economy will continue to grow steadily. Indeed, if we all plan in this way our expectations are the more likely to be realised.

Even the most cautious amongst us can scarcely fail to be confident of the future of this country. Vast new discoveries of resources are becoming almost a commonplace. In this recent phase, each discovery has inspired further effort and further effort has led to new discoveries.

As far ahead as we can see Australia has all the potentialities for sustained growth and we in Australia are in truth making creditable efforts ourselves. I say this against the background that we plough back a quarter of all we produce into investment for the future, allocate 5% of our national production for defence, and make a large contribution to international assistance. This I repeat is a worthy and creditable effort.

These efforts together with these great natural resources are the source and foundation of growth.

There are, loo, other pre-conditions of growth we cannot afford to neglect and there are many questions we should ask. Our workforce is growing and gaining in competence. Is it growing fast enough for all the tasks now crowding upon us? Management has a critically important task to fulfil. Is management everywhere doing the job national greatness demands? Are we mobilising the capital we are accumulating and allocating it to the right uses? Are we sufficiently conscious of the critical necessity to control costs of production? Are we efficient? To ask these and other questions is not to belittle the achievements of those who are in fact finding the answers to our problems. They simply remind us that if the opportunities that lie before us are great, the efforts they demand are equally great too.

page 22

STATEMENT No. 1- BUDGET RESULTS, 1966-67

page 22

PART A- SUMMARY

In 1966-67, the excess of Commonwealth expenditures over receipts - the amount to be met from borrowings- was $535 million. This was $284 million greater than in 1965-66. Expenditures, receipts and the excess of expenditures over receipts increased in 1966-67 as follows: Total expenditures were $5,922 million in 1966-67. Excluding the effects of changes in accounting procedures, expenditures were about $593 million, or 11 per cent, greater than expenditures in 1965-66. The main variations between expenditures in 1966-67 and expenditures in 1965-66 were: Total receipts amounted to $5,388 million in 1966-67. Excluding the effects of changes in accounting procedures, they were about $309 million, or 6 per cent, greater than in 1 965-66. Taxation collections increased by $267 million, including an increase of $191 million in income tax collections from individuals and an increase of $55 million in excise collections. Collections of income tax from companies declined by $17 million. Receipts of the Business Undertakings increased by $32 million. The increase in other Trust Fund balances was $19 million less than in 1965-66. Part B of this Statement contains more detailed comments on expenditures and receipts in 1966-67. In national accounting terms, total Commonwealth outlays increased by 1 1 . 5 per cent in 1966-67. This comprised increases of 23.8 per cent in Commonwealth outlays overseas and 10.4 per cent in outlays in Australia. The high rate of increase in Commonwealth outlays was a major factor in the increase in expenditure by the public authorities sector as a whole in 1966-67. Expenditure on goods and services by this sector is estimated to have increased by 12.8 per cent. Gross National Expenditure isestimated to have increased by 7 . 5 per cent. Personal consumption expenditure is estimated to have risen by 6.8 per cent while private fixed capital expenditure is estimated to have declined slightly. Thus public authority expenditure, and particularly Commonwealth expenditure, contributed largely to the increase in 1966-67 in demand in the economy. The following table shows how the excess of expenditures over receipts in 1966-67 was financed. Part C of this Statement contains further information regarding the financing of the excess of expenditures over receipts. {: .page-start } page 23 {:#debate-21} ### PART B- EXPENDITURES AND RECEIPTS. 1966-67 {:#subdebate-21-0} #### Expenditures The main changes compared with the Budget estimates for 1966-67 and actual expenditures in 1965-66 are shown in the following table. The main variations from the Budget estimates were as follows: *Defence Services.* Expenditure on Defence Services fell short of the Budget estimate by $50 million. Expenditures on purchase and manufacture of aircraft for the R.A.A.F. and the R.A.N. were, respectively, $21 million and $14 million less than estimated. In addition, expenditures on equipment and stores for the R.A.A.F., on naval construction, and on general stores were, respectively, $12 million, $1 1 million and $9 million less than estimated. The cost of maintaining the Australian Military Forces in Malaysia and Vietnam was $6 million more than estimated and expenditure on arms, armaments and equipment, $4 million more. *Payment to the National Welfare Fund.* The payment to the National Welfare Fund exceeded the Budget estimate by $11 million, mainly because of greater than estimated expenditure on Age and Invalid Pensions, Pharmaceutical Benefits and Widows' Pensions. The number of pensioners and their average pension entitlement, which was affected by increases in pension rates granted in the 1966-67 Budget, were greater than had been allowed for. *Other Special Appropriations.* Expenditure under Other Special Appropriations exceeded the estimate by $22 million. Drawings of Australian currency from the International Monetary Fund by other countries involved expenditure of $27 million. No allowance for these drawings was made in the Budget estimates. On the other hand, the payment into the Wheat Prices Stabilization Fund was $5 million less than estimated mainly because world prices for wheat were higher than had been expected. *Departmental Running Expenses.* Expenditure on Departmental Running Expenses exceeded the Budget estimate by $9 million mainly as a result of arbitration determinations, including the interim margins decision, made after the Budget. (In all, arbitration decisions resulted in an increase of about $26 million in Departmental Running Expenses in 1966-67.) *Business Undertakings.* Expenditure by the Business Undertakings was $10 million greater than the estimate mainly because of higher wages and salaries paid following arbitration determinations. *State works and housing programmes.* As State domestic raisings yielded $14 million more than was allowed for at the time of the Budget, the amount of State works and housing programmes met from Commonwealth borrowings was less than had been estimated by that amount. (The increase in programmes before taking account of State domestic raisings was $40 million, or 7 per cent.) The main variations from the Budget estimates were as follows: *Customs Duty.* Customs collections fell short of the estimate by $11 million mainly because imports subject to duty represented a smaller proportion of total imports than had been estimated. *Excise Duty,* Excise collections were $19 million less than the estimate. Clearances of motor spirit and beer rose less rapidly than estimated and clearances of tobacco products, which had been expected to show a small increase, declined. *Safes Tax.* Collections were $20 million less than estimated mainly because sales of passenger vehicles which are subject to 25 per cent tax declined slightly in 1966-67. The estimate had allowed for an increase in sales of passenger vehicles in 1966-67. *Income Tax-Individuals.* Income tax collections from individuals subject to provisional lax were $28 million greater than the estimate. Incomes of individuals other than primary producers rose more in 1965-66 than estimated. These 1965-66 incomes were assessed to tax in 1966-67. Downward variations of provisional tax by self-assessment were less than had been expected. *Income Tax - Companies.* Collections were $15 million greater than estimated. Company income in 1965-66, which was assessed to tax in 1966-67, declined less than estimat d. *Pay-roll Tax.* Gross collections of pay-roll tax were $192 million, which was $2 million less than was estimated in the Budget, and rebates to exporters exceeded the Budget estimate by $5 million, with the result that there was a shortfall in net pay-roll tax collections of $7 million. {:#subdebate-21-1} #### Net Loan Proceeds Cash proceeds received during 1966-67 from public loans in Australia and overseas and from the International Bank loan for the Snowy Mountains Hydro-electric Authority amounted to $699 million. As redemptions totalled $393 million, net loan proceeds for the year amounted to $306 million. In Australia, loan proceeds exceeded redemptions by $388 million, but overseas loan proceeds fell short of redemptions by $82 million. There were four Commonwealth public cash loans in Australia in 1966-67. Securities totalling $554 million were issued in these loans and the cash proceeds, after allowing for discounts on the issue price, were $553 million. After excluding loan proceeds received before 30 June 1966, but including receipts in 1966-67 from outstanding instalments and advance subscriptions received up to 30 June 1967, proceeds from public rash loan* in 1966-67 were $563 million. Cash proceeds of $84 million from the sale of Special Bonds during the year brought total borrowing proceeds to $647 million, or $646 million after deducting net expenses of $462,000 charged during 1966-67. Three public cash loans raised overseas in 1966-67 - two US dollar loans each of $US25 million and a loan for Sf. 50 million issued in Switzerland- yielded $52 million alter deducting loan expenses. A final drawing of $499,000 was made on the International Bank loan for the Snowy Mountains Hydro-electric Authority. Redemptions in 1966-67 totalled $393 million. Of the $715 million maturing securities in Australia (other than Special Bonds) which were offered for conversion in 1966-67, an amount of $177 million was redeemed. In addition, Special Bond redemptions of all Series, including Series B and C Bonds finally maturing in 1966-67, amounted to $57 million. Market repurchases and other contractual repurchases in Australia in 1966-67 amounted to $25 million. Total redemptions and repurchases in Australia were $258 million. Overseas redemptions in 1966-67 were $135 million. This was substantially higher than in previous years because two New York loans and one London loan matured during (he year. The London loan maturing on 1 September 1966 was paid off at a cost of £56 million and the New York loans maturing on 1 December 1966 and 1 June 1967 were also redeemed at a cost of $31 million. Repayments on International Bank loans were $22 million and other contractual commitments and repurchases in New York, London and Canada totalled $25 million. Credit Arrangements for Defence Purchases in the United States of America Arrangements were made in 1965 and 1966 for the financing on extended payment tortus of purchases of defence equipment in the United States of America. These arrangements were authorised by the *Loan (Defence) Act* 1-966. In 1966-67, finance amounting to $91 million was drawn on under these arrangements {:#subdebate-21-2} #### Residual Financing In 1966-67, expenditure on Defence Services amounting to $198 million was charged to Loan Fund. To finance this expenditure, a similar amount was borrowed from the Reserve Bank, by the issue of $75 million of securities and $123 million of Treasury Bills. As this was in excess of the amount required for residual financing purposes. $59 million of Treasury Bills were redeemed from the Loan Consolidation and Investment Reserve and $1 million was added to the cash balances of the Commonwealth. There was a decline of $26 million in 1966-67 in the value of Treasury Notes on issue. In accordance with arrangements authorised by the Loan Council, there was a corresponding re-issue of Treasury Bills. The main element in the prospective increase in expenditures in 1967-68 is an estimated rise of $168 million, or 18 per cent, in expenditure on Defence Services. This follows an increase of $202 million, or 27 per cent, in 1966-67. Of the total amount of $950 million expended on Defence Services in that year, $91 million was financed under credit arrangements for defence purchases in the United States of America, lt is expected that about $138 million of the estimated amount of $1,118 million to be expended in 1967-68 will bo financed in the same way Further details of the 1967-68 estimates of expenditures are given in Statement No. 3. After allowing for the effects of the proposed increases in Post Office charges and the other revenue proposals referred to in the Budget Speech - these are expected to result in a net addition of $19 million to revenues in 1967-68 - total receipts are estimated to increase in 1967-68 by $499 million, or 9.3 per cent. In 1966-67. total receipts increased by 6 per cent. Within the total, taxation collections are estimated to increase by $365 million, compared with an increase of $267 million in 1966-67. It is expected that income tax collections, as well as collections from other taxes, will benefit from a strong increase in employment, incomes and spending in 1967-68. Income tax collections in 1967-68 will also reflect the improvement in 1966-67 of incomes of primary producers and companies, which had declined in 1965-66 Details of the estimates of receipts are given in Statement No. 4. Total Commonwealth expenditures in 1967-68 are estimated to exceed total receipts by $596 million. This would be $61 million greater than the excess of expenditures over receipts in 1966-67. (In 1966-67, the excess was $284 million greater than in 1965-66.1 As 10 the financing of the prospective excess of expenditures over receipts of $596 million, it is expected that net drawings under the credit arrangements for defence purchases in the United States of America will amount to $123 million, compared with $91 million in 1966-67. That would leave an estimated $473 million to be obtained from the other categories of borrowings. The comparable figure in 1966-67 was $444 million. As regards overseas borrowings, redemptions are again likely to exceed new loan proceeds but the excess is likely to be smaller than in 1966-67, when it was $82 million. Consequently, the net amount to be borrowed locally to finance the prospective excess of expenditures over receipts is not likely to be larger than in 1966-67. In that year.a net $527 million was borrowed locally. The Government will be seeking to obtain the major part of the amount required by way of net subscriptions to Commonwealth loans and Special Bonds, especially from sources outside the banking system. It is expected, however, that some borrowing from the Reserve Bank will be necessary. What the eventual composition of borrowings will be and what they will involve in the way of finance, not only from the Reserve Bank but also from the rest of the banking system, cannot be estimated in advance with any degree of precision. Much will turn on the ability and willingness of the non-bank public to add to its holdings of Commonwealth securities in 1967-68. That, in turn, will depend on, amongst other things, how other factors affecting the monetary situation develop during the year. The implications of the Budget in relation to the monetary situation are discussed further in Statement No. 5 and in Chapter II of the Supplement to the Treasury Information Bulletin entitled 'National Accounting Estimates of Public Authority Receipts and Expenditure' published concurrently with the Budget. The estimates of expenditures and receipts that have been summarised above are estimates compiled on a conventional basis. To indicate more clearly what they imply in terms of the effects they may have on the growth of expenditure, income and demand in the economy, these prospective transactions may be expressed in national accounting terms. They are shown in that form in Statement No. 6. As pointed out there, a substantial part of the estimated increase in Commonwealth outlays in 1967-68 will represent direct expenditure overseas. It is expected that outlays overseas will increase by about 29 per cent, and local outlays by about 8.5 percent in 1967-68. In 1966-67, the comparable increases were 23.8 per cent and 10.4 per cent, respectively. STATEMENT No. 3- ESTIMATES OF EXPENDITURE 1967-68 It is estimated that Commonwealth expenditures will increase by$560,624,000, or9 . 5 per cent, to $6,483,1 10,000 in 1967-68 The estimates for 1967-68 are compared in summary form with actual expenditures in 1965-66 and 1966-67 in the following table Tables setting out the composition of the various items of expenditure and notes on the main variations follow. Defence expenditure abroad from cash and credits, including costs of maintaining Force* us well as purchase of equipment and services, was approximately $240,000,000 in 1966-67: it is estimated to rise to about $350,000,000 .in 1967-68. Substantial payments will be due in 1967-68 in respect of aircraft (Tracker, Skyhawk, FI I l-C, Orion, Mirage, Macchi, H.S. 748, BAC-I1 1), ships (Submarines, Destroyers) and other equipment purchased under the current three year Defence Programme. The foregoing figures do not include defence expenditures in Papua and New Guinea and Defence Aid for Malaysia and Singapore. Expenditure on pay, salaries, administrative expenses and general services for the three Services is expected to rise by $42,000,000 to $377,000,000. In addition to providing for increased Service and civilian strengths, the estimate includes $15,000,000 for pay and salary awards granted in February and July 1967. This item includes payments in the nature of financial assistance to or for the States except payments to the States for the maintenance of tuberculosis hospitals, which are charged to the National Welfare Fund, and contributions towards the cost of development of an integrated township at Exmouth, which are charged to Defence Services. Further details of the various payments are given in the White Paper Commonwealth Payments to or for the States, 1967-68'. General revenue grants are expected to rise m 1967-68 by S58,072,000, or nearly 7 per cent. On the one hand, the financial assistance grants are tentatively estimated to be $73,487,000 greater than the combined total of the 'formula' grants in 1966-67 and the $3,000,000 special assistance paid in that year. The estimate allows for the expected effect of the decision taken al the June 1967 Premiers' Conference to include that $5,000,000 special assistance in the formula 'base' for purposes of determining the financial assistance grants for 1967-68 and subsequent years. *Or.* the other hand, payments amounting to 810,750.000 were made in 1966-67 to assist the budgets of New South Wales and Queensland, which had been adversely affected by drought, but no such payments are to be made in 1967-68; and the special grants recommended by the Commonwealth Grants Commission for payment to Western Australia and Tasmania in 1967-68 are $4,665,000 less than the grants paid to these States in 1966-67. Specific purpose payments of a revenue nature are estimated to be $3,052,000 greater in 1967-68 than in 1966-67. An estimated decline of $8,674,000 in natural disaster payments of a revenue nature is more than offset by estimated increases in a number of other payments. Specific purpose payments of a capital nature are estimated to increase by $69,608,000, or 28 per cent. This includes increases of $29,153,000 in payments to the States for education. $10,000,000 in Commonwealth Aid Roads grants and $12,925,000 in expenditure on railway projects. Provision has been made for an initial payment of $6,300,000 to be made available to Tasmania to assist in financing a further stage of power development, and for the payment of $5,000,000 to South Australia towards the finance for a natural gas pipeline. Provision has also been made Ibr an additional $4,580,000 for capital payments associated with natural disasters, including an additional $7,150,000 to Tasmania in respect of expenditure on restoration measures following the bushfires in that State. (Because of a decline in revenue payments, total payments to Tasmania for this purpose are estimated to increase by $6,000,000*:) The National Welfare Fund Act provides that the payment from the Consolidated Revenue Fund to the National Welfare Fund each year should be equal to the actual expenditure from the Fund in that yea'. It is estimated that expenditure from the National Welfare Fund will increase by $39,908,000 to $1,071,025,000 in 1967-68. The increase includes $18,914,000 for Social Services, $19,776,000 for National Health Services and $1,218,000 for Housing Benefits. *Social Services* The new measures announced in the Budget Speech are estimated to cost 86,600,000 in 1967-68 and $9,400,000 in a full year. The additional full-year cost of the increases in rates of benefits and widened eligibility granted in 1966-67 is estimated to be approximately $21,100,000 in 1967-68. Increased rates of Child Endowment announced in the Budget Speech aTe estimated to cost $6,100,000 in 1967-68 and $8,400,000 in a full year. However, there will be only four twelve-weekly payments to beneficiaries' bank accounts compared with five in 1966-67. The net result is that expenditure on Child Endowment in 1967-68 is estimated to be $13,182,000 less than in 1966-67. *National Health Services* The growth in the number of persons receiving National Health benefits, higher costs and increased utilisation of services are responsible for about $12,500,000 of the estimated increase in expenditure of $19,776,000 in 1967-68. Most of the balance of the additional requirement is attributable to higher rates of Commonwealth payments granted in 1966-67. The proposals announced in the Budget Speech will require an estimated $190,000 in 1967-68. *Housing Benefits* Most of the increase of $1,315,000 in expenditure on the Homes Savings Grants Scheme is attributable lo the cost of implementing the Government's election undertakings to treat widows with dependent children as eligible under the scheme, to increase the limitation on the value of a house from $14,000 to $15,000 and to provide discretionary power to the Department of Housing to meet cases of hardship under the Scheme Interest payments amounting to Sl,332,000 in 1966-67 and an estimated $7,250,000 in 1967-68 relating to the drawings under the United States of America credit arrangements for the purchase of defence equipment are included under Item No. 1 - Defence Services. The *National Debt Sinking Fund Aci* 1966 revised the percentage contribution payable from the Consolidated Revenue Fund to the Sinking Fund and the basis for determining the amount of debt subject to percentage contribution. This had the effect of reducing the contribution payable in 1966-67 by about $50,000,000. It is estimated that the 1967-68 contribution will be $4,31 1,000 higher than in 1966-67 because of contributions applying to new debt created in 1966-67. Also, under the Act, the payment to the Sinking Fund from Consolidated Revenue is reduced by interest earned from investments of the Sinking Fund. Interest income is expected to be $2,151,000 lower in 1967-68 and the estimated payment from Consolidated Revenue will be correspondingly higher. Expenditure on Other Special Appropriations is estimated to increase by $14,450,000 to S229.320.000 n 1967-68. The main estimated increases in expenditure are: *Sugar Marketing Assistance.* An amount of $19,775,000 is to be made available to Queensland to enable the State to repay to the Reserve Bank, with interest, the amount which was advanced by the Bank to the Queensland Sugar Board to assist the marketing of 1966 season No. 1 Pool sugar. Provision has also been made for the payment of a further 510,000,000 to Queensland to enable assistance to be made available to the sugar industry in marketing the 1967 crop. The amounts are repayable in future years. *Superannuation.* Expenditure on superannuation is estimated to increase by $6,530,000 in 1967-68. Of this increase, $4,180/000 relates to the cost of proposed adjustments to existing pensions. *FhosphateFertilizers Bounty.* Bounty payments on phosphate fertilizers are expected to increase by $3,651 , 000 in1967-68 as a result of increased sales of superphosphate. *Wool Promotion and Research.* The estimated increase of $3,261,000 in 1967-68 is attributable mainly to greater Commonwealth contributions to wool promotion and research in accordance with the *Wool Industry Act* 1967. *Nitrogenous Fertilizers Subsidy.* It is expected that sales of nitrogenous fertilizers will increase in 1967-68 and accordingly expenditure on the subsidy is estimated to increase by $3,135,000. Items showing reductions in 1967-68 are: *International Monetary Agreements - International Monetary Fund.* $27,187,000 was paid from the Consolidated Revenue Fund to finance drawings in Australian currency by other countries from the International Monetary Fund in 1966-67. No allowance has been made for similar payments in 1967-68. *Currency - Transition to Decimal Currency.* Expenditure on the introduction of decimal currency is expected to decline by $8,026,000 in 1967-68, reflecting the fact that the transition to decimal currency is nearing completion. *Wheat Industry Stabilization.* The estimated average export price for wheat of the 1966-67 crop, the greater part of which is expected to be sold in the calendar year 1967, is expected to be higher than the average export price received for the previous crop and, accordingly, the Commonwealth payment into the Wheat Prices Stabilization Fund is expected to decrease by $3,154,000 this year. The estimated increase in Departmental Running Expenses is made up as follows: Of the estimated increase of $21,199,000 in expenditure on wages and salaries in 1967-68, approximately $3,500,000 is attributable to increased rates of wages and salaries following the decision in the National Wage Cases. The additional full-year costs of arbitration determinations made during 1966-67 also contribute to this increase. The estimated decline in expenditure of the Bureau of Census and Statistics reflects the fact that the figure for 1966-67 included expenditure of a little over $3,000,000 on the Census. The main factors giving rise to the estimated increase of $28,692,000 in expenditure on Other Services are: *International Development and Relief,* lt is estimated that expenditure on the International Development and Relief items shown above will increase by $9,026,000 to $35,078,000 in 1967-68. The largest single element in this prospective increase is $5,200,000 for emergency aid to Indonesia, lt should be noted that other expenditures on international aid are provided for elsewhere in the estimates. They are brought together in Statement No. 8. *Commonwealth Scholarship Schemes.* The estimated increase of $4,691,000 for expenditure under the Commonwealth Scholarship Schemes is attributable, in part, to the first full-year costs of increases in the number of post-graduate and university scholarships introduced from 1 January 1967. The increase comprises: *Ship Construction.* Expenditure on ship construction is estimated to increase by $5,152,000 to 842,000,000 in 1967-68. It should be noted that receipts from prospective owners for vessels constructed or under construction are estimated to increase by $7,241,000 to $32,825,000 in 1967-68 - these receipts are included in Other Revenue. *Industrial Research and Development Grams.* A scheme of grants, to cost up to $6,000,000 a year, to encourage industry to undertake more research and development was foreshadowed in the 1966-67 Budget Speech. The *Industrial Research and Development Grants Act* 1967 established a Board to authorise the payment of grants to eligible companies, lt is not expected that, in the first year of operation, grants under the scheme will exceed S3.000.000 *Australian National University.* The increase of $2,502,000 for the Australian National University reflects the increased level of recurrent grants recommended by the Australian Universities Commission for the 1967-69 triennium, together with an allowance for the effect of the recent announcement by the Commonwealth of its willingness to support, and contribute to, increased academic salaries in universities from 1 July 1967. Of the estimated increase of $10,685,000 in expenditure on repatriation services in 1967-68, $6,165,000 relates to war and service pensions and allowances. The increased rates of benefit and widened eligibility granted in 1966- 67 account for approximately $4,200,000 of this amount. The measures announced in the Budget Speech will require an estimated 8127,000 in 1967-68 and $169,000 in a full year. The estimated increase in expenditure of $37,334,000 includes $21,865,000 for increased expenditure on wages and salaries, comprising $799,000 for the Commonwealth Railways, $19,420,000 for the Post Office and $1,646,000 for broadcasting and television services. Of the total increase in expenditure on wages and salaries for these undertakings, §5,314,000 is a direct result of the increase awarded in the National Wage Cases and, in the case of the Post Office, an additional 33.600.000 arises from other recent arbitration decisions. The largest single element in expenditure on the Territories is the grant to the Administration of Papua and New Guinea. In 1967-68 the grant is estimated to increase by $7,816,000 to §77.600,000, an increase of more than 1 1 per cent. Expenditure on the Australian Capital Territory is estimated to rise by S2.743.000, or 12 5 per cent, with the continued development of Canberra as a population ecn re and as the Natiwal Cap it 'I The increase of 84,559,000. or nearly 15.5 per cent, in the expenditure on the Northern Territory also reflects the cost of providing services to a growing community. Expenditure on Capital Works and Services is estimated to increase by $44,064,000, or 9.3 per cent, to $515,759,000 in 1967-68. The largest single element in the estimated increase is the provision for increased expenditure of $34,923,000 on Post Office capital works, of which S23,846,000 is for telecommunications equipment lo meet increased requirements for subscribers' telephone services, trunk facilities and associated equipment. Expenditure on buildings, sites and miscellaneous plant and equipment, including motor vehicles, is expected to increase by $7,077,000 while the working advance to the Post Office Stores and Services Trust Account has been increased by $4,000,000. Expenditure on civil aviation is estimated to increase by $6,696,000 comprising $5,795,000 under the civil works programme for airport development, mainly at Sydney and Tullamarine, and a net increase of $901,000 in other capital expenditure, mainly for navigational aids and equipment. Other major increases in expenditure include: $4,047,000 for expenditure in the Australian Capital Territory, which includes an additional $3,850,000 for the National Capital Development Commission's works programme. $3,865,000 for the Department of the Interior, of which almost half is attributable to the installation of the first stage of a computer system for the Bureau of Meteorology. $3,145,000 for expenditure by the Commonwealth Railways mainly to meet the cost of passenger rolling stock for the proposed Sydney-Perth standard gauge service. $2,963,000 in expenditure on broadcasting and television services mainly to meet the cost of buildings and equipment for the Radio Australia booster station at Darwin. $2,774,000 for the Bureau of Census and Statistics associated with the provision of additional computer equipment in Canberra and the States. The provision of $45,500,000 for advances under the War Service Homes Act is based upon an expected decrease in the rate of applications from eligible persons during 1967-68. Expenditure on the Snowy Mountains Hydro-electric Scheme is estimated to be $6,964,000 less than in 1966-67, mainly as a result of reduced expenditure on contracts, reflecting some tapering off in the Authority's capital works activities. {:#subdebate-21-3} #### Item No. 12 - State Works and Housing Programmes At its meeting in June 1967, the Loan Council approved a governmental borrowing programme for 1967-68 of which $677,000,000 was for State works and housing. At this meeting the Loan Council also decided that the borrowing programme for semi-government authorities for which approval should be sought under the Gentlemen's Agreement should include those authorities seeking to borrow amounts greater than $300,000 in a financial year. Previously, approval was required for authorities seeking to borrow more than $200,000. The Loan Council approved borrowing programmes of $311,000,000 for State semi-government and local authorities with programmes in excess of $300,000 in 1967-68, and $3,060,000 for Commonwealth authorities. The Loan Council also decided that no overall limit should be placed on borrowings by authorities for which the State Governments approve programmes of not more than $300,000 in 1967-68. State domestic raisings are estimated to produce $20,000,000 in 1967-68 which would leave $657,000,000 to be provided to complete this year's borrowing programme for works and housing purposes. This compares with $625,342,000 in 1966-67. Details of the manner in which the State works and housing programmes have been financed since 1956-57 are given in the White Paper 'Commonwealth Payments to or for the States, 1967-68'. STATEMENT No. 4- ESTIMATES OF RECEIPTS, 1967-tfS After taking into account the revenue proposals referred to in the Budget Speech, total receipts in 1967-68 are estimated at 55,887,107,000. This would be S499,269,000, or 9.3 per cent, more than in 1966-67. The following table compares the estimated receipts for 1967-68 with actual receipts in the two preceding financial years. {:#subdebate-21-4} #### Taxation Revenue Total taxation revenue is estimated to increase by $364,932,000, or 8 . 3 per cent, in 1 967-68 to $4,778,400,000. Notes on the main changes in estimated taxation collections in 1967-68 as compared with actual collections in 1966-67 follow. *Customs Duty.* In 1966-67, recorded imports amounted to 83,049,000,000 and customs collections to 5277,032,000. It is estimated that customs collections in 1967-68 will amount to $303,000,000. This assumes a stronger increase in imports in 1967-68 with imports of defence and other governmental equipment and civil aircraft which will attract no duty increasing faster than total imports. in 1966-67, excise collections increased by $54,673,000 but this increase reflected the full-year effects of the increases in rates of duty introduced in the 1965-66 Budget. *Sales Tax.* The estimate of sales tax collections for 1967-68 assumes a more rapid rate of increase in total sales of goods subject to sales tax than occurred in 1966-67. In particular, the estimate allows for a moderate rate of increase in sales of passenger motor vehicles and commercial motor vehicles which showed little change in 1966-67. On the basis of existing legislation, sales tax collections are estimated to increase by $33,730,000, or about 9 per cent, to $413,000,000 in 1967-68. After allowing for the effects of the proposed changes referred to in the Budget Speech, sales tax collections are estimated to be $414,260,000 in 1967-68 or $34,990,000 more than in 1966-67. {:#subdebate-21-5} #### Income Tax - Individuals: {: type="a" start="a"} 0. *Pay-as-you-earn Instalment Deductions.* In 1966-67, average employment, in terms of male units', rose by about 2.5 per cent and average earnings by over 6 per cent. On the assumption that the rate of increase in average employment in 1967-68 will be about 2.75 per cent, and the rate of increase in average earnings about 5.5 per cent, it is estimated that, on the basis of existing legislation, gross collections of pay-as-you-earn instalment deductions will increase by $216,672,000 in 1967-68 to $1,829,000,000. As refunds of excess deductions are estimated to increase by 541,209,000 to $330,000,000, net pay-as-you-earn collections are estimated, on the basis of existing legislation, to increase by $175,463,000 to $1,499,000,000 in 1967-68. 1. *Other.* Collections on assessments of individuals are estimated to increase by 852,957,000, or nearly 9 per cent, to $652,000,000 in 1967-68, on the basis of existing legislation. This reflects estimated increases of about 12 per cent and 7 per cent, respectively, in 1966-67 incomes (for taxation purposes) of primary producers and other individuals subject to provisional tax. These are incomes which are subject to tax in 1967-68. Collections from primary producers will be affected by the carryforward of losses incurred during the drought. The effect of the measures referred to in the Budget Speech is to reduce the estimated increase in total collections from individuals by $18,860,000. Of this, the increase in allowable deductions for dependants accounts for $14,000,000, the change in the age allowance for $4,200/100. the changes affecting primary producers for $510,000, and the increase in the maximum deduction for insurance and superannuation for $150,000. *Income Tax - Companies.* Taxable incomes of companies in 1966-67, which are subject to tax in 1967-68, are estimated to have increased by 5 per cent following a decline of about 1 per cent in the preceding financial year. On this basis, it is estimated that income tax collections from companies will increase by $40,456,000, or about 5 per cent, to $825,000,000 in 1967-68. *Pay-roll Tax.* On the basis of the assumptions adopted as to movements in average employment and average earnings (referred to above in relation to pay-as-you-earn instalment deductions), it is estimated that gross pay-roll tax collections will increase by $17,042,000, or almost 9 per cent, to $209,000,000 in 1967-68. However, rebates of pay-roll tax under the export incentive scheme are estimated to increase by $5,274,000 to $25,000,000, so that net pay-roll tax collections are estimated to increase by only $1 1 .768,000, or less than 7 percent, to $184,000,000. *Estate Duty.* The estimated increase of $5,966,000 to S47,5O0,0O0 reflects the growth in the value of estate duty returns available for assessment in 1967-68. {:#subdebate-21-6} #### Business Undertakings On the basis of existing legislation, it is estimated that Post Office receipts would increase by $36,3 10,000 to $467,000,000 in 1967-68. This increase or more than 8 per cent would reflect the normal growth in postal, telephone and telegraph business. The proposed tariff changes referred to in the Budget Speech are estimated to yield an additional $36,000,000 in 1967-68 and $64,000,000 in a full year. After allowing for these increases in tariffs, it is estimated that Post Office receipts will increase by $72,310,000 to $503,000,000 in the current financial year. Increases in revenue from Commonwealth' Railways and broadcasting and television services allow for normal growth in business in 1967-68. The estimated increase of 816,227,000 in Other Revenue in 1967-68 allows for proposed increases in air navigation charges and the effect of the proposal to introduce stamp duties in the Australian Capital Territory. The statutory percentage contributions payable by the Commonwealth out of the Consolidated Revenue Fund in respect of Commonwealth debt are reduced by interest on investments of the National Debt Sinking Fund. The *National Debt Sinking Fund Act* 1966, which repealed the previous legislation, effected a significant reduction in the percentage contribution from the Consolidated Revenue Fund. As a result, the contribution from the Consolidated Revenue Fund in 1966-67 was reduced by about §50,000,000. The amending legislation also requires repayments of principal on War Service Homes and reparation moneys to be paid to the Consolidated Revenue Fund. In 1965-66, these items had comprised $31,045,000 and $22 1.000. respectively, or the amount of $32,906,000 shown as 'Other repayments' Net Increase in Other TRUST Fund Balances Other Trust Fund balances increased by $28,390,000 in 1966-67 and are estimated to increase by $60)000,000 in 1967-68. The main reason for the larger increase in 1967-68 is an estimated increase of $16,00^,000 in the cash balance of the General Trust Fund resulting from a reduction in investments in metal for coinage. In 1966-67. the cash balance of the General Trust Fund decreased by $10,000,000 as a result of an increase in investments in metal for coinage. {: .page-start } page 49 {:#debate-22} ### STATEMENT No. 5- FINANCING OF THE EXCESS OF EXPENDITURES OVER RECEIPTS The estimates of expenditures and receipts set out in the two preceding Statements point to an excess of expenditures over receipts of $596 million in 1967-68. This is the estimated amount that will have to be financed by net borrowings in one form or another. Last year, the net amount which had to be borrowed was $535 million. In the following table, the estimated amount to be borrowed this year is compared with the actual borrowings last year: *Overseas Borrowings.* In 1966-67, drawings under the credit arrangements for defence purchases in the United States of America amounted to $91 million. On the other hand,the proceeds of other loan raisings overseas fell short of redemptions overseasby$82 million, thus leaving a net amount of only $9 million in respect of overseas borrowings. (These figures do not include borrowings overseas for aircraft financing purposes on behalf ofQantas Airways Limited and the Australian National Airlines Commission.) In 1967-68, drawings under the credit arrangements for defence purchases are estimated at $123 million, comprising drawings of $138 million less repayments of$1 4 million. This would be $33 million more than the amount drawn last year. It is not possible to make a reliable estimate of other loan raisings overseas in 1967-68 as much will depend on how circumstances affecting international capital markets develop during the year. It is expected, however, that overseas redemptions will be less than in 1966-67, when there were two New York maturities. *Borrowings in Australia.* It is not possible to make a firm estimate of theamount which will have to be raised locally. Nevertheless, it seems reasonable to assume that, despite the prospective increase of $61 million in 1967-68 in the excessof expenditures over receipts, the net amount to be borrowed in Australia will not be larger than in1966- 67 when a net $527 million was borrowed locally. The Government will be seeking to obtain the major part of this by way of net subscriptions to Commonwealth loans and Special Bonds, especially from sources outside the banking system. In 1966-67, a net amount of $388 million was obtained in Australia from public loan operations and the issueof Special Bonds. Gross cash proceeds of public loans amounted to$563 million and the gross proceeds from the issue of Special Bonds were $84 million; on the other hand, redemptions of market securities totalled $177 million and of Special Bonds $57 million, and other repurchases and redemptions totalled $25 million. Commonwealth inscribed stock and bonds other than Special Bonds outstanding at 30 June 1967 and due to mature in 1967-68 totalled $819 million; the comparable amount at 30 June 1966 was $792 million. Redemptions could be at least as large as last year and net loan raisings in Australia could show some decline from the abnormally high level reached in 1966-67.It is expected, therefore, that some borrowing from the Reserve Bank will be necessary The prospect that borrowings from the Reserve Bank will be necessary to complete the financing of the excess of expenditures over receipts is, of course, relevant to the question of what the effects of the Budget might be on the money supply and on the liquidity of the public arid the banking system. Borrowings from the Reserve Bank cannot be considered in isolation as many other factors also influence the relationship between the Budget and the monetary situation. The main effect of the Budget on the monetary situation derives' from the size and rate of change of the excess of expenditures over receipts. Any increase in that excess, except to the extent that it is due to expenditure overseas, will make possible an equivalent increase in the Budget's contribution to the increase in the money supply. This is simply a reflection of the fact that, broadly speaking, Budget expenditures domestically add to the money supply and Budget receipts subtract from it. Given the excess of expenditures over receipts, the way in which it is financed will also affect the monetary situation. At this point, however, analysis and prediction are complicated by the fact that the monetary situation - which is the product of a complex of interacting factors including not only the Budget but the balance of payments (in which Government transactions figure substantially), Rural Credits Advances and bank lending - in turn itself influences the way in which the excess is financed. There are complex interactions between the two and no straightforward cause and effect relationship can be isolated. There is one useful concept that can advance analysis of the monetary effects of the Budget a little further than is possible by focusing attention on borrowings from the Reserve Bank. Spending financed by borrowings from the Reserve Bank does, of course, tend to add commensurately to monetary expansion. However, the same is essentially true of spending financed, directly or indirectly, by the rest of the banking system whereas, to the extent that the non-bank public adds to its stock of Government securities without drawing on bank credit, there is an offset to the expansionary effect on the money supply of the spending of the funds concerned. It is, therefore, important, for purposes of assessing the monetary effects of a Budget, to make a distinction between Government borrowings from the banking system as a whole and borrowings from the non-bank public. That this point might take on some significance in practice can be illustrated by experience in 1 966-67. In that year, the amount borrowed locally was $527 million. As shown earlier, $165 million was borrowed from the Reserve Bank but, as a result of other transactions in Commonwealth securities, the net increase in Reserve Bank- holdings of such securities was $124 million. However, during 1966-67 the banking system as a whole increased its holdings of Commonwealth securities by $277 million (face value); an amount equivalent to a little more than one half of the amount financed locally. The remainder was represented by an increase in the security holdings of the non-bank public. It is apparent from the size of the increase in holdings of securities by the banking system that a significantly greater volume of bank credit: than is evident in the net figure of borrowings from the Reserve Bank was involved in the financing of the excess of expenditures over receipts in 1966-67. lt should be added that the influence of the banking system on net security transactions is not fully reflected in the figures mentioned above. For example, an increase in bank *lending* to t he short term money market may have the ultimate effect of increasing the money market's holdings of securities - and also of reducing those of the banking system. In the event, the total money supply in 1966-67 increased by the large amount of $886 million. It is not possible to disentangle the effects of the Budget on this monetary expansion from the effects of all other relevant factors. However, the substantial increase in the banking system's holdings of securities does provide a firmer starting point in analysing relationships between security transactions, including those arising out of the need to finance the excess of expenditures over receipts, than does the figure of borrowings from the Reserve Bank. In 1967-68, the excess of expenditures over receipts likely to be financed locally is not expected to be any larger than in 1966-67. It is impossible to predict the direct and indirect role the banking system will play in financing it as that will depend on many other factors affecting the monetary situation. Nor is it possible to make any firm predictions as to the extent to which the total money supply might increase in 1967-68. Nevertheless, a further sizable increase in the money supply does appear to be in prospect - though not perhaps as large as in the financial year just closed. The relationship of the Budget to the monetary situation is discussed in more detail in Chapter II of the Supplement to the Treasury Information Bulletin entitled 'National Accounting Estimates of Public Authority Receipts and Expenditure' published concurrently with the Budget. *Loan Bill.* In view of the prospective need to borrow from the Reserve Bank in 1967-68, authority will be sought in a Loan Bill to borrow up to a limit of S300 million for defence purposes. It is not expected that it will be necessary to use this proposed authority to anything like the full extent, but, as usual, it will provide against possible contingencies. The Loan Bill will also seek authority for the proceeds of any borrowings made under it to be expended on Defence Services. The effect of charging expenditure on Defence Services to Loan Fund would be to increase the estimated payment from the Consolidated Revenue Fund to the Loan Consolidation and Investment Reserve and provision for this has accordingly been included in the Appropriation Bill (No. 1) 1967-68. {: .page-start } page 52 {:#debate-23} ### STATEMENT No. 6- BUDGET ESTIMATES IN NATIONAL ACCOUNTS FORM The presentation of the receipts and outlay of the Commonwealth in national accounting form facilitates the analysis of the inter-relationships between the Budget and the economy as a whole and makes it possible to appraise more readily the economic significance of the Budget. Tn this form, transfers between different parts of the Commonwealth's accounts are eliminated, so that the figures shown relate to the transactions which occur between the Commonwealth Government and the rest of the economy or overseas. These transactions are classified into economically significant categories, corresponding with those for which similar information is provided, in respect of past years, for the entire economy in the White Paper on National Income and Expenditure. The following summary table compares the actual outcome in 1966-67 with the prospective outcome for 1967-68 implied by the present Budget estimates. A more detailed table appears on page 38.(~0 As a general proposition it may be said that outlays from the Budget tend to add, directly or indirectly, to demands on production or imports and that receipts tend to subtract from the level of demand which would be forthcoming in their absence. Total outlay is estimated to increase by S582 million or 10.3 per cent in 1967-68, compared with an increase of S579 million or 11.5 per cent in 1966-67. Total receipts are estimated to increase by §435 million or 8.5 per cent in 1967-68, compared with an increase of S293 million or 6. 1 per cent in 1966-67. <') A Supplement to the Treasury Information Bulletin entitled 'National Accounting Estimates of Public Authority Receipts and Expenditure'. being published concurrently with the Budget, provides corresponding data tor Commonwealth authorities outside the Budget and additional information on various aspects of the national accounting presentation employed in this Statement. In order to assess the implications of the Budget for the trend in incomes and expenditures in the economy, it is necessary to bring together estimates of movements in outlay and in receipts. A first step towards an assessment could be made (though in a simple way which does not take account of many important factors) by comparing movements in the excess of *total* outlay over *total* receipts. This excess is estimated to increase in 1967-68 - that is, total outlays are estimated to rise by more than total receipts. The size of the estimated increase is, however, much smaller than the actual increase in 1966-67. As the last une in the table above shows, the gap between outlays and receipts increased by $286 million in that year, whereas in 1967-68 the estimated gap is $147 million greater than in 1966-67. So far as this simple test goes, it indicates that the initial impact of the Budget should be expansionary, but not to the same degree as that of the 1966-67 Budget. This comparison is, however, a very crude one. The effects of individual outlays and receipts differ so significantly, one from another, that it is, in practice, not possible to measure the totality of the complex effects of a Budget upon an economy by any single figure, lt *is* possible, however, to distinguish particular categories of receipts and outlays according to their implications for the economy including the balance of payments. Some of the mora important of these distinctions are discussed below, under the following headings: Payments in Australia and overseas. Composition of domestic outlays. Elements of the change in receipts. On the outlay side of the Budget there is an important distinction between payments made within Australia and payments made overseas. Payments abroad by the Commonwealth are relevant in assessing balance of payments prospects in the year ahead, and in any longer-term assessment they also have important implications for the domestic economy. They do not, however, add to domestic incomes and the demand for locally-produced goods and services. On the other hand, payments by the Commonwealth within Australia add, for the most part, to domestic expenditure and incomes. To some extent, payments within Australia may still add indirectly to overseas rather than Australian incomes, because orders met by local suppliers may include an import content. It is not possible to make reliable estimates of the import content of Commonwealth expenditure within Australia. However, the proportion would not be large, and it may be assumed that it is unlikely to change markedly between one year and -the next. By contrast, direct payments overseas by the Commonwealth may fluctuate widely between one year and another; since these fluctuations are not relevant to an assessment of the impact oi' the Budget on the domestic economy in the year immediately ahead it is necessary, for the purpose of such an assessment, to exclude payments made (or to be made) directly overseas.( This is done in the following table: It will be noted that, as was the case last year, overseas outlays are expected to rise much more rapidly than domestic outlays in 1967-68. Thus, whereas total outlay in 1967-68 is estimated to rise by $582 million or 10.3 per cent, the estimated rise of $435 million in domestic outlays represents an increase of 8.5 per cent. This is a smaller increase than in 1966-67 when domestic outlays rose by $482 million or 10.4 per cent. On the outlay side of the Budget there is a further basic distinction between expenditure on goods and services, which adds directly to demand for domestic production or imports, and transfers and loans from the Budget, which increase the capacity of other sectors to purchase goods and services. In either case, 'multiplier' effects induce further increases in demand, additional to the initial effects here described. Payments from the Budget to purchase goods and services add immediately to demand (that is, to Gross National Expenditure) to the full extent of the payments involved. Except insofar as such payments add (directly or indirectly) to demand for imports, they also represent an addition to demand for domestic production - that is, Gross National Product. By contrast, transfer payments and loans from the Budget do not add directly to demand for output or imports. The impact of such payments on total demand depends on their effects on the spending of the recipients. Almost one-half of the transfer payments and net loans from the Commonwealth Budget are to the States. Together with the funds available to the States from their own resources, these outlays are used by the State governments and their authorities to finance their expenditures, which are predominantly expenditures on goods and services. The other main types of transfer payments from the Budget are cash benefits to persons and payments of interest on Government debt. Increases in such payments do not *directly* affect total expenditure in the economy. Their effects depend on the proportion spent (rather than saved) by the recipients. This would vary, and would almost certainly be greater in respect of cash benefits than interest payments. Domestic expenditure on goods and services is again estimated to rise by a larger percentage than transfer payments, but the increase is considerably smaller than in 1966-67. On the other hand, the increase in payments and net loans to the States is estimated to be significantly larger in 1967-68 than in 1966-67. The estimated increase in the other main component of transfer payments - cash benefits to persons - is S49 million in 1967-68, compared with an actual increase of §91 million in 1966-67. A large part of the difference between these increases arises because of variations in the incidence of payments as between financial years, which have no significance for economic analysis. The net effect of this factor was to add $5 million to the increase in outlay on cash benefits which would otherwise have occurred in 1966-67 and to reduce the estimated increase by S20 million in 1967-68. These changes thus account for S25 million of the difference between the increases in cash benefits to persons, and in domestic outlay, shown in the table. The effects on the economy of changes in the Commonwealth's receipts are more con.ectural than the effects of changes in outlays. The main reason for this is that movements in receipts, while they also influence trends in economic activity, are at the same time very much influenced by those trends. Those trends are in turn determined by the Budget and by all of the other forces, domestic or external, operating in the economy. A rather arbitrary but useful distinction may be made by dividing the change in total receipts into three categories, according to the influences determining the respective movements. In the first place there is the movement in total receipts between one year and another which results from (or is estimated to result from) changes or proposed changes in rates of taxation and charges. This movement may be described as the 'discretionary' change in receipts. In assessing the impact of the Budget, such increases must, generally speaking, be regarded as an offset to the effects on total demand of increases in outlays from the Budget. Whatever the *purpose* of particular changes in rates of taxation and charges, one of the *effects* of such changes is on the expenditure of the private sector.(l) Secondly, there is the movement in receipts, at unchanged rates of taxation and charges, which is essentially a product of concurrent trends in expenditure and income in the economy as a whole. This movement, which will be described as the 'induced' change in receipts, may be determined approximately by taking the total of the changes, other than 'discretionary' changes, in indirect taxes, public enterprises income and gross collections of P.A.Y.E. instalment deductions. 'Induced' increases in receipts differ from 'discretionary' increases in that they are a *consequence* of, rather than an *offset* to, the trend in activity resulting from Commonwealth expenditures and other influences. Finally, there is the net change in those items of receipts which do not depend to any significant degree on economic trends in the year concerned. The principal items are income taxes on companies and on persons subject to provisional tax, which are related to incomes in the year prior to the collection of the tax.(*) This category also includes interest, some minor items of receipts and (negatively) refunds of excess P.A.Y.E. deductions. The change in these may be termed the 'independent' change in receipts. This term connotes no-more than that they are largely independent of economic trends in the year of collection. The effects of such increases on spending are particularly difficult to determine. They are, for the most part, similar to 'discretionary' changes in that they are not affected to any significant degree by economic trends occurring in the year of collection. In other respects, however, they are very different. The effects of such increases largely depend on business decisions rather than personal decisions to spend; they involve, to an important degree, (') The effect on private spending is unlikely to be as great as the change in receipts, because there would also be effects on savings. In both years, the 'induced' increase in receipts, which is essentially a product of the concurrent growth in economic activity, accounts for the greater part of the total increase. As already noted, the increase in receipts arising from this growth cannot be regarded as offsetting the effects on demand of increases in budgetary outlays. The net increase in receipts resulting from changes or proposed changes in rates and charges is relatively small in both years. (However, the movement between 1965-66 and 1966- 67 largely reflects the residual 'full year' effects of changes in the 1965-66 Budget, while the movement between 1966-67 and 1967-68 represents the estimated net increase in receipts in 1967-68 which is attributable to changes in taxes and charges proposed in the 1967- 68 Budget.) The estimated increase in collections of taxes related primarily to the previous year's income (referred to above as 'independent' increases) is much larger in 1967-68 than the actual increase in 1966-67. At least some part of this increase could be regarded as offsetting the effects on demand of the estimated increase in domestic outlays in 1967-68. The implications of the analysis in the preceding sections may be summarised in the following propositions: It must be emphasised that the question of whether or not the impact of a particular Budget on the domestic economy is greater than its precedessor is itself, if taken in isolation, of limited significance. 77te *economic effects of a Budget can only be adequately assessed in the context of the totality of trends in the economy as a whole. Those trends are affected not only by the outlays and receipts of the Budget, but by all of the other influences affecting the growth in demand and prospective increase in supplies both from domestic production and* {: .page-start } page 59 {:#debate-24} ### RECONCILIATIONS The following table shows how the Net increase in indebtedness shown in the table on page 38 may be reconciled with the Excess of expenditures over receipts (as shown in summaries of Budget results and estimates in Statements Nos. 1 and 2), the Net movement in securities on issue (as shown in Government Securities on Issue at 30 June 1967) and the Current account surplus of Commonwealth authorities (as shown, for years up to 1966-67, in National Income and Expenditure 1966-67, Table 10). A further table, on pages 40 and 41, shows, in summary form, how the national accounting table is derived from the Budget accounts. {: .page-start } page 62 {:#debate-25} ### STATEMENT No. 7- SUMMARY OF -BUDGET RESULTS, 1953-54 TO 1966-67, AND 1967-68 (ESTIMATED) The first of the tables on the following pages is designed to show details of Commonwealth expenditures and receipts for the years 1953-54 to 1966-67, inclusive, in the same form as is used in presenting the estimates for 1967-68. The second table gives details of the financing of the excess of expenditures over receipts for the period 1953-54 to 1966-67. The third table presents the Budget results for the years 1958-59 to 1966-67 and the Budget estimates for 1967-68 in national accounts form. {: .page-start } page 62 {:#debate-26} ### TABLE 1 Numerous changes have been made in the financial accounting arrangements of the Commonwealth Government since 1953-54. The figures for that and subsequent years have been adjusted so as to produce the greatest practicable degree of consistency but it has not been possible to remove all inconsistencies. The more important ones that remain arise from accounting changes made in 1963-64 and 1966-67. Since 1963-64, credits amounting to $44,034,000, which in earlier years had been offset against expenditure, have been paid to revenue, tn 1966-67, following the revision of the National Debt Sinking Fund Act, a reduction of about $82,000,000 in the income of the Fund was offset by an addition of about $32,000,000 to Other Revenue. Other inconsistencies remaining do not involve substantial sums and are unlikely to affect significantly the comparability of the figures Many of the figures included in these tables differ from those which appeared in the Budget documents for earlier years. The following notes explain the content of particular items and the adjustments which have been made to the more important figures previously published. {:#subdebate-26-0} #### Expenditures Expenditures exclude redemptions of savings certificates and Treasury Bills, etc., as well as redemptions of other public debt of the Commonwealth. They also exclude transfers made to Trust Accounts such as, for example, the Loan Consolidation and Investment Reserve and the Debt Redemption Reserve. The figures for the years prior to 1960-61 have been adjusted to include the so-called 'self-balancing items' (mainly taxes and charges on commodities, the proceeds of which are appropriated for expenditure for specific purposes) which were not then included as receipts and expenditures. *Defence.* In 1966-67, payments for defence equipment to a total of $90,553,000 were financed under credit arrangements with the United States of America. It is estimated that the amount of credit to be utilised in 1967-68 will be $137,686,000. These sums have been included in expenditure on Defence Services. This item also includes the interest payable on drawings on these credits. *Payments to or for the States.* Moneys reimbursed to the States in respect of expenditures incurred by them on behalf of the Commonwealth, which had previously been included under Payments to or for the States, are now included in Other expenditure. *State works and housing programmes.* The figures shown against this item are net of the amounts raised by the States themselves by way of domestic loans. As such, they represent the amounts actually payable out of Loan Fund by the Commonwealth in respect of the programmes. Details of the total works and housing programmes in each year are set out in Table No. 35 of the White Paper 'Commonwealth Payments to or for the States, 1967-68' {:#subdebate-26-1} #### Receipts As with expenditures, the figures of receipts for the years prior to 1960-61 have been adjusted to include the so-called 'self-balancing items' for those years. The figures for Other Revenue (in all years) and for receipts of Business Undertakings (in 1962-63 and 1963-64) include transfers of unrequired Trust Fund balances. *National Debt Sinking Fund.* The figures published in the Annual Reports of the National Debt Commission have been adjusted to exclude the proceeds from various International Bank loans which were credited to the Sinking Fund prior to 1959-60. The figure for 1966-67 reflects the revision of the National Debt Sinking Fund Act. *Net movement in other Trust Fund balances.* This item excludes the receipts and expenditures of the National Debt Sinking Fund, expenditure from the Canadian and Swiss Loan Trust Accounts, and other transactions which are included elsewhere in Tables 1 and 2. In recent years, the number of Trust Funds and the scope of the financial transactions carried out through Trust Funds have been considerably reduced. {: .page-start } page 63 {:#debate-27} ### TABLE 2 *Loan proceeds.* The figures of loan proceeds are the actual cash proceeds from loans, etc., credited to Loan Fund in each year less loan flotation expenses, etc., incurred net of amounts recovered from the States during the year. The figures for loan proceeds in Australia include the gross proceeds derived from the issue of Special Bonds since 1958-59; they do not include the amounts subscribed by the Commonwealth to special loans or to public loans (as occurred in 1954-55 and 1955-56). Overseas 'refinancing' operations are treated in this table as adding to both loan proceeds and redemptions where they involve receipts into Loan Fund and outlays from Loan Fund. As a result, total loan proceeds and total redemptions are increased compared with the figures published previous to 1965-66 for the years in question ; net loan proceeds are not affected. *Redemptions.* This item consists of outlays incurred in reducing the amount of funded debt (that is, public debt other than temporary borrowings by way of Treasury Bills and Treasury Notes and drawings under the credit arrangements for the purchase of defence equipment in the United States of America) outstanding, in Australia and overseas, including redemptions of Special Bonds. It includes at) outlays on redemptions, repurchases and repayments from the National Debt Sinking Fund (except outlays on the reduction of temporary debt - for example, Treasury Bills and Debentures domiciled in London from 1953-54 to 1955-56, inclusive) and all outlay on redemptions, etc., from Loan Fund and from the Consolidated Revenue Fund and the Canadian Loan Trust Account. *Credit Arrangements for Defence Purchases in the United States of America.* This item includes drawings under the credit arrangements for defence purchases in the United States of America, which are in the nature of borrowings, and repayments of these credits from Consolidated Revenue Fund, which are in the nature of redemptions. *Residual Financing.* The residual financing item comprises the movement for the year in Treasury Notes on issue and the movements in borrowings from the Reserve Bank and cash balances. As borrowings from the Reserve Bank are made by the issue of both Treasury Bills and longer term securities and Treasury Bills held by the Bank have been funded from time to time, these borrowings do not coincide with movements in the amount of Treasury Bills on issue. {: .page-start } page 63 {:#debate-28} ### TABLE 3 The national accounting classification shown in tin's table is the same as that used in Statement No. 6. The classification is designed to present the Budget transactions in categories which are readily comparable with national accounting data for the economy as a whole prepared by the Commonwealth Statistician. {:#subdebate-28-0} #### Outlay *Net expenditure on goods and services.* This heading covers direct purchases of domestic output and imports from the Budget, and includes wages and salaries of government employees and pay and allowances of defence forces. Any recoupments of such expenditures from other sectors of the economy are netted off. Current and capital expenditures are shown separately, and each is further classified by function. In accordance with national accounting conventions, all equipment purchased for defence purposes is classified to current expenditure. *Transfer payments.* Current payments to other parts of the economy or overseas, other than payments for goods or services supplied, are listed in their various forms under this heading. *Net loans for capital works and housing.* Loans, advances and additional capital made available by the Commonwealth to domestic borrowers other than financial institutions are shown in the respective items under this heading. Repayments of loans and advances are deducted to arrive at the net figures. {:#subdebate-28-1} #### Receipts *Taxation.* This heading includes, in addition to the larger items listed under Taxation' in the Consolidated Revenue Fund, some minor indirect taxes included in Other Revenue. Small amounts of expenditure are offset against receipts. *Interest, rent and dividends.* Interest on loans to the private sector is not included in -this item, but is treated as financial enterprises income and included in the next item. *Public enterprises income.* This item represents gross income, *less* operating expenses, of enterprises which operate within the Budget. It includes interest received on advances to the private sector, which is treated as financial enterprises income. *Net sales of existing assets.* The principal components of this item are sales of land, houses and other buildings, *less* acquisitions of sites and existing buildings. Net Increase in Indebtedness This item is the difference between total outlay and total receipts. It consists of the increase in securities on issue other than holdings of Commonwealth Government trust funds, *less* the increase in net assets of the Commonwealth with financial institutions (including cash, loans, and capital). Some minor changes in other liabilities and investments are also included. 9892/67- -R-[3] {: .page-start } page 69 {:#debate-29} ### STATEMENT No. 8- EXTERNAL ECONOMIC AID ESTIMATES The items of external economic aid expenditures which appear in various parts of the Budget are brought together in the following table: The various items shown in this table accord with the criteria of external economic aid adopted by the Development Assistance Committee of the OECD and the figures are, therefore, broadly comparable with the economic aid statistics published by that body for Australia and other donor countries!1). These figures do not include, of course, the amount which Australia is providing by way of defence aid. Nor do the figures allow for the hidden 'subsidy' involved in the fact that the numerous private and officially-sponsored overseas students at various educational institutions in Australia are assisted indirectly by the subventions which the Commonwealth and State Governments make towards the running expenses and capital costs of such institutions. (*) The figures of Australia's aid effort published by the Development Assistance Committee, in fact, tend to be somewhat higher than the above figures. For example, the Development Assistance Committee includes as official aid portion of the annual contributions made to the regular budgets of the United Nations and of such U.N. Specialised Agencies as the World Health Organization, the Food and Agriculture Organization, the International Labour Organization and the U.N. Educational Scientific and Cultural Organization. Some brief comments follow on the more important items in the table. *International Development Association (IDA).* The main function of IDA, which is an affiliate of the International Bank for Reconstruction and Development, is to help developing countries by providing loans on concessional terms. Thus, IDA extends development credits repayable over fifty years without interest, although a small service charge is imposed to cover administrative expenses. When EDA was set up in 1960, Australia agreed to contribute $18 million over a five-year period, and in 1963 Australia agreed to contribute a further $17.7 million over a three-year period to help replenish the Association's resources. As cash payments to IDA during the period to 30 June 1967 amounted to $20.8 million, an amount of $14.9 million remains outstanding in respect of these commitments. Calls on this amount by IDA during 1967-68 are estimated at $8.3 million, compared with $6 million last year. *Asian Development Bank.* Australia agreed to subscribe $US85 million ($75.9 million) to the capital stock of this Bank, which was set up recently in Manila to promote the economic growth of developing countries in the ECAFE region. One-half of this subscription will remain at call while the balance is payable in five equal annual instalments - half in convertible currency and half in domestic currency. The amount of $3,795,000 provided in the Budget estimates represents the second annual instalment of the convertible currency portion of Australia's capital subscription. The domestic currency portion of these instalments is made available initially by way of non-negotiable, non-interest-bearing demand securities lodged with the Reserve Bank of Australia. These securities may be cashed as and when the Asian Development Bank needs funds for the purchase in Australia of goods and services required in its lending operations. As the Bank has not yet commenced lending operations, no provision has been made in the Budget estimates for any calls by the Bank during 1967-68 on the domestic currency portion of Australia's subscription. *Other Multilateral Programmes.* For the most part, the estimates provide for a continuation of existing rates of contribution to various U.N. aid programmes. It has been decided, however, to increase Australia's contribution to the U.N. Development Programme by $132,000 consequent upon the establishment of the new United Nations Industrial Development Organisation: this increase will be applied to industrialisation projects in developing countries. The higher provision for the World Food Programme allows for an expected increase in calls upon Australia's pledge to contribute a total of SUS2.25 million to this Programme over the period 1966 to 1968. *Colombo Plan.* The Colombo Plan is the most important of Australia's numerous bilateral aid programmes. Aid to Colombo Plan countries has taken the form of providing both technical assistance facilities and help in undertaking specific development projects. Technical assistance has included not only the training in Australia of students, government officials and other people from member countries but also the provision of Australian experts to work overseas in developing countries. Under the Economic Development Programme, machinery and equipment, etc., is provided for particular projects undertaken in developing countries. Expenditure under the Colombo Plan in 1967-68 is estimated at $18.6 million, or $5.9 million more than last year. This includes provision for special emergency assistance of $5.2 million for Indonesia. *International Grains Agreement - Food Aid Programme.* Arising out of the recent GATT cereals negotiations in the Kennedy Round, Australia has undertaken to contribute 225,000 tons of wheat (or its equivalent in flour), valued at $13.5 million, each year for a period of three years to a new food aid programme to be set up m the context of the proposed International Grains Agreement now being negotiated in Rome. As this programme is not expected to operate for the full year 1967-68, an amount of $9.5 million has been provided in the Budget estimates for this purpose. A gift of 150,000 tons- of wheat to India, valued at $9 million, has already been arranged. *Other Bilateral Programmes.* The estimates provide for minor increases in various technical assistance programmes, such as the Special Commonwealth African Assistance Plan and the Commonwealth Co-operation in Education Scheme, and a new provision of $60,000 has been made to cover the administrative costs of setting up a Register of Experts' Services under the auspices of the recently established Asian and Pacific Council. The S.E.A.T.O. Aid programme will be increased to $2.5 million in 1967-68 and it is expected that this year Australia will be called upon to contribute $126,000 more to the Indus Basin Development Fund than in 1966-67. The provision for the South Pacific Aid Programme has been increased by $253,000. The reduced provision for the Foreign Exchange Operations Fund in Laos reflects the fact that Australia was called upon to make a supplementary contribution to this Fund in 1966. *Papua and New Guinea.* Provision has been made in the Budget for a grant to the Administration of Papua and New Guinea of $77.6 million, which is $7.8 million more than last year *(see* Statement No. 3). In addition, various Commonwealth Departments and instrumentalities incur in the Territory expenditures of an economic character which are currently running at an annual rate of about $14 million. {:#subdebate-29-0} #### International Aid Comparisons All told, Australia has provided more than $1,000 million in official economic aid since the end of the Second World War. As shown above, a further $142 million is expected to be provided in the current financial year. Since 1961, the total aid provided by all Western donor countries represented on the Development Assistance Committee of the OECD has remained relatively static. By contrast, Australia's aid expenditures have more than doubled over this period, with the result that Australia now ranks second in the world in terms of official aid to developing countries expressed as a percentage of national income. It might be noted also that Australia, unlike any other donor country, provides all of its official aid in the form of outright gifts. The following figures based on data published by the Development Assistance Committee compare relative aid performances by member countries in recent years: APPROPRIATION BILL (No. 2) 1967-68 Message from the Governor-General recommending appropriation for proposed expenditure announced. Bill presented by **Mr McMahon,** and read a first time. {:#subdebate-29-1} #### Second Reading {: #subdebate-29-1-s0 .speaker-009MA} ##### Mr MCMAHON:
Treasurer · Lowe · LP -- I move: That the Bill be now read a second time. This Bill contains details of the proposed appropriations for expenditure on: {: type="a" start="a"} 0. the construction of public works and buildings; 1. the acquisition of sites and buildings; 2. items of plant and equipment which are clearly definable as capital expenditure; 3. grants to the States under section 96 of the Constitution; and 4. new policies not authorised by special legislation. The main points regarding the proposed expenditures in this Bill are dealt with in my Budget Speech. I commend the Bill to honourable members. Debate (on motion by **Mr Crean)** adjourned. {: .page-start } page 72 {:#debate-30} ### BUDGET 1967-68 {: #debate-30-s0 .speaker-009MA} ##### Mr McMAHON:
Treasurer · Lowe · LP -- I present for the information of honourable members the following papers in connection with the Budget for 1967-68: Estimates of Receipts and Summary of Estimated Expenditure for the year ending 30 June 1968. Commonwealth Payments to or for the States 1967-68. National Income and Expenditure 1966-67. Government Securities on Issue at 30 June 1967. Commonwealth Income Tax Statistics for income year 1964-65. Civil Works Programme 1967-68, circulated by the Minister for Works. Ordered to be printed. {: .page-start } page 72 {:#debate-31} ### POST AND TELEGRAPH RATES BILL 1967 [No. 3] Bill - by leave - presented by **Mr Hulme,** and read a first time. {:#subdebate-31-0} #### Second Reading {: #subdebate-31-0-s0 .speaker-KIF} ##### Mr HULME:
PostmasterGeneral and Vice-President of the Executive Council · Petrie · LP -- I move: That the Bil] be now read a second time. As my colleague, the Treasurer **(Mr McMahon),** indicated when presenting the Budget for 1967-68, the Government proposes to amend the Post and Telegraph Rates Act to provide for increases in a range of postal and telegraph charges. Honourable members will recall that the Senate has twice rejected such measures, which dealt with certain basic charges, and disallowed regulations covering a range of other charges. There can be no question that these increases are necessary and the Government is concerned about the financial effect of further delay in the introduction of the new rates. In addition to this Bill, I will shortly be introducing further legislation dealing with those rates previously the subject of regulations. It is the Government's intention that the full range of new charges be open to debate during consideration of this first Bill. I am presenting statements showing in detail the proposed adjustments in postal and telecommunications charges. These include not only those covered by this legislation but also those adjustments which will be the subject of the further Bill. The Government is proposing that all the new rates take effect from 1st October next. When these matters were last before the House I stressed that, although the Post Office has obligations of service to the community, it is also a national business which should pay its way. The Government views as a business investment the substantial capital funds provided from annual Budgets for the expansion of the Post Office's services, and expects the Post Office, like any other business, to earn sufficient revenue from the sale of its services at least to cover its costs, including interest on capital. This leads me to refer to another statement made by the Treasurer in his Budget Speech regarding the Government's decision to create a Post Office trust account. Appropriate legislation to enable the introduction of this new financial arrangement as from 1st July 1968 will be brought down in due course. It will, however, enable honourable members to view the Post Office tariffs and finances in better perspective if I outline briefly the changes proposed and the main reasons for them. The Post Office is continually involved in making business judgments and decisions, it must react quickly to variations in demand for its services, and it is subject to the added discipline of planning its expenditure with an eye to the revenue and the net financial out-turn it will yield, as well as to the service rendered to the community. While the Government and Post Office management recognise all this and expect the Post Office to conduct its affairs on a business basis, it nevertheless still operates within the same financial machinery as any other department of state. The Post Office is required to pay all of its revenue into the Consolidated Revenue Fund, and it must draw all of the funds it needs for operating and capital purposes from annual parliamentary appropriations. These financial arrangements are not suited to the operations of a business undertaking and in fact detract from the ability of the Post Office to operate efficiently on a business basis. They also pose difficulties, rather than assist, in bringing about effective parliamentary control and public understanding of the Post Office's finances. The new financial arrangements will do much to remove these difficulties and will provide for the Post Office to operate its own trading account into which all its revenues will be paid and from which all expenses, both capital and operating, will be met. Because of the likely levels of capital investment required, particularly in the telecommunications area, the revenues of the Post Office will not be sufficient to meet all its needs in any year. It will be dependent therefore upon Parliament for its cash requirements over and above its revenues, and requests for additional funds, or net borrowings, will be dealt with through the normal Budget procedures and the Estimates debate. To give a better appreciation of its operations and prospects, the Post Office will submit a White Paper to Parliament at the Budget session each year outlining its affairs generally and including estimates of its commercial results for the year, the proposed capital programme, and the method of financing it. There will still be presented an annual report, together with financial statements and the report thereon of the Auditor-General. The Post Office will thus be still subject to parliamentary and ministerial control and honourable members should be in a position to be much better informed than under the present system. It is against this background of the Post Office being regarded as a business enterprise and the Government's intention to give it business-type financial arrangements, that the measures I am now bringing before the House should be considered. When these matters were before the House recently, I outlined in some detail the nature and scope of the proposed new charges, and I do not intend to go into the same detail again. Since the matter was last dealt with in the House, however, several changes have been made in the proposals, and I will, of course, deal with them fully. It needs to be emphasised that there have been no overall increases in postage rates for eight years, since the basic postage rate of 5d was introduced in 1959. In fact, the only significant change has been the reduction in the basic rate to 4c at the time of the changeover to decimal currency last year. This has so far cost the postal service almost $lm in lower revenue. Although there have been continual improvements in efficiency and productivity, in recent years it has not been possible to absorb the increases in wage rates which have been granted to postal staff. Consequently, losses on postal operations have occurred and are increasing rapidly. The postal service was able to maintain a breakeven financial position over the five year period from 1959-60 to 1963-64, averaging a profit of about $900,000. In 1964-65, however, a loss of $2.6m was incurred and this was followed in 1965-66 by a loss of $10.3m. The loss incurred in 1966-67 is expected to exceed $20m and in the current financial year, with current postal tariffs and allowing for a continuation of recent cost trends, might exceed $30m. Over the last two years, the extra wages payable as a result of variations to awards totalled more than $12m compared with an increase of only $7m in postal revenue in the same period. Awards have already added almost $6m to postal service costs this financial year, the recent national wage decision alone adding $2m. Increases in postal rates are required to offset these increasing losses. Australian postage rates compare more than favourably with those in other countries, especially when allowance is made for the huge size of our continent and the scattered nature of a large proportion of our population. A proposal for a 6c basic postage rate, equivalent to 5.7c Australian, is before the United States Congress at present; and I understand that the British Post Office is considering an increase to 5d, equivalent to 5.2c Australian. The United States Post Office this financial year is expected to have a deficit of $ 1,800m. The basic postal rate for letters in the European Economic Community countries is 7c Australian and each country concerned is recording a continuing loss in mail service operations. For example, the West German Post Office last year incurred a loss in its mail operations of $A90m. The proposed changes in postal rates and conditions are set out in the statements which I have circulated. The most important single change is the increase in the basic postage rate from 4c to 5c. As I have already said, I do not intend to repeat the detailed explanations of the various postal rate proposals I gave previously, for no alterations have been made to the increases I submitted earlier in the year, except in respect of postage discounts. The postage discounts of up to 25% will be welcomed by the business community. These will be available to large users who reduce Post Office handling costs by presorting their mail and by meeting certain other posting conditions concerning make-up and transmission. The discount allowed will vary according to the size of the consignment and the amount of presorting by the customer. Two variations have been made to the discount conditions previously submitted. Firstly, the minimum quantity of mail which must be posted to be eligible for a 5% discount has been reduced from 5,000 to 2,500. This change will allow many smaller firms to participate in the scheme. Secondly, postings in large envelopes, as well as those in small and medium size standard envelopes, will be eligible for discounts. The inclusion of postcodes in the addresses on discount mail will be a requirement from 1st October 1968. A variation has also been made to the postage discount which it is proposed to apply to the householder mail service, by which articles addressed to 'The Householder' or similar title are delivered to each point in a designated area. At present a flat 30% discount applies. Earlier proposals envisaged a flat 40% discount, but the Government now proposes a 40% discount on articles up to 2 oz in weight and a 60% discount on articles over 2 oz. A survey has shown that this will not incur a loss of revenue. On the contrary, the increased business that will result is expected to increase it. Attention is also drawn to the revised date of effect of new size limits for enveloped mail eligible for conveyance by air free of airmail fees within Australia and its Territories under Operation Post Haste. This will be effective from 1st October 1967. Fu:4 details are set out in the statements which I am presenting. It will be necessary for the proposed increases in domestic rates to be applied to several international rates for surface mail. The price for aerogrammes will also be increased from 9c to 10c. These will be effected by Executive action as authorised by the Post and Telegraph Act. The variations in postal charges which I have outlined, together with those which will be dealt with in detail in a further Bill and some miscellaneous charges which will be covered by administrative action, will, if introduced on 1st October 1967, bring in additional earnings of approximately $22m in 1967-68 and $30m in the first full year. It will be appreciated that the additional earnings of $22m in 1967-68 will not now offset the predicted loss, at current tariffs, of at least $30m. If the new tariffs had operated from 1st July last the postal service could well have broken even during 1967-68. Even with the tariff adjustments now proposed it is estimated that a loss exceeding $10m will be incurred in 1968-9. This figure is, in fact, higher than the estimate I gave to the House when this matter was last debated. Before the end of the financial year it could only have been an estimate. The Department is continuing to explore all means of arresting the loss trend in the postal service, but because it is a labour intensive enterprise these efforts are largely nullified by the continued wage increases granted to Post Office employees along with other members of the community. In the circumstances, it would appear that our experience may be similar to that in, for example, the United Kingdom where a select parliamentary committee drawn from all parties concluded in a report of February 1967: {: type="i" start="1"} 0. . the need for periodic tariff increases appears to your Committee to be inescapable if the general standards of the postal services are to be preserved. The telecommunication tariff proposals in this Bill cover only increases in telegram rates. Telephone call fees and trunk rates, together with some adjustment of charges for miscellaneous telecommunication facilities and services, will be dealt with in the further Bill I have already mentioned. Apart from a minor adjustment in 1964, telegram rates have not been altered since 1956. The telegram service is operating at a loss unci it is proposed to increase telegram rates by 20%. The new charges for ordinary rate messages will be 36c for the first 12 words and 3c for each additional word, compared with the current rates of 30c for the first 12 words and 5c for each additional two words. The revised telegram rates will bring in additional revenues of about $600,000 in 1967-68 and $lm in a full year, but the telegram service will continue to operate at a toss. In the White Paper presented recently in the British House of Commons outlining certain changes within the British Post Office, this paragraph was included: >The Corporation will inherit a number of public services which cannot be made financially viable at any reasonable level of charge. The outstanding example is the inland telegraph service, which has run at a loss for many decades and cannot hope to pay for itself as its use continues to decline. Obligations of this kind are normally taken into account when financial targets are fixed. I found during my recent visit overseas that the problems faced by the Australian Post Office have a parallel in almost every country in the world - namely, that telephone services are generally profitable, but profits are dwindling each year, telegraph services show a small but continuing loss, and postal services invariably are operated at a great loss. Every administration has, or is, considering increasing its charges, not only for mail services but for others too, because other profits are becoming smaller each year. All administrations are looking forward to some mechanisation to handle the mails more speedily and economically. There is no doubt in my mind that Australia's communication services compare favourably with those of other countries, particularly as we have the problem of a large area and a small and scattered population outside the capital cities and principal provincial centres. The electronic mail coding equipment Australia is using is undoubtedly the best in the world. The nearest approach to its efficiency and sophistication I saw was in Germany where it is still in very limited use. It has always been held by succeeding governments, irrespective of their politics, that the Post Office should be operated as a business undertaking and that those who use the services should pay for them. For this reason it has been the custom for measures varying Post Office charges to be given free passage through both Houses of Parliament. The previous Bill to vary certain charges, whilst it passed this House, was rejected twice in another place. Similarly, regulations to amend certain other charges were rejected by the Senate in an unprecedented special sitting. It is quite apparent to the Government that this action was taken for political purposes only - an endeavour, in fact, to gain political kudos from the Australian people. What it has done in the result is to reduce the ability of the Post Office this year to be reasonably profitable and perhaps to affect adversely the essential services being demanded by the Australian public. It would be interesting to have an explanation by the Leader of the Opposition **(Mr Whitlam)** of the reason why the Australian Labor Party has changed its Post Office philosophy. I commend the Bill to honourable members. Debate (on motion by **Mr Webb)** adjourned. {: .page-start } page 75 {:#debate-32} ### POST AND TELEGRAPH REGULATIONS BILL 1967 Bill - by leave - presented by **Mr Hulme,** and read a first time. {:#subdebate-32-0} #### Second Reading {: #subdebate-32-0-s0 .speaker-KIF} ##### Mr HULME:
PostmasterGeneral and Vice-President of the Executive Council · Petrie · LP -- I move: That the Bill be now read a second time. The purpose of this Bill is to amend the Postal, Telephone, Telegraph and Picturegram Regulations in order to vary the charges for certain Post Office services. Provision is made also for the introduction of a special mail despatch service. In addition, the opportunity is being taken to convert to decimal currency equivalents, where necessary, money amounts specified in these Regulations. The changes are the same as those which were the subject of regulations recently disallowed in the Senate. Under the provisions of the Acts Interpretation Act, they cannot be again presented in the same form within a period of six months from the date of disallowance. It is for this reason that it has become necessary to deal with the changes in the form of legislation. I would point out that, although this Bill replaces action by regulation, the method of fixing tariffs in the future will be covered in the Bill to be introduced in due course in connection with the new financial arrangements for the Post Office. The amended postal charges relate to miscellaneous facilities and services and are the same as those previously proposed for introduction on 1st July. These are set out in full in the statements circulated and refer to a new special mail despatch service to operate from 1st October this year, commission on money orders, fees on some postal orders and charges for philatelic services. Honourable members will recall that in previously announcing the introduction of a special mail despatch service, I pointed out that it was designed for highly urgent mail between the business areas of capital cities. This service will allow mail posted at specified locations after normal mail closing time to be available for collection or to be delivered early the following morning in all but the most distant capital cities. I come now to charges for telecommunication services. It will be appreciated that telecommunication costs in recent years have been affected significantly by higher wage rates and by the capital charges associated with expenditure on new facili ties. It is necessary to take heed of the current trend in the operating results of telecommunication services. Taken together, telephone and telegraph services showed a profit of $10.2m in 1965-66, most of the expenditure and revenues being associated with telephone facilities. Higher wage rates and other increased costs are expected to result in only a marginal profit in 1966-67 and, unless telecommunication charges are increased, a loss of some millions of dollars will be inevitable this year. The dependence of the business community and the public generally on the Post Office for adequate and effective communication services places a heavy responsibility on the Post Office. With these growing needs is associated a corresponding demand for capital and it is also for this reason that increases in some telecommunication tariffs are inevitable. About 95% of the proposed Budget appropriation of $240m for Post Office capital works in 1967-68 will be spent on telecommunication facilities. Demand for telephone services rose by about 12% last financial year and, with local telephone calls and trunk traffic increasing steeply, the capital needs for telecommunications will almost certainly show a sharp rise in future years. Apart from connecting new services, the major emphasis is on providing improved facilities and services to the existing 2,200,000 subscribers within the network who derive increasing benefit from this continued development. The telecommunication tariff proposals in this Bill cover increases in telephone call fees and trunk rates together with some adjustment of charges for miscellaneous telecommunication facilities and services, some of which will be dealt with by administrative action. All of these proposed adjustments are detailed in the statements which have been distributed. With regard to telephone charges, the local call fee is to be increased from 3J cents to 4 cents, with corresponding adjustments in trunk call fees. This is the first increase in call charges for eight years, apart from a few minor variations in trunk call fees at the time of introduction of decimal currency. There are variations to the trunk rates previously intimated to the House. These now provide for uniform three minute rates for all trunk calls from subscribers services, irrespective of whether they are booked through an operator or subscriber-dialled; there is no change in the principle that with STD calls the subscriber pays only for the time he speaks. The variations will mean that earnings from this source will be $3m less in a full year than proposed earlier. The adjustments in charges for miscellaneous telecommunications facilities, which include a reduction in the rates for the longer distance private telegraph lines, will increase overall earnings in this area by about 20% . Overall, increased telecommunication tariffs including those covered by the earlier Bill will bring in additional earnings of about S26m in 1967-68 and $34m in a full year. However, in 1967-68 additional cash receipts will be only Si 4m because of the six monthly billing cycle for most accounts. I have already, in this session, dealt at some length with the financial position of the postal service and I will not take up the time of the' "House by repeating these details. I am sure that honourable members will agree that, in the light of the information already placed before them, any further delay in the introduction of new charges would have a serious effect on Post Office operations. It is proposed, therefore, that the increased charges covered by this Bill should take effect from 1st October this year. These increases in a full year are expected to bring in additional earnings of about $34m - $4m postal and S30m telecommunications. I commend the Bill to honourable members. Debate (on motion by **Mr Webb)** adjourned. {: .page-start } page 77 {:#debate-33} ### LOAN (HOUSING) BILL 1967 Bill - by leave - presented by **Mr Bury,** and read a first time. {:#subdebate-33-0} #### Second Reading {: #subdebate-33-0-s0 .speaker-JTP} ##### Mr BURY:
Minister for Labour and National Service · Wentworth · LP -- I move: >That the Bill be now read a second time. The Australian Loan Council decided at its meeting last June that the borrowing programme for States works and housing for 1967-68 should be $677m. Within the limits of this borrowing programme the States themselves have nominated the proportion of the funds that they wish to receive as advances for housing. Thus, with Loan Council approval. an amount of $122,840,000 will be made available to the States this financial year in accordance with the provisions of the Housing Agreement Act 1966. These advances will be repayable over 53 years and bear interest at 1% per annum below the long-term bond rate. The distribution, by States, is as follows: This Bill seeks the necessary authority for the Treasurer **(Mr McMahon)** to borrow the amount of $122,840,000 in question. Last financial year advances to the States under the Housing Agreement amounted to $120m. This year the amounts nominated by the States represent, in aggregate, an increase of a little more than 2%. As honourable members will be aware the current Housing Agreement continues the provision that requires each State to appropriate at least 30% of the advances they receive to a Home Builders' Account from which loans for private home building are made available through building societies and other approved institutions. The balance of the advances is used by the States for the erection of homes either for rental or for sale to families with low or moderate incomes. I commend the Bill to the House. Debate (on motion by **Mr Crean)** adjourned. {: .page-start } page 77 {:#debate-34} ### SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) BILL (No. 3) 1967 Bill presented by **Mr Howson,** and read a first time. {:#subdebate-34-0} #### Second Reading {: #subdebate-34-0-s0 .speaker-0095J} ##### Mr HOWSON:
Minister for Air and Minister Assisting the Treasurer · Fawkner · LP -- I move: >That the Bill be now read a second time. The purpose of this Bill is to amend the Sales Tax (Exemptions and Classifications) Act to give effect to the sales tax alterations which the Treasurer **(Mr McMahon)** foreshadowed in the Budget Speech. As the Treasurer mentioned, a review has revealed a need for some adjustments to sales tax exemptions and classifications. With the rapid strides of modern technology there is the inevitable flow of new products and new techniques that could not be envisaged when many of the existing exemption and classification provisions were incorporated in the sales tax schedules. This Bill is designed to effect various alterations that are now considered necessary in the light of technological and other developments. A number of the new exemptions will benefit persons engaged in primary industry or in handling primary produce. Among this group of exemptions are gas welding equipment for use in agricultural industry, machines for grading, sorting and cleansing vegetables and equipment for canning butter. Exemption is also to be provided for refrigeration equipment for use in the preservation of eggs by poultry farmers, egg marketing authorities and persons who grade and store eggs on behalf of egg marketing authorities. Hitherto cranes and winches fitted to tractors used in the timber-getting industry in the hauling of log timber have been exempt but this has not applied to cranes fitted to other types of motor vehicles used in the same operations. In many forest areas cranes and winches fitted to motor trucks are now being used for hauling and loading logs. It is therefore proposed that these cranes and winches for attachment to motor trucks should be exempt also. Certain other exemptions are designed to assist the Australian film industry. For many years a wide range of imported films has been exempt from tax but comparable Australian films have been subject to tax. The Government intends to remove this disadvantage to the Australian film industry by providing a uniform exemption for practically all motion picture films other than advertising films and those filmed by home movie makers. The industry will derive further benefit from an exemption to be granted for a wide range of equipment, including cinematograph cameras and sound recording and film processing equipment, used by professional film producers. Other exemptions cover a wide and varied field. Optometrists are to be placed on the same footing as medical practitioners, dentists and physiotherapists as regards exemption of instruments and equipment used in their sight testing activities. Retailers will benefit from the exemption of further wrapping and packaging materials such as rubber bands and plastic and other netting which is now widely used in packaging fruit, vegetables and other foodstuffs. Most of the other types of wrapping and packaging materials used in the retail trade are already exempt. There is at present a limited exemption applicable to fork-lift trucks used in certain stevedoring operations. The exemption applies only where the fork-lift trucks are for use partly in shipboard cargo handling activities. This exemption is to be extended to cover fork-lift trucks for use only on wharves, provided that they are to be used exclusively or primarily and principally in the handling of cargo in the course of loading or unloading ships. Household articles affected by the proposed changes include candles which are to be taxed at a uniform rate of *2i%* in common with other household lighting appliances. This will involve the withdrawal of the exemption of plain wax candles and a reduction in rate on other candles. The rate of tax on household incinerators is to be reduced from *12i%* to *2i%,* and a similar reduction is proposed for household articles of pewter which are now taxed at 12$%. Pewter ware will thus be taxed at the same rate as silver-plated ware. In recent times there has been a noticeable trend towards the use of tape recorders and tape players to provide musical entertainment. It is not unlikely that, in time, tape recorders and players will in this field displace the conventional record players which are now taxed at 25%. It is accordingly proposed that the rate of tax on tape recorders and tape players should be increased from *12i%* to 25% to place these machines in the same sales tax bracket as record players. The increase will not, however, affect office dictation machines or other appliances designed primarily and principally for the recording and reproduction of speech. These will remain taxable at 12i%. A similar increase is to be effected in the rate of tax on tape recordings of music or other entertainment that are produced for sale or lease. Disc records for radiograms and record players bear tax at 25%. These tape recordings will now be taxed at the same rate. Photographic equipment and photographs are in genera] taxable at 25% but 35 millimetre photographs, including transparencies mounted in slides, have been taxable at 12i%. This came about because the 35 millimetre size photographs are produced on film which is identical with cinematograph film. As a consequence they came within the scope of a provision designed to exclude motion picture films from the field of photographic goods taxable at 25%. It was never intended that the exclusion applicable to motion picture films should apply to still photographs. This Bill will rectify the situation by placing still photographs and transparencies of this particular type in the 25% rate class with other still photographs. Vinyl floor tiles have previously been exempt under a provision originally drafted with the object of exempting various classes of building materials such as ceramic tiles. Other floor coverings, including linoleum tiles, rubber tiles and cork tiles, are taxed at *2i%.* Vinyl floor tiles are now to be taxed at the same rate. During the war years, car covers made from cloth weighing less than 10 ounces per square yard were coupon goods under the rationing system applicable to clothing, drapery, piece goods and soft furnishings. The goods which had been on the coupon scale were subsequently exempted from sales tax and, as a result, the light weight car covers were brought within the field of exempt goods. Although marketed as car covers, many of those in the smaller sizes are suitable for use as beach shelters and they are regularly purchased with this end in view. Beach shelters and car covers made from heavier cloth are taxable at 12fr%. In the interests of consistency, exemption of the light weight car covers is to be withdrawn so that they also will be taxable at 12i%. Among the other items affected are clutch pencils, the rate on which is to be increased from 12i% to 25%. They will then bear tax at the same rate as propelling pencils which operate on a different mechanical principle but are otherwise comparable with clutch pencils. I do not propose to detail all of the amendments included in this Bill. Those I have touched on are illustrative of the adjustments which are to be effected by the Bill. Details of other alterations may be found in the summarised statement of sales tax amendments that is being circulated. A memorandum explaining the clauses of the Bill is also being made available to honourable members. Some of ,the amendments will result in a loss in revenue: others will bring in additional revenue. The net result overall will be an increase in revenue estimated at approximately $1.5m per annum. In addition, it should not be overlooked that many of the proposed amendments, through the removal of complications, will result in material savings in administrative costs. I commend the Bill to the House. Debate (on motion by **Mr Crean)** adjourned. {: .page-start } page 79 {:#debate-35} ### SOCIAL SERVICES BILL (No. 2) 1967 Bill - by leave - presented by **Mr Sinclair,** and read a first time. {:#subdebate-35-0} #### Second Reading {: #subdebate-35-0-s0 .speaker-5E4} ##### Mr SINCLAIR:
Minister for Social Services · New England · CP -- I move: That the Bin be now read a second time. In his Budget Speech the right honourable the Treasurer **(Mr McMahon)** announced the Government's intention of increasing the rates of child endowment for the fourth and subsequent children in a family. The purpose of this Bill is to give legislative effect to that decision. As honourable members will recall it was the present Prime Minister **(Mr Harold Holt)** who, as Minister for Labour and National Service in the 1941 Liberal and Country Party Coalition Government, introduced the original Commonwealth child endowment scheme in this House. Since then child endowment has become an accepted feature of the family income and the present proposals represent an important extension of this social service. At present child endowment is paid at the rate of 50c for the first child under sixteen years in a family, $1 for the second child and $1.50 for each of the subsequent children. The proposal in the Bill before the House is to increase to $1.75 a week the rate of endowment for the fourth child under sixteen years in a family; fo increase the rate to $2 a week for the fifth child with cumulative increases of 25c a week for each subsequent child so that in the case of the ninth child $3 a week will be payable. The increase of 25c a week in the rate payable for each successive child will apply cumulatively irrespective of the number of children in the family. For example, a family with six endowed children will receive an increase of SI. 50 a week bringing the total endowment payable to $9 a week; a family of nine will receive an increase of $5.25 a week bringing the total endowment payable to $17.25 a week. For some time the Government has been concerned with the fact that large families are adversely affected by wage and price increases when compared with the smaller family. The need to spread any wage increase over a greater number of dependants results in a smaller relative improvement of the position of all family members. We believe that the most effective way of bridging the gap between the economic needs of a family and the income of that family is the payment of an allowance that will increase with the size of the family. The financial burden becomes increasingly heavy with the number of children in a family and the introduction of a graduated scale of endowment rates acknowledges this fact. One original purpose of child endowment, that of being a complement to the basic wage, has lost much of its force because of the fact that wages today are now related to the capacity of industry to pay rather than to the actual needs of a man, wife and one or two children. Originally endowment was payable at the rate of 50c a week for each child other than the first or only child. The rate was raised on two occasions and when the present Government took office stood at $1 a week. In 1950 the Menzies Government extended endowment to the first or only child under sixteen years of age. This marked the beginning of a differential child endowment, 50c per week being paid for the first or only child and St per week being paid for second and subsequent children. The principle of graduated payment was further extended in 1964 when the Government increased the rate of endowment for the third and subsequent children in a family to $1.50 per week. At the same time eligibility for endowment was extended to include student children, over sixteen but under twenty-one years of age who receive full time education at a school, college or university and are not in employment. While the standard of living has increased immeasurably since this Government came to office, it is axiomatic that the parents of medium and large sized families are in need of greater help than the parents of smaller families. The proposed progressive increase of 25c in the endowment for the fourth and subsequent children will help correct this position. Internationally the principle of government assistance to children was supported by the United Nations in its Declaration of the Rights of the Child. There it was said: 'Payment of State and other assistance towards the maintenance of children of large families is desirable'. This Bill conforms to this principle. The family is an integral part of our society. Today some people see the disintegration of the family unit with the economic and social pressures of contemporary living. Yet in the larger family the dependence of children on brother and sister and on parent is still more pronounced. In a society of large families the family unit appears of even greater importance. It is in these families however that the financial pressures are more acute. The parents and particularly the mothers make tremendous personal sacrifices for their children's sake. The extended endowment assistance provided by this Bill will help to ease the financial stress facing many of these parents. Beyond this the benefit will give greater opportunities to the children who tomorrow will be the responsible citizens of Australia. Endowment is not the only direct assistance provided by the Commonwealth for the family man. In the field of education the Commonwealth plays a major role. This assistance is not only available to individual children through secondary and tertiary scholarships but also through capital grants to help in the construction of science and technical facilities in secondary schools. The Commonwealth also gives substantial assistance towards administrative and capital expenses in Australian universities. Milk is provided for children attending primary schools and preschools, while indirect assistance to the family is given in many other forms. The value of Commonwealth assistance in all fields helps to reduce the cost of raising children. Child endowment is only one form of Government aid. It is estimated that about 240,000 families with a total of over a million children will benefit from the increased rates payable under this Bill. Rates of endowment will be increased for some 400,000 children at a cost of some $8.3m in a full year. Endowment will represent nearly one-fifth of the total expenditure from the National Welfare Fund of over $l,000m a year. The number of endowed children now approaches 3,700,000 and payments are made to 1,650,000 families and nearly 500 institutions. The Bill provides for the increased benefits to become effective from 19th September which will allow payment at the increased rate on the child endowment payday 17th October. For those endowees who receive payment by credit to a bank account each twelve weeks the increase will be payable on 12th December. The measures contained in this Bill are seen by the Government as the most effective way in which child endowment can be extended at the present time. The necessity to maintain a national policy of economic growth is universally recognised. This policy is supported by internal domestic policies directed at the maintenance of a high and rising standing of living. To maintain our population growth both by natural increase and by sustained migration is a course to which the Government is firmly committed. It may be arguable whether the birth rate can be stimulated by increased endowment payments. The assistance this Bill provides for parents who undertake the obligations and responsibilities for raising large families is unarguable. **Mr Speaker,** I commend the Bill to the House. Debate (on motion by **Mr Crean)** adjourned. {: .page-start } page 81 {:#debate-36} ### BILLS RETURNED FROM THE SENATE The following Bills were returned from the Senate: Without amendment - Broadcasting and Television Bill 1967. Brigalow Lands Agreement Bill 1967. Sugar Marketing Assistance Agreement Bill 1967. Australian National Airlines Commission Equipment Bill 1967. Industrial Research and Development Grants Bill 1967. Without requests - Customs Tariff Validation Bill 1967. Excise Tariff Validation Bill 1967. {: .page-start } page 81 {:#debate-37} ### HOMES SAVINGS GRANT BILL 1967 Message received from the Senate intimating that it does not press its request for amendments, which the House has not made, and that the Senate has agreed to the Bill. {: .page-start } page 81 {:#debate-38} ### ASSENT TO BILLS Assent to the following Bills reported: Appropriation Bill (No. 3) 1966-67. Appropriation Bill (No. 4) 1966-67. Australian Tourist Commission Bill 1967. National Library Bill 1967. Sales Tax (Exemptions and Classifications) Bill (No. 2) 1967. Trade Practices Bill 1967. Tasmania Grant (Fire Relief) Bill 1967. Wool Industry Bill 1967. Stales Grants (Advanced Education) Bill 1967. States Grants (Teachers Colleges) Bill 1967. Australian Universities Commission Bill 1967. Supply Bil] (No. 1) 1967-68. Supply Bill (No. 2) 1967-68. Income Tax Assessment Bill (No. 2) 1967. Income Tax (International Agreements) Bill 1967. Estate Duty Assessment Bill 1967. Gift Duty Assessment Bill 1967. Softwood Forestry Agreements Bill 1967. Petroleum Search Subsidy Bill 1967. Sugar Marketing Assistance Agreement Bill 1967. Customs Tariff Validation Bill 1967. Excise Tariff Validation Bill 1967. Broadcasting and Television Bill 1967. Brigalow Lands Agreement Bill 1967. Australian National Airlines Commission Equipment Bill 1967. Homes Savings Grant Bill 1967. Industrial Research and Development Grants Bill 1967. Superannuation Bill 1967. Narcotic Drugs Bm 1967. Customs Bill 1967. Constitution Alterations (Aboriginals) Bill 1967. {: .page-start } page 82 {:#debate-39} ### CENTENARY OF THE ESTABLISHMENT OF THE DOMINION OF CANADA {: #debate-39-s0 .speaker-10000} ##### Mr SPEAKER: -- Honourable members may know that 1st July this year marked the centenary of the establishment of the Dominion of Canada. On 21st June on behalf of honourable senators and members **Mr President** and I addressed a joint communication to the Presiding Officers of the Canadian Parliament extending the warmest good wishes of our Houses to senators and members of the Canadian Houses. House adjourned at 10.17 p.m. {: .page-start } page 83 {:#debate-40} ### ANSWERS TO QUESTIONS UPON NOTICE The following answers to questions Public Services Superannuation Payments (Question No. 182) **Mr Webb** asked the Prime Minister, upon notice: >Are Commonwealth public servants performing national service obliged to meet their superannuation contributions out of their Army pay? > >Did the Commonwealth meet these contributions during World War II? > >Can he say whether the Governments of Tasmania and South Australia meet the superannuation contributions of their employees who are performing national service? > >If so, will the Commonwealth meet these contributions for its employees? {: #debate-40-s0 .speaker-KXI} ##### Mr Webb:
STIRLING, WESTERN AUSTRALIA asked the Prime Minister, upon notice: {: type="1" start="1"} 0. Do the Commonwealth Banking Corporation and the Reserve Bank make up the difference between Army pay and bank pay? 1. Can he say whether the practice of making up pay applies in the New South Wales Public Service7 2. If so, will the Commonwealth Government arrange for the difference between Army pay and Public Service pay to be made up by the Public Service, as was the case when national service training was in force in the post-war years? {:#subdebate-40-0} #### Aboriginals: Wages (Question No. 227) {: #subdebate-40-0-s0 .speaker-JSU} ##### Mr Bryant:
WILLS, VICTORIA asked the Minister for Air, upon notice: {: type="1" start="1"} 0. How many Aboriginals are employed by his Department in a non-service capacity in northern Australia? 1. Are any of these Aboriginals not receiving award rates? If so, in which areas are they located, and what are they being paid? {: #subdebate-40-0-s1 .speaker-0095J} ##### Mr Howson:
LP -- The answer to the honourable member's questions is as follows: >In the past, Aboriginals have been engaged by my Department in the Northern Territory under terms and conditions of employment that were determined by agreement between the Department and the Northern Territory Administration, having regard to the terms and conditions of the Wards' Employment Ordinance. As at 30th June 1967 twenty-five Aboriginals were employed. > >However, in accordance with Government policy, approval has now been given to the introduction ot normal employment arrangements in relation to Aboriginals employed in the Department as from 6th July 1967. As from that date, employment opportunities will be available in the Northern Territory for twenty-seven Aboriginals at full award rates of pay and under all the other terms and conditions of the relevant industrial award or determination. In actual fact, we now have the twenty-seven Aboriginals employed at Darwin under full award conditions. {:#subdebate-40-1} #### Aboriginals: Wages (Question No. 228) {: #subdebate-40-1-s0 .speaker-JSU} ##### Mr Bryant: asked the Minister for the Army, upon notice: {: type="1" start="1"} 0. How many Aboriginals are employed by his Department, except as soldiers, in northern Australia? 1. Are any of these Aboriginals not receiving award rates? If so, in which areas are they located, and what are they being paid? {: #subdebate-40-1-s1 .speaker-QS4} ##### Mr Malcolm Fraser:
WANNON, VICTORIA · LP -- The answer to the honourable member's questions is as follows: >In the past, Aboriginals have been engaged by my Department in the Northern Territory under terms and conditions of employment that were determined by agreement between the Department and the Northern Territory Administration, having regard to the terms and conditions of the Wards' Employment Ordinance. As at 30th June 1967 sixteen Aboriginals, including one at full award rates of pay, were employed. They were located at Larrakeyah Barracks, Darwin. > >However, in accordance with Government policy, approval has now been given to the introduction of normal employment arrangements in relation to Aboriginals employed ;n the Department as from 6th July 1967. As from that date, employment opportunities will be available in the Northern Territory for thirty-one Aboriginals at full award rates of pay and under all the other terms and conditions of the relevant industrial award or determination. {:#subdebate-40-2} #### Army: Vietnam Force (Question No. 260) {: #subdebate-40-2-s0 .speaker-KXI} ##### Mr Webb: asked the Minister for the Army, upon notice: >For what periods are (a) members of the Regular Army, and (b) national servicemen, expected to serve in Vietnam before being returned to Australia? {: #subdebate-40-2-s1 .speaker-QS4} ##### Mr Malcolm Fraser:
WANNON, VICTORIA · LP -- The answer to the honourable member's question is as follows: >The normal full tour of duty in Vietnam for both members of the Regular Army and national servicemen is from twelve to thirteen months; this includes travelling time. However, members in either category with less residual service may be required to move to the area with their unit In this case a minimum of three months service in Vietnam applies. Workers' Compensation: Uniform Benefits (Question No, 262) **Mr Webb** asked the Prime Minister, upon notice: {: type="1" start="1"} 0. Has his attention been drawn to a statement made by Judge R. R. McGrath to the Industrial Relations Society of New South Wales that workers' compensation benefits and payments should be made uniform by legislation in all States? 1. If so, will he arrange for the next Premiers' Conference to discuss the co-ordination of all workers' compensation Acts in Australia with the object of ensuring that uniform benefits and payments are available for all workers covered by the Acts? {: #subdebate-40-2-s2 .speaker-009MC} ##### Mr Harold Holt:
LP -- The answer to the honourable member's question is as follows: 1 and 2. The provision of compensation for the large majority of employees in Australia is governed by State legislation and the question of co-ordination is primarily a matter for the States. {:#subdebate-40-3} #### Public Debt: Commonwealth and States (Question No. 265) {: #subdebate-40-3-s0 .speaker-K6T} ##### Mr Costa:
BANKS, NEW SOUTH WALES asked the Treasurer, upon notice: {: type="1" start="1"} 0. What was the amount of the public debt in respect of (a) the Commonwealth, (b) the States and (c) municipalities and shires at 30th June in each of the years 1954 and 1964? 1. What was the percentage increase or decrease in each case between these years? {: #subdebate-40-3-s1 .speaker-009MA} ##### Mr McMahon:
LP -- The answers :o the honourable member's questions are as follows: >Public debt of the Commonwealth and State Governments, as evidenced by the issue of securities, and debt of local and semi-governmental authorities at 30th June 1954 and 30th June 1964, and the percentage increase or decrease in debt over this period, was:_ {:#subdebate-40-4} #### National Debt (Question No. 266) {: #subdebate-40-4-s0 .speaker-K6T} ##### Mr Costa: asked the Treasurer, upon notice: >What proportion of the national debt is related to (a) the Commonwealth, (b) the States, (c) local government and (d) semi and quasi-government bodies? {: #subdebate-40-4-s1 .speaker-009MA} ##### Mr McMahon:
LP -- The answer to the honourable Member's question is as follows: >The proportions of debt shown below are based on the figures of debt outstanding at 3.0th June 1965, which were given in reply to Question No. 265. These proportions are as follows: {:#subdebate-40-5} #### Employment: Persons Aged Over Forty Years (Question No. 297) {: #subdebate-40-5-s0 .speaker-KNM} ##### Mr E JAMES HARRISON:
BLAXLAND, NEW SOUTH WALES · ALP n asked the Minister for Labour and National Service, upon notice: {: type="1" start="1"} 0. Has his attention been drawn to regular advertisements inserted in the metropolitan press which would indicate that there is a lack of employment opportunities for persons over forty years of age? 1. If this is the situation, will be have the matter investigated? 2. Is there any method by which his Department can materially assist persons over forty years of age to obtain employment? {: #subdebate-40-5-s1 .speaker-JTP} ##### Mr Bury:
LP -- The answers to the honourable member's questions are as follows: 1 and 2. I am aware that some employers, when advertising for workers, specify age limits for some positions. In some cases there are evident and justifiable reasons. My Department continuously endeavours to emphasise the important contribution that older agad workers can make. Never to be forgotten is that more than 1# millions, or about 35%, of the work force are aged forty years and over. {: type="1" start="3"} 0. The facilities of the Commonwealth Employment Service are freely available to all persons seeking to obtain employment My Department never flags in propagating the view that selection for employment should depend on the qualifications, abilities, experience and personal attitudes and qualities needed to do the work offering. {:#subdebate-40-6} #### Ikara Missile (Question No. 306) {: #subdebate-40-6-s0 .speaker-JO8} ##### Mr Barnard:
BASS, TASMANIA asked the Minister for Defence, upon notice: {: type="1" start="1"} 0. Is it a fact that Australia is negotiating with Holland a major order for the Ikara antisubmarine missile? 1. If so, can he supply details of the order? 2. What prospects has Australia of selling the Ikara missile to other members of the North Atlantic Treaty Organisation? {: #subdebate-40-6-s1 .speaker-KEN} ##### Mr Fairhall:
Minister for Defence · PATERSON, NEW SOUTH WALES · LP -- The answers to the honourable member's questions are as follows: >There have been discussions extending over the past twelve months with representatives of the Netherlands Government regarding the possible adoption by the Royal Netherlands Navy of the Australian anti-submarine weapons system Ikara. It is understood the matter is under consideration by the Netherlands Government > >The Ikara system was brought to the attention of all NATO countries by means of a technical appreciation given in Europe in April/May 1965. The prospects of sales to other countries are undetermined at this stage. {:#subdebate-40-7} #### Public Service: Superannuation (Question No. 311) {: #subdebate-40-7-s0 .speaker-YF4} ##### Mr Cross:
BRISBANE. QLD asked the Minister for the Army, upon notice: {: type="1" start="1"} 0. Where employees of the Public Service and, in particular, of the Postmaster-General's Department are required tq undertake national service training, are details of superannuation deductions forwarded promptly to the Army? 1. If so, are there cases where a delay of three months has taken place before deductions are made from paybooks? 2. Will he look into this matter with a view to removing any legitimate cause of complaint? {: #subdebate-40-7-s1 .speaker-QS4} ##### Mr Malcolm Fraser:
WANNON, VICTORIA · LP -- The answer to the honourable member's questions are as follows: {: type="1" start="1"} 0. Normally, my Department is advised of the details of superannuation deductions within the first week of training of national servicemen. Some members even have the necessary information when they enlist and authorise deductions from their Army pay before notification is received from their employer departments. 1. There have been some delays before superannuation contributions were deducted, including a few cases involving employees of the PostmasterGeneral's Department. Most of these cases occurred during the early stages of the national service scheme due to the inexperience of departmental officers in implementing ail unfamiliar administrative system. 2. The administrative procedures have been reviewed and steps taken to ensure prompt action in the future. Decimal Currency: Conversion of Scales (Question No. -317) **Mr Peters** asked the Treasurer, upon notice: {: type="1" start="1"} 0. Has the Decimal Currency Board power to demand repayment of compensation paid to scale firms for the conversion of scales which are deliberately wrecked after compensation has been paid by the Board, or have certain scale firms played on an apparent lack of power and so obtained or endeavoured to obtain compensation payments for what is virtually only scrap metal. 1. With respect to the two scale vending firms which, after receiving compensation from the Board, scrapped scales which were in working order, how many scales were allegedly wrecked by each firm? 2. Does the Board suspect or know whether all of these scales were converted before being wrecked, or does it suspect or know that, although the scales in most instances were never converted, compensation was claimed by these firms after they switched serial number plates on the scales? 3. If the Board knows that the scales were not converted, why have these firms not been prosecuted? 4. If it is profitable for scale firms to convert scales, obtain compensation and then wreck the scales, why are these firms permitted to charge a shopkeeper up to and even above 80 per cent more than the compensation payable by the Board to the shopkeeper, particularly as the Board, in its circular entitled "Compensation Arrangements for Conversion of Price Computing Scales', advises scale owners to secure a competitive quote if the price quoted by a scale firm is greater than the amount paid by the Board? 5. Will he have this price aspect investigated by the Board7 6. Is it a fact that it is impossible to obtain competitive quotes in Victoria, and can he say whether the major scale firms have formed a mutual protection society in this respect? 7. Will he have the Board investigate the availability of scale conversion kits with a view to ascertaining (a) whether the conversion kits are freely available from the relevant suppliers to all firms and persons engaged in the scale industry, and (b) whether conversion kits would be withheld by the suppliers from any firm or person who had the temerity to quote a price at or near the amount payable by the Board by way of compensation to the scale owner? 8. Kas the Decimal Currency Board, since my questions appeared on the Notice Paper of 5th April, decided to comply with Commonwealth audit procedures and obtain acknowledgment of receipt of compensation voucher books distributed all over the Commonwealth by the Board some fifteen months previously? 9. As weights and measures inspectors issue compensation vouchers, have weights and measures authorities throughout Australia been officially advised by the Board of the possibilities of scale firms obtaining by fraudulent means multiple conversion payments for the one scale? 10. Does the Board have a record of serial numbers of all types of scales eligible for compensation? 11. Have scale firms been known to make up their own serial numbers, particularly for the older type scales? 12. Is it a fact that, if a scale firm did make up its own serial numbers, all that the records kept by the Board would show is whether the serial numbers had been claimed on before? {: #subdebate-40-7-s2 .speaker-009MA} ##### Mr McMahon:
LP -- The answers to the honourable member's questions are as follows: {: type="1" start="1"} 0. The Decimal Currency Board is examining whether it has power to demand repayment of compensation made for scales which were wrecked after compensation was paid. Compensation is paid only for price-computing scales which have been passed by weights and measures authorities as operating satisfactorily after conversion. These could not be classed as 'scrap metal'. 1. Fifty-five scales are known :o have been scrapped by two scale-vending firms, following payment of compensation for the machines by the Board. 3 and 4. The Board at this stage has no direct evidence that the procedures described in question 3 wire followed but is investigating this possibility further. 5 and 6. The Board does not consider that the practice of converting scales and then wrecking them after compensation has been paid would be profitable to the owners of scales. Before setting its compensation rates, the Board carried out a full investigation of conversion methods and costs and had lengthy discussions with manufacturers and importers in this field. The compensation rates do not include allowances for some costs which are not involved in the conversion itself. Because it would not be able to exercise direct control over the charges made, the Board advised scale owners to obtain competitive quotations where the price quoted by a converting firm for the conversion of scales was greater than the compensation payable by the Board. 2. The Board has no information which would suggest that competitive quotations cannot be obtained in Victoria, and it knows of a number of firms in Victoria which are prepared to convert scales of the various makes. 3. The Decimal Currency Board has advised that, to the best of its knowledge, scale conversion kits are made available to firms regularly engaged in the maintenance or repair of scales for the purpose of conversion. 4. Since October 1966, the Board has asked weights and measures authorities for a formal acknowledgment of receipt for voucher books supplied to them. This was a precautionary measure adopted on the suggestion of a Commonwealth Audit Office inspector. 5. Since the inception of the compensation programme, weights and measures authorities have been fully aware of the possibility of more than one serial number being used in respect of the one set of scales. 6. The Board does not have a complete record of the serial numbers of all scales eligible for conversion. It does, however, possess records which would indicate whether a serial number quoted in respect of a particular make of scale would warrant further examination. It was the absence of complete information on price computing scales in use in Australia which led the Board to employ a system of checks, which in turn led to its investigation of cases where more than one amount of compensation has been paid to the one claimant. 12 and 13. There has been a long-standing practice in the industry for scale firms to make up their own serial numbers. The practice also extends to changing scale brand names. However, records kept by the Board, in addition to showing whether a particular serial number has been claimed on previously, also show details of each set of scales claimed by a particular scale owner and this has enabled the Board to carry out a series of routine checks of cases where compensation has been paid more than once to Hie same person or firm. {:#subdebate-40-8} #### Motor Vehicles (Question No. 322) {: #subdebate-40-8-s0 .speaker-KID} ##### Mr Luchetti:
MACQUARIE, NEW SOUTH WALES asked the Minister representing the Minister for Supply, upon notice: {: type="1" start="1"} 0. How many motor vehicles are under the control of the Department of Supply? 1. What is the number of these vehicles of each trade make? 2. How many were (a) wholly manufactured in Australia, (b) assembled in Australia and (c) imported from other countries? 3. What was the purchase price of each category? {: #subdebate-40-8-s1 .speaker-KEN} ##### Mr Fairhall:
LP -- The Minister for Supply has provided me with the following answers to the honourable member's questions: {: type="1" start="1"} 0. Excluding ancillary vehicles such as cranes, tractors, fork lift trucks and motor scooters, there are 3,884 powered motor vehicles. 3. (a) 2,356; (b) 3,864; (c) 129. {: type="1" start="4"} 0. The figures listed below show only the average purchase prices for cars and station sedans. The balance of the vehicles, 2,188, covers a wide end varying range of types, e.g., fuel tankers, trucks, passenger buses, fire fighting vehicles, furniture vans and ambulances. Considerable detail {:#subdebate-40-9} #### Nogoa River Dam (Question No. 323) {: #subdebate-40-9-s0 .speaker-KXV} ##### Dr Patterson: asked the Prime Minister, upon notice: >Did the Queensland Government approach the Commonwealth Government in the latter part of 1963 requesting an investigation by the Bureau of Agricultural Economics of the proposed Nogoa River Dam? {: #subdebate-40-9-s1 .speaker-009MC} ##### Mr Harold Holt:
LP -- The answer to the honourable member's question is as follows: >I would draw the honourable member's attention to an answer to a previous question by him on this matter (Hansard 11th October 1966, page 1598) in which I said that it is not customary to make information of this type public without the prior agreement of the State government concerned and that no such agreement had been made in this case. > >However, as the honourable member will be aware, the Commonwealth Government has announced that it will provide up to S50m over the next five years for a national water resources development programme, drawn up by the Commonwealth and the States, with the object of increasing water conservation activity, reducing the hazards of drought and expanding primary production. > >The Press on 31st May 1967, when referring to this development programme, reported that the Premier of Queensland has said that one of the projects he has suggested for the programme is the Nogoa Irrigation Project. The proposal will be considered, along with projects suggested by the other Premiers, when the Government is considering the details of the national water resources development programme. {:#subdebate-40-10} #### Water Conservation: Queensland Projects (Question No. 324) {: #subdebate-40-10-s0 .speaker-KXV} ##### Dr Patterson: asked the Prime Minister, upon notice: >Is it a fact that, since 1st January 1950, the following water conservation projects have been submitted by the Queensland Government to the Commonwealth Government for financial assistance: Burdekin, Fitzroy and Dawson, extension of Mareeba Dimbula, Maclntyre Brook, Border Rivers and Nogoa? {: #subdebate-40-10-s1 .speaker-009MC} ##### Mr Harold Holt:
LP -- The answer to the honourable member's question is as follows: >It is not customary to make information of this type public without the prior agreement of the State government concerned. A review covering a period of seventeen years does not appear to be justified to seek the information requested, which in any case may not be available for public information without the prior agreement of the Queensland Government. {:#subdebate-40-11} #### Royal Australian Air Force Central Band (Question No. 345) {: #subdebate-40-11-s0 .speaker-KXV} ##### Dr Patterson: asked the Minister for Air, upon notice: {: type="1" start="1"} 0. On what dates and at what places and functions have members of the Royal Australian Air Force Band played at dances or similar functions in the last two years while on official tours? 1. What funds were received by the Band at each function, and did members of the Band keep the moneys paid to them? {: #subdebate-40-11-s1 .speaker-0095J} ##### Mr Howson:
LP -- The answers to the honourable member's questions are as follows: {: type="1" start="1"} 0. With the exception of Mackay, Queensland, there have been no other occasions in the last two years when the private dance group formed from members of the RAAF Central Band has played at dances or similar functions while on tour. 1. Mackay $100. Yes. {:#subdebate-40-12} #### Royal Australian Air Force Central Band (Question No. 346) {: #subdebate-40-12-s0 .speaker-KXV} ##### Dr Patterson: asked the Minister for Air, upon notice: >What were the working hours of members of the Royal Australian Air Force Band on the day and night of 14th April 1967? {: #subdebate-40-12-s1 .speaker-0095J} ##### Mr Howson:
LP -- The answer to the honourable member's question is as follows: >The working hours of members of the RAAF Centra] Band on the day and night of 14th April 1967 were 0945-1300 hours and 1730-2100 hours - total, six hours and forty-five minutes. Performances were given at Mackay Hospital at HOO hours and Queens Park, Mackay, at 1900 hours. {:#subdebate-40-13} #### Royal Australian Air Force Central Band (Question No. 347) {: #subdebate-40-13-s0 .speaker-KXV} ##### Dr Patterson: asked the Minister for Air, upon notice: {: type="1" start="1"} 0. On what dates and at what places and functions has the Royal Australian Air Force Band played at approved non-charitable functions? 1. What fees were charged at each function, who authorised them, and what amounts were paid into Consolidated Revenue? {: #subdebate-40-13-s1 .speaker-0095J} ##### Mr Howson:
LP -- The answers to the honourable member's questions are as follows: {: type="1" start="1"} 0. There have been several hundred occasions since its inception when the RAAF Central Band has played at approved non-charitable functions. 1. No set fee is charged. The object is to recover the direct costs to the RAAF, i.e. cost of transport, meals and accommodation. All official RAAF Central Band performances are authorised by the Air Officer Commanding Support Command. The total amount received is $16,475, and all of this amount has been paid into Consolidated Revenue. {:#subdebate-40-14} #### Royal Australian Air Force Central Band (Question No. 348) {: #subdebate-40-14-s0 .speaker-KXV} ##### Dr Patterson: asked the Minister for Air, upon notice: >Do members of the Royal Australian Air Force Band, when playing at dances, balls or similar functions, use RAAF Band equipment, travel from place to place at government expense and receive government funds for accommodation and meals? {: #subdebate-40-14-s1 .speaker-0095J} ##### Mr Howson:
LP -- The answers to the honourable member's questions are as follows: >The private dance band group formed from members of the RAAF Central Band who play at functions in their off duty hours use instruments and equipment which were purchased at their own expense, they travel at their own expense and do not receive government funds for accommodation and meals for this purpose. Royal - Australian Air Force Central Band (Question No. 349) **Dr Patterson** asked the Minister for Air, upon notice: >Will he (the Minister) take the necessary steps to repay to the Mackay RSL Club the $100 demanded and received by some members of the Royal Australian Air Force Band when playing exhibition tunes at the RSL Ball on 14th April 1967? {: #subdebate-40-14-s2 .speaker-0095J} ##### Mr Howson:
LP -- The answer to the honourable member's question is as follows: >The dance band did not play exhibition tunes. It gave a normal dance band's performance and played bracket for bracket with the other band at the function. I do not intend to take steps to have repaid to the Mackay RSL Club the $100 received by a private dance group for services rendered. Royal Australian Air Force Central Band (Question No. 350) **Dr Patterson** asked the Minister for Air, upon notice: >What are the scale of fees and conditions set down by the Musician's Union which apply to the Royal Australian Air Force Band when playing at private functions? {: #subdebate-40-14-s3 .speaker-0095J} ##### Mr Howson:
LP -- The answer to the honourable member's question is as follows: >The dance band rate approved by the Musicians' Union is $8.80 per man for three hours. There are also overtime rates after three hours, with further penalty rates after midnight {:#subdebate-40-15} #### Genocide Convention (Question No. 352) {: #subdebate-40-15-s0 .speaker-YF4} ##### Mr Cross: asked the Minister for External Affairs, upon notice: {: type="1" start="1"} 0. How many countries have ratified the international Genocide Convention? 1. On what dates did the following countries ratify the convention: (a) Australia, (b) Canada, (c) France, (d) the Soviet Union, (e) the United Kingdom and (0 the United States of America? 2. Have any countries renounced the Convention after previously ratifying it? {: #subdebate-40-15-s1 .speaker-ZL6} ##### Mr Hasluck:
Minister for External Affairs · CURTIN, WESTERN AUSTRALIA · LP -- The answers to the honourable member's questions are as follows: {: type="1" start="1"} 0. 70. 2. (a) 8th July, 1949. (b) 3rd September, 1952. (c) 14th October, 1950. (d) 3rd May, 1954. (e) and (f) the United Kingdom and the United States are not yet parties to the Convention. {: type="1" start="3"} 0. No. {:#subdebate-40-16} #### Metal and Mineral Reserves (Question No. 123) {: #subdebate-40-16-s0 .speaker-KID} ##### Mr Luchetti: asked the Minister for National Development, upon notice: {: type="1" start="1"} 0. What are the (a) known and (b) estimated reserves of all metals and minerals in Australia? 1. Is any action being taken to retain necessary reserve supplies of these basic materials for Australia's expanding industrial needs? 2. If measures have been adopted to conserve raw materials for our future national requirements, what is the nature of these controls or other provisions? {: #subdebate-40-16-s1 .speaker-KDT} ##### Mr Fairbairn:
Minister for National Development · FARRER, NEW SOUTH WALES · LP -- The answers to the honourable member's questions are as follows: {: type="1" start="1"} 0. Bulletin 72 of the Bureau of Mineral Resources entitled 'Australian Mineral Industry: The Mineral Deposits' discusses and catalogues 180 mineral commodities in 55 chapters covering the main groups of commodities. The information on each mineral commodity includes ore reserves where these have been assessed and published. The question of defining ore reserves is a complex one, as they are a function of many factors, including tonnage and grade; amenability or otherwise to low cost mining and concentrating methods; geographic location relative to transport facilities and ports, power and water supplies; size of local and overseas markets; prices, etc. These factors are changing constantly and are affected also by technological developments in a wide range of fields. At present major deficiencies in Australian mineral production include the following: Asbestos, chromite, industrial diamonds, diatomite, some of the ferro alloys, fluorspar, graphite, nickel, petroleum, potassium fertilisers and brimstone. In a number of the above cases there are raw materials available in Australia but the Australian market is too small or too scattered to warrant production units in the face of larger scale, lower cost production overseas and Australian freight costs. There have recently been announced discoveries of deposits of nickel and phosphate. It will be some time before these deposits are fully evaluated to a stage where we can be assured of self-sufficiency in these minerals. 1. and 3. It has been found by experience that the best way to ensure that the search for, and assessment of, our mineral wealth continues is for governments to create a climate in which private enterprise will undertake exploration. An essential part of this climate is that the discoverer has the incentive to develop any viable deposit found during the search. Such development in Australia is usually dependent on the right to export some of the production and permission is normally given. There are cases where, because of the need for conservation of our resources, a careful control of our exports is maintained. Examples of minerals in this category are phosphate and uranium. {:#subdebate-40-17} #### Banking (Question No. 279) {: #subdebate-40-17-s0 .speaker-KUX} ##### Mr Stewart:
LANG, NEW SOUTH WALES asked the Treasurer, upon notice: {: type="1" start="1"} 0. Has his attention been drawn to an article on page 1 of the April 1967 issue of the journal Travel Trade' under the heading 'Bank used loan power to get travel business'? 1. Can he say whether similar allegations have been made in previous issues of the journal? 2. Have any investigations been made of these allegations? 3. If *so,* what action has been taken against the offending bank for this unethical practice? 4. If no investigation has been made, will he arrange for the allegation contained in the article to be investigated? {: #subdebate-40-17-s1 .speaker-009MA} ##### Mr McMahon:
LP -- The answers to the honourable member's questions are as follows: {: type="1" start="1"} 0. Yes. 2 to 5. Alleged practices of the kind referred to are not considered a matter for regulation under the Banking Act. However, at my request, the Governor of the Reserve Bank has discussed the matter with the general managers of the trading banks. I am advised that not all banks conduct travel business, but banks generally have informed the Reserve Bank that it is not their policy to make the granting of loans for travel purposes conditional on their handling the related travel business. As regards the particular case mentioned in the publication Travel Trade', I have been informed that the financial assistance sought was subsequently granted by the bank. In respect of a simitar allegation made in the May 1967 Issue of Travel Trade', the Reserve Bank has been advised by the bank concerned that this allegation was fully investigated last year at the instigation of the Australian Federation of Travel Agents. The bank was able to assure the Federation unequivocally that the customer's loan application was declined for reasons unrelated to the handling of the travel business. {:#subdebate-40-18} #### Oil Refineries (Question No. 301) {: #subdebate-40-18-s0 .speaker-KGH} ##### Mr Hansen:
WIDE BAY, QUEENSLAND asked the Minister for National Development, upon notice: {: type="1" start="1"} 0. What oil companies operate refineries in Austraia? 1. Where is each of these refineries situated? 2. Can he say whether these refineries supply to competitor companies or only to the parent company and its subsidiary companies? 3. Is the cost of refining petrol known to the Government? If so, are *costs* comparative in all refineries? {: #subdebate-40-18-s1 .speaker-KDT} ##### Mr Fairbairn:
LP -- The answers to the honourable member's questions are as follows: 1 and 2. Oil Company Refinery Location Amoco Australia Pty Bulwer Island, Queens- Ltd land Ampol Refineries Ltd Fort Lyton, Queensland Australian Oil Refining Kurnell, New South Pty Ltd (Caltex) Wales Australian Lubricating Kurnell, New South Oil Refinery Ltd (50% Wales Caltex; 25% Ampol Petroleum Ltd; 25% H. C. Sleigh Ltd) Boral Ltd Matraville, New South Wales B.P. Australia Ltd Kwinana, Western Aus tralia B.P. Australia Ltd Westernport, Victoria Petroleum Refineries Altona, Victoria (Aust.) Pty Ltd (74% Mobil Oil Australia Ltd; 26% Esso Standard Oil (Aust.) Ltd) Petroleum Refineries Port Stanvac, South (Aust.) pty Ltd Australia Shell Refining (Aust.) Geelong, Victoria Pty Ltd Shell Refining (Aust) Clyde, New South Wales Pty Ltd {: type="1" start="3"} 0. It is normal oil company policy for refinery to supply only to the parent company and its subsidiary companies. However, to minimize transport costs, most companies participate in intercompany borrow and loan arrangements whereby a refinery may supply products to competitors in its particular area in exchange for a similar amount of products in, say, another State. Tt is also possible for a refinery with spare capacity to refine t> competitor's crude oil for an agreed upon processing fee. It is understood that this practice is not widespread in Australia. 1. Refining costs depend on the type and size of the processing units incorporated in the refinery, the type of crude ofl processed, and the required product pattern. Costs for individual Australian refineries are not available to the Government but as each refinery is different to the others and each processes a different crude oil blend, it would be expected that each would have different refining costs. Breaking down the overall cost of refining crude oil into the cost of refining individual products such as petrol can only give an arbitrary figure because of the number of products involved. {:#subdebate-40-19} #### Flood and Bush Fire Relief (Question No. 325) {: #subdebate-40-19-s0 .speaker-KXV} ##### Dr Patterson: asked the Treasurer, upon notice: >What Commonwealth funds are being made available to assist in rehabilitation following the recent tragedies of the (a) Tasmanian bush fires, and (b) north Queensland floods? {: #subdebate-40-19-s1 .speaker-009MA} ##### Mr McMahon:
LP -- The answer to the honourable member's question is as follows: {: type="a" start="a"} 0. Under the Tasmanian Grant (Fire Relief) Act 1967, the Commonwealth Government has undertaken to provide an amount of up to $14.5m to assist Tasmania in financing the cost of various relief and restoration measures designed to alleviate the effects of the disastrous fires that occurred in that State during February of this year. This Commonwealth assistance will take the form of grants where the corresponding State expenditure is in the form of grants and it will be in the form of loans where the State itself provides .assistance by way of loans. 1. Following the severe floods in northern areas of Queensland that occurred in March of this year, the Commonwealth agreed to join wilh the State on a $1 for $1 basis in providing assistance for the relief of personal hardship and distress and in meeting the cost of restoring State government and local authority assets damaged or destroyed by floods. In accordance with this undertaking, the Commonwealth has made a grant of $625,000 for the relief of personal hardship and distress and has made provision in the 1967-68 Budget for $750,000 to be available to assist in meeting the cost of restoring government assets. {:#subdebate-40-20} #### Farm Development Loan Fund (Question No. 330) {: #subdebate-40-20-s0 .speaker-KXV} ##### Dr Patterson: asked the Treasurer, upon notice: >What are the names of the banks participating in the Farm Development Loan Fund, and what funds have been distributed by each participating bank? {: #subdebate-40-20-s1 .speaker-009MA} ##### Mr McMahon:
LP -- The answer to the honourable member's question *is as* follows: >The arrangements regarding the establishment within the banking system of the Farm Development Loan Fund and the purposes *for which it* is intended were set out fully in my statement to the House on 31st March 1966 (Hansard pages 801-3). As indicated in that statement, the Fund comprises accounts of the major trading banks, which they administer. The major trading banks are: Commonwealth Trading Bank of Australia. Australia and New Zealand Bank Limited. The Bank of Adelaide. Bank of New South Wales. The Commercial Bank of Australia Limited. The Commercial Banking Company of Sydney Limited. The English, Scottish and Australian Bank, Limited. The National Bank of Australasia Limited. On5th April 1966, each of these banks established a separate fund in the form of an account with the Reserve Bank; approximately two-thirds of the fund was provided by transfers from its Statutory Reserve Deposit Account with the Reserve Bank and approximately one-third from its other assets. In total, an amount of $50m was transferred to the banks' Farm Development Loan Fund accounts. Published figures show that to 26th July 1967 the aggregate amount drawn from the accounts by the banks was $20.4m. Figures of the drawings by each participating bank are not published. {:#subdebate-40-21} #### Farm Development Loan Fund (Question No. 331) {: #subdebate-40-21-s0 .speaker-KXV} ##### Dr Patterson: asked the Treasurer, upon notice: >What funds have been made available by the banking system to individual States from the $50m Farm Development Loan Fund? {: #subdebate-40-21-s1 .speaker-009MA} ##### Mr McMahon:
LP -- The answer to the honourable member's question is as follows: >A classification by States of balances of loans outstanding from the Farm Development Loan Fund is published at six-monthly intervals. The latest figures published are in respect of loans outstanding at 11th January 1967, and I provided these in my reply of 19th May 1967 to a question without notice by the honourable member (see Hansard pages 2490-1). {:#subdebate-40-22} #### Farm Development Loan Fund (Question No. 332) {: #subdebate-40-22-s0 .speaker-KXV} ##### Dr Patterson: asked the Treasurer, upon notice: >What is the approximate average rate of interest for loans under the $50m Farm Development Loan Fund? {: #subdebate-40-22-s1 .speaker-009MA} ##### Mr McMahon:
LP -- The answer to the honourable member's question is as follows: >It has been agreed with the banks that the rates of interest on loans from the Farm Development Loan Fund are to be within the range of preferential overdraft rates normally applicable to rural customers. Within this range, the rate on an individual loan will of course be determined by the bank concerned in the light of all the circumstances relevant to the particular proposition. Currently the statistical information published concerning interest rates charged by trading banks relates to advances other than those for term and farm development lending. However, consideration is being given to the possibility of extending the information. {:#subdebate-40-23} #### Farm Development Loan Fund (Question No. 333) {: #subdebate-40-23-s0 .speaker-KXV} ##### Dr Patterson: asked the Treasurer, upon notice: >What funds have been made available to sugar farmers from the $50m Farm Development Loan Fund? {: #subdebate-40-23-s1 .speaker-009MA} ##### Mr McMahon:
LP -- The answer to the honourable member's question is as follows: >The information is not available. {:#subdebate-40-24} #### Petrol Grades (Question No. 344) {: #subdebate-40-24-s0 .speaker-KGH} ##### Mr Hansen: asked the Minister for National Developmen, upon notice: {: type="1" start="1"} 0. What is the difference between standard and premium or super grades of petrol? 1. Who is responsible for seeing these standards are maintained? {: #subdebate-40-24-s1 .speaker-KDT} ##### Mr Fairbairn:
LP -- The answers to the honourable member's questions are as follows: {: type="1" start="1"} 0. The industry-recognised average octanes - by research method - for the two main grades of motor spirit sold in Australia are: {: type="1" start="2"} 0. There is no control over quality standards of motor spirit, other than that exercised by the oil companies themselves. The companies act in unison from time to time to raise octane levels in response to the pressure of demand from motor engine manufacturers as balanced against additional costs to the oil industry of increasing octanes. Companies do sell motor spirit of octane ratings other than quoted. Some imported motor spirit shows slightly higher octane ratings for the two grades. One company at least markets, in addition to the normal standard and premium grades, 25%, 50% and 75% blends of the two. {:#subdebate-40-25} #### State and Local Government Debts (Question No. 355) {: #subdebate-40-25-s0 .speaker-6U4} ##### Mr Whitlam: asked the Treasurer, upon notice: >Can he give by States the information on State; local government and semi-government debts which he gave me in his answer on 5th April 1967 (Hansard, page 966)? {: #subdebate-40-25-s1 .speaker-009MA} ##### Mr McMahon:
LP -- The answer to the honourable member's question is as follows: >Tables showing by States details of securities on issue, the annual interest liability on these securities, and capital repayments on behalf of the States, local government and semi-governmental authorities are set out below. Sources of the information are the same as set out in my answer on 5th April 1967 (Hansard, page 966). Water Conservation {: #subdebate-40-25-s2 .speaker-009MC} ##### Mr Harold Holt:
LP -- On 18th April, the Leader of the Opposition **(Mr Whitlam)** and the honourable member for Mallee **(Mr Turnbull)** asked me questions without notice about the national water resources development programme in which the Commonwealth will provide financial assistance to the States for a programme of water conservation works additional to those carried out by the States in their continuing programmes. My colleagues and I have determined details of the programme and I have written to the State Premiers outlining our plans for its implementation. The scheme is essentially one for extending the conservation and use of water in rural industry. Works wholly or principally for urban purposes or for hydro-electric power generation would be excluded. The Commonwealth contribution to the programme could amount to $50m in the form of nonrepayable grants over the next five years. It is envisaged that the States will maintain at least their existing pattern of growth in this field from their own financial resources. The Premiers have been asked to provide an outline of proposed water conservation programmes over the next five years including information on anticipated production from those programmes, together with a comparison of the proposed level of water conservation activity with the level in the immediate past At the same time, they have been asked to submit lists of projects for inclusion in the national programmes. After examination of these submissions, the Commonwealth will select those projects which appear to it sufficiently attractive to warrant closer examination. The Commonwealth will be primarily responsible for the necessary detailed studies which will be carried out in collaboration with appropriate State authorities. Parliament will then be invited to make the necessary financial appropriations in respect of the projects selected for inclusion in the programme. The State will be expected to provide any supplementary works that might be required to enable effective utilisation of the water made available by the project. Water Conservation {: #subdebate-40-25-s3 .speaker-009MC} ##### Mr Harold Holt:
LP -- On 13th April, the honourable member for Macquarie **(Mr Luchetti)** asked me a question without notice concerning water conservation projects in Australian States and Territories. In reply I said that I would treat the question as though it were on notice and give him a considered reply. Information about requests for assistance submitted by the States is regarded by the Commonwealth Government as confidential between itself and the State Governments concerned unless it is agreed to make the information public. The Commonwealth has, however, provided assistance to the States for the following water projects since 1950: Comprehensive Water Supply Scheme, Western Australia (grant of SI Om). Ord project (Stage one), Western Australia (grant of $ 12.2m). Chowilla Reservoir, South Australia - under the River Murray Waters Agreement the Commonwealth, along with the States of New South Wales, Victoria and South Australia, is contributing towards the cost of the Chowilla reservoir; in addition the Commonwealth is making a loan to New South Wales of its share of the cost. Blowering Dam (New South Wales)the Commonwealth is making a loan to New South Wales of half the cost of the Blowering Dam. South-west Region Water Supply (being the second stage of the Comprehensive Water Supply Scheme), Western Australia - the Commonwealth is providing financial assistance of up to $ 10.5m by way of loans. With regard to the Australian Territories, there are no firm proposals for water conservation projects which will be commenced within the next three years. The task of recording and collating basic data is however proceeding at an accelerated rate. In Papua and New Guinea a stream gauging programme is being undertaken. In the Northern Territory during the 1964-67 period, the Commonwealth Government has provided S2.07m to enable the Territory to carry out a programme of surface and underground water investigations which formed part of a ten year national programme sponsored by the Australian Water Resources Council. This programme, involving the assessment, measurement and systematic recording of the Territory's water resources, aims at providing a sound basis for the proper planning of developmental projects, which include dam construction and the reticulation of water supplies for domestic purposes as well as for agricultural, pastoral and industrial development. Programmes will continue at a similar level for at least the next three years. In addition to the work mentioned above, the honourable member will be aware that in my policy speech prior to the last election I announced that the Government had in mind a national water resources development programme aimed at increasing water conservation activity, reducing the hazards of drought and expanding primary production. My colleagues and I have since determined details of the programme and I have written to the State Premiers outlining our plans for its implementation. The scheme is essentially one for extending the conservation and use of water in rural industry. Works wholly or principally for urban purposes or for hydro-electric power generation would be excluded. The Commonwealth contribution to the programme could amount to $50m in the form of nonrepayable grants over the next five years. It is envisaged that the States will maintain at least their existing pattern of growth in this field from their own financial resources. Public Service: Wage Increases for Fourth Division Officers **Mr Harold** Holt- On 18th May the honourable member for Leichhardt **(Mr Fulton)** asked me a question without notice about wage increases for Fourth Division officers in the Commonwealth Public Service. In reply I undertook to provide him with information on the subject. All general pay increases resulting from decisions of the Conciliation and Arbitration Commission in the national wage cases have been received by Fourth Division officers and employees of the Commonwealth Public Service. This will also be so in respect of the decision handed down by the Commission on 5th June 1967. 1 might also mention that in the period 1st January 1964 to 30th June 1967 about 120,000 officers and employees of the Fourth Division received other pay increases as a result of 7 arbitrated and 201 consent determinations issued by the Public Service Arbitrator. A number of staff associations with members employed in the Fourth Division of the Commonwealth Public Service also have pay claims, based on work value, currently filed with the Public Service Arbitrator. These claims are awaiting hearing. Wheat Storage {: #subdebate-40-25-s4 .speaker-009MC} ##### Mr Harold Holt:
LP -- On 18th May the honourable member for Bendigo **(Mr Beaton)** asked me a question without notice about Commonwealth assistance for the provision of additional wheat storages. In reply I said that I would examine the matter and give him a detailed reply. The provision and management of storage facilities for wheat come within the responsibilities and prerogatives of the governments of States in which the wheat is produced. This has been made clear when approaches have been made to the Commonwealth for assistance in providing additional storage capacity. The raising by State authorities of loans for the purpose of providing storage facilities, as for other purposes, is of course a matter for consideration by the Australian Loan Council, which I understand approved special borrowing allocations totalling $4m for the New South Wales Grain Elevators Board for 1966-67. The first advance, the payment of which is made possible by the Rural Credits Department of the Reserve Bank making the necessary moneys available to the Australian Wheat Board, is payable, in accordance with the terms of the Wheat Industry Stabilization Act 1963-1966, on wheat delivered to the Board. I understand that the last of the wheat in No. 29 Pool - 1965-66 season - was sold some months ago. The speed of construction of wheat storages must depend on a number of factors including the size, location and type of storage. The matter of assessment of needs and priorities is something which comes within the ambit of State responsibilities to which I have referred earlier in this reply. {:#subdebate-40-26} #### Australian Overseas Territories: Visitors and Settlers (Question No. 101) {: #subdebate-40-26-s0 .speaker-2V4} ##### Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP asked the Minister for Territories, upon notice: {: type="1" start="1"} 0. Under what circumstances can inhabitants of (a) Europe, (b) Asia, (c) Africa, (d) North America, (e) South America and (f) Australia enter Australia's overseas territories, including trust territories, as (i) visitors or (ii) settlers? 1. From what date has the current policy applied? 2. How many inhabitants of each of these continents have entered each territory as (a) visitors or (b) settlers in the last ten years? {: #subdebate-40-26-s1 .speaker-JOA} ##### Mr Barnes:
Minister for Territories · MCPHERSON, QUEENSLAND · CP -- The answers to the honourable member's questions are as follows: {: type="1" start="1"} 0. Australia's external territories coming under my administration include: The Territory of Norfolk Island; The Territory of Papua; The Trust Territory of New Guinea; The Trust Territory of Nauru; The Territory of Cocos (Keeling) Islands: and The Territory of Christmas Island. The Territory of Heard and McDonald Islands and the Australian Antarctic Territory are under the control of my colleague the Minister for External Affairs. Immigration policies applying to the Australian external territories, including trust territories, under my control are as follows. They are not based on the country of origin of an applicant Territory of Papua: Trust Territory of New Guinea: Administered jointly as the Territory of Papua and New Guinea. {: type="a" start="i"} 0. Visitors: Providing visitors can satisfy normal immigration requirements of health and character and either possess a ticket to a destination beyond the Territory, or a return ticket, or lodge a landing bond with the Administrator prior to entry, they may be permitted to enter the Territory for a period appropriate to the purpose of their stay, but generally not exceeding three months in the first instance. This period may be extended upon application to the Administrator, Limited numbers of certain key professional and technical non-European workers required for essential Territory enterprises may be permitted to enter the Territory for a period normally not exceeding two years even though these workers may not come within normal immigration categories. {: type="i" start="ii"} 0. Settlers: As a general rule no person may enter Papua and New Guinea for permanent residence unless he is eligible in similar circumstances to enter Australia for permanent residence. Normal immigration requirements of health and character must be met. The applicant must also lodge a landing bond with the Administrator prior to entry and must have approved employment in which to engage, or show evidence of possessing sufficient funds with which to maintain himself whilst in the Territory. Territory of Norfolk Island: Entry to and residence on Norfolk Island are in general governed by the same principles that apply to entry to and residence in Australia. Eligibility to enter Australia is a pre-requisite of admission to Norfolk Island. {: type="i" start="i"} 0. Visitors: Visitors are required to be in possession of return tickets or tickets to a destination beyond the Territory. 1. Settlers: Permanent settlers must have sufficient means of support together with satisfactory references as to health and character. Trust Territory of Nauru: Territory of Christmas Island: Territory of Cocos (Keeling) Islands: {: type="i" start="i"} 0. Visitors: A visitor must possess a valid passport or similar travel document and a ticket to a destination beyond the territory concerned. He must also satisfy character and health requirements and possess a recent chest X-ray. 1. Settlers: The British Phosphate Commissioners provide the major employment opportunities on Nauru and Christmas Island in connection with the extraction of phosphate in those territories. It recruits staff in Australia and elsewhere and recruits Asian labour under indenture for its operations on both islands, but on Nauru also employs indentured Pacific Islanders. The Australian Government recruits staff for the Administrations on Nauru and Christmas Islands, and Government functions on *Cocos* (Keeling) Islands are carried out by Commonwealth Departmental officers stationed there. Apart from people directly recruited for employment on Nauru and Christmas Island, opportunities do not exist for people to enter those Territories or Cocos (Keeling) Islands as settlers independently seeking to establish homes there. People entering the three territories with assured employment are required to meet the same entry conditions as for visitors except a ticket to a destination beyond the territory concerned would not be required. {: type="1" start="2"} 0. Current immigration policy has applied as follows: Territory of Papua and Trust Territory of New Guinea: 1966. Territory of Norfolk Island: Trust Territory of Nauru: Since at least end of World War II. Territory of Christmas Island: 1958. Territory of Cocos (Keeling) Islands: 1955. {: type="1" start="3"} 0. Figures of entry of persons into the external territories under my control from the continents specified are not available in that detail. Overall numbers of persons entering Papua and New Guinea and Nauru for various periods are shown below, but such data is not available for Christmas Island and Cocos (Keeling) Islands. During the ten years ended 31st December 1966, 24,487 persons visited Norfolk Island, of whom 153 took up permanent residence. {:#subdebate-40-27} #### Aboriginals: Wages (Question No. 229) {: #subdebate-40-27-s0 .speaker-JSU} ##### Mr Bryant: asked the Minister for the Navy, upon notice: {: type="1" start="1"} 0. How many Aboriginals are employed by bis Department in a non-service capacity in northern Australia? 1. Are any of these Aboriginals not receiving award rates? If so, in what areas are they located, and what are they paid? {: #subdebate-40-27-s1 .speaker-3V4} ##### Mr Chipp:
Minister for the Navy · HIGINBOTHAM, VICTORIA · LP -- -The answer to the honourable member's questions is as follows: >In the past, Aboriginals have been engaged by my Department in the Northern Territory under terms and conditions of employment that were determined by agreement between the Navy > >Department and the Northern Territory Administration, having regard to the terms and conditions of the Wards' Employment Ordinance. As at 30th June 1967, nine Aboriginals, including one at full award rates of pay, were employed. > >However, in accordance with Government policy, approval has now been given to the introduction of normal employment arrangements in relation to Aboriginals employed in my Department as from 6th Jury 1967. As from that date, employment opportunities will be available in the Northern Territory for ten Aboriginals at full award rates of pay and under all the other terms and conditions of the relevant industrial award or determination. {:#subdebate-40-28} #### Commonwealth Employees' Compensation Act (Question No. 273) {: #subdebate-40-28-s0 .speaker-KXI} ##### Mr Webb: asked the Treasurer, upon notice: >Will he supply the following statistical information in respect of the Commonwealth Employees' Compensation Act for each of the years ending on 30 June from 1960 to 1966, inclusive: > >The amount paid under section 9, general accidents in (i) cases of incapacity and (ii) cases of death. > >The amount paid under section 9a, travelling, in (i) cases of incapacity and (ii) cases of death. > >The amount paid under section 10, diseases, in (i) cases of incapacity and (ii) cases of death. > >The total, amount of compensation paid under section 12, specified injuries. > >The amount paid in respect of medical, surgical, hospital and funeral expenses. > >The total amount paid under the Act. > >The number of injuries in respect of which compensation was paid under the Act {: #subdebate-40-28-s1 .speaker-009MA} ##### Mr McMahon:
LP -- The particulars sought are as follows: {:#subdebate-40-29} #### Papua and New Guinea: Medical and Dental Officers (Question No. 313) {: #subdebate-40-29-s0 .speaker-YF4} ##### Mr Cross: asked the Minister for Territories, upon notice: {: type="1" start="1"} 0. Is the five year training course at the Papuan Medical College for the training of medical officers or for the training of assistant medical officers? 1. Are the graduates of this College subsequently employed by the Commonwealth as medical practitioners in the Territory of Papua or the Territory of New Guinea? 2. Are these medical graduates given the title of 'doctor' in the Territories. 3. Do these medical practitioners have the right under section 135 of the National Health Act to practise their profession in any outer State or Territory of the Commonwealth? 4. Does the Papuan Medical College train dental officers or assistant dental officers? {: #subdebate-40-29-s1 .speaker-JOA} ##### Mr Barnes:
CP -- The answers to the honourable member's questions are as follows: {: type="1" start="1"} 0. Graduates of the five year medical course at the Papuan Medical College are medical officers. Under the Medical Services Ordinance (1965), these graduates will be provisionally registered and later registered as medical practitioners by the Medical Board of Papua and New Guinea. Registration will follow two years experience in a working situation approved by the Board. The Medical Services Ordinance (1965) replaces legislation which did not contain satisfactory provision for graduates of the Papuan Medical College and required their registration as assistant medical officers. 1. They are employed by the Papua and New Guinea Administration as medical officers. 2. Yes. 3. No, unless they were also to bc registered in one of the States, the Australian Capital Territory or the Northern Territory. 4. The Dental College trains dental officers who will be provisionally registered or registered under the Medical Services Ordinance (1965). The Dental College is part of the Public Health Department. It is not part of the Papuan Medical College and the only relationship between them is that they provide mutual lecturing services. The dental course commenced in 1966. {:#subdebate-40-30} #### Commonwealth Employees' Compensation Act (Question No. 274) {: #subdebate-40-30-s0 .speaker-KXI} ##### Mr Webb: asked the Treasurer, upon notice: >What number of appeals were heard by county courts or equivalent State tribunals under the Commonwealth Employees' Compensation Act during each of the years ending on 30th June from 1960 to 1966, inclusive? {:#subdebate-40-31} #### Water Conservation Development Projects (Question No. 326) {: #subdebate-40-31-s0 .speaker-KXV} ##### Dr Patterson: asked the Treasurer, upon notice: {: type="1" start="1"} 0. What Commonwealth funds have been made available since 1st January 1930 to each of the States to finance water conservation development projects for irrigation, power and flood mitigation? 1. What amount was made available for each project? {: #subdebate-40-31-s1 .speaker-009MA} ##### Mr McMahon:
LP -- The answers to the honourable member's questions are as follows: {: type="1" start="1"} 0. The following are the Commonwealth funds that have been made available by way of specific purpose grants to the States between 1st January 1950 and 30th June 1967, to finance water conservation development projects for irrigation, power and flood mitigation: {: type="1" start="2"} 0. The following are the amounts that have been made available for each of the projects indicated: {:#subdebate-40-32} #### Commonwealth Assistance for Development Projects (Question No. 327) {: #subdebate-40-32-s0 .speaker-KXV} ##### Dr Patterson: asked the Treasurer, upon notice: >What total amount of Commonwealth funds has been made available to the States since 1st January 1950 by (a) non-repayable grants and > >interest-bearing loans for each development project approved by the Commonwealth? {: #subdebate-40-32-s1 .speaker-009MA} ##### Mr McMahon:
LP -- The answer to the honourable member's question is as follows: >The amounts of Commonwealth funds made available by way of specific purpose grants to the States between 1st January 1950 and 30th June 1967 for development projects are shown in the following table. {:#subdebate-40-33} #### Queensland Water Conservation Projects (Question No. 329) {: #subdebate-40-33-s0 .speaker-KXV} ##### Dr Patterson: asked the Treasurer, upon notice: >What total funds have been made available to the Queensland Government since 1st January 1950 to finance water conservation projects for irrigation for (a) the whole State and (b) the area north of the Tropic of Capricorn? {: #subdebate-40-33-s1 .speaker-009MA} ##### Mr McMahon:
LP -- The answer to the honourable member's question is as follows: >While no funds have been provided to the Queensland Government for the specific purpose of financing water conservation projects for irrigation purposes, by the assistance provided in all except two of the years since 1951-52 to finance the annual borrowing programmes approved by the Loan Council for State works and housing, the Commonwealth has helped to finance the Slate's total capital expenditure pro gramme. The Commonwealth has invited all State Governments to submit for consideration water conservation projects for inclusion in the national water resources development programme. Commonwealth Assistance for State Development Projects (Question No. 328) **Dr Patterson** asked the Treasurer, upon notice: >Wilh respect to each State development project financed by the Commonwealth since 1st January 1950, what are the estimated total payments and repayments by the States for (a) interest and (b) principal? {: #subdebate-40-33-s2 .speaker-009MA} ##### Mr McMahon:
LP -- The answer to the honourable member's question is as follows: >The estimated total payments and repayments by the Slates for (i) interest and (U) principal, {:#subdebate-40-34} #### Employment of Married Women (Question No. 357) {: #subdebate-40-34-s0 .speaker-JSO} ##### Miss Brownbill:
KINGSTON, SOUTH AUSTRALIA asked the Minister for Labour and National Service, upon notice: >What progress has been made towards removing the marriage bar in the terms and conditions of each Commonwealth instrumentality as he intimated would be done when he introduced the Bill incorporating the reform in the Commonwealth Public Service Act? {: #subdebate-40-34-s1 .speaker-JTP} ##### Mr Bury:
LP -- The answer to the honourable member's question is as follows: >Only in a few areas has action not yet been completed in relation to the marriage bar. Amendments of legislation are needed before the Overseas Telecommunications Commission and the Commonwealth Banking Corporation can implement the new policy. The problem as it affects the Women's Services and the Commonwealth Police is under examination. Three of the Departments and some of the statutory marketing boards have not yet completed their review of the position.

Cite as: Australia, House of Representatives, Debates, 15 August 1967, viewed 22 October 2017, <http://historichansard.net/hofreps/1967/19670815_reps_26_hor56/>.