Senate
28 June 1951

20th Parliament · 1st Session

  1. Senate
  2. 20th Parliament
  3. 1951

The PRESIDENT (Senator the Eon. Edward Mattner) took the chair at 11 a.m., and read prayers.

page 559

QUESTION

POSTAL DEPARTMENT

Senator CRITCHLEY:
SOUTH AUSTRALIA

– Is the Minister representing the Postmaster-General able to inform the Senate what decision, if any, has been made by the Government in response to the repeated requests, that have been made by residents of the Wallaroo Mines district, South Australia, for the provision of proper conveniences for the public who desire to use the telephone at the local post office) I point out to the Minister that the public telephone is completely exposed to the elements, and no amenities whatever are provided for residents who have occasion to use it. If no decision has yet been made by the PostmasterGeneral, will he undertake to make an inspection of the telephone facilities at the post office’ at Wallaroo Mines?

Senator COOPER:
Minister for Repatriation · QUEENSLAND · CP

– I have no information to give to the honorable senator at present, but I shall find out from the Postmaster-General just how the matter stands and let him know.

page 559

QUESTION

SHIPPING

Senator HENTY:
TASMANIA

– It is reported that the Minister for Shipping and Transport has arranged for a vessel to lift accumulated cargoes of timber from -Tasmania shortly. Can the Minister inform me whether that ship will sail from Melbourne, and if so, whether it will carry general cargo for Tasmania from that port?

Senator McLEAY:
SOUTH AUSTRALIA · UAP; LP from 1944

– I shall make inquiries from the manager of the Australian Shipping Board and obtain a reply to the honorable senator’s question either this afternoon or to-morrow.

page 559

QUESTION

BUTTER

Senator TANGNEY:
WESTERN AUSTRALIA

– In view of the shortage of butter in Canberra and Sydney, will the Minister representing the Minister for Commerce and Agriculture consider subsidizing the freighting of butter from Western Australia where supplies are plentiful, to those cities so that Sydney and Canberra families will not have to pay 4s.. 4d. per lb. as they are doing at present for butter carried by air from Western Australia ?

SenatorMcLEAY. - I shall consult the Minister for Commerce and Agriculture and ask him to give consideration to the matter that has been raised by the honorable senator.

page 560

QUESTION

ELECTORAL

Senator GUY:
TASMANIA

– Will the Minister representing the Minister for the Interior give consideration to the appointment of aselectcommittee to consider and report upon electoral reform, particularly in relation to the method of voting at Senate elections and canvassing on polling days?

Senator McLEAY:
Minister for Shipping and Transport · SOUTH AUSTRALIA · LP

– I shall be pleased to bring that matter to the notice of the Minister for the Interior for consideration.

page 560

QUESTION

DEPARTMENT OF HEALTH

Senator BENN:
QUEENSLAND

asked the Minister representing the Minister for Health, upon notice -

  1. Is there a unit of industrial hygiene and medicine functioningwithin the Department of Health?
  2. If so, what are the functions of the unit, and where may any of its reportsbe examined?
Senator COOPER:
CP

– -The Minister for Health has supplied the following answers : -

  1. Yes. The unit is established within the Department of Health at the School of Public Health and Tropical Medicine, University of Sydney.

  2. The functions of the unit are -

    1. to act as a training school for medical men and others needed to carry out investigations into industrial hazards and problems of industrial hyginene; (b.) to advise the Government on all problems relating to diseases in industry.;
    2. as a research unit to initiate industrial hygiene fieldinvestigationsinto the cause, nature and extent of industrial health hazards.

The head of the unit acts as the Lecturer on Occupational Diseases within the University of Sydney. He is Secretary of the Committee on Industrial Hygiene of the National Health and Medical ResearchCouncil and the unit is the focal pointof liaison between the Department of Health and Labour and National Service in the publication of literature on industrial hygiene and welfare having medical aspects.

The reports may be seen at the School of Public Health and Tropical Medicine.

page 560

QUESTION

NATIONAL SERVICE ACT

Senator KENDALL:
QUEENSLAND

asked the Minister representing the Minister for Labour and National Service, upon notice -

As all those affected by the penaltyclauses in the National Service Act, which deal with failure to register or report for service training, are at present under the age of 21 years, does the onus fall on the parents or guardians in any way should their children or wards fail to observe the act

Senator SPICER:
Attorney-General · VICTORIA · LP

– The Minister for Labour and National Service has supplied the following answer: -

The Minister for Labour and National Service has advised that the National Service Act 1951 provides that a parent or guardian of a person required to registerunder the act shallnot prevent that person fromso doing or from complying with any other requirement ofthe act. The parent or guardian is not, however, under any position obligation to ensure that the person liable to register does so, or that he obeys his call up notice and the parent is not subject to a penalty if he tails to do so.

page 560

QUESTION

REPATRIATION

Senator SANDFORD:
VICTORIA

asked the Minister for Repatriation, upon notice -

Are any Repatriation benefits available to defacto wives and/or de faoto children of ex-servicemen ?

Senator COOPER:
CP

-Section 42 of the Australian Soldiers’ Repatriation Act provides for benefits to certain dependent females of members of the forces and reads as follows : -

  1. Where, at the time of the occurrence during his war service of an event that resulted in the incapacity or death of amember of the forces (including a member of the forces within the meaning of section one hundred or section one hundred and seven b of this act), a person was recognized as the wife of the member though not legally married to him, and the commission is satisfied thatthat person was wholly or partly dependent upon the earnings ofthemember, a pension under this division may be paid to that person at a rate not exceeding the rate of pension which would have been payable to her under this division if she had been legally married to themember.

The same benefits are granted to an exnuptial child under the act as are granted to a legal child provided the ex-nuptial child was born before oi within nine months after the member’s death or discharge from the forces or the termination of the war, whichever first happened.

page 561

KOREA

Senator SPOONER:
Minister for National Development · NEW SOUTH WALES · LP

– On the 26th June, Senator Robertson asked whether a special jubilee monetary grant would be considered for the .3rd Royal Australian Regiment in Korea to mark the nation’s appreciation of their gallant services. I have been advised by the Minister for the Army that, although a special monetary grant of this description is not proposed, the gallant services of the members of that unit are fully appreciated by the Government, which has already authorized special pay and other conditions of service for them, including deferred pay, gratuity pay, taxation exemptions, and the like. The Governmen’t has also declared as its policy that on discharge repatriation and post-war benefits should, as a general rule, be not less favorable for men with Korean service than for those who served in “World War II.

page 561

OIL FROM SHALE

Formal Motion fob Adjournment.

The Government’s proposals in relation to the discontinuance of the production of shale oil a’t Glen Davis.

Senator ASHLEY:
New South Wales

– I move -

That the Senate, at its rising; adjourn to Tuesday .next, at 3.15 p.in.

The PRESIDENT:

– Is “the motion supported?

F.our honorable senators having risen in support of the motion,

Senator ASHLEY:

– In order to deal effectively with this matter I shall trace briefly the long and chequered career of the shale oil industry in Australia. It was first established in the early part of this century at a place known as Wolgan on the Wolgan River, ‘by a British company that subsequently went into liquidation, and was known as the Wolgan Shale Oil Industry. In 1933 the Lyons Government, in conjunction with the Stevens Government of New South Wales, appointed the Newnes Investigation Committee to inquire into the possibility of the production of oil and petrol from shale in New South Wales, and to furnish its report to the Honorable A. J. McLachlan, Minister of Central Development for the Commonwealth, and the Honorable R. S. Vincent, M.L.A., Minister for Mines in New South Wales. The committee was composed of men of high standing and ability, many of whom are still engaged in the commercial life of this country. It included Mr. Robert W. Nelson, chartered accountant, chairman; Sir John Butters, consulting engineer; Sir Herbert Gepp, Commonwealth consultant on development-; Mr. Alex J. Gibson, consulting engineer ; Mr. V. J. F. Brain, chief electrical engineer, Department of Public Works, New South Wales; Mr. E. J. Kenny, geological surveyor, New South Wales Mines Department ; and Mr. Malcolm Morrison, curator of the New South Wales Mining Museum. I point out that .the committee was appointed by two conservative governments ‘of the same political thought as the Australian Government now occupying the Treasury bench. I make no complaint about its appointment, which was brought about by pressure that was brought to bear not only by the people of Australia as a whole but by the trade unions and the Labour movement. Its report of 1934 to the respective Commonwealth and State governments is readily available in the Parliamentary Library for perusal by honorable .senators. The committee reported that 6,000,000 gallons of motor spirit and 19,000,000 gallons of crude oil could be produced each year, for a capital expenditure of £600,000. Towards the end of 1936, after public application had been invited for companies to develop this field, and no applications being received the Government approached Mr. George Davis, who later became Sir George Davis, of the Davis Gelatine Company, to develop the field. He agreed, and a company was formed, known as National Oil Proprietary Limited. The arrangement with Mr. Davis was covered by the National Oil Proprietary Limited agreement which was ratified by the Parliament in 1937. Under that agreement, the capital to be provided consisted of £334,000 by the Australian Government, £166,000 by the Government of New South Wales, and £166,000 by National Oil Proprietary Limited. The government moneys were provided on a loan basis at 44 per cent, interest. Following the appointment of the committee, and during the investigations that took place between 1933 and 1934, when the approach was made to Mr. Davis, the oil companies of Australia were apprehensive of the interference with their industry because of the research that was being undertaken, and the price of petrol was reduced from 2s. a gallon to ls. 7d. and ls. 5d. a gallon. At that time petrol had been sold at 2s. and ls. lOd. a gallon, there being two grades. That reduction was made deliberately in order to frustrate the investigations and to indicate the uneconomic aspect of the extraction of oil and petrol from shale.

I mention that matter because I think that to-day there is a similar indication in the proposed disposal of the Glen Davis plant to the Bitumen Oil Company of New South Wales. I refer particularly to the plant known as the cracking or refining plant. In fact, it was previously admitted by the Minister for Shipping and Transport (Senator McLeay) that negotiations had taken place with the major oil companies concerning the disposal of that plant. One would have expected that the recommendations of the committee that was appointed by conservative governments would receive the .fullest consideration, and that the governments of the day, both State and Federal, would have ensured that those recommendations were carried out. One of the initial blunders made in connexion with the development of the oil industry in Australia can be attributed to the conservative governments of this country, which ignored the recommendations made by the committee to which I have referred. I now wish to read the following extract from the report of the committee : -

After considerable investigation and research, and on the advice of the best technical experience in Australia, when this committee recommended that the industry remain at Newnes, the company that was formed through the financial and moral assistance of the then State and Federal governments removed the industry to Glen Davis.

It has now been suggested that the industry was removed to Glen Davis to give the company a greater opportunity to exploit the people through the sale of land which the company owned there. A great deal of that land has been sold to home makers. After the committee’s recommendation had been made, two sites were considered - site “A” at Wolgan and site “ B “ at Glen Davis. In the latter part of its operations at Wolgan the industry was known as the Newnes shale oil industry. A railway station had been provided between Mount Victoria and Lithgow to serve its needs, and its employees who lived at Newnes, or Wolgan, enjoyed all the amenities that are normally provided in country towns. A school, a police station, and a post office were provided and the area was served by an abundant and unfailing water supply from the Wolgan river. In spite of the fact that the committee had estimated that it would cost only £25,000 to put the undertaking in first-class order, it was removed to Glen Davis.

I ask the Ministers concerned to pause for a moment and consider the vast amount of money that was involved in dismantling the tens of thousands of tons of machinery that had been installed at Newnes and transporting it over the mountain and down the valley to Glen Davis, 56 miles away by road. I ask them to consider also the damage that was done to the machinery in the course of a transfer made against the advice of a committee which had been appointed by conservative governments for the purpose of developing the industry. I direct particular attention to one item of expenditure involved. Provision was made for a water supply at Glen Davis at an estimated cost of £12,500, but when the work had been completed the final cost amounted to nearly £400,000. The Treasurer (Sir Arthur Fadden) has considered this industry solely from a financial aspect, completely disregarding its value to the defence of this country. He has complained that in 1949 it cost the country no less than £400,000. I have directed his attention to the great burden which this industry had to bear, and which no other industry in Australia would attempt to bear, in interest and depreciation charges. Interest payments absorb £167,000 a year, and £124,000 a year is written off in depreciation. No industry in the world could carry that burden even under the best conditions. Certainly it is an impossible burden for the Glen Davis project, which is tucked away in an isolated valley 60 miles from the nearest town, and without even the ordinary amenities of life. It is little wonder that the greatest difficulty has been experienced in getting labour. As a matter of fact, we were for some time without a mine manager, and in 1949 I had to bring one from England. He made certain recommendations, and I expected that after the Labour Government went out of office in 1949 the new Government would give some consideration to those recommendations.

The production of oil from shale in Australia has proceeded by trial and error. The shale deposits are extraordinarily rich. Those at Glen Davis produce up to 100 gallons of oil to the ton, whereas Scottish shale produces only about 23 gallons to the ton. Indeed, one of the earliest difficulties encountered in Australia arose from the fact that the shale was so rich that the retorts, which were similar to those used in Scotland, were unable to treat it satisfactorily. Eventually, it was necessary to add inferior shale in order to reduce the oil content per ton. As I have said, the industry has been developed by trial and error.

Senator McLEAY:
SOUTH AUSTRALIA · UAP; LP from 1944

– So much so that it is developing backwards.

Senator ASHLEY:

– Apparently, tha Minister for Shipping and Transport (Senator McLeay) has himself been developing in the same way, because he has recently been relieved of some of his responsibilities. So long as production continues, technical know ledge of inestimable value is being gained. Petroleum experts from America have visited Glen Davis, and studied the work being done there. A further burden placed on the project was the cost of removing retorts from Newnes to Glen Davis. They had to be dismantled, transported over difficult country and reerected. When Sir George Davis was in control of the enterprise, he brought an American engineer to this country to experiment in the retorting of shale. The experiments cost a great deal of money and also, unfortunately, a number of lives. Finally, it was found necessary to revert to the use of the original retorts in an improved form. To-day, the production bottle-neck is not retorting, but the mining of shale. In a statement made on the lst J January this year. The Treasurer (Sir Arthur Fadden) said -

It is well recognized that the crucial factor in shale operations is the cost at which a sufficient quantity of raw shale can be mined.

During the war, mechanical methods of mining were introduced on the advice of those who were supposed to understand the matter. Unfortunately, the machinery was not suitable for the work. I accept responsibility for what was done. The machinery was designed for working coal, and when employed for the mining of shale it broke down continually. After consultation with mining experts in Australia it was decided to abandon the bord and tunnel system of mining and revert to the long wall method. When machinery was used, it collected too many stones and too much soil with the shale, with the result that the oil content dropped from nearly 100 gallons to the ton to 50 gallons. The miners cannot be blamed for that, but I have heard a member of the Liberal party say that production declined because of Communist activity on the field. That is entirely wrong and is typical of the excuses put forward by the Government to explain its many failures. The Government may attempt to answer the case I am putting forward by reminding me that in 1949 1 warned the miners at Glen Davis that unless production improved the plant would probably have to be closed. In the course of a statement made by the Treasurer, he said -

Senator Ashley, as Minister for Shipping and Fuel, visited Glen Davis in February, 1949, and warned the employees that the industry would have to close, down, unless production increased.

That statement conveys a misleading impression of the advice that I tendered to the miners on that, occasion. What I said to them was that if a change of government, occurred, the major oil companies in Australia would undoubtedly take advantage of the opportunity to urge the Government to close down the plant.

I remind honorable senators that in the precarious days of 1941, in the early stages of World War II., supplies of petrol from overseas were most uncertain. Sufficient tankers were not available to bring petrol to this country in bulk and we had to import petrol in barrels. That unfortunate state of affairs confronted Labour when it took office in 1941, and was largely a consequence of the neglect of the preceding anti-Labour administrations to accumulate sufficient stocks of petrol to safeguard our security. I know that the late. Mr. John Beasley, who was Minister for Supply in the Curtin Government,, had to scour the world for supplies of petrol. I also point out to honorable senators that only last year the Government of the United States provided 60,000,000 dollars to finance searches for oil deposits and for research into the production of synthetic oil. Of that huge sum of money, 30,000,000 dollars was specifically provided for research into the production of oil from shale, and that, sum is infinitely greater than the total amount that has been lost in developing the production of oil from shale in this country. I appeal to the Government,, even at this late hour, to conduct a proper investigation of the Glen Davis project and not to take action on the recommendation of a mere departmental committee. There must be something sinister in the Government’s proposals when it is. not prepared to release the names of the members of that, departmental committee. By refusing to reveal the identity of members of the. committee the Government is preventing representa-tions from being made to that body. I stress: the fact that such representations would be concerned not only with the livelihood of the residents of Glen Davis but also with the more important matter of the future, defence- of Australia.

It will be a national scandal if the Government discontinues the production of oil from shale. Ministers- have suggested that part of the cracking plant at Glen Davis1 may be transferred to Tasmania, but that is only soothing syrup ladled out in answer to “ Dorothy Dixers “ and is intended to quieten the anxiety that has been aroused by its announced intention to shut down the industry. The fact is that there are no shale or petrol deposits in Tasmania to be developed, and that the only use to which cracking plant could be put in that State would be to process imported crude- oil. I point out that any proposal to rely for petrol supplies upon imports of crude oil is potentially dangerous to this country because- if it is desired to produce a certain quantity of refined petrol double that quantity of crude oil must be processed in order to do so, which means that in time of war an enormous additional load would be thrown upon the shipping available for the transport of liquid fuel to this country. The present Government is unable to provide shipping, even in time of peace, to transport a few thousand tons of potatoes from Tasmania to the. mainland, where they are so badly needed, or even to transport, supplies of flour to- Tasmania, to relieve the acute scarcity of that commodity in that. State; I cannot, understand, therefore, how it- could possibly, obtain sufficient shipping space to import to Australia anything’ like an adequate supply of crude! oil in time of war.

Senator SPOONER:
Minister for National Development · New South Wales · LP

.- The d’uty of His Majesty’s Opposition is to oppose, and that is a principle to which we all subscribe. However, I believe that an Opposition, also has a duty to exercise that privilege in a responsible way. I suggest that at the conclusion, of the debate the explanation furnished by the Government of the action that it proposes to take in this matter will demonstrate that the Opposition, in bringing- this matter forward, is not exercising, its. privilege in a responsible, manner.

Senator Ashley:

– Why not make the Government’s proposals in this, matter an issue at the Macquarie by-election and let the people decide the matter?.

Senator SPOONER:

– That interjection, by Senator Ashley reveals the real motive; of the Opposition in bringing this matter forward. By supporting the motion submitted by Senator Ashley the Opposition has. made it clear that it is not actuated by any sense of national responsibility. Senator Ashley d!oes> not. care one whit for the good of Australia ; his only concern, is to bolster up. the dying Labour party by raising some trumped-up issue that he hopes will enable that party to win the Macquarie constituency. That is the only reason for the attitude adopted by the Opposition in. this matter.

To any disinterested observe^ no more powerful case could be made out for the closing- of the industry at Glen Davis than that which has just been presented by Senator Ashley in the course of hia speech. Indeed, if I had tried to think of all the- possible arguments to support the Government’s case, I confess that I would have been hard put to it to improve upon the case presented by Senator Ashley. In the course of his remarks he admitted that suitable labour for the industry cannot be obtained at Glen Davis. He also admitted that, suitable persons’ to manage the industry are- not available in- Australia and that qualified personnel baa to be brought, from overseas.. He also’ admitted that every consideration has been given to the industry by Labour and anti-Labour administra-tiona over a period of years, and tha adequate funds and technical assistance have been made available to the project. Neither the present Government nor the Opposition is responsible for what happened in years gone by in establishing the industry at Glen Davis. We must act to-day in the light of the circumstances that confront us now. Whether an initial mistake was made by establishing the industry at Glen Davis does not really concern us now. I am not asking the Senate to decide whether any such error was1 made ; I am merely stressing a fact that was mentioned by Senator Ashley himself, when he admitted that the Glen Davis undertaking has proved to be a most unsuccessful venture. The honorable senator claimed that the undertaking had overcome the difficulty caused by the installation of unsuitable retorts, but he had. to. admit that. it. is now confronted by difficulties related to the. actual mining of the shale, and he had to admit also that the plant is not suitable for the purpose, for which it was purchased. He> said also that the> machinery constantly breaks down and gives trouble. He admitted, that he was. sorry that he was the Minister responsible, for ordering that machinery.

Senator McLEAY:
SOUTH AUSTRALIA · UAP; LP from 1944

– The honorable senator got out of his depth.

Senator SPOONER:

– He. could not get out of his depth in the petrol! that is produced there. I shall1 make only one sharp criticism. I hope- that the rest of my remarks will be couched in moderate, terms. I take the strongest objection to Senator Ashley’s comment, made for miserable party political purposes, that there is something sinister behind the Government’s common-sense’ move and that what is being- done is being done in conjunction with major oil interests.

Senator Ashley:

– I rise to order. 1 did not say that there was something sinister in the Government’s actions. I asked whether there was something sinister in them. I ask for a withdrawal of that statement.

Senator SPOONER:

– If Senator Ashley says that he did not say what I have, stated he said, I accept him word. But, surely I am entitled to. say that it. is a. distinction- without a difference. There is not, the slightest: doubt that he endeavoured to attack the Government’s bona fides- in relation to this matter. I shall> approach the problem in a more reasonable and generous manner than that in which it was approached by Senator Ashley. I do not. criticize Senator Ashley for having ordered the wrong machinery. Nobody expected him- to know what was the; right type of machinery. All that he,, or any other Minister, could do- was to act upon the technical advice that was tendered to him. Since 1933,, when- this plant was-, established, there have been several changes of government in the Commonwealth. Each government that has been in power has tried to place this industry on a sound basis. It has dipped into the nation’s coffers and expended public moneys upon proposals made by its technical advisers.

But not one of those proposals has been successful, and not one of those endeavours has resulted in the industry being placed upon a reasonably sound basis. That being so, can any fair-minded person come to a conclusion other than that the whole proposal is basically unsound? No political party has a monopoly of the virtues. Each party has done all that it could do to place the industry on a sound basis and each party lias been unsuccessful.

The ball is now in our court, and it is our responsibility to reach a decision. A proposal was made for the expenditure of a substantial sum of the taxpayers’ money upon a scheme that an expert considered would be for the good of the industry. Having examined all the facts and considered the sorry history of the industry, we came to the conclusion that we should not be justified in putting more money into it. We believe - and I hope that our belief is shared by the Opposition - that we must marshal the resources of this nation in such a way as will enable us to undertake necessary defence preparations and, as far as possible, implement our developmental programme. Therefore, we are bound to examine in a sane and sensible manner every proposal that is made to us. I believe that that is incontrovertible. The only logical approach to the Glen Davis problem is to consider the effect of any action that may be taken upon, first, our defence effort; secondly, the objective of establishing and safeguarding Australian industry which is common to all parties; and thirdly, those who are dependent upon Glen Davis. Approaching the matter from the defence viewpoint, the hard fact is that the annual production of petrol at Glen Davis, which is 2,750,000 gallons, is only two-thirds of the load carried by one tanker. If we imported seven tanker loads of petrol, we should have imported a quantity equal to that which would be produced at Glen Davis in a decade. Seven tanker loads of petrol is the equivalent to ten years’ production at Glen Davis.

The cost of producing petrol at Glen Davis is 5s. 3d. a gallon, if an interest charge is included, and 4s. Id. a gallon if the interest charge is excluded. Petrol can be imported at a cost of ls. 3d. a gallon. I have cited figures for last January, and it may be that costs have increased since then. However, if the cost of imported petrol has increased since January, it is probable that the cost of petrol produced at Glen Davis has increased to an even greater degree. Therefore, the figures that I have cited still form the basis for a fair comparison of costs. Unfortunately Glen Davis cannot make a contribution of any significance to the defence of Australia.

What should be done in those circumstances? One of Australia’s great weaknesses is its lack of capacity to refine crude oil. We have been advised that if we used the plant at Glen Davis to refine crude oil we could obtain from it 16,500,000 gallons of petrol a year. We could continue to operate the plant at the present site. However, that would necessitate the laying down of a pipe-line from Sydney to Glen Davis. I do not think that anybody would accept such a fantastic proposition. The alternative would be to shift the plant to some other situation.

Senator Ashley:

– To where?

Senator Grant:

– To Tom Murray?

Senator SPOONER:
NEW SOUTH WALES · LP

– That second interjection is typical of the mentality of some members of the Opposition in this chamber. The honorable senator who made it has no sense of national responsibility. His only endeavour is to play parly politics at its meanest and lowest level. It is an interjection with which I would be ashamed to be associated in an ordinary debating society or in a football club, far less in the National Parliament. From the point of view of defence, surely it cannot be argued that it would not be better to move the plant to a situation whereit could produce 16,500,000 gallons of petrol a year. There arises another equally important factor. There is no doubt that the industry in its present position cannot be re-organized or rehabilitated, because many of its employees of long standing are seeking more secure positions elsewhere. Whether we like it or not we must face the fact in any event Glen Davis will ultimately close down through lack of employees. If the plant closes, Australia will be denied the only source of petroleum coke in Australia. As honorable senators know. aluminium cannot be processed or manufactured without the use of petroleum coke. The Commonwealth is already committed to a large aluminium manufacturing project in Tasmania. Without a doubt those who are associated with Glen Davis know that the shale oil industry there is on the way out. Men are leaving their employment at Glen Davis, and unless we are particularly careful it will be found, when Glen Davis has closed, that there is no petroleum coke, and that the aluminium plant in Tasmania, although completed, cannot be put into operation because of the lack of that commodity. Therefore there is urgent necessity for decision in this matter. At present the Commonwealth has £4,500,000 invested in Glen Davis, without making any allowance for accrued interest. By making no interest charges at all, we, as a Parliament, and not as political parties, have shown an earnest of our endeavours to get this industry going in Australia by investing that large amount of capital in it. Arrears of interest amount to £1,000,000. Since the indus: try was commenced, the Commonwealth has expended £5,500,000 on it, for a production of 2,750,000 gallons of petrol a year. There have been all sorts of difficulties associated with Glen Davis which indicate to wise men that if they cannot be surmounted the problem is insoluble. It was suggested to the Government that as a last endeavour it should purchase long-wall mining machinery at a cost of £110,000. While machinery was being installed and the mine developed, which would take about eighteen months, another £300,000 would be lost. I do not think that any one would disagree violently with my statement that it was proposed that the Government should put in another £500,000 for the purpose of having a last gambler’s throw to see if the undertaking could be rehabilitated, and whether we could get this trickle of petrol. Even if we were successful, the industry could not be carried on with the present staff. We would require a substantially increased number of miners. The Government considered that it could not obtain additional miners, unless houses were available foi them.. Furthermore, there are not enough miners on the coal-fields, where the basic .problem is the provision of sufficient houses to attract men to mining. As a last throw, the Government was asked to obtain miners from the’ coalfields, where they are performing useful national work, and employ them at Glen Davis.

The Opposition has criticized the Government’s announced intention to close Glen Davis. The facts are that the Labour party came to a somewhat similar decision in 1943, when in office. It was requested to adopt a similar proposition, but declined. I do not blame Labour for declining; it probably came to the right conclusion. Those who now criticicize the Government should search their conscience as to why they did not then do what they now ask this Government to do. The position is really worse than I have indicated. The Labour party refused to stand behind this industry in 1943, but is now prepared to make mouthy platitudes to the Government. Even when Labour was in office in 1948 it was not prepared to allow this industry to obtain the dollars that were required for the purpose of purchasing additional plant. That was a proposal, not that the Labour Government should put additional capital into the scheme, but that it should make dollars available. It was not prepared to do even that. 1 hope that I am a peaceable man and thai; I do not speak in a heated way. However, I consider that it is completely intolerable that the Opposition should, on the eve of a by-election, make criticism such as this. It is criticism in which no reasonable member of the Opposition could have confidence, and it is levelled merely for the purpose of upsetting or attempting to destroy the Government in its performance of a task during a time of national emergency.

No case has been made out by Senator Ashley in support of his criticism. At one time he himself was the responsible Minister and in that capacity he had every opportunity to take action similar to that which he now suggests the Government should take. He refrained from doing so himself, but in an unjustifiable and an untenable way he now endeavours to criticize us. The Government has come to the conclusion, which it believes to bp the correct one, that this industry must be reorganized in the interests of Australia. We must provide the refined petrol which the country needs, and at thu same time we are obliged to safeguard supplies of petroleum coke. Experience over many years unfortunately shows that those things cannot be done at the present site of the refining plant. I point out to honorable senators that the Government is not acting hurriedly in this matter ; but it is determined, in a time of crisis, to do its best for those who are dependent upon the Glen Davis industry and to act in the fairest and most reasonable manner. An undertaking has been given to the persons concerned that when the sequence of events has been worked out by those who possess the knowledge to do so, the persons affected will be called together and informed of what the Government contemplates in order that each one will be enabled to make the best possible arrangements for the protection of his own interests.

I make no apology for the decision of the Government or for its policy in this matter. ‘The real and simple truth is that a decision, which was shirked by the Australian Labour party when it was in office, has been made by the Government. I consider that it is a decision that should be put into effect in the interests of Australia.

Senator ARMSTRONG (New South Wale [12.13]. - I rise to support the motion proposed by Senator Ashley. My first reaction is not to deny for one moment the earnestness of the Government in this matter or, for that matter, the earnestness -of any Minister concerned. If earnestness is a praiseworthy quality in this matter, I give the Government full marks. However, it is not a question of earnestness. What is on trial is the judgment of the Government and of tinMinisters concerned. I point out that some of the most earnest men have been the greatest blunderers. The Government is on trial to-day before the people of Australia, and the long-term verdict will be one of guilty, because it has taken a decision which bears the earmarks of grave national dereliction of duty.

Mention has been made of the trickle of petrol that comes .from the plant at Glen Davis. That is perhaps true, but what is being done to increase the flow?

It is an industry in the experimental stages, in the first stumbling years of its existence.; but because of the natural shale deposits that exist there, it could make a tremendous impact on the national economy in years to come and could help to ensure the national safety. All honorable senators will remember the tragic history of the early years of World War II. The day might yet come when every gallon of the 3,000,000 gallons a year produced by the Glen Davis plant will be worth £1,000,000 to Australia. That day nearly dawned when the Australian Labour party came to office in 1941. The Minister for Shipping and Transport (Senator McLeay) has ample knowledge of that. At that time there was less than three months’ supply of petrol in the country, and the United States of America and Great Britain were not prepared to send us any.

Senator McLeay:

– That is not true. The honorable senator has forgotten that the United States of America helped us out.

Senator ARMSTRONG:
NEW SOUTH WALES

– Finally it did.

Senator McLeay:

– While we were in office.

Senator ARMSTRONG:

– That assistance merely kept the Government afloat. I repeat that at that time there was on hand sufficient petrol ‘ for only three months. It has been said that the greater the truth the greater the libel, and I have no doubt that that saying applies in the instance to which I have just referred. The Minister knows very well that we were forced to import petrol in drums. As Senator Ashley has already stated, we scoured the world. We should examine the international position as it now appears. I remind honorable senators opposite that we are not living only for to-day and that we have responsibilities to the nation. We must look forward. What will happen if the much discussed conflict comes to pass and that the nation to which the Government .has pointed becomes in reality our enemy ? What will then be our .source of supply of oil and petrol? In the event of such a catastrophe, do honorable senators opposite really believe that we shall receive one ton of oil from Persia? The great source1 of our oil supplies to-day, the United States of America, geologically is old. The flow of oil from the’ Persian oil wells is. 400 times as great as that from individual wells in the United States of America. That shows that the United States of America, which is already spending vast sums of money on oil research,, within the next ten to twenty years will, find it necessary to mix flow oil with synthetic, products.. It is at. present planning for that time by spending huge sums on research,, whereas in. Australia,, we are tearing down and. destroying our installations.

We all pray, that there will, never be another war, but, if there is, I suggest that, we: must write off supplies of oil from Persia. I do not say that Russia could use Persian oil for many years to come, because the distances involved are too great, particularly in time of war. I suggest, however, that rather than see a ton of Persian oil supplied for our use, those plants would be bombed and put out of commission. If that happened we should be, in a worse position than that in which we find ourselves to-day. I do not suggest that the production of 3,000,000 gallons of oil a year- would save us, but I do suggest that when our oil supplies can become as low as they were in 1941 we should thank the Glen Davis plant for every gallon of petrol that it can produce. I appreciate the: problems of all the governments that have been concerned with Glen Davis, but my approach to this matter is the long one. In all great national efforts difficulties must be expected. Such difficulties constitute a challenge to the Government. Nobody would contend that down the years the shale oil undertaking has been completely efficiently handled, but it cannot be denied that a great deal of brain-power, money and energy have been directed to it. One reason for my confidence in the future of the undertaking is the outstanding fact that a great Australian engineer, Mr. Keith Butler, the general manager of the works of the Broken Hill Proprietary Company Limited at Newcastle, has advised the Labour government to continue to persevere with the industry because of the great amount of money spent on it and its grea>t national value. Most honorable senators know the gentleman to whom I have referred. The Labour government had to face all the difficulties which this Government is now- experiencing in connexion with the undertaking: It examined the project very closely; it scrutinized most closely the financial aspect of the venture and it considered very carefully the man-power and other problems involved in exactly the samecold, earnest way as the present Government is doing. After taking all these’ factors into account, we reached a decision completely the reverse of that of the present Government. We would not be a party to the destruction of an industry which might well prove to be the cradle of. the greatest development which this country had ever known. Almost inexhaustible supplies of oil-bearing shale are available at Glen Davis. Are we to turn, our backs, on the tremendous potential source of power in the Wolgan Valley for once and all and say that it, is impossible to do anything to develop it? Arn we- to be defeatists and say that there arc not in. this, country, or in the world, men. of sufficient capacity to place this industry on a satisfactory footing? I should not be afraid to bring the best technical men. from other countries to assist in. its development. Indeed, I greatly favour such a course. Is the Government so completely defeatist in outlook that it is prepared to write off these great national’, shale resources on the ground that the cost of their development is too great ? All the earnestness in the world will not justify this decision of the Government in the eyes of the people. It was realized at the outset that this undertaking could not become an economic proposition for twenty years. When the project was first investigated in 1924 the investigating committee advised the Government not to expect it to be an economic proposition. Any government that expects an undertaking of this kind to be an economic proposition in the early years of its operation is foolish. The Government should reverse its decision and, as a first step towards the placing of the undertaking on a sound basis, it should write off the heavy interest charges which it has to bear. It is rather late to plead for the life of this industry, but plead we must in the national interest.

The Minister for National Development (Senator Spooner)’ has most unfairly suggested that the forthcoming by-election in Macquarie has some bearing on this .motion. We have taken this, the first opportunity that has been afforded to us, to debate the Government’s decision since its announcement was first made. Certainly this decision will be discussed during the by-election campaign. After all, 2,000 men, women and children in Glen Davis, which lies within the electorate of Macquarie, are to be uprooted from their homes. I do not know what the Government proposes to do for them. The Wolgan valley is one of the richest areas of oil bearing shale in the world. This is not a case of a decision to abandon a town after the wealth has been taken out of the surrounding area. In this instance the Government proposes to abandon the project and leave the wealth in the ground. I had thought that the Minister for National Development and the Minister for Shipping and Transport (Senator McLeay) had much greater vision than to worry about this industry in terms of present-day conditions. Surely anything would’ be better than to turn our backs on these tremendous shale resources. In 1949, the trading loss incurred by the undertaking amounted to £183,000. Surely that is a small premium to pay for the ultimate benefits which will be derived. Glen Davis may be regarded as an Australian laboratory, even as a world laboratory, in which can be developed knowledge about the handling of oil from shale. The Department of Supply has spent considerable sums of money in financing private companies engaged in the search for flow oil. Do honorable senators opposite contend that, because no positive results have been achieved, that money has been wasted? Although the money has irretrievably gone down the drain our oil engineers have gained a great deal of practical experience and at least certain defined areas can be disregarded as the search continues. In this instance, however, valuable sources of oil are known to exist and only need development. What does a loss of £183,000 a year mean to the Government which stands to lose £12,000,000 on the operations of the

Postal Department alone ! Does it intend to close down the Postal Department because of its cost to the community? Not at all. The Government’s earnestness in this matter will not save it from the results of this decision. I am prepared to accord it full marks for earnestness in this matter, but I question the wisdom of its decision. Similar decisions have not been made in respect of other governmentfinanced undertakings. Although no return is expected to be received from the aluminium production project for at least ten years, yet the Government is going ahead with it with full knowledge of its cost to the nation because aluminium is a strategic metal in peace and in war. Similarly, oil is a fundamental basic requirement in peace and in war. Had reasonable sources of flow oil been discovered I should have looked upon the Government’s decision in this matter in a different light, but the search for flow oil on the mainland and in New Guinea having failed, every effort should be made to keep the shale oil undertaking in operation. In the engineering field knowledge is increasing day by day. The engineer of to-day is much better informed than was the engineer of a few years ago. We should recruit the best technicians and engineers in the world and send them to Glen Davis to place this industry on a proper basis. We should also do everything possible to attract to it employees of the best type.

The PRESIDENT:

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

Senator McLEAY:
Minister for Shipping and Transport · South Australia · LP

– Under the Standing Orders only fifteen minutes are allowed to me to discuss this important matter, and accordingly I shall not have time to reply in detail to the extraordinary speeches of Senator Ashley and Senator Armstrong. If they were the economic advisers of the Government and they gave it the sort of advice they have given to the Senate this morning all I could say would be “ God help the country ! “ I have examined this project and ascertained that the accumulated loss on its operation amounted to no less than £4,000,000, and that Senator Ashley and the Government of which he was a member, some months prior to the general election of 1949, acting oil the advice of Treasury officials, had refused to advance it £100,000 for the installation of new machinery. I have also ascertained that next year it is estimated that we shall lose £350,000 on this undertaking, from which we can hope to obtain only 2,750,000 gallons of petrol at a cost of 5s. 3d. a gallon. Australia consumes no less than 560,000,000 gallons of oil annually. The Minister for National Development (Senator Spooner) has indicated that the money already spent on the project would be sufficient to improve storage capacity equivalent to the total production of the project during the next twenty years.

We all are aware that side issues are inclined to intrude in debates of this kind. Glen Davis is in the heart of the Macquarie electorate where a by-election is to be held on the 28th July and those great orators, Senator Ashley and Senator Armstrong, have been making statements designed to tickle the ears of people who have done more than has anybody else to destroy this industry. That is what we can expect. I take full responsibility for recommending to the Government that the project he closed. It has now been in operation for eight years, and the longer we go the greater are our losses. Dr. McFadyn, one of the best technical experts in Australia, said that the extraction of petrol from shale never was, and never would be, an economic proposition. It is stupid for Senator Armstrong to talk about great” mountains of shale waiting to be exploited. I have looked into the records, and have found that Senator Ashley, when Minister for Shipping and Fuel, was not prepared to recommend the granting of £100,000 for the purchase of machinery. On the 24th February, 1949, Senator Ashley went to Glen Davis and there delivered certain pronouncements. He was reported as follows in the Lithgow Mercury : -

The Minister for Fuel and Shipping (Senator W. P. Ashley) told two meetings of Glen Davis workers yesterday that production of shale at that centre must materially improve or else serious consideration would have to be given to a closure.

In the course of his addresses one at 3.30 during the shift break when 80 were in attendance, and the other at night when, despite heavy rain, there were 60 present - Senator Ashley said that approximately £4,000,000 had been spent on the industry which had always lest a comparatively large sum each year, but he was sorry to say that in 1948 there was the greatest loss of all. “ This position cannot continue”, went on the Minister.

Production figures, as supplied by the technicians, were examined. The retorting problem had been solved, and we were looking to the miners to deliver enough shale. The capacity of the plant was 10,000,000 gallons a year, but only enough shale was being mined to produce 2,750,000 gallons. “When Senator Ashley delivered his famous oration in 1949, the output per man shift was 3 tons. By 1950, production per man shift had fallen to 2.8 tons. Production figures for 1949 and 1950 are set out in the following table : -

As the Minister for National Development said, by transferring, the cracking plant-

Senator Ashley:

– Where?

Senator McLEAY:

– Let us say that we transfer it to Bell Bay, in Tasmania. It can produce up to 16,000,000 gallons of petrol from crude oil a year, and show a profit. It is necessary that we get supplies of petroleum coke which cannot be obtained from outside sources. Technical officers are now considering the best place in which to install the cracking plant, and political issues will not affect their judgment.

Honorable senators interjecting,

The PRESIDENT:

– Order! I insis that the Minister be heard in silence. We want .to hear .his statement, .not interjections. -Senator MoLEAY; - I have here a report on the la’bour position -at Glen Davis. “We considered transferring more miners to the field, but had we done so it would have been necessary tq provide housing for them, and miners could only have ‘been .obtained from the coal-field* where they were urgently needed. I quote the following from the report : -

Apart from a dozen or so really good men whom I could name, they simply could not be persuaded, by any means, to do more than three or four hours’ wor,k per , day, amd if -a man was sent out for .refusing to do any more, a stoppage was called by the Lodge officials until he was re-instated. Another part of -my work was to. think :out and institute (if possible) various methods .to increase production, but -when the miners found that these would require them to .do a ‘bit more work, every effort would be made to StOP them, machines and cables would be damaged, locos and skips derailed, &c, the result being that production was usually decreased instead of increased.

That is borne out by the official figures for 1949 and 1950. It is not easy for a government to decide to close down an industry, knowing that .the . closing will inflict hardship on people living in the area, but sometimes a government must take its courage in its hands and act. ‘Some of the 600 men working at Glen Davis cou’ld T)e employed to-morrow on the coalfields, where they could give -good -service.

This Government is not responsible for what was done in the past. We must deal with the situation as it is now. We can see what the -prospects are, and we must be guided by the advice of technical men. It would be criminal waste of the taxpayers’ .money for the Government to persist with this project when the losses are so heavy. The manager at Glen Davis, Mr. Christie, is a first-class man, who nas done a great job. Mr. Richards, whom Senator Ashley brought from Great Britain, is also a first-class man. The industry, with the help of Mr. Butler and others, was put on a good footing, but even if maximum production could be obtained from the miners, Glen Davis would still not be an economic proposition.

Senator Ashley:

– There should be a full investigation of the matter.

Senator McLEAY:

– Senator Ashley would ‘like us to nave a public inquiry at which such ,men as Mr. Williams, of the miners’ federation, could make trouble. The dirty suggestion was made in some Sydney newspapers that I had offered the Glen Davis project to a certain company. I regret that any one should take advantage of his position in this House of privilege to malign Australian businessmen who have done so much to develop the country. When the last war broke out, no one did ‘more to help the Menzies Government than did the Americans by -supplying oil in an emergency. Oil in -drums was ordered by me from the United States of America before the Menzies -Government went out of office. The cracking -plant .at Glen Davis, which is the only one of its kind in Australia, has never been offered to any company.

Senator Ashley:

– Have there been negotiations for its disposal £

Senator McLEAY:

– No. My technical officers explored the possibility of Commonwealth Oil Refineries Limited and other companies using the plant if the project were closed down. If it is decided to sell the plant, it will be offered for public tender in accordance with custom. The Government has not yet made a final decision because the whole proposition is still being examined by technical men who are among the best in the world. I have considered how valuable the plant would be to the aluminium industry in Tasmania, and if it can be proved ^beyond doubt that it should be sent there the Government will not hesitate to act. There is nothing sinister a’bout the Government’s proposals. Everything is fair and above board. Cabinet is considering the possibility of establishing some other industry in place of the shale oil project at Glen Davis. It is also considering what to do with the people who have invested their money at Glen Davis, and have built houses. The Government will not do anything to prejudice the position of the people there until other jobs and other accommodation have been found, for them. It is hoped that the report of the technicians will be in the hands of the Government within a few weeks. When it is received, the Government will act fearlessly. The Glen Davis project was a mistake from the start. It was never any good and it never can he any good.

Motion (by SenatorAnnabelle Rankin) put, -

That the question be now put.

The Senate divided. (The President - Senator the Hon. Edward Mattner.)

AYES: 31

NOES: 22

Majority . . 9

AYES

NOES

Question so resolved in the affirmative.

Question put -

That the Senate, at its rising, adjourn to Tuesday next, at 3.15 p.m.

The Senate divided. (The President - Senator the Hon. Edward Mattner.)

AYES: 22

NOES: 31

Majority . . 9

AYES

NOES

Question soresolvedin the negative.

Sitting suspended from 12.52 to 2.15 p.m.

page 573

ADDRESS-IN-REPLY

Presentation to the GovernorGeneral.

The PRESIDENT:

– I desire to inform the Senate that His Excellency the Governor-General willbe pleased to receive the Address-in-Reply to his Speech at Government House on Tuesday next, at 5.15 p.m. I invite honorable senators to accompany me on that occasion.

page 573

NEW AND OPPOSED BUSINESS AFTER 10.30 P.M

Motion (by SenatorO’Sullivan) agreed to -

That Standing Order68 be suspended up to and including Friday, the 13th July, to enable new business to be commenced after 10.30 p.m.

page 574

SUPPLY BILL (No. 1) 1951-52

Bill received from the House of Representatives.

Standing Orders suspended.

FIRST Reading.

Senator SPOONER:
Minister for National Development · New South Wales · LP

.- I move -

That tho bill be now read a first time.

This bill is the first of a series of nine measures that deal with the Government’s financial requirements. I understand that seven of them, in addition to this one, have been received from the House of Representatives. Three of the measures are Supply Bills, which the Senate cannot amend. Honorable senators may, if they so desire, speak upon the motion for the first reading of each of those bills.

The normal procedure would be for the Senate to deal with each of the nine bills separately, but I suggest that honorable senators should waive that privilege. I suggest for the consideration of the Senate that I be allowed to take each of the bills, except this one, to the secondreading stage and that, when I have made my second-reading speech on a bill, an honorable senator opposite should move the adjournment of the debate upon it. Then we could make the bill an order of the day to be dealt with at a later hour this day. That having been done, we could return to this bill, the debate upon the first reading of which should, I suggest, be adjourned shortly on the motion of an honorable senator opposite. We could then discuss the eight bills on the motion for the first reading of this one. Having the eight bills before them, honorable senators would be better informed than they would be if they were dealing with the bills one at a time. That debate having been concluded, it would be for honorable senators to decide to what extent they required to discuss each of the measures that came before the Senate subsequently. It seems to me that if we follow that procedure we shall have a more informed debate than would otherwise be the case, and perhaps avoid repetition. The ninth bill has not yet been received from the House of Representa tives. I suggest that, when it does arrive, the debate that is then in progress be adjourned and the bill taken to the second-reading stage.

As all the bills to which I have referred relate to the Government’s financial requirements and require to become effective as from the 1st July, it is essential that they shall be dealt with before the Senate rises this week. It is for honorable senators to decide whether we shall deal with them before the time at which the Senate would normally rise to-night, whether we shall sit later than usual to-night, or whether we shall sit tomorrow. If honorable senators agree that what I have suggested is a common-sense and efficient way of dealing with the bills, all that will be necessary to indicate assent will be for an honorable senator opposite to move the adjournment of the debate on the first reading of this bill.

Senator ASHLEY:
New South Wales

– The Minister for National Development (Senator Spooner) said that three of the bills that will come before the Senate are financial measures that cannot be amended in this chamber, but he did not say that the Senate could make requests in regard to them if it so desired. I ask the Minister to make it clear whether he is suggesting that the debate upon this bill shall cover all the bills.

Senator Spooner:

– That is my proposal.

The PRESIDENT:

– If the Senate grants leave, that will be permissible.

Senator McKENNA:
Leader of the Opposition · Tasmania

– Earlier to-day, the Minister for National Development (Senator Spooner) acknowledged that it is the duty of the Opposition to oppose. Therefore, he acknowledged also, by implication, that it is the duty of the Government to provide adequate opportunity for opposition to be developed. I recognize, as do other members of the Opposition, that it will be necessary for the Government to secure the passage of these nine bills before the 30th June, but I point out that the Government has had since the 28th April to prepare them. It is not a new government. Now, two days before the 30th June, the nine bills are to be presented to the Senate. On behalf of the Opposition, I record the strongest possible protest against the fact that important financial measures of this kind, which must be passed before the 30th June to enable the Government to function, are presented to us with this exceedingly limited opportunity for debate. I point out that one of the measures has an appendix containing 93 pages and that the bill now before the Senate is a document of 35 pages which deals with the activities of many government departments. An intelligent consideration of this bill would demand many hours of study. It will be necessary to peruse the Estimates and Budget Papers of last year in order to ascertain whether there were increases or decreases of the sums sought to be appropriated for various departments. That is plainly what would be involved in a thorough approach to a consideration of this bill. I say at once that an opportunity for adequate consideration of the measures will not be given to the Opposition.

I understand that these bills had a speedy passage through the House of Representatives. It is bad for democratic processes to push measures of this kind through the Parliament in an exceedingly limited space of time. The Minister has said that the Opposition can debate these measures to-morrow, if it so desires, but to-morrow is the deadline. These bills must be passed then to enable the Government to pay its way during the coming month. The Opposition believes that the time that will be available to it to discuss the measures will be quite inadequate for that purpose. We are not in a position to do justice to a consideration of bills, which contain a vast mass of detail and of which we have had no prior notice. They have not been under consideration for a long time in the House of Representatives, and it has not been possible for us to familiarize ourselves with their details.

There is much to commend the suggestion of the Minister that the nine bills be discussed on the motion for the first reading of this bill. As the Opposition has been denied an opportunity to discuss all of the bills adequately, we might as well concentrate our energies in the limited time that is at our disposal. But, although the Opposition is prepared to meet the Government upon that matter, it is not prepared to waive its right to comment upon” the other eight bills. With the leave of the Senate, which I assume the Minister will seek if the President rules that it is necessary to do so, we could concentrate the debate upon this motion, as a matter of honorable understanding rather than otherwise, but members of the Opposition would be free to discuss the other eight bills if they wished to do so. As the Minister is nodding his acquiescence, I take it that at last we are in agreement upon something.

I shall comment upon two matters. From a limited perusal of the statistics it is apparent that under the aegis of the present Government there has been a vast increase of governmental expenditure. I invite the Minister when he replies to hark back to the policy speech of the Government parties in November, 1949, when there was ,the most explicit promise on their behalf to the people of Australia that if they were returned as a government - and they were - governmental expenditure would be cut and that the number of public servants would be reduced. Those two specific pledges have not been honoured. Governmental expenditure last year, in peace-time, was an all-time record. The total expenditure was far higher than was the expenditure of the government that was in office at the peak of the war period, and it calls for broad explanation. We realize that there has been added expenditure on immigration, development, and defence, owing to the world situation or the Government’s appreciation of it. I invite the Minister in his reply to indicate any department in which economies have been effected, and to show where some genuine attempt has been made to honour the Government’s pledge that governmental expenditure would be decreased. I tell the Minister in advance that it will not be sufficient for him merely to indicate the fact that departments have been transposed and cut out, that certain changes have taken place, and that there has been established the portfolio of Territories. That is not the kind of explanation that will satisfy the Opposition and I venture to say that it will not satisfy the public. There ought to be from the Government a clear explanation why governmental expenditures are soaring, in view of the explicit pledge that was given by the Government parties when they were wooing the electors. It is significant that on their return to office the number of public servants was increased rather than decreased. At my last examination of the position at the beginning of this year the numerical strength of the Public Service had increased by about 7,500 persons since Labour relinquished office. I am not saying that the increase has not been necessary, having regard to the functions of government, but it is’ encumbent on the Government to explain to the people why its pledge to cut down the number of public servants has not been honoured. It is not necessary to consider the number of employees of such undertakings as the Snowy Mountains’ hydro-electric scheme and extra-governmental bodies. The increase that I have mentioned applies only to permanent and temporary appointments under the aegis of the Public Service Board, and does not include increases in the military forces and staffs of governmental instrumentalities. The Opposition seeks an explanation of that increase. I recall that when honorable senators opposite were sitting in opposition they used the opprobrious term “ bureaucrats” frequently and offensively in their references to the Public Service. They found on their return to office, however, that public servants have a value. After all is said and done, people who are serving their country in the Public Service are serving in a very high capacity indeed. There is no more satisfactory form of service than to serve one’s country according to the best of one’s capacity, and in whatever position is available. I regard it as an honour to be a member of the Public Service of the country. Although public servants have given marvellous service, when we come to consider the economy of this country, and the soaring expenditures, we are entitled to ask the Government to justify the substantial increase of the number of public servants employed during its regime. I shall not carry this matter further. Some of my colleagues will address themselves to the motion. At the moment I believe that there will not be many speakers, and I inform the Minister, through you, Mr. President, that if it suits his convenience one of my colleagues will now move the adjournment of the debate as he suggested.

Debate (on motion by Senator Nicholls) adjourned.

page 576

SUPPLY (WORKS AND SERVICES) BILL (No. 1) 1951-52

Bill received from the House of: Representatives.

Standing Orders suspended.

Bill (on motion by Senator Spooner) read a first time.

Second Reading

Senator SPOONER:
Minister for National Development · New South Wales · LP

.- I move-

That the bill be now read a second time.

This bill appropriates an amount of £21,687,000 to enable Commonwealth works in progress at the 30th June, 1951, to be continued until the 1951-52 budget is approved by the Parliament. A policy of comprehensive long-range planning for capital works covering from three to five year periods is in operation in the defence services, and also in such departments as the Department of Works and Housing, the Postmaster-General’s Department and the Department of Civil Aviation. To enable these programmes to be continued successfully funds must be available without interruption for the purchase of materials in. advance, both in Australia and from overseas, and also to ensure continuity of employment on the many projects. The bill therefore provides for four months’ expenditure on works which are included in the expenditure programme of £80,173,000 included in the Capital Works and Estimates for 1950-51 and the Additional Estimates for 1950-51. In accordance with the usual practice in submitting a Supply bill, no provision has been made for any new services.

Debate (on motion by Senator McKenna) adjourned.

page 577

APPROPRIATION BILL (No.2) 1950-51

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator Spooner) reada first time.

Second Reading

Senator SPOONER:
Minister for National Development · New South Wales · LP

. -I move-

That the bill be now read a second time.

The purpose of this measure is to seek parliamentary approval for additional expenditure incurred during the financial year 1950-51 in respect of certain items, and for which provision was not made in the Estimates presented to the Parliament in October, 1950. I shall explain briefly to the Senate why this measure is necessary. Expenditure on items under annual appropriation is expected to exceed estimates by£40,000,000. These items include -

It is for these items of additional expenditure that authorization by the Parliament is sought. In addition, it is proposed to provide for an additional transfer of £5,000,000 to the strategic stores and equipment reserve, of which a further explanation will be given presently.

The amount covered by additional appropriation, ordinary services, will thus be £34,000,000, and the amount covered by additional appropriation, works and services, which will be the subject of a separate bill, will be £11,000,000, making a total of £45,000,000. It may be pointed out, however, that whilst in respect of the items in the annual appropriations just mentioned, expenditure is expected to exceed estimates by £40,000,000, expenditure is expected to fall below esti mates in respect of other items to a total amount of £19,000,000. These items include -

Thus it can be said that the net increase in expenditure on items coming under annual appropriations will be only £21,000,000.

There will, however, be increased net expenditure amounting to £19,000,000 under special appropriations for which legislative authority either exists already or will be sought separately. The items making up this total are -

Taking together, then, annual and special appropriation, it can be said that the net increase of total expenditure over the budget estimates in 1950-51 is expected to be £40,000,000. On the other hand, it is expected that revenue will also exceed the budget estimates. It is still not possible to give exact figures,but it appears that income tax and social services contribution will be appreciably above estimates and that there will also be higher collections than expected on account of wool deductions, excise and pay-roll tax. Revenue from other sources seems likely to be approximately equal to estimates.

Whilst again stressing that individual figures may change to some degree by the end of the financial year, it appears likely that, on balance, a small surplus for the year may be realized. It will be recalled that in the budget last October a surplus of about £400,000 was predicted. If a surplus occurs it is proposed to transfer the amount to the strategic stores and equipment reserve so that it may be applied next year to meeting defence commitments. An amount of £5,000,000 has been included in the additional estimates to enable this to be done and this is the amount of £5,000,000 which I

Mentioned earlier in my speech. The surplus actually realized may or may not come up to this figure. Of the strategic stores and equipment reserve for which an amount of £50,000,000 was included in the budget, I point out that because of difficulties of procurement overseas, only about £10,000,000 has actually been spent. At the same time very substantial commitments have been entered into under the defence programme, and the unspent balance, together with any budget surplus, will be available to meet the commitments which have already been entered into.

As to the budget generally, I may say that very many forms of expenditure have been affected this year by the steep rise in wages, salaries and costs of materials. This applies particularly to post office works and administrative expenditure. Fundamentally also, it is the rise in wages and general costs that has made necessary the additional grant of £15,000,000 which the Government proposes to make to the States and for which legislation is being submitted to the Parliament. At the same time, of course, revenue has benefited through the higher incomes and purchasing power in the community. This is true particularly of pay-as-you-earn income tax collections and pay-roll tax. I commend the bill to honorable senators.

Debate (on motion by Senator McKenna) adjourned.

page 578

APPROPRIATION (WORKS AND SERVICES) BILL (No. 2) 1950-51

Bill received from the House ofRepresentatives.

Standing Orders suspended.

Bill (on motion by Senator Spooner) read a first time.

Second Reading

Senator SPOONER:
Minister for National Development · New SouthWales · LP

.- I move-

That the bill be now read a second time.

In the second-reading speech on the Appropriation Bill (No. 2) 1951, for ordinary services, which I have just con cluded, I indicated that it is necessary to seek additional appropriation of £11,468,000 for capital works and services. This measure is designed to give effect to that appropriation.

Debate (on motion by Senator Mckenna) adjourned.

page 578

LOAN BILL 1951

Bill received from the House ofRepresentatives.

Standing Orders suspended.

Bill (on motion by Senator Spooner) read a first time.

Secondreading.

Senator SPOONER:
Minister for National Development · New South Wales · LP

– I move-

That the bill be now read a second time.

Provision was made in the budget for 1950-51 for expenditure from the Loan Fund of £25,000,000 for war service homes and £4,000,000 for war service land settlement. Authority for the raising and expending of these moneys is contained in Loan Act 1950. Sufficient funds are available only to cover expenditure to the 30th June next and further authority is therefore necessary to cover the period from then until the Government’s budget proposals are agreed to. The present measure accordingly seeks parliamentary approval for expenditure of £9,000,000 for war service homes and £1,500,000 for war service land settlement. Those amounts will meet requirements for a period of approximately four months at the present rate of expenditure.

Debate (on motion by Senator McKenna) adjourned.

page 578

WAR PENSIONS

Bill received from the House ofRepre- sentatives.

Standing Orders suspended.

Bill (on motion by Senator Spooner) read a first time.

Secondreading

Senator SPOONER:
Minister for National Development · New South Wales · LP

– I move -

That the bill be now read a second time.

A similar measure is submitted to Parliament from time to time for the purpose of appropriating out of the Consolidated Revenue Fund an amount for payment into a trust account to enable war pensions to be paid in accordance with such rates as are approved by Parliament. Expenditure on war pensions is showing a continuous increase as the following table indicates : -

The amount of £31,000,000 now requested will cover approximately a year’s expenditure at present rates. The amount of £28,000^000 appropriated in October last will meet payments only to mid-July. This bill merely authorizes the provision of funds for the Trust Account from which war pensions are paid. It has no relation whatsoever to the rates or conditions under which those pensions are paid.

Debate (on motion by Senator McKenna) adjourned.

page 579

SUPPLEMENTARY APPROPRIATION BILL 1949-50

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator Spooner) read a first time.

Second Reading

Senator SPOONER:
Minister for National Development · New South Wales · LP

– I move -

That the bill be now read a third time.

These supplementary appropriations total £7,444,206 and relate to the financial year 1949-50. The amounts set out in the bill were expended out of a general appropriation from revenue of £10,000,000 made available to the Treasurer to meet expenditure which could not be foreseen when the Estimates were prepared. It is now necessary to obtain specific parliamentary appropriation to cover these several items of excess expenditure.

Full details of the expenditure for 1949-50, which includes these increases, are shown in the Estimates and budget papers for 1950-51. These publications show the amount voted for 1950-51, together with the amount voted and the actual expenditure for 1949-50. These details are included for informative purposes. Details are also included in the Treasurer’s financial statement for 1949-50 which was tabled earlier this year for the information of honorable senators. The bill gives in detail the items under which the additional amounts were expended by the various departments. The chief items in round figures are -

Any further details of the various items of expenditure will be available at a later stage.

Debate (on motion by Senator McKenna) adjourned.

page 579

SUPPLEMENTARY APPROPRIATION (WORKS AND SERVICES) BILL 1949-50

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator Spooner) read a first time.

Second Reading

Senator SPOONER:
Minister for National Development · New South Wales · LP

– I move -

That the bill be now read a second time.

The total appropriations passed by Parliament for capital works and services under this heading during 1949-50 amount to £79,293,000. The actual expenditure was £73,268,000, which is £6,025,000 less than the amount appropriated. However, due to requirements which could not be foreseen when the Estimates were prepared, certain items show an increase over the individual amounts appropriated and it is now necessary to obtain parliamentary approval to cover these increases. The excess expenditure on the particular items concerned totals £2,940,894, which ls spread over the various- works items of the departments, as set out in the schedule to the bill. Any details which may be required will be furnished at a later stage.

Debate (on motion by Senator McKenna) adjourned.

page 580

SUPPLY BILL (No. 1) 1951-52

FIRST Beading.

Debate resumed (vide page 576).

The PRESIDENT (Senator the Hon Edward Mattner:
SOUTH AUSTRALIA

– Is it the pleasure of the Senate that this bill and related bills be treated as cognate measures and that the related bills may be dealt with during the debate on this bill?

Honorable Senators. - Yes.

Senator NICHOLLS:
South Australia

– I take the opportunity which the introduction of this bill affords me to deal briefly with the subject of uncontrolled inflation, which in my opinion i3 the outstanding problem that faces this country. Every day the purchasing power of the £1 falls still lower and we continue our headlong rush into a position which will inevitably result in a depression unless effective action is taken immediately to stabilize our economy. Realizing the dangerous .state of our economy the Labour party during the last Parliament was instrumental in introducing into this chamber, through Senator McKenna, a bill designed to clothe the Commonwealth Parliament with power to control prices. The outcome of that bill is now past history. It was passed by this chamber and transmitted to another place where in accordance with the Government’s well-known technique for pigeonholing unwanted documents, it was promptly buried. It has never since seen the light of day. The Labour party was compelled to take the initiative because of the refusal of the Government to arrest the tragic deterioration of our economy which was then taking place and which has continued at an alarming rate ever since. The action taken by the Government in regard to that measure was not prompted by its ignorance of the gravity of the economic situation, because as far back as November, 1949, the Prime Minister (Mr. Menzies), who was then Leader of the Opposition, in a joint policy speech made on behalf of the Liberal and Australian Country parties, said that if he were elected to office his first task would be to get value back into the £1 and to reduce prices. Later, that statement of policy was confirmed by the present Minister for External Affairs (Mr. Casey)., who said that the Al problem facing Australia was inflation and that defence took second place to it. That statement was made on the day upon which the Prime Minister made his first broadcast on defence, and it was readily accepted in the community which, paradoxically, had been forced in a period of record national income and of high prices to consider the likelihood of an economic depression with all the trials and tribulations that it would entail. Those who relied upon the definite, specific and unqualified election promise of the Government to put value back into the £1 and the statement that it had a plan for increasing the purchasing power of wages and reducing the cost of living have been let down badly. Honorable senators well know that the Commonwealth has no power under the Constitution to regulate the prices of commodities. It is true that, from 1939 to 1948, this Parliament exercised certain power in relation to prices, under the defence power. It is now generally realized that in war-time the defence power is expanded to embrace all activities having relation to defence. It is an incontestable fact that in time of war. particularly one of the character of that in which Australia was last engaged, the whole of our economy, including our prices structure, which is a vital part of our economy, must be organized and harnessed for the prosecution of the war. The High Court has now held that the expanded defence power continues for a reasonable period after a war has ended to enable the government of the day to unwind the war effort and the country to return to a peace-time economy. However, there has always been uncertainty about the length of the period during which such a power may be exercised. In some instances that uncertainty has been ended by a decision of the High Court on a challenge of the validity of action taken by the Government under its defence power. We all know the confusion and uncertainty that exists when the High Court has ruled that the Commonwealth has no constitutional power to ^exercise certain powers. That uncertainty was manifested in the closing stages of the operation -of Commonwealth prices control when the Commonwealth Prices Commissioner had the greatest difficulty in retaining a skilled sta.fi. His officers were naturally eager to ,return to their peace-time avocations or to join in the rush for profitable post-war engagements. In- 1944, the Curtin Labour ‘Government realized that when the war ended and heavy expenditure on defence was no longer necessary, large sums of money would be left in the hands of the Australian people and that, with the restriction of peace-time production, this would result in undesirable competition for goods in short supply, particularly those commodities which would continue to remain in short supply for a lengthy period. That Government, realizing that this might lead to inflation, sought from the people increased Commonwealth powers to deal with the situation. In the (referendum proposals fourteen specific pow-ers w.ere asked for, but members of the Liberal party .and Australian Country party strenuously opposed the granting of them, with the result that the referendum was defeated. In 1947, the Chifley Government .asked the people for legislative power to control prices and charges, including rents. It was pointed out that the first ‘to be affected by rising prices would be those on .fixed incomes, such as pensioners, and people who were .living on their savings. The government of the day recognized that the task of controlling prices was beyond the power of the State governments, but .the anti-:Labour parties took the opposite view. They claimed that the States, being closer to the people, were better able to control prices. The then Opposition parties went so far as to advocate the abandonment of all controls, saying that the restoration of free competition would ensure the charging of fair prices. The Chifley Government’s referendum proposals were defeated, and Mr. Chifley then informed the State Premiers in ‘ conference that the Commonwealth would abandon the field of prices control to the States, but agreed to reimburse them their administrative expenses. For the year 1948-49, the Commonwealth paid to the States .£565,114 under this heading. For more than two and a half years the control of prices has been the concern of the States, but it is obvious that they cannot do the job properly because of -factors beyond their control. Several conferences have been held between Commonwealth and State Prices Ministers, and between State Premiers and Commonwealth Ministers of State at which the subject was discussed. Without exception, the State Premiers have confessed that .they cannot effectively control prices. The Premier of New South Wales, Mr. McGirr, has repeatedly asked the Commonwealth to seek powers .from the people by way of referendum to legislate for the control of prices.

The States have not done anything to control profits. Every day the financial columns of the newspapers tell the story of raging inflation. They tell of record turnover, record prices and record profits, all of which are indicative of an inflationary condition.. It is unnecessary to quote -statistics in order to show that inflation is out of hand. Every worker knows it. He knows that it is becoming more difficult to buy the necessaries of life that he helps to produce, or to buy one of the houses he helps to build. Every .housewife trying to balance her budget on a fixed income is in the -same position.

Senator McKenna, when introducing the bill to provide for the taking of a referendum on the subject of the control of prices, .said that the consulting rooms of physicians were filled with women suffering from nervous disorders caused by financial worry. It is unnecessary to refer to the hardships, under present conditions, of the ‘340,000 age pensioners, the 76,000 invalid pensioners and the 43,000 widows who are drawing pensions.

Everywhere we .see signs that point to the coining of an economic depression. Indeed, economic depression is the inevitable outcome of uncontrolled inflation. In ‘the present state of affairs certain unprincipled persons are trafficking in the necessaries of life at the expense of the community. The return of the present Government in 1949 and at the election of a few months ago after it had advocated the throwing overboard of economic controls was an invitation to the exploiters to increase their activities at the expense of the public.

When introducing the bill to which I have referred, Senator McKenna made it clear that the Labour party did not suggest that the transfer of prices control from the States to the Commonwealth would have the effect of restoring prices to a normal level. He made it clear that prices control by itself could not prevent further increases, but he pointed out that the Labour party believed that control of prices wag necessary, in conjunction with other measures, to deal effectively with prices. The real purpose of control, he said, was to ensure that no more than a proper proportion of rising costs was reflected in prices, and he warned the Government that unless action was taken quickly and courageously our economy was threatened with chaos. We are heading in that direction, with the result that the privileged few are becoming more and more wealthy, while the rest of the people are faced with poverty, suffering and degradation.

It was said in 1949 that the Chifley £1 was worth only 10s. as compared with the pre-war £1. The Menzies £1 to-day is worth not more than 6s., and” if the present trend continues for another few years I doubt whether the £1 will be worth ls. I cannot see how we are to avoid an economic depression with its accompaniment of poverty, suffering and even starvation. The last depression was not confined to any one State or even to Australia; it was world wide. In the United States of America, before the national emergency recovery proposals were put into operation, 20,000,000 persons were unemployed. At one time in Chicago alone there were 365 eviction cases daily. Try to imagine a state of affairs in which 365 families were turned out of house and home in one city in one day to starve in the midst of plenty. At the same time, British ships were sailing from British ports manned by Chinese crews, while 30,000 British seamen tramped the docks looking for work. The leisured classes of England were spending £5,000,000 a year at that time on hunting. In Adelaide, the city of churches and culture, 90 per cent, of the children admitted to the Children’s Hospital in

North Adelaide were certified as undernourished. A large majority of the mothers who had their babies at Queen’s Home in Adelaide were also undernourished. Some of them were themselves mere girls, and at a time when they should have been receiving the. best of everything, they started off a long way behind scratch. Surely it is our job as legislators to see that those conditions do not recur.

If we go to a football match or a race meeting or a picture show we travel by the shortest route, but in our efforts to do something for the welfare of the people we run around in circles, and often fail to reach our destination. The servicemen who placed their bodies between the enemy and ourselves during the darkest days of the war now find that their savings and gratuity money are worth only 50 per cent, of what money was worth when the Menzies Government came into office in 1949. We should always remember those to whom we owe a debt of honour that can never be repaid. We should never forget our anxiety in 1941, when the Japanese were coming south at a bewildering pace, and we had to call upon the United States of America for armed assistance. That assistance was supplied promptly because of the successful appeal made to the United States Government by the late Mr. John Curtin, who undoubtedly saved this country. We must all realize what would have happened if that appeal had not been made, or if the assistance had not been forthcoming so promptly. At that time the vulnerable north-eastern coast line of Australia was protected by a defence screen that extended from New Guinea through the New Hebrides, New Caledonia and Fiji. That successful strategy kept the enemy at arm’s length and prevented him from gaining a foothold in this country. The strategy adopted for defending the north-western coast line of Australia was equally successful. The government led by Mr. Curtin believed that the decisive battle in the campaign to defend north-western Australia would be fought in Timor, and realized that the islands in the south Pacific were vital to our defence. By almost superhuman efforts, it sent troops to those islands and supplied them with reinforcements and war materiel. The people of this country responded to Labour’s splendid leadership and did everything possible to assist in defending their country. The Allied Works Council was established, and despite the fact tha* Australia had had no previous experience of the conscription of civilian labour, it performed splendid work. Men were taken from all parts of Australia and sent to Darwin and other remote places to build strategic roads and airstrips that were capable of handling the heaviest traffic and the biggest aircraft. Munitions factories were built and huge factories were established for the production of aircraft. I remind honorable senators that the great majority of those who actually carried out that work had been rejected by the armed services because of physical disabilities, and that many of them had never performed manual work before in their lives. Australia owes a deep debt of gratitude to them. Another example of the magnificent response to the Curtin Administration’s appeal to the civilians of this country was the great job done by the Australian Women’s Land Army. Because of the splendid efforts of the women in that organization Australia was able to feed the 5,000,000 men in the Allied Services in the Pacific, in addition to our own civilian population of approximately 7,500,000 people.

I have recalled these matters at some length in order to impress upon the Government the obligation that it owes to the people of this country who sacrificed so much in the dark days of war. Undoubtedly, its first duty is to prevent the savings of our” people from being filched from them. The Government should ensure that everything possible is done to stabilize our economy. I appeal to Ministers and their supporters to seize the opportunity to take a referendum of the people on the re-introduction of prices control when they conduct the proposed referendum on the suppression of communism. In conclusion, I point out that it is idle for honorable senators opposite merely to assert that prices control will not of itself cure the situation. Although we concede that fact, we believe that the reintroduction of prices control will not prevent the Government from taking any additional steps that may be necessary to halt inflation.

Senator HANNAFORD:
South Australia

– The speech that has just been made by Senator Nicholls was excellent, as also was the speech that he made in this chamber last week. I listened to both addresses with considerable interest. The matters with which the honorable senator dealt in his address to-day are most important, and if time permitted I should like to reply to many of the critical remarks that the honorable senator’ made concerning the present Government. However, I had prepared the material for my speech with a view to discussing the important matter of the delay in the turn-round of ships at Port Adelaide, with which the honorable senator dealt at considerable length in the speech that he made last week, and I propose therefore to deal with that matter now. Senator Nicholls’s remarks amounted to an attempt to acquit the wharf labourers of Port Adelaide of all responsibility for the very unsatisfactory position in that port. The honorable senator mentioned the decision of certain British and foreign ship-owners not to send their vessels to Port Adelaide because of the unconscionable delay in the loading and unloading of vessels in that port, and he also referred to an article that was published by a timber merchants’ association in the Adelaide News on the 27th April last. As the honorable senator took great exception to the statements contained in that article, I availed myself of the opportunity, when I was in South Australia last week-end, to read the article and to discuss it with persons in the industry. The article, which appeared under the heading, “ Timber Shortage - Why?”, contained a number of statements that are irrefutable, or, at least, have not been seriously challenged by members of the Waterside Workers Federation in South Australia or by their parliamentary representatives. The statements in that article contradict many of the assertions made by Senator Nicholls, and they are so important that I shall read some of them. For instance, the article contains a statement that the present rate of discharge of cargo from ships in Port Adelaide is less than half the rate of discharge in 1939. Another disturbing allegation; is contained in the following passage : -

A conservative average rate in 1939’ for the discharge of timber ships was 10.000 super, feet per hold per hour. To-day the average rate; mechanical unloading devices’ notwithstanding, is 5,000 super, feet per hour.

The article also contains a number of interesting references to the relation between the slow turn-round of ships and1 the increasing cost of living, and I thinkthat the following extract is very significant : -

Timber freight rates to South Africa, whose discharge is- good, is to-day only 21s. per 100 super., ais against 7.8s-. per 100 feet in Australia

That information was obtained from a letter received by the Timber Merchants Association in Adelaide from exporters in Sweden, to whom the Australian merchants had complained because Swedish ships were not unloading timber at Port Adelaide. I think that honorable senators will agree that the fact that such a statement should be made by merchants overseas is highly significant and most disturbing. Unfortunately, I think that it must also be conceded that similar criticism can justly be levelled at the rate of cargo-handling in most ports in Australia, and it undoubtedly has a. very direct bearing on the increasing cost of living.

The honorable senator alleged that wharf accommodation is inadequate in Port Adelaide. However, on his own; admission, there are thirteen wharfs on the Port Adelaide side of the harbour and five on the Birkenhead side, making a total of eighteen wharfs. Admittedly, there are no sheds on two of those wharfs. However, in addition to the eighteen wharfs mentioned, there are seven wharfs at Outer Harbour, of which one is at present being repaired, and is out of use. Of the 25 wharfs, six are used ordinarily by coastal vessels, and I think that an inspection of the wharfage facilities at Poet Adelaide would dispose of the honorable senator’s contention that lack of wharf accommodation is responsible for the delay in clearing vessels. Senator Nicholls conceded that there has been a considerable improvement in the equipment available on the wharfs. Because of the attraction that the waterfront possesses, I frequently visit Port

Adelaide. At one time the equipment on the Port. Adelaide waterfront may not have been as good as it could’ have been, but it can safely be said that during the last few years it has been improved considerably. Senator Nicholls said that one of the causes of the slow turn-round1 of ships at Port Adelaide was obsolete equipment. The port is now equipped with all modern means of shifting cargo, including fork-lift trucks and cranes, but despite that fact, the rate at which cargo is handled has decreased. The honorable senator said that trucks that were formerly pulled by horses were now pulled by tractors, which were constantly breaking down. I think that that was an exaggeration. From my experience with tractors, I would say that a truck pulled by a tractor is- less liable to damage than is one pulled by a horse.

As a result, of my investigations, I. say unhesitatingly that the slow turn-round of ships at Port. Adelaide, is due-

Senator Sandford:

– To the Communists;

Senator HANNAFORD:

– I do not suggest that the delays at Port Adelaide are due directly to the activities of Communists,, but I shall deal with that aspect of the matter later in my remarks. I say without hesitation that the slow turnround of ships there is attributable to a. shortage of labour. On the 5th June of this year, an independent investigation of conditions on the Port Adelaide waterfront was conducted by Captain F. R. Miller, the Deputy-Director of Navigation. He made a complete check of what was occurring on every wharf and in every shed at Port Adelaide and Outer Harbour. He has reported that, although nine berths were vacant on that day, one ship was without labour. I believe that the nine vacant berths can be explained by the fact that vessels which formerly called at Port Adelaide are now avoiding the port. The fact that, although nine berths were vacant on that day, one ship was without labour indicates clearly that the main cause of the trouble at Port Adelaide is the shortage of labour there. Had all the berths been occupied, there would have been a tremendous shortage of labour. Conditions of that kind have obtained for a considerable period, not only in Port Adelaide but also in other Australian ports.

Lack of .shipping space is one of the most acute problems that confront this country. In every Australian port, there is a large accumulation of urgently needed material awaiting transport. The number of ships that we have should be adequate to transport the materials that are normally carried by sea. There are 30 vessels under the control of the Australian Shipping Board, apart from those that are operated by private shipping companies. But, because those ships spend an undue proportion of their time in port, we are unable to move all the materials that are awaiting sea transport. Shipping is one of the lifelines of this nation.

The cause of the trouble is not inadequate port facilities but the restrictions that have been imposed upon the number of men who may be employed on the waterfront. Not very long ago, the Waterside “Workers Federation imposed a ban upon overtime in Australian ports. If, during the period of five weeks when that ban was in force, the waterside workers had worked for 50 hours a week instead of 40’ hours, they could have moved a vastly increased quantity of cargo. In April, 1950, the chairman of the Australian .Stevedoring Industry Board requested the Port Adelaide waterside workers to increase their numbers to’ 1,700, and they agreed to do so, but the latest report indicates that their present strength is only approximately 1,670 men.

Senator Critchley:

– Since’ the 1st April, 287 men have left the industry.

Senator HANNAFORD:

– That is not my information. I am informed that, when a call was made for labour on the Port Adelaide waterfront three weeks ago, the effective strength of the waterside workers was approximately 1,500, or 200 less than the figure agreed upon. I have discussed this matter with the Premier of South Australia, who is fully aware of the seriousness of the situation at Port Adelaide. He has told me that a minimum of 1,850 men is necessary for the efficient unloading and discharging of cargo there. Many of the men who are employed on the waterfront are over 65 years of age. That reduces the effectiveness of the available labour force. I say without hesitation that the present trouble at Port Adelaide is due, in the main, to a shortage of labour.

I agree with Senator Nicholls that Port Adelaide is not afflicted with many Communists. In fact, South Australia is comparatively free of Communists. But that does not mean that the waterside workers’ organization at Port Adelaide does not take its orders from the Communistcontrolled “Waterside Workers Federation. No honorable senator will deny that the Waterside Workers Federa-tion is Communist-controlled. It is freely acknowledged that those who are in control of it are Communists or have Communist affiliations. The policy of the federation is directed by the Communistcontrolled federal executive. That policy has been consistently to maintain the number of men employed on the waterfront at a level that is inadequate to meet requirements. The federation imposed a ban upon overtime at a period when, in every Australian port, ships were banking up and lying in the roadsteads awaiting unloading. That was a criminal action. The present state of affairs will continue to exist while Communists have control of vital organizations.

Senator Hendrickson:

– What is the . Government going to do about it ?

Senator HANNAFORD:

– We shall do plenty about it, as the honorable senator ^ will learn shortly.

Senator Armstrong:

– The Government is going to deport the waterside workers’ leaders.

Senator HANNAFORD:

– That may occur even yet. The policy of restricting the number of men employed on the waterfront means that waterside workers are required to work overtime, for which they receive high rates of pay. The additional cost of unloading materials from ships caused by that restrictive policy is passed on to consumers, and has a considerable effect upon the cost of living. We recognize that the present high cost of living presents a problem of great magnitude, but I point out that our efforts to reduce costs are not being assisted by the attitude that is now beingadopted by waterside workers throughout Australia. I cannot .exclude from that remark the men who are employed on the South .Australian waterfront, much as I should like to do so.

Senator Nicholls placed too much emphasis upon over-stowage. I do not deny that there have been instances of over-stowage, but I believe that the effects of it have been exaggerated. It applied, I believe, to Australia, the new Italian ship that arrived in South Australia recently. Over-stowage occurs mainly on passenger liners which receive cargo at the eleventh hour. It is understandable that in those circumstances there would be a certain amount of over-stowage, but the proportion is very low. The Government and responsible bodies have made representations to overseas shipping companies to avoid this . practice if at . all possible. Senator Nicholls also referred to the storage and removal of cargo. While I do not deny that the turn-round of ships is occasionally caused by a lack of facilities to handle cargo, that is the exception rather than the rule. It is inconceivable that timber merchants and other traders requiring materials urgently would permit them to remain in wharf sheds for unduly long periods. Of course, when, ships are unloaded during week-ends there may be an accumulation of cargo in the sheds, but in the main it is removed from the wharfs expeditiously.

It must be realized that there is another side to the picture that was painted by Senator Nicholls. I am not reflecting on the honorable senator personally. He has had long experience on the industrial front in South Australia and knows what he is talking about. However, there are always two sides to a picture, and I believe that in this instance it is my duty to point out that the slow turn-round of ships is attributable to a number of factors. In the first place, I do not consider that the men engaged on the waterfront now are working as well as did those of former years. It is generally recognized that many waterside workers, in common with many members of other sections of the community, are not doing an honest day’s work for the remuneration that they receive. Unless we can fmt the ships moving freely -the cost of li vins will be further aggravated and there will continue to be hold-ups in home-building and in many other activities. Because of shipping hold-ups large, quantities of goods are now being transported by road. As a result, the condition of our highways has deteriorated considerably. Indeed, I understand that freight charges of up to £55 a ton are being imposed for the road carriage of urgently needed steel products from New South Wales to Western Australia. This sort of thing cannot be allowed to continue. The first step in overcoming this problem must be to remove the Communist influence from the Waterside Workers Federation. The Government believes that that will have an important bearing on the obtaining of a quicker turn-round of ships.

The measure before the chamber permits great latitude to honorable senators’, and I should like, if time permitted, to refer to the primary producers. I shall conclude, however, by associating myself with the congratulations that have been extended to the President, and ‘to you, Mr. Deputy President, upon your elevation to high positions in the Senate. You have both played a distinguished part as soldiers - and as civilians and I am sure that the destinies of this chamber have been entrusted to very worthy hands. The contributions that have been made by the new senators to the debate on the motion for the adoption of the Address-in-Reply have been of the highest order. I am sure that those honorable senators will strengthen the debating power of the Senate. I sincerely hope that the steps that the Government intends to take to combat the Communist influence will result in a quicker turn-round of ships and thereby improve our economic relationships.

Senator ARMSTRONG:
New South Wales

– I shall address myself first to the subjects that have been mentioned by Senator Hannaford. The outstanding claim that he. made, and with which I .must disagree, was that the trouble on the waterfront is due not to a deficiency of equipment but to a shortage of labour. To deny that bad equipment is one of the fundamental problems on the waterfront is to deny the whole position. Admittedly there is a shortage of labour, but any one who has taken the trouble to watch the handling of cargo at the various ports of this country must have been appalled at the almost primitive methods that are still being used by the waterfront workers. In many instances the old-fashioned iron wheel barrow constitutes their principal means of moving cargo about the wharf. I suppose that when the first ship tied up to the first improvised wharf in the history of the world a somewhat similar vehicle was used. Undoubtedly there is. urgent need for modern handling equipment to be installed at all ports in this country. We should approach this problem in the manner that American industrialists have done, that is, by eliminating man-power by the scientific application of technical methods and the provision of modern equipment. They consider that a worker’s energy should be conserved as far as possible by the utilization of machinery. There is no reason why similar consideration should not be extended to our waterside workers. I think that there should be an entirely different approach to this problem from that of the past. There should be installed on the wharfs, not on the ships, the most modern equipment available for the loading and unloading of ships and the carriage and stacking of cargo. Efforts should be made to attain standardization of such equipment throughout the world. In my opinion this is the only approach whereby the problem can be solved. Many new wharfs in Sydney are probably better equipped than are those at Outer Harbour in South Australia, but the methods employed to handle cargo on some of the older wharfs that have been in use in Sydney for over half a century are completely archaic. Less advance has been made in the application of scientific methods to the loading and unloading of ships than to any other industry. I agree completely with Senator Hannaford’s contention that there is no more important economic aspect in this country than the quick turn-round of ships. It is fundamental to our everyday life, and we cannot afford shipping delays. However, I point out that the responsibility for getting shipping moving and maintaining its continued free movement is now the responsibility of honorable senators opposite ; Labour shouldered that responsibility during the difficult war years. Supporters of the Government must do more than talk about the problem. In my opinion the responsibility for manning the waterfront should rest with the Australian Stevedoring Industry Board. This could be brought about by appropriate amending legislation. Senator Hannaford emphasized that the Communist influence should be removed from the waterfront. I remind the honorable senator that despite all of the talk about communism, the speeches in this chamber, and the pledges that the Government parties made from the public platform, the Communist influence on the waterfront is nowstronger than it has ever been previously. Of course the Australian Labour party has taken action in some States, but in other States Communists are still occupying executive positions in the Waterside Workers Federation. If the Government succeeds in its efforts to improve the turn-round of ships we shall be loud in our praises. On the other hand, if the Government’s efforts prove unsuccessful we shall be just as loud in our condemnation. The acceptance of office implies the acceptance of responsibility, and the Government should face up to its obligations.

I rose primarily to address the Senate about the Department of Supply, of which I was once the ministerial head. In 1939, the right honorable member for La Trobe (Mr. Casey) developed a plan for the establishment of the Department of Supply, and the Supply and Development Act was passed. The whole idea of the department was to set up in peacetime an organization that could prepare the country for war if it developed. Unfortunately, it has been the history of English-speaking nations that they prepare for war after it has broken out. Mr. Winston Churchill has said that the general history of British wars shows that production in the first year is usually nil, in the second year a trickle, that it improves in the third year, and that by the time the fourth year is reached it is enormous. They then start to win the war. I consider that that involves tragic waste of man-power.

The Department of Supply and Development was intended to develop the technical and scientific knowledge in government departments’ and in factories throughout the country, and to keep those factories in production, so that if wai broke out there would be an organization that could do the job required to be done. The right honorable member for La Trobe did not have time to give proper rein to that idea. Although the department was set up, war came long before the neces-sary man-power had been mustered. It was then that the weight of the war proved too great for the department,, which was broken up into separate depart ments of Munitions, Aircraft Production and Supply, each under a separate Minister. Under those groupings, man-power was brought from outside and inside the Public Service with which to man the departments. When the war ended, the Australian Labour party was in office and it was decided to revert to Mr. Casey’s original idea, which was to reinstitute the Department of Supply and Development. The separate Departments of Munitions. Aircraft Production and Supply came, together again, and to them were added the Aeronautical Research Section of the Commonwealth Scientific and Industrial Research Organization and the Industrial Development Section of the. Department of Post-war Reconstruction. That department was designed to give encouragement to industry, to introduce the latest methods of aircraft production, to. carry on. experiments with rockets, and to introduce efficient methods into factories. It was a big conception and a big department,, but because many of the men who returned to that department had. been previously heads of other departments, its personnel was of excellent calibre. As assistant secretaries there were at least two men who had been heads of, departments in their own right. Other men with the best possible experience were also there, and the machine was moving along smoothly. To-day, I ask what happened to those men during the months that have elapsed since December. 1949. I am afraid that this Government has made a grave mistake in chopping into small pieces the Department of Supply and Development. I appreciate that certain problems had to be overcome inside the Cabinet in relation to the allocation of portfolios, but I regret that a more satisfactory solution was not arrived at.

When the right honorable member foi La Trobe- became Minister for National Development, I went to> him1 and formally handed over’ to him my department. I informed him of the work that’ was being performed by it and I pleaded with him to keep the department as it was because of its great potential value to national development. I believed; that it could do the job that the right, honorable gentleman then had in mind. However, he incorporated only some sections of the department in the new department which was then formed. He took with, him the Bureau of Mineral Resources and the Bureau of Industrial Research. After the last general election, what was left of the department was further disintegrated. The Government has decided to remove the Australian Shipbuilding Board’ from that department and to place it under the jurisdiction of the Department of Shipping. I think that that is a fundamental error. It has always been good policy that the producer and the user should not come under the same department. In other words, the user department should place its order with the producing department. The- same thing applies to the Navy, the Army and the Air Force, except that in some instances the Navy handles- its own production. The Army and the Air Force place their orders with the Department of Supply, the orders are checked and are then handed to the producing department. That policy has been departed from in connexion with shipbuilding, and I think that is a mistake. However, time alone- will tell whether it is or not. In order that the user should be completely protected, the Labour Government brought into the Department of Supply and Development men of high rank from each of the fighting services. Those men became part and parcel of that civilian department, their duties being to check production in order to see that the articles ordered were produced in the manner required. The aircraft, munitions, chemicals and explosives factories have now been taken from the department and handed over to the administration of Mr. Eric J. Harrison as Minister for Defence Production. I consider that that will provide the Government with a problem and will make its efforts to work out defence plans very difficult indeed. Administratively, I consider that the Government has set itself problems which should have been eliminated. It has left with the Department of Supply such matters as contracts for the rocket range, and stores and transport. Prior to the breaking up of the department the Government had a complete unit which, through trial and error during a number of years, had been developed so that it could give great service to the Commonwealth. The day may yet come when those sections will again be grouped under one ministerial head, and if it does I consider that the department will be much more efficient in its operations.

The whole purpose of the Department of Supply and Development was to prepare the nation for war. The powers conferred on the department were extraordinary for peace-time, but those powers were given to it deliberately because the government of the day appreciated that in time of total war the important thing is to strengthen secondary industries. Such matters as food and clothing then acquire great importance.

I have no doubt that this Government is continuing the encouragement that was previously given to young scientific trainees in this country. I see in those young men the future of Australia. Where a country possesses a population as small as ours, the lack of numbers must be compensated for by development of the standard of brainpower of the people. The Labour Government did everything it could to encourage such trainees. “ I remember that at one time, when checking through my department, I found that there were 92 employees overseas. They were in aircraft, munitions, and marine engine factories in secret places in England studying all manner of subjects. They would return to Australia as a tremendous potential for good in this country. It did not concern me whether they stayed with the department or went elsewhere. The important thing was that once they had received their training they became an asset to Australia wherever they might be employed. It is remarkable that when a war breaks out many of such young men come forward, and are to be found in all branches of the war effort. The Lithgow Small Arms Factory has always conducted a highly satisfactory training scheme. During World War II. it was noticeable that men who had undergone their training at Lithgow and had later left were pulling their weight in the war effort. The basic training that such men receive at government expense is a very cheap way to develop the quality of the man-power of the country. That does not apply only to scientific trainees; it should also be encouraged at technical levels. It is unfortunate that management is accidental more often than not in Australia. A man may produce a product which is a very good one and he may make high profits from its 3ale, but it will often be found that managerial knowledge is not as wide as it should be. He is therefore unable to get the most from his factory or to develop the technical knowledge of the men who work for him.

I am pleased to have had the opportunity to discuss the Department of Supply and Development and to present my views on what should be done concerning it. I appreciate that the Government has reasons of its own for the action that it has taken, but I am certain that those reasons are not sufficiently good to justify the disintegration of a department which was developing into a great power for good in this country.

Senator REID:
New South Wales

– As this is the first time that I have addressed myself to the Chair during the present Parliament, I take the opportunity to convey my congratulations to the President on his election to that high office. I am sure that with the record that he has, both in civil life and on active service, he is properly equipped to give creditable service to the community. I also wish to congratulate you, Mr. Deputy President, on your appointment as Chairman of Committees. You too have had long experience of both civil and military life, and I have no doubt that that experience has equipped you to be a very able assistant to the President in the conduct of this chamber.

I wish to deal briefly with the shortages of” foodstuffs that exist in this country at the present time. Let us consider some of the causes of these commodity shortages. The acute shortage of butter is only partly due to seasonal conditions. The present shortage of dairy products was foreseen many years ago by leaders of the industry who consistently warned ns that, unless adequate steps were taken to improve the lot of dairy men, within a comparatively few years the people would not be able to buy sufficient butter to meet their requirements and that we would not bo able . to carry out our function as a great primary producing country and provide food not only for ourselves and for the people of the United Kingdom u nder the agreements which we have made from time to time, but also for the peoples of other countries which do not produce dairy products in sufficient quantities to meet their own requirements. One of the principal causes of the shortage of dairy products has been the introduction of the 40-hour week in secondary industries. I do not propose to discuss the merits of the 40-hour week as it applies to industry generally, but I shall have something to say about its effect upon the dairying industry. Dairymen whose employees work under an award of 56 hours a week are forced to compete for labour with secondary industries which work only a 40-hour week. The work of the dairyman is spread over 365 days a year, but the work of the employee in secondary industries is spread over only about 280 clays a year. It is understandable that in these circumstances dairymen have the greatest difficulty in obtaining and retaining labour. Labour is not likely to be attracted to the dairying industry until dairy-farmers are able to pay wages commensurate with the services demanded of their employees. The condition of workers in the dairying industry must inevitably be raised to that of employees in other industries. If that is to be done the price of butter must be increased. If the people urgently need a vital commodity they must be prepared to pay a fair price for it. The price of butter and other dairy products must be fixed at a level which will enable dairyfarmers to provide for their employees accommodation and amenities of a standard equal to that enjoyed by workers in secondary industries. I do not suggest that we should provide- for rural workers all the attractions that are to be found in big cities - that is not possible^ - but. at least we should fix the price of dairy products at a level that will enable the dairy-farmer to provide for his employees facilities which will make employment in the dairying industry less tiresome and more productive.

The present high price of wool has also had a marked effect on the dairying industry. Along the coastline of New South Wales many rich dairying properties, valued at from £120 to £200 an acre, have been changed over from dairying to (he production of beef. Their owners know that they will not be able to obtain from beef production the high returns which they formerly obtained from dairying, but the shortage of labour has forced them to make the change. Only a few days ago I read that the son of the owner of one of the best dairy farms near Lismore decided that he would not become a farmer like his father. Instead, he commenced an apprenticeship in the carpentry trade because he was not prepared to work seven days a week. His father thereupon decided to engage in the production of beef and has since moved into Lismore so that he may be with his son. That sort of thing is happening in almost all dairying areas. There are other factors that affect the supply of butter to the community. For instance, the rapid advance in the production of dried milk has had a serious effect on butter production. Here again shortage of labour has been a determining factor. If the production of whole milk is to be maintained the price of butter must be increased. Consideration might also be given to the possibility of increasing the productive value of the land by topdressing. Many dairymen would topdress their land heavily if they thought the cost involved would be worth while, but they are deterred from doing so because they fear that the shortage of labour may rob them of the fruitful results of such expenditure. The Government should encourage dairymen to increase the productivity of their properties by paying a subsidy on top-dressing materials. If that were done the higher return per acre would, at least to some degree, offset the effect of the shortage of labour.

What has happened in relation to dairy products is happening also in relation to other food commodities. Beef is in short supply and if the present rural policy is continued we may well reach the stage when the wheat-farmer will no longer produce wheat for home consumption. Since the No. 5 wheat pool was established wheat-growers have been subsidizing many other industries. In 1938, the price of wheat was approximately 2s. 9d. a bushel-

Senator Hendrickson:

– Where was it 2s. 9d. a bushel? In that year wheat was sold for’ ls: 7d. a bushel.

Senator REID:

– The Australian parity price then was 2s. 9d. a bushel. At that time it was agreed by the then governments of the Commonwealth and the States that the home-consumption price of wheat should be fixed at 5s. 2d. f.o.b. ports Melbourne. The agreement specifically prescribed that that price applied only to wheat used for human consumption. The quantity of wheat used for home consumption .then amounted to approximately 25,000,000 bushels. When the Labour- Government came into office in the Commonwealth sphere it introduced wheat stabilization legislation and, with a take it or leave it attitude, it practically forced the wheat-growers to accept its stabilization scheme. When that legislation came into force the procedure originally adopted was abandoned and the then Minister for Commerce and Agriculture, Mr. Scully, undoubtedly acting upon the instructions of the Labour caucus, determined that wheat for the pig and poultry industries and for stock feed should be supplied at the same price as had been fixed for wheat for human consumption, notwithstanding the fact that in the meantime the export price of wheat had risen considerably. Only after very intense agitation by the wheatgrowers’ organizations did the Government agree to fix an increased price for wheat for home consumption. The supplying of wheat for home consumption at lower than export parity is still going on and will continue to go on until a new stabilization scheme has been evolved and the legislation has been suitably amended.

I am well aware that if the poultryfarmer had to pay the export price for his wheat the price of eggs and poultry would be very greatly increased, but I contend that it is not the responsibility of the wheat-growers in Australia to subsidize the poultry industry or any other industry.

Senator Courtice:

– The honorable senator does not believe in a stable price ?

Senator REID:

– I do, but not a price fixed at the expense of only one section of the community. Does the honorable senator contend that it is fair that the wheat-growers should be obliged to make wheat available to the poultry industry at 7s. Id. a bushel when the export price is 18s. 6d. a bushel. Is it fair’ to ask him to subsidize other industries to that extent ? If it is the policy of the Government in its efforts to prevent the rising of costs in Australia, to subsidize certain industries, the cost should be borne, not by the wheat-farmers alone, but by the whole community, and it is the duty of the Government to ensure that the burden is fairly distributed. The proportion of wheat exported is steadily declining. More and more is being used in Australia. Farmers are now saying that it does not pay them to grow wheat because the bulk of what they produce is consumed in Australia, and they are paid for it at the home-consumption price. On the wheat put into the various pools from No. 5 to No. 11, the farmers have lost £98,000,000 on the home consumption proportion compared with what they could have got on the open market. The wheat-farmer is expected to provide wheat at 7s. Id. a bushel for the feeding of stock, when the export price of wheat is 18s. 6d. a bushel, and the wool clipped from the sheep to which the wheat is fed is being sold for 200d. per lb. The principle is wrong, and it is time that a change was made. I shall do all in my power to place the facts forcibly before the Minister concerned when we are considering legislation dealing with the stabilization of the wheat-growing industry.

During the recent election campaign, Labour speakers made some extraordinary statements on the subject of defence. Yesterday, some honorable senators opposite said that we had deceived the electors with ballyhoo, but it was the Labour party that resorted most flagrantly to ballyhoo. For instance, they claimed that the Menzies-Fadden Government consisted of war-mongers who were trying to frighten the people into putting, them back into power. They claimed that there was no justification for the Government’s defence proposals. Even the Leader of the Australian Labour party said that it was time we got out of Korea.

Senator Hendrickson:

– A good many others are saying that now.

Senator REID:

– I hope that Australia will never forsake its allies. The Korean campaign has played a very important part in the history of the world. If the United Nations had not declared itself definitely on the Korean issue, we in Australia might have been in a much more difficult position to-day than we are. The war in Korea has been a demonstration to those whose one aim is to dominate the whole world. The attack on South Korea was a try-out to see what the reaction would be. Fortunately for us, the United Nations decided that Russia had gone far enough and should be taught a lesson. I admit that there is still cause for anxiety unless we make adequate defence preparations. I was pleased to hear Senator Armstrong say that it would be too late to prepare for defence when war was upon us. That represents an entirely ‘different attitude from the one adopted by the Australian Labour party during the election campaign. The Government’s defence proposals were then condemned by Labour speakers. In the Senate just before the election, the Labour Opposition unnecessarily delayed the passage of the National Service Bill. They held it up until they realized that they were treading on dangerous ground. In the election campaign, however, they gave full expression to their feelings on the subject of defence. No one wants the country to be forced into unnecessary expenditure on defence preparations. The money that we a’re expending on defence could be put to much better use in developing the country, but, as Senator Armstrong pointed out, it would be too late to begin our preparations when the enemy was knocking on the door. The only way to guarantee peace is to be strong enough to discourage potential aggressors. Therefore, we must see to our defences so that we may take om place, if necessary, with the other democracies of the world.

This is the jubilee of the inauguration of the Commonwealth, and it is a suitable time to survey some of the occurrences of the last 50 years, to decide whether the Constitution has worked satisfactorily, and whether any adjustment or alteration is needed. On the whole, the Constitution has served its purpose admirably. Tt. has undoubtedly been a safeguard on occasions against attempts to enact legislation that would be oppressive to the people. Those who were responsible for the framing of the ‘Constitution were wise old heads who foresaw many of the things that were’ to happen in the future, and they took measures accordingly. I admit, however, that there is need for some alteration of the Constitution, and the only suitable way to decide upon the necessary alterations is to hold a Constitution convention .to work in an atmosphere outside the influence of party politics.

When federation was consummated, the founders envisaged it as a permanent federation of the States. Unfortunately, with the passage of years, that attitude has changed, and there is a growing tendency towards central control from Canberra. The powers of the States are being whittled away one after another. During a war the Commonwealth must have supreme control, but it is our experience that all governments are loath to surrender powers even when the need for them has passed. If the present tendency continues we might as well go for straight-out unification, and be done with it, but that would be a disaster. The fathers of federation provided in the Constitution, not only for the subdivision of existing States, but also for the creation of new ones in areas outside the boundaries in any of the existing States. Unfortunately, that provision has not been availed of, nor have any of the original States been subdivided, despite the fact that for many years there has -been an agitation for the formation of new States in Queensland and New South Wales. The people of northern New South Wales, in particular, have repeatedly asked that they be given the right to form a new State. The influence of the large cities is too great. They have too much voting power, and “the natural inclination of governments is to concentrate upon areas where the voting strength lies. If the people of northern New South Wales are satisfied that they can shoulder the responsibilities associated with the running of a sovereign State, why should they be denied ? Unfortunately, it is necessary to get the approval of the State government concerned before a State can be divided, and even before a referendum on the subject can be held. The people of northern New South Wales have repeatedly approached their Government, but have always met a blank refusal.

An alteration of the Constitution should be considered with a view to simplifying the machinery for the setting up of new states. I was pleased to hear Senator Henty advocate the formation of a new State in Northern Australia. I believe that to be the only solution of the problems associated with the development of that part of the country. It will be objected, of course, that in the north there is insufficient population to justify the formation of a new State, and that the people lack the necessary financial resources to justify the Commonwealth in handing the area over to them to develop. Well, tha Commonwealth has not made much of a job of developing those areas, and the local people could hardly do worse. At any rate, if that objection had been pressed in the case of the existing States at the time of their formation, few of them would ever have been established. ‘Queensland separated from New South Wales when there was only half a dollar in the till. Western Australia was established as a State by a few shiploads of people from Britain. Under the States’ grants legislation the less populous States now receive financial assistance from the Commonwealth Government. Their development requires the expenditure of considerable sums of money, and I consider that it is right and proper that the Australian Government should subsidize them. I do not know what >Senator Henty had in mind w.hen he referred to the establishment of .’another State in northern Australia. I believe that a separate -State should be established in northern Queensland and another State in the Northern Territory. However, before new States are established the people who reside in the areas concerned, should be -consulted, because they will be more directly affected by any such proposal than will the people of the more populous States. Of course, the whole of Australia would ultimately derive considerable benefit from the development of the less populous parts of Australia, and I think that the time has arrived for a constitution convention to consider such matters. I also consider that we should simplify the machinery for the establishment of new States. The powers of the States are constantly -being filched by the Commonwealth Government, and perhaps the greatest encroachment , th’at has been made on the independence of the States is the introduction of the uniform tax system. The responsibility for raising public money should always rest with the authority that will spend the money, =and for that .reason I consider that the uniform tax system i3 absolutely wrong in principle. The present system encourages a lack of responsibility in governments that expend money which they themselves do not raise. In conclusion, I express the view that the summoning of a constitution convention in the near future would be a most appropriate Commonwealth Jubilee gesture.

Senator BYRNE:
QUEENSLAND · ALP; QLP from 1957; DLP from 1968

– I shall not address myself at great length to any particular matter, but I shall refer briefly to .several matters that appear to me to be of considerable importance. I think that the fact that many speakers “who have taken part in this debate have seen fit to refer to the unbalanced .state of our .economy, indicates that that matter is of paramount importance. Although considerable mention has been made of prices control as a possible solution of our economic problems, we all know that prices control is not, of itself, a complete panacea for our economic ills. Because those ills are many and complex, it seems clear that the remedies for them must also be many and complex. Prices control is only one of the remedies that may !be invoked, and although it would undoubtedly make a useful contribution to restoring our economy, it will not prove a complete panacea. I know something at. first hand of this subject because I was associated with the take-over of prices control by the Queensland Government when, following the defeat of the prices referendum in 194S control of prices reverted to the States. Unfortunately, it is an historic fact that it is very difficult for the six States of Australia to agree on any major matter, and for that reason it is practically impossible to formulate a uniform policy. That was one of the difficulties that confronted the States when they had to assume responsibility for the control of prices. A conference was convened by a former Prime Minister and was attended by Ministers from each State. At that time three >of ‘the .State’ Governments were governed by the conservative parties and three were governed by the Labour party. One of the States revealed its real attitude to prices control by appointing, almost, immediately, a Prices De-control Commissioner. That action was a breakaway, in spirit at least, from the principle of price fixation. Although the States have not always succeeded in their efforts to control prices, because of circumstances beyond their control, I think that they have made a most creditable attempt to do so, having regard to the constitutional difficulties that have confronted them.

Reference was made in this chamber recently to the acute shortage of certain commodities and goods in Queensland, and it was suggested that that shortage was due to the alleged failure of the Queensland Government. During the recent election campaign I pointed out to the people, especially in northern Queensland, where they were experiencing an acute shortage of supplies, that that shortage would continue so long as the responsibility for administering prices control rested with the States. For example, although Queensland is producing a sufficient quantity of eggs to fulfil its own demands, the supply of eggs actually available in that State is not nearly sufficient. The reason for that shortage is that Queensland eggs are being sold in New South Wales, where thu price is much higher than in Queensland. It is obviously inevitable that there shall be a disparity between the prices paid for various commodities in the respective States until prices control ‘s made uniform throughout Australia. At present an internecine conflict is being waged by the various States for various commodities in short supply, and unless we can terminate that conflict, the present unsatisfactory distribution of commodities, with consequent shortages, must continue. The present Government has announced its intention to seek, by referendum, additional constitutional powers to implement its defence programme, including the power to impose certain economic restrictions. I cannot understand, therefore, why the Government does not propose to seek power also to impose price? control. That problem, should be confronted now, and the Government should seek power from the people to introduce legislation to re-introduce prices control on a national basis.

Another matter to which I desire to refer is the suggestion that members of the Australian Labour party are, in some way, affiliated or associated with the Communists. During the recent election campaign members of that party were subjected to severe personal attacks. We were accused of being avowed Communists, quasi-Communists, near Communists, or, at least, of being sympathizers with the Communist party, and our party was subjected to the over-all charge that it was favorably disposed towards communism. I realize that that charge was, very largely, the outcome of election campaign tactics, and now that the election is over I do not complain about it. Nevertheless, I resent very much the suggestion that we are in anyway connected with the Communist party. However, the point that I desire to stress now is the danger to democracy of making such a charge against, any democratic political party. After all, nothing would please the Communists more than that our people should become divided by the suggestion that one of the major political parties in this country is disloyal to Australia. Possibly the most subtle, and. therefore the most dangerous, attack, that the Communists can make on any community is an intellectual one. They seek to drive the members of a democratic community into a position where, in endeavouring to destroy communism, they destroy themselves.

Democracy, as we understand it, rests ultimately on certain legal processes; but if we destroy those processes in attempting to destroy the Communist party,, which is opposed to democratic legal principles, we may very well destroy the mainspring of our existence. That is why I say that an intellectual attack by the Communists is their most dangerous form of assault. When we review the history of Communist attacks in Europe we find that in almost every instance where communism has been defeated it has been defeated by an autocracy of the right. That happened in Hungary in 1928, where the Communists were defeated and a dictatorship of the right was established. It also happened in Spain, and, of course, it happened preeminently in Germany. The technique of inciting a democratic community to distrust one of its major political parties is well known to the Communist. If we discredit one of our major political parties by permitting our people to be persuaded that it is Communist-controlled, we are playing into the hands of the Communists. Fortunately, in Australia there is little evidence of the “ class war “ which is a fundamental of Communist thought, and, generally speaking, our various social classes get on quite well together. However, if the political party that represents the workers is labelled “ Communist “, that must have the effect of making people class-conscious. I have dwelt upon this matter in order to direct the attention of honorable Senators opposite to the seriousness of what they are doing. I ask them that, in playing the game of politics, they give consideration to the wider national issues and keep before them the fundamentals of our democratic system.

The debate on the statement on international affairs drew attention to our contiguity to Asia, and I shall make a brief reference to the attitude that Asia has adopted towards the western democracies. I do not think that anyone would suggest that, over the years, our association with Asia has been particularly fruitful. I point out at once that I do not condemn the policy that Britain pursued in India over the centuries. On the balance of advantages, Britain probably did a very fine job. However, the position in Asia to-day is very grim. As an instance I recall something that I saw in India. I remember landing at an aerodrome at Bombay and seeing a line of young women and boys carrying on their heads flat pans of mixed cement from a concrete mixer to a dumping point. I saw a young woman leave the line, come to where I was standing on the edge of the airstrip, take a small baby a few weeks old from the arms of a child of approximately seven years, and feed it. I saw her reprimanded by the overseer because she had been away from her work for too long. I saw her again take her place in the carrying line. That is symptomatic of the Asiatic problem.

I believe that Asia requires industrial organization from the point of view of both manufacturing methods and industrial tribunals. This country is highly advanced in industrial organization and has a multiplicity of arbitration courts, conciliation commissioners, wages boards and similar authorities functioning in various ways and in various industries. We should give Asia the benefit of our experience. Let us bring Asiatic students here to study our methods. By doing so, we shall be helping to discharge any debt that we owe to Asia and assisting it materially to advance quickly to a condition of industrial and social development that otherwise it might not reach for many years. There is no reason why Asia should commence its industrial and social organization at the point at which we commenced ours. There is no reason why it should not commence at the point that we have now reached. If Asia commences at that point, we can advance together to a high degree of industrial and social development and establish a com’ity that will enable us to live in peace.

Senator Reid referred to the necessity for a review of the present constitutional position. I attended the meeting of the Loan Council that was held in Canberra recently. I had attended similar meetings previously. It was evident that something was happening there that could not go on indefinitely. The meeting was attended by the Prime Minister, the Treasurer of the Commonwealth and by the State Premiers and/or State Treasurers. Listening to the proceedings, one felt that the States were in a position of almost complete subservience; That state of affairs cannot continue indefinitely. As Senator Reid said, the Commonwealth is a federation of independent sovereign States. It was intended by the framers of the Constitution that the, sovereignty of the States should be maintained. Therefore, we cannot permit the States to be financially starved until ultimately they have no alternative to accepting the demands of the Commonwealth. Commonwealth-State financial relations must be placed on a basis that will enable the States to preserve their integrity, independence and sovereignty. If any action is taken to achieve unification in this country, it must be taken in a constitutional manner. We must not sabotage State sovereignty by subterfuge.

I shall deal now with the necessity to regard our defence preparations not only in -the light of national requirements but also in the light of an exchange of assistance between this country and others, especially Great Britain. Recently we witnessed the sorry spectacle of a ship that had broken down in one of the northern ports of Queensland coming to Brisbane and, so *to** speak, by-passing the dry dock that was built there during the war at considerable expense. The reason that was given for not using the dock was that it was. not equipped with the electrical or mechanical machinery necessary to enable repairs to be done to the ship. I do not know whether it is true or not, but I have been told that the ship is owned by a British company, which insisted that, the ship go to a Sydney dock in which the company had a financial, if not a controlling, interest. It will be a sorry day for us if the nature of our defence preparations is ever determined by considerations such as those. That dock was built during the war for strategic purposes. Therefore, it is an integral unit of an overall scheme of national defence. A dock of that kind should always be well equipped and civilian workers should always be available to work in it so that, in a time of war, it can be put into commission immediately and perform the functions for which it was ‘constructed. We cannot permit vested interests in Australia or other countries to determine which of our national defence units shall be out of commission at any time.

The Leader of the Opposition (Senator McKenna) referred to the increase of the number of Commonwealth public servants.. As a member of the public service of a State at one time, I have always resented the tendency to attach the tag “ bureaucrat “ to members of any public service. We must recognize that our present social order is undergoing a transformation. I do not propose to discuss whether that is the result of positive action that was taken by the Australian Labour party when it was in office or whether the present Government parties are caught up in a definite social trend when they are in office. There is an increasing demand by all sections of the community for State services and State interference. To-day, people who normally would resent any suggestion of State control require, for example, a high standard of milk hygiene, which necessitates the employment of inspectors, the establishment of committees and the imposition of controls. That is a definite trend.. Consequently, the public services of the Commonwealth and of the States are expanding. Men who join a public service do so because they want to make the public service their career. They do not immediately become different from other citizens and turn into official autocrats, wrapped in an official cocoon into which nothing, goes and out of which nothing comes. They remain ordinary units in our society and have no more desire to become isolated autocrats than we have. They are ordinary persons who have been entrusted with certain powers. They try to perform their duties with honour to themselves and in accordance with their obligations to the Crown.

Senator CORMACK:
VICTORIA

– Is not there a limit to the capacity of the people to support them?

Senator BYRNE:
QUEENSLAND · ALP; QLP from 1957; DLP from 1968

-Probably there is. But the. very people who criticize the growth of the public service are those who, in the same breath, insist upon the provision of additional services which necessitate the employment of more public servants. The point I am making is that we must give public servants the status in. the community that is their due. Unfortunately, we are living now in a plutocracy, in which wealth is the determining factor in establishing social status and dignity. On that basis, the average public servant does not rank very high, but I say that, because of the responsibility that he has, the work that he does and of his importance to the community, it should be our duty always to ensure that he is given his proper place in the community.

I direct attention to the necessity for developing coal deposits in Queensland. The fact that we have not succeeded in developing successfully the project for the production of- oil from shale in New South “Wales should not obliterate from our minds the recollection that in other countries coal is considered as an important source of petrol. The process of hydrogenation of coal has been used successfully in. other countries. It operated especially in Germany and other European countries during the war. Our economy must remain a coal economy. Unfortunately, we have not yet found any flow oil in Australia, but we have tremendous deposits of coal, especially in Queensland. “When I read that a subsidy of £3,000,000 is to be paid upon imported coal, I wonder whether the Government is completely sincere when it professes its intention to place the defence of this country on a stable basis. Australia and its defence industries must run on coal. I commend to the attention of the Government, the tremendous coal- deposits in Queensland, especially at Blair Athol. The Queensland Government has not been remiss in endeavouring to develop the major coal-fields in that State. If any honorable senator visited Blair Athol, he could go down what I shall call a tremendous glory-hole and look up at a solid wall of coal, 80 feet high without a band of any other material in it wider than a finger-nail. The coal is suitable for steaming purposes. That deposit is one of the geographical wonders of the world, and we cannot afford to allow it to remain undeveloped’. Some years ago the Queensland Government made an agreement with a private company from England which, it was understood, had a considerable financial backing and was in a position to market the coal that, was produced. The scheme was an ambitious one but, unfortunately, the company either could not raise sufficient money or was not prepared to proceed with the scheme. To-day, that coal-field is still being worked with what is virtually a meccano set. That is not good enough. We cannot afford to allow tremendous coal deposits to remain undeveloped.

I commend those points to the attention of the Government. I am not sufficiently optimistic to believe that they will sway the Government, but I hope that they will receive earnest consideration.

Senator WEDGWOOD:
Victoria

– I congratulate you, Mr. President, and the Chairman of Committees upon your elevation to high office in the Senate. I am sure that in the hands of both of you the dignity of this chamber will rest securely.

Senator Byrne referred to prices control by the Commonwealth. I gather that the honorable senator was associated with prices control in Queensland. I was a member of the first decontrol committee that was established in Victoria. Prices control was practicable in war-time only because it was supported by other controls that cannot be imposed in peace-time. As the honorable senator knows, wage pegging, man-power, rationing,, subsidies and other restrictive measures were introduced during the war. As a matter of fact all cost of living increases to the basic wage were refunded to the employers, and that had the effect of keeping every item in the “ C “ series index under control. Therefore, prices control was reflected in every manufactured article. But immediately wage-pegging was lifted, subsidies were withdrawn and those allowances were not refunded, to the employers, prices began to rise. Of itself, prices control is not. an effective means to stop prices from rising. It can only register increases in costs, determined by world competition or by fixed arbitration tribunals. I agree that the control of prices by the States has not been effective. No system of prices control which is not based on the controls that we had in wartime could be effective.

I had intended to speak about the Commonwealth and States financial relationships, particularly as they affect the development of power and the provision of fuel in Victoria. I believe that there should be a review of Commonwealth revenue and expenditure. However, in the light of events in this chamber last night 1 shall devote the short time at my disposal to registering a very emphatic protest about the vicious attack that has been made on our great ally, the United States of America, by Senator Morrow. I am very sorry that the honorable senator is not present in the chamber to hear what I have to say.

Senator Sandford:

– We shall send for him.

Senator WEDGWOOD:

– I should be glad if he would take his place. Labour was rejected at the polls for two .major reasons, which are closely interlocked. The first was its attitude towards defence, and the second was its attitude towards the activities of the Communist party, which are a direct threat to our internal and external safety. Last night Senator Willesee referred to the evitability, or I should say the inevitability, of war.

Senator Sandford:

– The honorable senator should make up her mind.

Senator WEDGWOOD:

– I have made up my mind very clearly. It is a pity that Senator Sandford’s mind is not as clear. I am convinced that every Australian man and woman prays that there will not be another world war. What honorable senators opposite have failed to tell the Australian people is that since 1941 Russia has been on a military footing. The whole of Russia’s economy is based on the idea that war is inevitable. The Prime Minister (Mr. Menzies) has stated that Australia may have until 1953 to prepare. However, reliable information to hand from Switzerland indicates that 1952 will be the dangerous year. Senator Maher cited figures concerning Russia’s armed forces. I understand that Mr. Strachey, the British Minister for Defence, stated recently that Russia had over 4,500,000 men under arms, 19,000 operational jet aircraft, and expected to obtain an additional 10,000 jet aircraft this year. Those figures are indicative of the preparedness of our enemy. After Senator Maher had mentioned those figures Senator Morrow contraded that if they were true it would be impossible for Russia to be proceeding with its major internal projects. I point out that since the cessation of World War

II., while the democracies have been feverishly disarming, Russia has been rebuilding and increasing its military strength. It has had its total economy geared for war, and we should be extremely foolish if we did not appreciate the real position. Indeed we should be recreant to the responsibility with which we have been vested by the Australian people. In Russia, public opinion is being conditioned by a “Hate-Britain, Hate-America “ campaign, and it is astonishing that any Australian could stand in his place in this chamber and pursue a “ Hate-America “ campaign. Shame on any Australian who stands in our Australian Parliament and behaves in such a manner! .Senator Gorton has stated that Senator Morrow was the leader of the Labour party’s Senate team and that, therefore, he presumed that the honorable senator spoke for the Australian Labour party. Although he may have been the leader of the Senate team as a result of a mistake in Tasmania, I point out that it was no mistake on the part of the Australian Labour party that he was allowed to “ take the air “ at 9 o’clock last evening. That is something for which the Australian Labour party will be answerable to the Australian people.

Although Communist leaders the whole world over have proclaimed their desire for peace, they have sacrificed the social well-being of their people in order to develop long-range projects for strengthening their war potential to destroy the democracies. Senator Morrow stated last night that the Korean war was not being fought to save the world for democracy and from communism but because the United States of America was short of nickel, tungsten, and other scarce metals, and that Korea had these metals. I point out that to-day the United States of America is subjecting its people to real hardships in the interests of world peace. It is now a fully armed nation, expending almost £250,000,000 a week on. armaments. The Korean war has already cost the United .States of America £500,000,000 arid much loss of human life. Yet this is the country that some of our colleagues would seek to divorce from Australia. It is interesting to recall that while the United States of America has developed. an enormous military programme, its industrial programme, also, has been greatly accelerated. It has been estimated that very shortly that country will be expending about £166 a year per head of is population on defence, compared with an expenditure of £40 by Great Britain, £55 by Canada and £12 by Australia. Consequently I do not consider that we are in any position to criticize the United States of America. Certainly we should make better preparation ourselves. Because of our belief in the United Nations, there should be no difference between the Government and the Opposition on the fundamental policy of repressing aggression wherever it occurs. About twelve months ago the Parliament was called together for- a special sitting,’ which lasted only one day, because the Security Council of the United Nations had called on its member nations to take up arms in defence against an aggressor. Practically every member nation agreed. At that time we had the spectacle of the Labour party repudiating the staunch feeling of loyalty that existed away back in 1912 when the Fisher Government of this country was the first government in the British Empire to introduce compulsory military service.

In 1950, and again this year, Labour has refused to assist the Government’s recruiting campaign. Unfortunately there are in this chamber men who are prepared to utter treacherous statements about Australia’s great ally. There must be a hypocritical feeling to-day that we are .living in normal times. We are not. The Prime Minister has made it abundantly clear that we are at peace only in a technical sense. Ever since the end of World War II. the Australian Communists, under direction from the Soviet leaders, have disorganized industry, disrupted our waterfront industries, and interfered with the nation’s development and defensive capacity. There has been ii series of strikes, and it has been revealed that in some trade unions control has been gained by means of fraudulent ballots. It is hypocritical for honorable senators on the other side to say they are prepared to assist the Government in any defence project. It is national folly to forget the lessons of the past, when we were unprepared. Emphasis was given to this contention by Senator Paltridge. On the next occasion we may not have years in which to prepare and fight back. In a short war delay could mean the difference between defeat and victory. Australia must have a defence policy which will ensure that every arm of the services is properly equipped. It must also have a policy for dealing with traitors in the country, so that we may be able to balance our economic and our military strength.

Sitting suspended from 5.45 to 8 p.m.

Senator WEDGWOOD:

-Before the suspension of the sitting I had been speaking of the condition of our defences and of the position concerning Russia. It has been . claimed in this Senate ‘ that Russia has few territorial ambitions. My reply to that is that few nations have taken so little time in which to annex so many territorial possessions as has Russia. In five years it has added to its empire almost 180,000 square miles of territory and more than 22,000,000 people. Those figures disregard China. At the present time Russia is exerting direct control over five sovereign States. I suggest that we should betray the trust of the Australian people if we accepted the theories propounded by Senator Morrow.

In a speech made during the last Parliament I congratulated the Government on its announced intention to re-constitute the Public Accounts Committee. I consider that that is something which this Government must do. Honorable senators have heard a great deal about inflation. I suggest that the presentation of a budget which deals with the allocation of almost £800,000,000 for a country with approximately 8,250,000 people warrants the appointment of a committee charged with the responsibility of examining the public accounts. On his last trip abroad the Auditor-General was privileged to see the Committee of Public Accounts sitting in London, and he agrees that a committee of that nature could well be an instrument in the machinery of parliamentary government in this country. It is interesting to recall that years ago when the volume of public finances was very much smaller than at the present time, a public accounts committee operated. During a .speech which I -delivered last year I made specific reference .to the reports that were presented to the chamber by that committee and I then stated that that inf ermaWon had been gained at very little cost to the taxpayer. I hope the Government will immediately reconstitute that committee. I believe that through it definite control of finance can be achieved ti nd that it will be the means of influencing the work of government departments generally and of bringing about much needed reform in Government expenditure. I support the bills.

Senator TANGNEY:
Western Australia

– In addressing myself to the question of Supply, I greatly regret that the time at my disposal is limited. I understand that unless Supply is passed by to-morrow the civil servants will not receive their salaries. Out of consideration for them I shall get on with the business, because if they receive their pay this Friday they may be able to buy some commodities with it, whereas if they are forced to wait till next week, goodness knows what it will buy ! The main prob-. lem that confronts us all to-day is that of inflation. It is not merely a bogy conjured up from the dark recesses of our minds ; it is one of the most threatening menaces in the community. At no time during the darkest days of the last war, when we were required to cater for many more people than there are in the country to-day and when there was a great dearth of man-power in the community and we were obliged to send supplies of food to troops scattered througout the Pacific and Indian Ocean regions, was there such a shortage of essential foodstuffs as there is to-day.

I wish -to refer honorable senators to a short article which appeared in the Melbourne Age of to-day’s date, because T suggest that it throws light on the lopsidedness of our present economy. I do not know how such an article found its way into a conservative newspaper such as the Age, but I quote it for the benefit of “honorable senators. It reads as follows : -

At the same store were men’s bed sox. In a delicate shade of pink, they were pure wool angora and cost Ils. 6d.

In these times of shortage of essential commodities it is absurd to think that man-power and wool, which is a necessity not only in times of peace but also in war, are being used to manufacture such articles. I mention that because it seems to me to be an indictment of the ridiculous use of our man-power. Senator Wedgwood has stated that the only way in which price’s control can be made effective is to control the other factors in prices, such as man-power. When one reads an article such as that to which I have referred, it makes one think that its publication is a waste of valuable newsprint. It also indicates that perhaps it would be a good idea if man-power could be diverted from such wasteful production to production of the necessaries of life. An examination of most forms of control operating during the war years will show that there was fairness in the distribution of commodities that were in short .supply. It has been said that we cannot have prices control without also having control of wages. I suggest that we already have wages control by means of arbitration court awards. The wages of industrial workers are based on such awards, which is a definite form of control. Even when prices control operates in a State and a manufacturer desires an increase of the price of a certain article, he does not go into open court with his application. The workers are obliged to go to the arbitration tribunals where there are advocates for and against, and a judge gives his decision. When .a manufacturer wishes to have the price of his product increased, his representations are heard behind closed doors and the first intimation that the public receives of his application is when an increase of price is granted. I have not yet been able to find a manufacturer who has approached the prices authorities in order to have the price of a commodity reduced.

It is noteworthy to-day that goods are in short supply until a rise of price occurs. Then the allegedly scarce commodities come out from under the counter or from the store rooms. We all know that that is true. To-day we are witnessing the spectacle of meat being bought on time payment. I ask honorable senators if they have ever heard of anything so ridiculous. If Gilbert and Sullivan were living to-day they could find ample material for a whole series of operas based’ on the- economic chaos into which this nation has fallen. This is the National Parliament and it should have as its aim and object the well-being of all the people, of this country. It is impossible, to have a happy,, contented people if they find injustices all round them. Even though wages have risen, I suggest that the value of wages has not increased’.. We are often told that it is because of increases of the basic wage that essential commodities also increase in price; Let us take meat as an example. If every slaughterman engaged in the slaughter yards worked to-day for nothing, I suggest that it would not reduce the price of a pound of steak by one-tenth of a penny. I am sure that honorable senators will agree that that is not, mere fantasy but is hard fact. To-day a slaughterman receives 5s. for slaughtering and dressing an animal. The middleman, the stock agent who auctions the beast, receives £2. Again, it is not the producer who makes the profit but those who come in and provide no other labour than that of selling the animal.

I suggest that it is necessary for us to look beyond the basic wage increases for the inflationary agent which is causing prices to rise. The fact that the basic wage follows prices is a point which is not always considered. When the Commonwealth Arbitration Court makes an award it is invariably three months behind prices. That is another matter that should be rectified in order that real wages can be kept at a reasonable level. The only answer of the Government to the problem of inflation is communism. The Government blames the Communists for everything. As I have previously stated in this chamber, communism has made us very lazy because it has provided us with a ready-made excuse for not doing our jobs. Governments and members of all parties in this Parliament see in communism an easy way out. When that ideology has been banned finally by act of Parliament, I wonder what we shall do for an excuse, because no longer will we be able to say that it is the fault of the Communists. We shall be forced to return to basic principles and to acknowledge the fact that communism is not the only cause that should be blamed. I do not wish it to be understood that I am extolling communism. I merely wish to point out that there are in the- community other factors which contribute towards the absurd state of affairs in which a man who has only his labour to offer receives for it but a quarter of the value he received a few years ago, although in monetary terms his wages have increased fourfold.

During the debate on the bills at, present before the chamber a great deal has been said concerning communism and Russia. My attitude towards those matters is, I feel, too well known for me to need to refer to it again. However, I ask honorable senators opposite to face the facts fairly and squarely. Communism as we know it in Australia is no more the spirit of the Russian, people than it is the spirit of the true Australian people. We must cast our minds back to a few years ago when the same Russians whom some honorable senators traduce each time they make a speech in this Parliament were on our side and we were very pleased to have them as our gallant allies. We applauded the epic stand made by the Russians at Stalingrad. We were just as pleased to have Russian aid then as we were pleased to have American aid when we were attacked by Japan. In 1941 England was left alone to fight the battle for Britain.. The Dominions did their utmost to help the Mother Country but they were not in a position to do very much. In those days when England stood alone we were pleased to be able to count on the might of Russia to keep our enemies busily engaged. But, we must go back further than 1941 if we wish to get the whole story of Russia in true perspective. We must go back to the Russia of the Czars and realize that communism thrives on the sufferings and miseries of the poor. Through the centuries the Russian people were oppressed and lived under most appalling conditions. When they revolted they did so with an intensity of purpose that had never been known in any other country. Senator Wedgwood appears to have been able to lift- the Iron Curtain and obtain statistics relating to the war and production potential o’f Russia. We have not been so fortunate.

Going back along the corridors of history and recalling the circumstances in which the people of Russia lived in earlier years we cannot but pay tribute to them for the manner in which they have risen from the depths of darkness into which they had fallen during the period of their oppression. As far as territorial ambitions are concerned, honorable senators would do well to read the agreements of Yalta and Potsdam and see for themselves what inducements were offered to Russia to help us against the Japanese. The other parties to the agreement had no right to offer such inducements. I say these things because I am violently anti-Communist and because I think that they come better from me than from those who are suspected of “ red “ tendencies. I ask honorable senators to exercise tolerance and judgment in respect of these matters and not to attempt to lay at the door of the Communists responsibility for their own shortcomings and their failure to retain a balance in our economy. What I have said about Russia applies with equal truth to our dealings with Japan. Last night the Melbourne Herald published an article which was written by a man who, by no stretch of the imagination, can be called a Labour man or a Communist. In fact he was a Liberal candidate and waged a very bitter fight against the Labour candidate in the general election of 1946. He said that for Japan the threat of communism is not only a source of great industrial profit but also a mighty lever to prise all manner of concessions from the Western Powers. It is the duty of the members of this National Parliament not to regard communism as the only bug-bear of the community and to use it as an excuse for our failure to do the things that we should do. We should endeavour to put all that aside for the moment, and see how we can best lift the whole strata, of society in Australia and so bring about a more balanced economy.

I regret that Senator Wedgwood should ‘ have implied that we, on this side of the Senate, are anti-American. Nothing could be further from the truth. I was in this chamber in 1943 when we were very pleased to have American assistance. Eighteen months earlier, when the late John Curtin approached the United States Government for aid, he was branded as a traitor. It was said of him that he was seeking to cut the painter and withdraw from the British Empire. As the leader of the great Labour movement who was given the task of maintaining British integrity in this dominion. Mr. Curtin, when he realized that Britain could no longer help us, and that Australia, with its 7,000,000 people, could not alone defend this continent and ensure its retention in the British ‘Commonwealth, appealed to the United States only to be branded as anti-British by some persons who sit in this Parliament. To-day, we, the members of the same political party to which he belonged, and who were privileged to sit under him in this National Parliament, are branded as anti-American. Nothing could be further from the truth. No person with Australian blood in his veins could help but be grateful to the Americans for all that they did for this country, but we cannot overlook the fact that the United States did not enter the war until December, 1941, after the Japanese attack on Pearl Harbour. Those American lads who gave their lives for Australia and America forged a bond between the two countries that can never be broken, no matter how bitter or hostile the winds of party politics may blow. It was unworthy of Senator Wedgwood to brand members of the Opposition as antiAmerican. The United States is a very great democratic country, but it has many problems of its own. We contend that we are not obliged to emulate the Americans in every aspect pf national life. We have our Australian way of life, our own culture and our own problems. Our problems must be solved by our own people. Although it is desirable that we should learn from the experiences and example of other nations there is no reason why we should emulate the example and precept of one nation to the exclusion of all others.

I realize that I must be brief so that our public servants may not have to go without their pay, but before I conclude I should like to refer to the subject of housing, which is probably one of the most important problems that face us to-day. “We talk about our Australian way of life, but how can we have an Australian way of life when an Australian man and his wife and six children are compelled to live in a converted army hut measuring 16 feet by 10 feet because they are unable to obtain any other accommodation? The plight of that family is typical of difficulties caused by the housing problem. How many young married people can start off in life with an indebtedness of £2,000 or £3,000 for a house? Having regard to the present high cost of housing construction many workers in the community would regard themselves as fortunate if they owned even a wash-house. How much of the cost of a house is represented by wages and how much goes in profits to the contractor? What happens to all the thousands of pounds that are invested in a house? Before the war it was possible to obtain a four-roomed house for between £500 and £600. In the last three or four years construction costs have increased by 65 per cent. To-day we spend many thousands of pounds in bringing immigrants to this country, but we ignore the needs of our own people. Although I believe in immigration I believe that the best immigrant is a native-born Australian. Are our children who are born into the world in the dreadfully overcrowded conditions that prevail getting a fair go?

When I was in Darwin not long ago I was amazed to see houses erected in a settlement there that would be much better suited to Canberra or a very much cooler place than Darwin. Although there is no shortage of land in Darwin the houses were built so close together that a person living in one of them would be able to hear a whisper by his next-door neighbour. From the top of the street in which the houses were built I could see through the windows of all the houses in the street. I was informed that those houses, which were asbestos and fibro-cement structures, cost between £3,000 and £4,000 each.

When I asked why they had been built so close together I was told that that had been done to save money and materials on water and electricity reticulation and sanitation. When I asked why the houses contained no verandahs, I was informed that verandahs had been omitted to save a few pounds. Could anything be more ridiculous than to spend £3,000 or £4,000 on a cubby house of that kind and then stop short of the expenditure of a few pounds to make it a little more comfortable? That sort of thing is going on in settlements were temporary structures, prefabricated houses, and the like are being erected. These settlements will be the slum areas of the future. In Canberra two groups of temporary houses which were erected for temporary employees of the Commonwealth in 1927, are still occupied. When we are dead and gone they will still be regarded as temporary and will still be occupied if they last for that length of time. Fortunately some of the temporary structures being built to-day will not last very long, yet they cost almost as much as permanent houses which contain similar accommodation.

The Government must view the problem of housing as a matter of national concern. A part of my work in this Parliament has been to deal with the problem of divided homes, or husbands and wives separated because of accommodation difficulties, and of homes broken up because of the shortage of accommodation. During the war, as the result of the great influx of servicemen from other countries domestic problems became very acute, and as I was the only woman in the Senate at the time many persons came to me for help. Similar demands are being made on me to-day but from different causes. Since the war one of the greatest enemies of domestic harmony has been the housing problem. It is impossible satisfactorily to house two or three families in one house. Rarely are two women able to share a common kitchen for long without differences flaring up at times into bickering and a flood of invective that ultimately destroys family unity. A nation that does not base its strength on the family unit and do everything possible to keep it intact is heading for disaster.

I appeal to the Government to do something to remedy the housing problem. As a first step it should endeavour to control the sale of houses to speculators. An ordinary working man cannot afford to pay £3,000 or £4,000 for a house.

In Western Australia this week-end will be a sad one for a number of people because on next Saturday, the 30th June, the protection given by legislation to exservicemen and other tenants will expire. According to a newspaper published in Western Australia yesterday 300 families will then become homeless. Others who have not sought government assistance in the purchase of their homes will be placed in a similar position. During the weeks that ensued between the date of the general election and the meeting of the Parliament my main task was endeavouring to find shelter for those who had been evicted from their homes. Doubtless, Senator Robertson was also busily engaged in that work. What concerns me so much about this matter is that those who claim to uphold the rights of ex-servicemen were the very ones who permitted that legislation to be passed through the Western Australian Parliament in the dying hours of a session. The thought that 300 families in Western Australia will become homeless during the coming week-end appals me.

A week before I left Western Australia a war widow whose husband was killed in World War I. and who was a patient at the Hollywood Hospital, Perth was evicted from her home while she was in hospital, all her goods a ad chattels were put on the street in West Leederville where she had resided. One of the nurses at the hospital telephoned me and gave me details of the case. The hospital authorities gave the unfortunate woman some hours’ leave to endeavour to fix up her affairs. Finally, the police in the district allowed her to erect a tent in a paddock and to place her goods and chattels in it. The reason for the eviction was, I understand, that her married daughter had been staying in the house with three children, and was regarded as a sub-tenant. The daughter was unable to get a home of her own when she married, and, later, when the mother became ill, the daughter was unwilling to leave her. I can supply the name and address of the woman, as well as the ward in the hospital where she is being treated. She is being kept in hospital until she can find a place to which to move the tent.

Most of the people who are being evicted are widows. They have no man to protect them, and perhaps the authorities think they are easy game. In many instances these tenants do not know what their rights are, and technically they may be at fault. A widow who has two or three children, and has to work for her living, has no time to study the regulations in order to see just what are her rights and obligations, and it is easy to let’ a period of grace go by. Finally, when eviction proceedings are begun against her it is too late to lodge an appeal in the proper quarter. The officers of the Housing Commission do what they can, but once an order is made they are helpless. They are doing their best, but they cannot provide houses overnight.

The authorities are certainly taking a strange course to meet the housing shortage. The regulations used to provide that a permit had to be obtained to build a house of more than 12£ squares. Now, when building materials have become scarcer and dearer than ever, the permissible limit has been increased to 15 squares. Could anything be more ridiculous? The result is that many houses are now being built on “ spec.” so that those with money get the houses and those without it get none. Housing is a matter of national interest because, at the present time, children are being forced to live under insanitary conditions. We saw the same sort of thing during the depression, and while there is no depression now so far as employment is concerned there is a depression in the sense that the money which people are able to earn will not buy them the things they need. I offer these comments in all sincerity. The fact that we are expending millions of pounds on armaments in order to preserve our liberty means little to men and women who see their children turned out into the street because the authorities have made no provision to shelter them.

Senator WOOD:
Queensland

.- Asa Queenslander, I realize that there is great need for development in Australia. This is still a young country, and in many ways it is still undeveloped. It was, therefore, with pleasure that I noticed the proposals that were put forward by this Government in 1949 for national development. I hope that the various schemes drawn up since then will eventually come to fruition. Schemes for national development can be ‘divided into two groups. There are the major schemes undertaken by State governments or by federal authorities; and there are the smaller schemes, of more intimate concern to the people, which are the prerogative of local governments. Unfortunately, very little has been done in the past by Australian Governments in regard to the smaller schemes. The charter under which local governments operate is very wide, particularly in Queensland, local governing authorities are usually handicapped by lack of money. I have noted with grave concern the gradual decline of primary production. We are hearing a good deal now about the scarcity of butter and other primary products. What is the reason for the scarcity? The reason lies in centralization of population through the drift of people from the country to the capital cities. Governments of other days encouraged the development of secondary industries in the cities, and those industries attracted population from the country. I am one of those who believe- that we have over-invested in secondary industries, and that we are to-day paying the price in commodity shortages.

Local authorities can play an important part in bringing the people back from the cities to the country towns and rural areas. For .some years, I have been interested in local government, and I have tried to make my own city of Mackay an attractive place in which to live. Many young people are being drawn away from country towns by the bright city lights. It is our duty to expend thought and money in making the country towns and villages so attractive that young people will want to live there. Along the coast of Queensland there is a chain of cities and towns which could be centres of happy community life if proper amenities were provided. It is first necessary to persuade those in control of local governments that improvement is desirable and necessary. Unfortunately, a great many people think of local-governing bodies as institutions that provide roads, footpaths and drainage, and no more. I believe that local authorities must provide social amenities in order to make life in country towns more attractive.

The great difficulty is that local authorities have practically only one source of revenue - rates on property, and from that source they are unable to get enough money. I believe that a scheme should be introduced under which the Commonwealth would provide .one-third, the State government one-third and the local authority one-third of the revenue required. The first interim report of the Commonwealth Housing Commission contains certain recommendations that could very well be adopted. My own city of Mackay was the first in Australia in which town planning was practised by a municipality. In the big cities people take for granted amenities which residents in country towns and in rural areas have to go without. Every country town should have a water supply, sewerage and electric power. Fortunately, in Queensland electric power is not so scarce as in some of the other States. Perhaps we looked further ahead than did the people of those States. At any rate, we have enough power to enable us to get along without blackouts. Sewerage is an essential requirement in any decent community, both for hygienic reasons and for the convenience of the people. There should also be community and civic centres with auditoriums, and in northern districts especially, there should be swimming pools. Local authorities should provide recreation grounds, as well as parks and gardens. There .should be child-minding centres and kindergartens as well as youth centres equipped with libraries, handicraft classes, &c. Next to travel, reading is the best medium of education. If facilities of the kind I have mentioned were provided, and. country towns made brighter and more cheerful places, I believe we could prevent the drift of young people to the cities. It can be done. Although the expenditure of money upon the improvement of the appearance of a town is often criticized as being a waste of money, I think that that view is completely mistaken. When the former Leader of the Opposition in the House of Representatives Mr. Chifley, was in Mackay his attention was drawn to proposals for certain major civic improvements and I recall very clearly emphatic statement that the improvements should be made, because, as he said, man does not live by bread alone.

Unfortunately, many Australian cities and towns were laid out without any thought for the future and without any regard to the requirements of town planning, and it is necessary now, in the interests of the citizens of those centres, that that state of affairs should be corrected. After all, Australia is still a young country, and f aults in town planning can still be corrected if the funds to finance the necessary works are forthcoming. I suggest, of course, that finance for this purpose should be made available by the Australian Government. The development of motor traffic has resulted in congestion of the principal thoroughfares of many cities and large towns, and in order to relieve that congestion it is necessary for ring roads to be constructed around them. Most centres also require a wide central avenue, which furnishes what town planners call a “ backbone “. Although all roadwidening construction is expensive, I insist that money expended upon such civic roads is not wasted. After all, the towns in which we live should be made as attractive as possible, because congenial surroundings are one of the things that make life worth while. Money is not everything, and the happiness of human beings is the most important thing in life. The highest ideal that any form of government can attain to is to make people happy, and nothing does more to make them happy than the provision of reasonable civic amenities. If such amenities are not provided the drift of people from the country to the cities will continue, and primary production will inevitably suffer. City residents must realize that fact, and should be prepared to contribute in taxes to the expenditure to improve our rural centres. The current shortage of such an essential commodity as butter is partly a direct consequence of the drift of people from the country, where they would engage in primary production, to the cities, and the main reason why people leave rural areas is that they do not enjoy the simple amenities to which all people rightly believe they are entitled. If the present inadequate production of primary produce is permitted to continue disaster will overtake the nation. The acute shortage of primary produce is exemplified by the inability of the parliamentary refreshment room to provide butter. For our supper to-night members of the Parliament can obtain only toast and dripping. Surely it is a disgrace that in the national capital of Australia adequate supplies of such an essential commodity us butter are not available.

If reasonable amenities are to be provided in our country towns sufficient funds must be made available to local authorities for that purpose. To-day the Australian Government is virtually the sole taxing authority, and we must look to it to provide the funds that are necessary for a virile local government. 1 particularly commend to honorable senators a precedent in the National Fitness Act 1941, under which money is made available to State governments by the Australian Government for distribution to local government authorities to promote physical fitness. Other legislation such as the States Grants (Local Public Works) Act 1936, also provided that funds for a certain purpose should be made available by the Australian Government, State governments and local authorities, each providing onethird of the finance necessary. National, State and local governments form a trinity of government in this country, but I emphasize that local authorities are closest to the people and are best qualified to ensure that funds made available for the public benefit are expended wisely and economically. For instance, many competent judges believe that if Australia’s housing programme had been entrusted to local government authorities they would have done a much better job than the Commonwealth and State authorities have done. For one thing, local government authorities would not have lost sight of the need, when building houses, to provide proper community services and amenities. I desire to state my considered opinion that the expenditure of £3,000,000 a year by the Australian Government and a similar amount by the combined State governments and by the local government authorities of Australia would transform the entire appearance of our country centres and would revolutionize life for the people of those centres. Special problems are presented by particular areas. I know that in northern Queensland we are confronted by problems different from those that confront local government authorities in other parts of Australia. That is why it is necessary that the greatest possible freedom should be allowed to local government authorities in the development of their areas. Fortunately, most members of the Parliament appear to realize that fact and share my view on the matter. Whilst I commend the present Government for its national development projects, I emphasize that the people of Australia would greatly appreciate the improvement of those areas that are already settled, and the Government should not lose sight of that fact.

Although those who devote their time, energies and capacities -to local government render invaluable service to the country, they do not receive adequate recognition for their work, but, on the contrary, they are constantly maligned by many people. Furthermore, most of them receive no remuneration whatever,

Oi-, at best, only nominal fees for their services. The important point to- recognize is that the only motive that actuates those individuals is the desire to serve the community, and I consider that they should receive every possible encouragement from National and State governments. I have been associated with local government for very many years, and as the senior vice-president of the Australian Council of Local Government, I know the difficulties that beset local government authorities in this country, and I realize that if sufficient funds are not provided to enable them to continue their work it may not be long before our local government bodies cease to function. I think that honorable senators will agree that if that happened it would be a national tragedy. Therefore, 1. conclude my remarks by appealing to the Government to be more generous in the provision of funds and technical assistance to local authorities to enable them to do much more for the communities they serve.

Senator COURTICE:
Queensland

– No member of the Senate will disagree with the views expressed by Senator “Wood concerning the importance of local government to Australia, and I agree wholeheartedly with his statement that the whole aim of all governments should be to make people happy. I should not have taken part in the debate but for the remarks made by Senator “Wedgwood in the course of her speech. I resented not so much the actual remarks that she made as the implication in those remarks. The honorable senator seemed to infer tb at when the Australian Labour party was in office it neglected its responsibility to provide for the defence of this country.

Senator Spicer:

– The Australian Labour party did not support the recruiting campaign.

Senator COURTICE:

– I shall deal with the interjection made by the AttorneyGeneral (Senator Spicer) later, but at the moment I am directing my remarks to the criticism of the Chifley Government uttered by Senator Wedgwood. I remind the honorable senator that the Chifley Government received high commendation from Viscount Montgomery on more than one occasion when he visited this country. The field marshal seemed to be quite satisfied with the part that Australia was playing in the defence of the British Commonwealth. The fact is that Labour did everything that it was asked to do, and more. Our former leader, Mr. Chifley, was held in high esteem by all, nations in the British Commonwealth, and he was regarded, as a very wise counsellor.

The Attorney-General said that Labour did not support the recruiting campaign, but that is only a half truth. “When the Prime Minister (Mr. Menzies) approached Mr. Chifley in connexion with the recruiting campaign, our former leader told . him that because of the state of his health, and particularly of his voice, he did not think that he could greatly assist the recruiting campaign. Incidentally, Mr. Chifley also told the Prime Minister that he did not consider that the right honorable gentleman would have much success in persuading young men to join the armed services. Our leader said that he would discuss the matter with the members of his party, and added that he believed that most of them, especially the returned servicemen, would gladly co-operate with the Government in the recruiting campaign. But the next day the Prime Minister made a different proposal. The right honorable gentleman knew that the Labour party was opposed to conscription and. held the view that men who enlisted in the Australian forces did so with the intention to defend Australia. The Prime Minister’s proposal was a new and novel one. Nothing had been said about, it before. It was that any young man who agreed to enlist in the forces for the defence of this country should also agree to go to any other country to which the government in power directed him to go. That proposal could not be supported by the Labour party. That is the only reason why we did not associate ourselves with the Government in the recruiting campaign. I believe that there was a great deal of wisdom in the attitude, we adopted. I am certain that the objective of the Prime Minister was to induce the people of this country to believe that the Labour party opposed the recruiting campaign.

Senator Reid has been a member of the Australian Country party for a long time and has been closely associated with Liberal-Country party governments. He was considered by some people to be a great advocate of the primary producers, but there is nothing in the record of Liberal-Country party governments which indicates that they have bestowed, any benefits upon the primary producers of this country. The record of such governments is one that they cannot boast about. During the period of office of the Labour party, however, great improvements of the conditions of primary producers were made.

Senator GEORGE RANKIN:
VICTORIA · CP

– The Labour party agreed to sell wheat at 5s. 9d. a bushel.

Senator COURTICE:

– The honorable senator is referring to the New Zealand wheat agreement. I admit that that agree ment was not in the best interests, of Aus. tralian wheat-growers, but I point out that, as an indirect result of it, we obtained from New Zealand considerable quantities of materials, especially leather, at a comparatively low price.

I have been a primary producer all my life, but I refuse to be associated with those primary producers who- believe that, because of present circumstances, they can blackmail the community. When Great Britain was beset with many difficulties, we sold wheat to the British people at from 18s-. to £1 a bushel. For many years Great Britain fought for the liberty of the democratic nations, and, if it had not done so, we should not be in our present fortunate position; but we showed our gratitude to the British people by charging them as much as we could for the wheat that they needed urgently. We helped the starving Indians by charging, in some instances, £1 a bushel for wheat. However, the Indians were not slow to realize what had happened, and they recouped themselves by making us pay high prices for jute. In the final analysis, we did not make much profit on the deal.

Our objective should be stability of prices. The present wild fluctuations of prices of primary products are not in the best interests of either primary producers or the nation. It is wrong for producers to adopt the attitude that they will exact from the community the highest prices that they can obtain for their products. If honorable senators opposite approve of that policy, how can they complain with justice about what the wharf labourers and others are doing? If the law of the jungle is to prevail and if wheat-growers and other primary producers are to be permitted to demand the highest possible prices for their products, how can we expect the trade unions of this country to accept the arbitration system under which the wages and working conditions of their members are determined by law. This desire to obtain the highest possible price for goods is not confined to one section of the community. The malady has spread throughout the land and attacked all sections of the people. We should aim for stability of prices. The Labour party believes that prices should be based1 upon production costs and a fair return from capital invested. We do not believe that any section of the community should be allowed to hold the country to ransom.

Senator Reid referred to the present shortage of butter and other commodities. Shortages of that kind did not occur while the Labour party was in office. We maintained rationing and ensured that Great Britain would receive the maximum quantity of butter that we could spare. This Government, during a period of shortage, has permitted over 50,000 tons of butter to be exported. Now our own people are unable to obtain butter. Senator McCallum hinted recently that the Government would probably be forced to institute a number of controls, not because it liked controls but because- the economic condition of the country and the requirements of the defence programme would render them necessary. I want to know how .far the country is to be allowed to drift before the Government comes to the conclusion that some controls are necessary. The bushranging that is going on at the present time among all sections of the community will, unless some action is taken to stop it, undermine the morale of our people. I am certain that before long the Government will have to take some action in the matter.

Senator Reid implied that the Labour party had done nothing to protect primary producers. I shall quote some extracts from country newspapers which prove that the Labour party’s agricultural policy was acceptable to the Australian primary producers and gave them greater security than they had ever had before. Mr. E. R. Davis, the general secretary of the Victorian Dairy-farmers Association in 1944, is reported to have made the following statement in that year : -

The dairying industry began the war with a bad reputation, for low and unstable prices had made it the agricultural Cinderella and had been the cause of bad wages and long hours. Those who could go to more attractive jobs did so. Then the services recruited all out sons and daughters, and the farms, denuded of man-power, began to decline in productivity and efficiency.

According to the Farmer and Settler Review of August, 1948, Mr. R. C. Gibson said -

It oan now be said that those engaged in the .industry have viewed with great satis- faction the implementation of the recommendation of the Joint Dairying Industry Advisory Council, by which the return to the producer is 2s. 2d.’ per lb. commercial butter delivered at the factory platform, and the cost of manufacture within the -factory has been fixed at 2.55d. per lb. commercial butter. Dairy-farmers can now look ahead and plan for the future, secure in the knowledge that their returns will be related to their production costs.

Mr. G. B. Howey, president of the Victorian Dairy Farmers Association, is reported by the “Victorian Dairy Farmer of November, 1947, to have said -

I have never seen the dairying industry with a brighter future. The dairy-farmers now have stability for at least five years.

The men whose remarks I have quoted are representatives of Australian dairyfarmers. What they have said is quite true. I believe it to be sound economic policy to- stabilize- prices and create conditions under which farmers will know from month to month what they will receive for, their products. The policy of the Labour party for many years has been to improve the conditions of the men on the land, especially the dairy-farmers, and to give them a better place in the business life of the community.

No useful purpose will be served by reminding the Senate of the Government’s sins. They are well known to all of us. When the present Government parties were in opposition, the three Liberal party and Australian Country party senators, whom we called the “ Three musketeers “, subjected the Labour Government to a great deal of criticism. Their stock saying was, “ When is the Government going to do something about all these bureaucrats ? “ They said that too many people were engaged in governmental activities. Since this Government has been in office, the number of public servants has increased still further. I conclude by saying that my experience of the Public Service has been a very pleasant one.

Senator SPOONER:
Minister for National Development · New South Wales · LP

– in reply - Honorable senators have discussed this bill in accordance with the standing order that provides that matters both relevant and irrelevant to a bill of this kind may be raised in the debate on it. .Doubtless, it will be agreed that it would be impossible for me to reply to honorable senators who discussed, matters irrelevant to the bill. Therefore, I shall confine my remarks to matters that are relevant to it. ‘

Senator McKenna alleged that the Government had failed to honour a promise that it made during the 1949 general election to reduce Commonwealth expenditure. I have searched the policy speechthat the Prime Minister delivered on behalf of the present Government parties in 1949, and I find that it contains no such promise. It refers to the need for effecting economies in administration. We must face the facts squarely. The Supply Bill shows that expenditure was £40,000,000 higher than the budget estimate. That increased expenditure can be very roughly apportioned in this manner: An additional £7,000,000 for the defence services; an additional £14,000,000 for the Postal Department, under the two categories works and services ; and an increase of £17,000,000 for grants to States including additional roads grants. There are a number of other items which balance out, but in broad terms those are the main influences that operate. There is no need for me to canvass the reasons for increased expenditure on the defence services and in relation to the Postal Department, I do not need to . advocate very ardently the expenditure in that sphere of governmental activity because, in truth, I believe there would be general agreement that that department has been the Cinderella of the government services for many years. On each occasion that a national emergency has arisen there has been a restriction on expenditure and invariably economies have first been effected in that department. The result is that the Postal Department has a tremendous lag of work to be overtaken, and that is now being attempted. The matter of grants to States will be the subject of legislation to be introduced into this chamber in due course, and I do not expect that opposition to the increases will be encountered. The expected increase of expenditure by £40,000,000 will be covered by increased revenue, and the indications are that the budget surplus for the year will be greater than was forecast when the budget was brought down. I submit that that is a very satis- factory conclusion, having regard to the circumstances which we all have had to face, that in this year in particular there has been a change of monetary values not only in Australia but . throughout the world. Monetary values of goods and services have increased and expenditure has mounted in Australia. In addition to the external influences, a basic wage increase of £1 a week was superimposed on the normal changing increase. I believe that it is a complete answer to say that if in those circumstances, the Government can finish the year’s governmental activities with an expected surplus that will be a very good performance indeed, having regard to the external and internal influences which affect expenditure.

The second point raised by the Leader of the Opposition related to the Public Service. Again, the figures speak for themselves. There has been a good deal of criticism because the Government had not reduced the numerical strength of the Public Service. At the 31st December, 1950, the number of employees under the Public Service Act was 6,000 more than at the 31st December, 1949. The number of such employees increased by 23,700 during 1949. Having regard to the greater developmental programme of the Postal Department, the obvious need for building construction, and the development of the Snowy Mountains Hydro-electric scheme this Government has done very well indeed in its first year of office to slow down the rate of growth of the Public Service from 23,700 in the last year of Labour’s term of office to 6,000 in this Government’s first year of office.

Turning to matters that have been raised by other honorable senators in this debate so far as they relate to supply, I think it is not unfair to say that the exhortations of honorable senators opposite fall within two categories. The first category is general requests to stabilize the economy, or general criticism that the economy has not been stabilized. I did not detect in the speeches of Opposition senators any constructive proposals about methods that the Government should adopt in order to check the existing inflationary trend. The second category related to the control of prices. Honorable senators opposite have reiterated their view that control of prices by theCommonwealth should be reintroduced. It is not unfair to say that the Opposition is devoid of constructive proposals other than price fixation. Having regard to the present circumstances, the Government believes that there could be nothing more destructive than the reintroduction of prices control. That proposal was decisively refused by a referendum of the people. It was a major issue in the 1949 general election, when the Australian Labour party was defeated, and it was again an issue at the recent general election. That leads inescapably to the conclusion that the people of Australia realize that Commonwealth prices control simply will not wort, and that they do not desire the Commonwealth again to control prices. Increasing prices is only a symptom of the trouble. A proposal to deal with the symptom instead of going to the cause is superficial and cannot be regarded as the conclusive answer. We on this side of the chamber are not destructive in this matter; rather are we constructive, and we are advancing our constructive proposals. I hope that before the forthcoming recess of the Parliament there will be introduced into this chamber a Defence Preparations Bill which will give the Government additional power. I hope that shortly after the termination of this sessional period arrangements will be completed between the Commonwealth and the States whereunder the representatives of the respective governments will sit around the conference table and decide the order of priority of government works, to what extent we can carry out proposed works, and in what order they shall be undertaken. I submit that there has developed too great a tendency to considerour difficulties in terms of the levels of prices, which again are merely a symptom of the disease. The basic problem arises not because our resources are in short supply, as evidenced in terms of pounds, shillings and pence, but because of the shortage of menand materials. The task is so to direct the available men and materials that the best result for the national good will be achieved. If that can be done it would have a desirable effect upon the inflationary trend. I hope that the net result of the economic proposals that will be included in the budget to be presented to the Parliament later this year will be that men, materials and financial resources will be diverted or transferred towards the ends that count and that the ends that do not count will have difficulty in obtaining supplies, with the result that the production of goods that we want to see produced will be stimulated, and the production of the goods that we do not want to see stimulated will be damped down. If there are superimposed the Government’s financial proposals I am convinced that a much better approach will be made to the problem than the reintroduction of prices control. Furthermore, on the available evidence, the people would not agree to its reintroduction. I commend the bill to honorable senators.

Question resolved inthe affirmative.

Bill read a first time.

Secondreading.

Senator SPOONER:
Minister for National Development · New South Wales · LP

– I move -

That the bill be now read a second time.

The purpose of this bill is to obtain an appropriation of £120,154,000 which is required to carry on the necessary normal services of government other than capital services for the first four months of the financial year 1951-52. The provision sought may he summarized under the following heads : -

The bill provides for the carrying on of essential services approved by the Parliament in the Appropriation Act 1950-1951. Honorable senators will appreciate, however, that under present-day conditions of rising costs for both wages And materials, it is no longer practicable to limit the provision to the rate of expenditure provided for in the 1950-51 Estimates. The amounts included in the bill have therefore been calculated on current rates of expenditure.

The amount of £38,483,000 for defence services provides for expenditure on the post-war defence plan and also for requirements in Korea and Malaya, whilst the amount of £5,110,000 under war and repatriation services . covers expenditure on repatriation, rehabilitation and other war charges. The amount of £15,000,000 for “Advance to the Treasurer “ is required to enable payment of the special grants to the States of South Australia, Western Australia and Tasmania to be continued until the report of the Commonwealth Grants Commission is received, also to .cover unforeseen and miscellaneous expenditure and to provide for any unexpected defence requirements. Except in relation .to defence, no amounts are included for new services.

Senator McKENNA:
TasmaniaLeader of the Opposition

– I should not have spoken on the motion for (the second reading of this bill had it not been for a comment made by the Minister for National Development (Senator Spooner). In speaking to the motion for the first reading of the bill I referred to the fact that the Government parties had promised to reduce government expenditure, and I claimed that they had failed to honour that promise. I was therefore more than amazed to hear the Minister state a few moments ago that no such promise had been made. I shall proceed without referring to any of the numerous advertisements which appeared in the newspapers about the relevant time, and I shall content myself with referring the Minister to page 12 of the joint Opposition policy speech of 1949. I shall read the following passage from that policy speech, and I suggest that it will put the issue beyond doubt. The Prime Minister (Mr. Menzies) then stated -

A resolute reduction in the burdens of. government and, with it, in the rates of tax, will mean reduced costs of production. In brief, higher production will mean lower costs; and lower costs will enable us ito enter and secure overseas markets which are now not supplied by us because we are not producing the goods. We will attack all these problems with ‘vigour and imagination.

I shall put the position quite fairly, I suggest, if I take two of those sentences together. They are - .

A resolute .reduction in the burdens of government and, with it, in the rates of tax, will mean reduced costs of production . . . We will attack all these .problems with vigour and imagination.

Senator Grant:

– How long ago was that said?

Senator McKENNA:

– In November, 1949. It is from the joint policy speech of the Opposition parties and it forms the basis of the comment that I made earlier to-day. I was accordingly amazed to hear the Minister deny that any such promise had been made. Apart from the .quotation I have read from the joint policy speech I could refer him, had I the time to pick them out, .to the innumerable advertisements issued under the names of the Government parties which made the same specific promise in even more emphatic terms than those of the joint policy speech. I am able to add to what I claim was a promise, one more broken promise that appears from the brief quotation that I have just read, because that quotation includes not only a promise to reduce the burdens of government and to attack that problem with vigour and imagination, but also a promise to reduce the rates of taxes. That promise was made in even more specific terms in the policy speech delivered by the Treasurer (Sir Arthur Fadden) on behalf of the Australian Country party. I therefore add the further promise to reduce rates of taxes.

Senator Spicer:

– That was in 1949.

Senator McKENNA:

– That is exactly what I claimed when I spoke in the Senate earlier to-day. That promise was made in 1949, and when the Government parties went to the people in April, 1951, they asked for a mandate to carry out their 1949 election pledges. There is a complete nexus between the two things. The Attorney-General (Senator Spicer), therefore derives no consolation from the fact that what I claim was promised in 1949 was not also specifically promised in 1.951, because every .mem Der of the Government ‘.parties asked the people to return him in order ito .carry -out »the promises made in 1949.

Senator Spicer:

– The people clearly understood what was meant by that.

Senator McKENNA:

– I am happy to be able to refresh the mind of the Minister concerning a promise that he , has apparently forgotten. Many other promises were also forgotten immediately the Government parties were re-elected.

I wish to make reference to another matter which also appears in the joint policy speech of the Government parties. In explaining what, the Government proposed to do in order to meet the economic and international emergency, the Minister .intimated with pride in his voice that a Defence Preparations Bill would be introduced in the Parliament, the net effect of which would be to confer power on- the Government to .direct men, materials .’and finance away from nonessential production and into channels of production which are essential to the nation in .an emergency. I take it that I quote the honorable senator accurately. I listened to him carefully. Let me again refer him to the joint policy speech of 19.49. This time I wish to read from page .9.

Senator Spicer:

– There was no emergency then.

Senator McKENNA:

– The Government .parties then claimed that this country was in danger of being overrun “by international communism, that Russia was on the warpath and that the country had to be protected from foes. It was the same kind of emergency as the Government claims exists to-day.

Government senators interjecting,

The PRESIDENT:

– Order ! The honorable .senator may develop iis argument in his own way.

Senator McKENNA:

– Paragraph 4 on page 9 of the joint policy speech, of 1949 reads as follows: -

You cannot have a controlled economy without controlling .human beings, who are still the greatest of all economic factors. You cannot socialize the means of production without socializing omen and women.

What are the means >of production? I suggest that they are men, materials and finance, the three ingredients mentioned by the Minister as those to be picked up and diverted.

Senator Spicer:

– ‘But not socialized.’!

Senator McKENNA:

– That is what the honorable senator says. The .joint policy speech refers to the fact that .a controlled economy means the control of human beings.

Senator Grant:

– In effect, it is conscription.

Senate McKENNA. - That is really what it boils down to. I think that it can be fairly claimed that the Government has suffered a conversion to socialism in terms of its own joint policy speech. The policy that the -Government parties condemned so roundly in 1949 is what they now seek to put into effect. In 1949 they stated that there should not be the slightest interference with the economy. Their attitude was, “Let things run loose and they will settle down “. It “was the old policy of laisserfaire, the policy of the inept. Now they find they must face responsibility because they have assumed responsibility. Yet the Minister proudly stated a few moments ago that a bill to be introduced into .this* Parliament will divert manpower, materials and finance into channels that are essential to the economy.

Senator Spicer:

– The honorable sena- “ tor will no .doubt support it.

Senator McKENNA:

– .Honorable senators ;on this side of the chamber may do so when they see it, but I think that I can say on behalf of every member of the Opposit -m that the difference between the Opposition and the Government parties Is that the members of the Opposition believe that matters which are fundamental and essential to the welfare of the country should be attended to first and dealt with long before the interests of private individuals are considered. The Opposition is not in the slightest degree concerned with the diversion of man-power, or interference with the passage of materials in the free course of trade unless the fundamental interests of the economy demand it. When that contingency arises we then have courage to say what should be done.

I congratulate honorable senators upon the wisdom with which they are at last facing realities. I merely remind them of their conversion by repeating the passage from the joint policy speech which reads -

You cannot have a controlled economy without controlling human beings who are still the greatest of all economic factors. You cannot socialize the means of production without socializing men and women.

If this Government intends to step in, either directly or indirectly, to divert man-power, materials and finance, as the responsible Minister has stated it does, then in effect it is introducing a very proper and effective brand of the socialism in which the Australian Labour party believes, and the Opposition congratulates it accordingly.

Question resolved in the affirmative.

Bill read a second time.

Tn committee:

Glauses 1 to 5 agreed to.

Schedule.

Proposed vole - Parliament, £216,000 -agreed to.

Prime Minister’s Department.

Proposed vole, £722,000.

Senator McKENNA:
TasmaniaLeader of the Opposition

– I understand that the jubilee celebrations and their promotion, including the invitation to Australia of distinguished visitors, fall within the jurisdiction of the Prime Minister’s Department. I believe that many invitees have come here sponsored either directly by the Government or by societies assisted financially by the Government. In that connexion I propose to read a very brief extract from a letter that reached me to-day from Tasmania, which poses the problem better than I could express it. The letter reads as follows: -

Much adverse criticism has arisen because the Jubilee famous guests are monopolized by certain societies. Rightly we agree those organizations which sponsor their visits should be consulted as to the itinerary followed, but as these guests’ expenses are partly covered by Government grants the taxpayers naturally fee] they should be given an opportunity of hearing these notabilities.

In Hobart at least many organizations were left out when invitations were issued to functions where the guests were to speak.

We consider the people are entitled to at least one public meeting in every city. As Sir Hartley Shawcross and Lord Jowett are coming out under the auspices of Law Society t,hey will probably be monopolized by same, bat we consider there will be great public demand to hear these famous men.

I believe that there is merit in the suggestion that these distinguished visitors should be given an opportunity to meet the people at large and that an opportunity should be given to the people themselves to meet these notabilities. I ask the Minister in charge of the bill to convey to the Prime Minister (Mr. Menzies) the suggestion of my correspondent. She has asked for an appearance at, “ at least one public meeting in every city “. I realize the impracticability of such a proposal. I believe that she had in mind one public meeting in every capital city. In these terms I convey the request to the Minister. It is only right that if public money is expended in paying even some of the expenses of the visits of notable persons to Australia for the jubilee celebrations, the taxpayers who would be eager to meet them, to get to know them and gain some personal impression of them, might well be given an opportunity to. do so.

Senator SPOONER:
Minister for National Development · New South Wales · LP

– The suggestion contained in the letter read by the honorable senator has a great deal of merit and I shall, of course, convey it to the Prime Minister. Perhaps I should add that the visits of these notable guests were very carefully arranged a good deal in advance of their arrival in Australia. I am not sure, but T think that a large number of them have made public appearances. The number who have done so would of course, depend very largely on the type of visitor. T.t would be very much easier to arrange for public appearances of a concert singer than, say, of an eminent surgeon. No doubt this matter has been considered by Lieutenant-General Berryman and the Jubilee Celebrations Committee. Nevertheless I shall discuss the suggestion with some members of the committee with a . view to its adoption if the practice is not already being carried out.

Proposed vote agreed to.

Department of External Affairs.

Proposed vote, £569,000.

Senator McKENNA:
TasmaniaLeader of the Opposition

– I refer to the two items Division 19, Australian Embassy, China, and Division 20, Australian Embassy, Union of Soviet Socialist Republics. I note that for the four coming months provision of £S,400 has been made for the Australian Embassy in China. What is the strength of our representation in China, and where is the staff located? Is it located on Formosa or in China, and has any change been made in the representation and its location? I shall be interested to hear the Minister’s reply because the Australian Government has not recognized the Communist republic in China.

I notice that the embassy in the Union of Soviet Socialist Republics is by far the largest of our embassies, the amount provided being £43,400, of which £28,100 is for salaries and payments in the nature of salary, and £15,300 for general ex,penses. I should like the Minister to give me some information regarding the strength of our representation in Russia. I should also like him. to indicate, if he is able to do so, whether any restrictions are imposed on our representatives in the discharge of their duties. I do not know whether such difficulties exist or not. 1 merely seek information on the point.

The third matter to which I wish to refer relates to cadets in the diplomatic service. When the right honorable member for Barton (Dr. Evatt) was Minister for External Affairs he initiated a system, which I believe had great virtue, under which very able young men and women were recruited to the diplomatic service and given special training. I understand that many of them have become ornaments of the department and will become great ambasadors of Australia in due course. Is the system of cadetship in the department still being continued, or has the need for it evaporated? Such information as the Minister is able to give me on the point will be very greatly appreciated.

Senator SPOONER:
Minister for National Development · New South Wales · LP

– Australia is represented in China by a consulate, at Shanghai. The establishment is being carried on as. best it can be in present circumstances. It is doubtful whether the amount shown on the Estimates will be expended. The Australian Embassy in the Union of Soviet Socialist Republics has a total staff of six, including the ambassador, who is not at present living there. The large amount of money provided is due, I believe, to the heavy exchange rate. I speak with some knowledge of conditions in that country because I have had a discussion with an officer who recently returned from Russia, in which he gave me some information about the prices thai he had to pay for goods as expressed in terms of Australian currency. They rather staggered me. The Australian Government has had to meet that position by making appropriate financial provision for its officers.

I regret that I cannot express an opinion about whether any difficulties are placed in the way of the staff carrying out their duties. This is a matter which calls for a reply by the Minister for Externa] Affairs (Mr. Casey). In saying that, I do not want it to be thought that difficulties have been placed in their way.

Senator McKenna:

– I shall not press the matter.

Senator SPOONER:

– The system nf cadetships in the department is being continued. To my knowledge it has gained approbation not only within mir own Public Service but elsewhere.

Senator GRANT:
New South Wales

– I am astonished to hear that the cadetship system has been continued. T was a member of the committee which assisted the department in the selection of cadets, but I have not heard of any meetings having been held for some time for that purpose. The committee was a non-party body and included in its membership Dr. Price, of Adelaide, Dr. Butters of Armidale, Dr. Curtin, of the Department of the Treasury, and a repre sentative of the Department of External Affairs. Applicants for appointment as cadet in the service of the department were submitted to a very gruelling examination by members of the committee. Apparently the -committee has ceased to function. If that is so, what system has been adopted by the Government for thu selection of cadets? Are they chosen by the Minister for External Affairs? If so, do they have to undergo an examination ? In the past, examinations covered tests in many aspects of history, economics, psychology and anthropology, the examination lasting for about threequarters of an hour. I shall be glad if the Minister will indicate the method now used in the selection of cadets.

Senator SPOONER:
Minister for National Development · New South “Wales · LP

– I understand from the honorable senator’s remarks that he was a member of the committee and that he is aware that its activities have been discontinued’.

Senator GRANT:

– I have not been notified to that effect. The committee has not been called together for a considerable time.

Senator SPOONER:

– If the committee’s activities have been discontinued I am not aware of that fact. Candidates are- selected, once, a year at a suitable dat, to coincide with the commencement of: university courses., I do not know whether cadeets have been appointed during the period of office of the present Government, but as it has been in office for fifteen months it is likely that some have been selected.

Senator GRANT:
New South Wales

– I should -like to see the committee resuscitated, because I believe it did good work. We travelled to all the States interviewing applicants, and some of those whom we interviewed now hold high positions in the diplomatic service. If may be that because there was some personal rivalry between Mr. Spender and Dr. Evatt the committee was allowed’ to lapse . when Mr., Spender became Minister. However, now that Mr. Casey is Minister, for External Affairs, there is no reason why the committee should not be re-appointed.

Senator MAHER:
Queensland

– Do? diplomatic cadets eventually become eligible for appointment as ambassadors? I believe that, when it comes to appointing ambassadors we should look for those who have made their mark in this country, who have acquired the ability to handle men, and who can meet the top men in other countries as equals. I do not doubt that the cadet system of recruiting- is excellent, and that under it’ the department gets young men capable of rising te highpositions in the diplomatic service, but their real role should be that of advisers to ambassadors who themselves- should’ not come up through the diplomatic service. The Government of. the United States of America has appointed as ambassadors several distinguished’ members of Congress, men who have made a success of their own business affairs, and. have made their mark in the community. They are used to dealing with people, and they can meet the greatest men- on. earth on terms of equality.

Senator SPOONER:
Minister for National Development · New South Wales · LP

– The. procedure.- is this .In. general, cadets are accepted only after they have received a university degree,, an exception being made in. the case of ex-servicemen. After they are accepted they must do a. two years’ special course at the Canberra. University College, after which they are placed in the Department of External Affairs with the. rank of Third Secretary. They are required to serve a probationary period in the department, and. are then posted overseas’ with the rank of Third or Second Secretary. They are then, career diplomats^ and their future- depends upon, their own. ability.. The Department of. External Affairs, pays; less: regard to seniority than does, any other, department. When a position, is to be filled a man. is chosen for his. capacity,, and. his suitability for that particular place.. When the honorable senator said that the higher posts in the service should be1 filled by outsiders- he raised a very wide field of argument. Under this Government and the previous- one, some of the senior positions have been filled by career diplomats and others have been filled by men outside the service. Fox instance, Australia’s representative in Paris is Sir Keith Officer, a career diplomat. Colonel Hodgson, also1 a career diplomat, is in charge in Japan.. Mr. Stirling, in South Africa, is a career diplomat. On the. other side, we have Mr. Spender in Washington,, and Mr. Forde, in Ottawa,, both ex-members of this Parliament. I do not think that we should be dogmatic; The filling of these posts is a matter of tremendous importance to Australia. If there are in the service capable career men with the capacity to fill the top positions I do not think they should be passed over for outsiders. On the other hand, I believe it is sometimes a good thing, both for the country to which the posting is made and for Australia, that a man with ripe commercial experience should be appointed. However, I should not like to lay it down as a .rule that the career diplomat shall go so far and no further. When posts fall vacant, the filling of them receives the most careful consideration.

Proposed vote agreed to.

Proposed vote - Department of the Treasury, ?2,429,000- -agreed to.

ATTORNEY-GENERAL’S DEPARTMENT. ‘

Proposed vote, ?349,000.

Senator McKENNA:
Leader of the Opposition · Tasmania

– An amount of ?29,300 is provided for the costs of the Legal Service Bureau. 1 have received many complaints that .the service rendered by the bureau has been curtailed. I know that it is the policy of the Government to cut down the service hitherto rendered, but I am particularly concerned to know whether there has been any cutting down of the service to pensioners. While the Labour Government was in office the services of the bureau were made available to pensioners as well

Ms to exservicemen.

Senator SPOONER:
Minister for National Development · New South Wales* · LP

– I have to confess that, although I was Minister for Social Services, I did not know that the bureau was supposed to place its services at the disposal of pensioners. The departmental advice which I have is that there is a doubt whether the scheme was ever actually put into operation, although it was contemplated.

Senator McKenna:

– The scheme was announced by the Labour Government, and I am now inquiring whether it did in fact come into operation.

Senator SPOONER:

– T doubt whether it ever did.

Proposed vote agreed to.

Department of the Interior.

Proposed vote, ?946,000.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I ask the Minister for National Development (Senator Spooner) .to bring .to the notice of the Minister for the Interior (Mr. Kent Hughes) my proposal for the introduction of a system of optional preferential voting. The Minister will recall that I also suggested that the names of parties might be recorded against groups of candidates on the ‘ballot-paper, and that the recomendations of the select committee, which tabled its report in November last, should be considered by the Government.

Senator AYLETT:
Tasmania

– -‘Casual officers engaged by the department to assist in the conduct of elections are paid less than are State officers engaged upon similar work. Naturally, they resent this, and I ask that their remuneration be increased.

Senator SPOONER:
Minister for National Development · New South Wales · LP

– I understand that the officers concerned have asked for more pay, and that their request is being considered. I shall bring the honorable senator’s representations to the notice of the Minister for the Interior. I shall also bring to his notice the points raised by Senator McKenna so that an immediate decision may be given on them.

Proposed vote agreed to.

Proposed vote - Department of Works and Housing, ?489,000 - agreed to.

Department oe Civil Aviation.

Proposed vote, ?2,995,000.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I should like the Minister representing the Minister for Civil Aviation to inform me whether there has been any change in the plans for the new major aerodrome to be erected at Llanherne, Hobart. When the new aerodrome was originally planned it wa9 designed to accommodate the largest aircraft operating to-day, but I understand that some modification of the .general plans has since been made. I should Hike to be informed whether that modification will .have the effect of reducing the facilities at the aerodrome; whether the aerodrome now proposed to be constructed is intended to be only temporary, and if so, whether the full-scale plan will be completed when circumstances permit.

Senator SPOONER:
Minister for National Development · NEW SOUTH WALES · LP

– I regret that I have no detailed information available at the moment, and I shall have to communicate with the Minister for Civil Aviation (Mr. Anthony) in order to ascertain the facts before answering the honorable senator’s questions.

Senator McLeay:

– The information desired by the Leader of the Opposition (.Senator McKenna) could probably be made available at a later hour to-night.

Further consideration postponed.

Proposed vote - Department of Trade and Customs, £966,000 - agreed to.

Department of Health.

Proposed vote, £302,000.

Senator McKENNA:
TasmaniaLeader of the Opposition

– 1 shall refer briefly to three matters. I deplore the fact that no reference has been made by the Government in any public statement to the provision of any scheme for promoting the dental health of the children of Australia. I think that I am correct in saying that when Labour left office almost unanimous agreement had been reached between the Australian Dental Association and the Government on a scheme to care for the teeth of children up to the- age of sixteen years. Details of administration, including the personnel to be engaged in that service, had to be settled, but the broad principle had been agreed upon; the methods by which the subject should be approached had been determined ; and it had been agreed that the Commonwealth Government would provide the necessary funds. I need not stress the importance to Australia of preserving the dental health of our children because it is so obviously related to the general health of our youth, and the’ Chifley Administration regarded that matter as one of prime importance. T should like to know whether the Government proposes to give consideration to that vital and positive aspect of public health. Instead of contenting ourselves with treating sickness in the community we should aim primarily to promote good health in order to prevent illness.

I shall now offer some criticism of the Government in respect of two matters. I am concerned about the Government’s proposals for the payment of hospital benefits in respect of patients in private hospitals. Under recent regulations that were made at the instance of the Minister for Health (Sir Earle Page), provision is made to continue in respect of hospital patients the payment of 8s. a day provided by the Labour Government, but they also include a provision to pay 12s. a day if the patient is insured with a friendly society or a. similar body under certain conditions. Those conditions require that the patient shall he insured with some -friendly society approved by the Government, but instead of the allowance being paid direct to the patient a payment of at least 6s. a day must be paid direct to the hospital by the friendly society concerned. My criticism of that proposal is that although it contains an incentive to people to help themselves, the incentive amounts to coercion of individuals to join friendly societies. It also amounts to an interference in the contractual relations between friendly societies and their members. At present most friendly societies pay certain allowances to their members when they fall ill. The regulations introduced by the present Government propose to reverse that process, and to require friendly societies to make payments direct to hospitals.

A similar spirit animates the proposals introduced by the Government concerning patients in public hospitals. Under the proposals formulated by the Chifley Government in co-operation with State governments all treatment in public wards of hospitals was to be supplied free of charge. Such treatment would include medical attention, accommodation, and the supply of medicine and food. The proposal of the Minister for Health is that a means test should be introduced by the hospitals, but that an increased payment of 12s. a day will be made by the Government to a hospital or to a State government which operates a hospital contribution scheme, in respect only of patients who are members of an approved friendly society or who contribute to the State hospital scheme. 1 criticize that proposal on three grounds. First, it amounts to a reintroduction of the means test, which the present Government professes to desire to abolish. Secondly, it imports an element of coercion of State governments to induce citizens to contribute to State hospital contribution schemes in order to enable those governments to obtain the benefit of an additional amount of 4s. a day in respect of any patient admitted to a public ward.

Senator Cooper:

– The bill does not contain any reference to hospitals.

Senator McKENNA:

– The measure that the committee is discussing is not a bill to promote public health, but is an appropriation measure and includes the proposed vote for the Department of Health. Surely, the committee is not confined to a mere discussion of the salaries and general expenses of the department. If it were, honorable senators would not have an opportunity at all to discuss matters connected with the administration of the department.

Senator Cooper:

– Matters such as that which the Leader of the Opposition (Senator McKenna) is now raising should have been discussed on the first reading of the bill and should not be raised at the committee stage of the bill.

Senator McKENNA:

– I should have imagined that the Minister for Repatriation (Senator Cooper) would feel it incumbent upon him to defend, or, at least, to explain, the policy of the Government and particularly the actions of his colleague the Minister for Health. The provision of hospital benefits to enable persons to obtain proper hospital treatment is obviously a matter of prime importance.

Senator Cooper:

– I quite agree, but the proper time to discuss such matters was during the first reading of the bill, and not when we arc in committee to consider the estimates for the Department of Health. There is no proper basis for discussion of . such matters because the bill does not contain, for instance, any reference to the dental health of children.

Senator McKENNA:

– If the Minister is seeking to evade his obligation to explain the actions of the Government I can only regret that he will not deign to furnish me with the courtesy of a reply to the matters that I have mentioned. I repeat that I thought he would have been only too willing to reply to the strictures that I have passed upon his colleague the Minister for Health in connexion with the hospital benefits scheme. However, I point out to him now that if he does not reply to my remarks his abstention will be at variance with the attitude of the Minister for National Development (Senator Spooner), who represents the Treasurer (Sir Arthur Fadden), and is in charge of the bill. In fact, he will have the distinction of being the only Minister who has not replied to criticism of the Government. If he prefers not to join issue with the Opposition—

Senator Cooper:

– I shall join issue with the Opposition at the proper time.

Proposed vote agreed to.

Proposed vote, Department of Commerce and Agriculture £495,000, agreed to.

Department of Social Services.

Proposed vote, £637,000.

Senator CRITCHLEY:
South Australia

– I am keenly interested in the provision of funds to continue the humanitarian work that is being carried out by the civilian rehabilitation scheme. I take this opportunity to express my appreciation of the sympathy with which the Minister for National Development (Senator Spooner) when Minister for Social Services received the representations that I made to him from time to time in connexion with the civilian rehabilitation scheme.- Can the Minister intimate whether the Government intends to continue the noble and Christian work of the civilian rehabilitation scheme? I know that the Government has encountered a good deal of opposition to its proposals for civilian rehabilitation, and that the scheme entails substantial expenditure. However, any one who has visited a centre where that work is carried out must appreciate its very great importance to those unfortunate members of the community who have been incapacitated, in some; instances, for years, andwhodesire again to become; useful members: of society. I contend that the first duty of any government is. to promote the health and welfare of members of the community, and. I trust: that the Minister will assure the Senate that the civilian rehabilitation scheme will be continued.

Debate interrupted.

page 620

ADJOURNMENT

The CHAIRMAN:

- (Senator George Rankin)-. - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -

That the Chairman do now leaves the chain and. report to the Senate.

Question resolved in the negative.

page 620

SUPPLY BILL (No.1) 1951-52

In committee:

Consideration resumed.

Senator SPOONER:
Minister for National Development. · New SouthWales · LP

– I have no reason to believe that the Government proposes to abolish the civil rehabilitation service.

Proposedvote agreed to.

Department of Supply.

Proposed vote,, ?115,000.

Senator O’BYRNE:
Tasmania

– I remind the Minister for National Development. (Senator Spooner) of a request that I have made on several occasions regarding the activities of the Department of Supply in north-east Tasmania, and ask him. whether any provision has been- made for the expansion, in the near future, of the tin dredging project at Dorset Flats.

Senator SPOONER:
Minister for National Development · New SouthWales · LP

-I believe that the matter to which the honorable senator has referred could be discussed more appropriately on the estimates for the. Department for. National Development. As I understand the nature of the proposal it is that we should use on the work that the. honorable senator has in mind dredges that are. at present, lying idle elsewhere.

I have notyetbeenabletomakea detailed examination of the proposal. I understandthataminingcompanyis dredgingfortin.

Senator O’Byrne:

– The Department of Supply has been undertaking dredging there. It is a very profitable activity.

Senator SPOONER:

– If the Department of Supply is doing the dredging,. I shall ask the Minister for Supply whether heconsiders the proposal to be a practicable one.

Proposed vote agreed to.

Department of Shipping and Transport:

Proposed vote, ?279,000:

Senator McKENNA:
Leader of the Opposition · Tasmania

– I. take advantage of this opportunity to thank the Minister for. Shipping and. Transport (Senator McLeay). for having arranged for a deputation of all Tasmanian members of the Parliament, to wait upon him and the Prime Minister. (Mr. Menzies). not long ago to discuss a matter of vital importance to Tasmania. I refer to its sea link with the mainland. I also thank the Minister, for the quick action that he took shortly afterwards. Now thathe realizes the plight of Tasmania in. this: connexion, it istobe hoped that he will maintain the interest that he displayed on that occasion. Tasmania depends upon ship.ping largely for the carriage of, many classes of: passengers; and almost wholly for the transport of goods.,

I shallreadatelegram that I received this morning froma very important citizen of Tasmania..Ishallnot disclose his. name, but I shall hand the document totheMinister when I have read it, The reason why I shall not disclose the name of the sender of the telegram is; that I do not know whether I am at liberty to do so. The telegram reads as follows : -

Iam reliably informed Commonwealth Government is contemplating sale orlease to private companies of ships, now controlled by. ‘ Australian Shipping Board. A number of these vessels are at present in service between Tasmania and mainland ports. We are apprehensive that: their disposal would seriously prejudice Tasmanian. trade. Therefore urge

Federal; Opposition to make strongest possible representations to ensure ships remain under control’ of Australian Shipping Board’.

Recently, the Minister stated that- there were 30 vessels under the control of the Australian. Shipping Board, that only one of them was under lease, and that no further disposals were contemplated. Having regard to the fact that” the telegram that I have just -read- was sent to me1 by the very responsible citizen, will the Minister say whether there is any foundation for the fears expressed in it?’

Senator McLEAY:
Minister for Shipping and Transport · South Australia · LP

.- I said recently that of the 30 ships owned by the Commonwealth, one was under lease to a private firm for the purpose of doing a special- job in thenorth of Queensland. I cannot give the’ Leader of the Opposition any assurance relating; to the future policy of the Australian Shipping: Board, which has- been under consideration by me1 since I- assumed: office. I. assure the- people of Tasmania that the1. Government, is fully aware of their special, position. The Tasmaniansmay rest assured that, whatever is done to save man-power and’ establish efficient shipping services on the Australian coast,, these ships will not be taken off the Tasmanian run.

Senator McKenna:

– Is the Minister referring to the ships owned by the Australian Shipping Board that are now on the- Tasmanian run?

Senator McLEAY:
SOUTH AUSTRALIA · UAP; LP from 1944

– The ships, owned! by the. Australian Shipping Board that’ are serving, ports in Tasmania’, and the rest, of Australia will’ not” be taken off their present runs-

Senator AYLETT:
Tasmania

:> - Under- the heading. “ Ships. Construction “,,the. following item appears : -

Salaries’ and; Payments in the nature* of, salary,. £33,800.

If only £ 33;800 is to be. expended in four months upon, the payment of salaries; and wages in connexion, with ship, construction,, it. would appear that- very little’ shipbuilding is in progress, in this country. More ships are urgently required to carry interstate cargo. During the” war we, were” able to maintain sea transport services for the carriage of essential goods interstate, although many ships were being* used to carry supplies to our fighting forces-.. Now that the war has> ended,, the position is worse than it was during, the war. It is feared by some people that the ships owned by the- Australian Shipping Board will be either sold or leased to private companies. Where there is smoke there is fire. The Minister for Shipping and Transport has assured the Senate that” those ships will not be taken off their present’ runs, but he has not* assured us that’, if they are disposed of, they will be’ used to maintain a continuous service and1 will operate fully loaded. A ship can be kept on a certain’ run, but it can also be required’ to call at ports at which it did not normally call and, if it loads cargo1 in those ports, it- will, have less space in its holds for the carriage of cargo from its usual ports of call.

Senator McLeay:

– If the? honorable senator” will tell’ me- what he wants”, to’ know;. I shall endeavour to- answer him.

Senator AYLETT:

– Is it the intention of the Government to increase our shipbuilding activities in Australia?’ It would appear’ from these estimates, that at present very little shipbuilding is im progress. A sum of £33,800 is a mere bagatelle. Most of it would -be absorbed in overhead expenses.. If the Government says that it cannot increase its- shipbuilding activities- because sufficient’ labour is; not available to enable it- to do so-,, it should obtain tradesmen from other’ countries< to work in the shipbuilding industry and,, in that, way, alleviate the present, deplorable’ position. Six» years after the’ end* of the-war,;we arein. a worse, plight in. connexion, with the transport: of. goods interstate by sea than we- were during, the most- critical days of the- war.

Senator McLEAY:
South AustraliaMinister for Shipping’ an’d’ Transport · LP

– The item to which the honorable. senator has. referred relates, only to administrative- expenses. Expenditure upon, shipbuilding is dealt with elsewhere. More ships; both, commercial and’ naval are now being constructed in Australia, than at any other period of our history. The Government is endeavouring’ to obtain as’ many immigrants as possible. I assure’ the honorable senator that the shipyards aire1! working.’ at: full- capacity.

Senator Aylett:

– The Minister stated that the proposed vote in relation to shipping is to defray administrative costs. I assume that his answer would apply also to the remaining items in the bill?

Senator McLEAY:
SOUTH AUSTRALIA · UAP; LP from 1944

– I refer the honorable senator to Division 94k. The proposed vote of £37,000 is for ship construction.

Senator Aylett:

– Is the proposed vote only in respect of ‘administrative costs in connexion with the construction of ships ?

Senator McLEAY:
SOUTH AUSTRALIA · UAP; LP from 1944

– Yes.

Proposed vote agreed to.

Proposed votes, Department of Territories, £47,000 ; Department of Immigration, £328,000; Department of Labour and National Service, £710,000; Department of National Development, £341,000 ; Commonwealth Scientific and Industrial Research Organization, £1,346,000; and Defence Services, £38,483,000 - agreed to.

Miscellaneous Services.

Proposed vote; £15,223,000.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I refer to Division 173, “Commonwealth .Scholarship Scheme “. This scheme was inaugurated by the previous Labour Government and provides for 3,000 scholarships a year. I understand that the scheme is being administered by the Office of Education for the first time this year. The broad proposals of the previous Labour Government were adopted by the present Government. Will the Minister for National Development (Senator Spooner) inform me whether all scholarships for this year have been allotted. If there are any vacancies, will an opportunity be given to a boy or girl to take up a scholarship now, although half of the year has expired ?

Senator SPOONER:
Minister for National Development · New South Wales · LP

– The Commonwealth Scholarship Scheme is in operation. It has been fully availed of this year; 3,000 scholarships have been actually allotted.

Senator ASHLEY:
New South Wales

– Will the Minister inform me whether the proposed vote of £100,000 in respect of Division 171, “ Jubilee Celebrations 1951 “ represents the complete expenditure in this connexion? If not, what amounts have been charged to other departments, and what was the total cost of the jubilee celebrations?

Senator SPOONER:
Minister for National Development · New South Wales · LP

.- An amount of £250,000 has been expended in accordance with the terms of the last budget, and the proposed vote will bring the total cost of the jubilee celebrations to £350,000.

Senator Ashley:

– Does that amount include the cost of transporting service personnel to Canberra?

Senator SPOONER:

– It includes all expenditure in connexion with the jubilee celebrations.

Senator Wood:

– Does it include amounts that were distributed to municipalities and shires throughout Australia in connexion with local celebrations?

Senator SPOONER:

– It is the total amount. The proposed vote of £100,000 is for the ensuing four months. The expenditure of the greater proportion of this money was left in the hands of the local governing bodies.

Proposed vote agreed to.

Wak and Repatriation Services.

Proposed vote, £5,110,000.

Senator O’BYRNE:
Tasmania

– I refer to the proposed vote of £4,700 in Division 196, “ Compassionate allowances paid on behalf of other departments “. I direct attention to an anomaly in connexion with payments in respect of various war-caused disabilities. I understand that the loss of a hand or a foot by a serviceman is assessed as 80 per cent, disability, whereas the loss of an eye is assessed at 50 per cent, disability. Will the Minister for Repatriation (Senator Cooper) take steps to rectify this anomaly ? I point out that the loss of an eye may restrict a person to the same degree as the loss of a hand or a foot.

Senator COOPER:
Minister for Repatriation · Queensland · CP

– The honorable senator has referred, apparently, to an anomaly in the provisions under the Australian Soldiers’

Repatriation Act. Although I am prepared to answer his question, I point out that he could have raised this matter during question time. The honorable senator is not correct in saying that the assessment in respect of the loss of a hand or a foot is 80 per cent. It is not as high as that. I can assure the honorable senator that a review of repatriation allowances will be made in accordance with promises given by the Prime Minister (Mr. Menzies) in the joint policy-speech of the Government parties delivered during the recent general election campaign.

SenatorMcKenna. - That will be a change.

Senator COOPER:

– It will not be a change but merely a further fulfilment of promises which have been honoured to the letter by the Repatriation Department. Remarks such as that made by the honorable senator do not add to the dignity of the Senate.

Proposed vote agreed to.

Proposed vote - Business undertakings, £24,626,000, agreed to.

Territories of the Commonwealth.

Proposed vote, £2,931,000.

Senator AYLETT:
Tasmania

.- I refer to Division No. 249 - “ Papua and New Guinea, Shipping Services”, for which an appropriation of £20,000 is sought. I should like to know whether that sum of money is to be paid by way of subsidy. If it is, to what company is it to be paid and in respect of what ships? If it is not to be paid to a shipping company, will the Minister for National Development (Senator Spooner) state whether the ships are government-owned ? In view of the untold wealth of New Guinea and Papua I suggest that perhaps it would be possible to develop the resources of those territories in order to avoid the expenditure of sums such as that.

Senator SPOONER:
Minister for National Development · New South Wales · LP

.- The £20,000 referred to is the estimated loss incurred in operating government-owned ships in those waters.

Proposed vote agreed to.

Department of Civil Aviation.

Consideration resumed (vide page 6.18).

Proposed vote, £2,995,000.

Senator SPOONER:
Minister for National Development · New South Wales · LP

– As the Minister for Civil Aviation (Mr. Anthony) left for New Zealand this morning and the head office of the department is in Melbourne, I am unable to obtain the information asked for by the Leader of the Opposition (Senator McKenna)earlier this evening. I can only offer to supply such information at a later date.

Senator AYLETT:
Tasmania

– I should like to know whether this appropriation is to cover administrative costs or whether the money is to be spent on construction works. Can the Minister for National Development (Senator Spooner) inform me whether any of the money will be used towards the completion of the Smithton aerodrome in the far north-west of Tasmania? I point our. that not a great deal of work requires to be done in order to complete that aerodrome and make it serviceable. The Minister for Air during the Chifley Government agreed to its completion, but deputations thatwaited on Mr. White, when he was Minister for Civil Aviation, did not receive any definite reply on the subject. I point out that some months ago a Tasmanian contractor stated that he could complete the aerodrome for approximately £11,000 or £12,000 and that it would then meet the requirements of the Department of Civil Aviation.

Senator SPOONER:
Minister for National Development · New South Wales · LP

– There appears to me to be some confusion of thought on the part of the honorable senator. This bill refers to administrative costs. Expenditure on the Smithton aerodrome would be included in capital works and services, which is the subject of a bill to be dealt with subsequently. I can only offer to obtain the information for the honorable senator.

Proposed vote agreed to.

Title agreed to.

Bill reported without requests; report adopted.

Bill read a third time.

page 624

SUPPLY (WORKS AND SERVICES) BILL (No. 1) 1951-52

Second Reading

Debate resumed (vide page 576).

Senator McKENNA:
Leader of the Opposition · Tasmania

– The debate that has already taken place has afforded ample scope for the discussion of this measure which is designed to carry on into the new financial year works already begun and upon which further expenditure will be incurred.. In the circumstances, the Opposition does not oppose the passage of the measure.

Question resolved in the affirmative.

Bill read a second time and passed through its remaining stages without amendment or debate.

page 624

APPROPRIATION BILL (No. 2) 1950-51

Second Reading

Debate resumed (vide page 578).

Senator McKENNA:
TasmaniaLeader of the Opposition

– Again, the scope of the earlier debate obviates the necessity for a great deal of discussion of this measure. It provides for the appropriation of £34,244,000 to cover additional expenditure beyond that estimated for the current financial year ending on the 30th June next. In those circumstances there is no objection by the Opposition to the measure. I merely comment to the effect that the Estimates for the year 1950-51 were £117,000,000 higher than the expenditure for the preceding year. As this measure indicates that the estimates have been exceeded by £34,244,000, it means that expenditure has increased by approximately £150,000,000 under the administration of the Menzies-Fadden Government.

Question resolved in the affirmative.

Bill read a second time and passed through its remaining stages without requests or debate.

page 624

APPROPRIATION (WORKS AND SERVICES) BILL (No. 2) 1950-51

Second Reading

Debate resumed (vide page 578).

Senator McKENNA:
TasmaniaLeader of the Opposition

– The Opposition sees no need for further debate on this bill, the subjectmatter having been under consideration during the debate upon another bill. This measure provides for the appropriation of £11,468,000, covering the financial year ending the 30th June, 1951’, and representing additional moneys required for capital works.

Question resolved in the affirmative.

Bill read a second time and passed through its remaining stages without amendment or debate.

page 624

LOAN BILL 1951

Second Reading

Debate resumed (vide page 578).

Senator McKENNA:
TasmaniaLeader of the Opposition

– The Senate has had a full opportunity to discuss the provisions of this measure and for that reason the Opposition does not propose further to comment on it.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 624

WAR PENSIONS APPROPRIATION BILL 1951

Second Reading

Debate resumed (vide page 579).

Senator McKENNA:
TasmaniaLeader of the Opposition

– The Opposition has no objection to the measure, which has already been the subject of consideration. It does not affect the rates of pensions or the conditions under which they are paid.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 624

SUPPLEMENTARY APPROPRIATION BILL 1949-50

Second Reading

Debate resumed (vide page 579).

Senator McKENNA:
TasmaniaLeader of the Opposition

– This measure relates to expenditure for the years 1949-50 and gives parliamentary authority for an appropriation to cover certain excess expenditure over the allocations made in that year. As it, too, has been under review in the debates that have taken place to-day, the Opposition has no objection to its passage.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without requests or debate.

page 625

SUPPLEMENTARY APPROPRIATION (WORKS AND SERVICES) BILL 1949-50

Second Reading

Debate resumed (vide page 580).

Senator McKENNA:
Leader of the Opposition · Tasmania

.- This measure was under consideration in the general debate that proceeded to-day; there is no objection by the Opposition to its passage.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 625

STATES GRANTS (SPECIAL FINANCIAL ASSISTANCE) BILL 1951

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator Spooner) read a first time.

Second Reading

Senator SPOONER:
Minister for National Development · New South Wales · LP

.- I move-

That the bill be now read a second time.

The purpose of this bill is to authorize the payment of a special grant of £15,000,000 to the States in 1950-51. Under the tax reimbursement formula embodied in the States Grants (Tax Reimbursement) Act 1946-48 the States are receiving this year grants amounting to approximately £70,400,000. In addition, under legislation which was approved by Parliament last November, the grants payable under the formula are being supplemented this year by a further tax reimbursement grant of £5,000,000. The present proposal will, therefore, increase the total payment for 1950-51 to approximately £90,400,000. This is about £27,900,000 greater than was the tax reimbursement grant paid last year. If the coal strike emergency grant of £8,000,000 paid last year is included in the comparison, the increase would be approximately £19,900,000.

At the beginning of the financial year it was expected that the tax reimbursement grant of £70,400,000 determined under the formula, plus the additional non-recurring grant of £5,000,000, would make reasonable provision for the States’ financial needs this year. Since then, however, various special factors have caused heavy additions to the financial needs of all States. I mention in particular the special increase of approximately £1 in the basic wage which operated in the latter part of the financial year and which has involved very heavy increases in the pay-rolls of State governments. After making a detailed review of the immediate situation with which each State government is confronted, the Government has decided to propose an additional grant of £15,000,000 in 1950-51 to be distributed among the States as follows : -

I commend the bill to honorable senators.

Senator McKENNA:
TasmaniaLeader of the Opposition

– I have three very brief comments to make on this measure. The first is that the additional £15,000,000 will be exceedingly welcome in the States whose costs have risen considerably during the last twelve months. This measure has been introduced rather late to enable the State governments to include the additional grants in their accounts for this financial year, but I have no doubt that arrangements will be put in train between the Commonwealth and the States to ensure that it will be possible for the States to receive the grants and to bring them into their budgets during this financial year. I should like the Minister for National Development (Senator Spooner) to inform me what has happened about the financial conference which was foreshadowed at the conference of Commonwealth and State Ministers held in September last year. If I remember aright, at that conference the Prime Minister (Mr. Menzies) undertook to summon a conference of Commonwealth and State Ministers for the sole purpose of discussing Commonwealth and State financial relations. It is possible that a conference of officers has been held in the interim; if it has, I have not heard anything about it. That, of course does not mean, nor do I claim, that nothing has happened. I only mean that I have heard nothing further about the proposed conference. Has it been held, or has it been abandoned ? If it has been held, what results were achieved ? If not, will it be held at some time in the future ? I doubt whether there will be found a formula that will remain immutable and do justice permanently to State and Commonwealth financial relations, or even for a few years, so rapidly do conditions change, and so rapidly can budgetary positions deteriorate. My third inquiry pertains to the basis of distribution of this amount of £15,000,000 among the States. What formula was applied ? Has it anything to do with the income tax reimbursement formula? I note that New South Wales is to receive £6,250,0.00, whereas Tasmania is to get only £200,000. We know that, in addition to the income tax reimbursement formula, various ad hoc formulas have been, acted upon from time to time. What formula is being applied this time?

Senator SPOONER:
Minister for National Development · New South Wales · LP

– in reply - By arrangement, the amount will be paid to-morrow, the 29th June, so that it may be taken forthwith into the budgets of the States. The Leader of the Opposition (Senator McKenna) referred to a proposed conference on financial relations between the Commonwealth and the States. As he said, a considerable amount of work was done by departmental officers in preparation for the conference. A date for the conference was actually fixed, but the general election intervened. There is no indication that a conference will not be held, although I did not hear it discussed at the last conference of Commonwealth and State Ministers. The decision still stands that a conference will be held, and preparatory work is still being done. No doubt the date will be decided at the next Premiers conference or at’ the next meeting of the Loan Council. There is a wide field of argument on the question of what should be the financial relation between the Commonwealth and the States, and I do not propose to embark on that argument now.

Senator Kendall:

– Has the allocation been purely arbitrary, or does it bear relation to some formula?

Senator SPOONER:

– The amount of £15,000,000 is being allocated on the basis of the needs of the various States. The allocation was not made on the basis of the tax reimbursement formula, or on the basis of State expenditure. It is in the nature of an ad hoc distribution, having regard to the needs of the States.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 626

PUBLIC WORKS COMMITTEE

Message received from the House of Representatives intimating that the following members had been appointed members of the Public Works Committee: - Mr. Bird, Mr. Bowden, Mr. Cramer, Mr. McDonald, Mr. O’Connor and Mr. Watkins.

page 626

LAVENDER OIL

Report of Tariff Board

Senator O’SULLIVAN:
Minister for Trade and Customs · Queensland · LP

– I lay on the table the report of the Tariff Board on the following subject : -

Lavender Oil

The Government has adopted the recommendation of the board, which does not involve any change in the rates of duty. Copies of the report are not yet available for circulation to honorable senators. I move -

That the report be printed.

Debate (on motion by Senator McKenna) adjourned.

page 627

PAPERS

The following papers were pre sented : -

Lands Acquisition Act - Land acquiredfor - Department of Civil Aviation purposes - Carnarvon, Western Australia.

Postal purposes -

Merino, Victoria.

Morwell, Victoria.

Public Service Act - Appointments - Department -

Civil Aviation - M. B. Rowe.

Defence - C. W. P. Campbell-Everden.

Senate adjourned at 11.39 p.m.

Cite as: Australia, Senate, Debates, 28 June 1951, viewed 22 October 2017, <http://historichansard.net/senate/1951/19510628_senate_20_213/>.

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