Senate
1 November 1951

20th Parliament · 1st Session



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

page 1412

QUESTION

DRUGS

Senator SHEEHAN:
VICTORIA

– I preface a question to the Minister representing the Minister for Health by reminding him that considerable publicity was recently given in the press and through the radio to the dramatic flight from the United States of America to Australia of an aeroplane with an unnamed drug which it was hoped would save the life of a gentleman in Sydney who was suffering from dropsy. Of my- own knowledge I know that that publicity caused considerable distress to tho relatives of another person who was suffering from the same complaint. I do not know whether the new drug was efficacious, because since it arrived no publicity has been given to the case. However, if the drug is of any value in curing the complaint or in alleviating suffering, would it be possible to have it manufactured in Australia, or, alternatively, to import a quantity, so that all persons who may be in danger of losing their lives through dropsy may have the benefit of it?

Senator COOPER:
Minister for Repatriation · QUEENSLAND · CP

– It is true that an entirely new drug was recently flown to this country for the argent treatment of an acute case of dropsy, and it is thought that the drug, which, I am informed by the Minister for Health, has a mercury base, will be efficacious in the treatment of that di.-ease. However, I point out that from time to time quite a number of new 1, fe-saving drugs are flown to Australia for use by the Government or for private use, and I have also been informed by the Minister that small samples of all new drugs produced overseas are distributed to various countries, including Australia. We have a special medical advisory committee of seven experts which sits continuously. The commitee tests new drugs and if they are proved to be clinically sound it considers the availability of supplies. Honorable senators will appreciate the fact that when drugs of a new type areproved to be. effective in the cure of certain diseases, they are immediately rushed by the public. While production is still in the experimental stage the quantity available is very limited. The committee also considers the relative priority of new drugs over other scarce drugs. If a new drug is manufactured in the United States of America the committee also considers what dollar allocation should be made for its purchase. Cortisone, a new drug that has been proved very effective for the treatment of diseases of various kinds, is in exceedingly short supply because it is -still being manufactured on an experimental basis. Until it can be manufactured commercially supplies will continue to he scarce. £ assure the honorable senator that the Minister for Health is in constant touch with the medical advisory committee and is keeping a careful watch on the development of new drugs. If they ure suitable for use here and supplies are available they will be imported for the benefit of our sick people.

page 1413

QUESTION

POSTAL DEPARTMENT

Senator COOPER:
CP

– On the 25th October, Senator Robertson asked the Minister representing the PostmasterGeneral the following question: -

Can the Minister representing the PostmasterGeneral say whether it is a fact that it now costs 8s. lOd. to send a food parcel to the United Kingdom whereas, before the recent increase of postage rates the cost was only 5s. 10d.? Will the Postmaster-General consider restoring the former postage rate on food parcels intended as Christmas gifts to people in the United Kingdom 1

My colleague the Postmaster-General has furnished the following information in reply to the honorable senator’s question : -

The necessity to raise the rates for parcels to overseas countries, including food parcels to the United Kingdom, is regretted but the decision was unavoidable in view of the greatly increased costs which the Postal Department^ in common with every other business undertaking, has now to meet.

Prior to the recent adjustment the charges for parcels to the United Kingdom and other overseas countries had not been varied since 1941, and since then the costs incurred by the post office, including shipping freights, have increased greatly.

The new charges are considerably less than the rates for parcels from the United Kingdom to Australia. For an II lb. parcel to Australia the charge is 12s. 7d. compared with Ss. lOd. for a similar parcel to the United Kingdom.

The suggestion that the former rates should be restored for food parcels intended as Christmas gifts to people in the United Kingdom has been considered but for the reasons mentioned it is regretted that the way is not clear to adopt such a course.

Senator COOPER:

– Oh the 25th October, Senator Byrne asked the Minister representing the PostmasterGeneral the following question : -

By way of preface to a question that I direct to the Minister representing the Postmaster-G’eneral, I inform the Senate that I understand that the Director-General of Posts and Telegraphs has indicated that it is essential to the health of telegraphists that when rostered on certain shifts they should have a respite of ten or twelve minutes. Will the Minister inform me whether this privilege is enjoyed by tele graphists in all States except Queensland? Is it also a fact that the excuse that has been given for the non-extension of the privilege to Queensland has been that there has been inadequate staff to permit of the health break being given and that it would he too expensive? ls the dismissal of telegraphists from the General Post Office, Brisbane, contemplated by the Minister as part of the Government’s staff dismissal policy? If so, how could such dismissals be justified in view of the apparently acute staffing position that already exists at the General Post Office, Brisbane?

My colleague, the Postmaster-General, has now furnished the following answer : -

The need for giving short breaks from duty for health purposes to employees including telegraphists is recognized and telegraphists employed at the chief telegraph office, Brisbane, in common with those at other centres throughout the Commonwealth, are granted such breaks as required. Because of the conditions of working of telegraphists at some offices it has been found practical and convenient to roster breaks, while at other offices, such as Brisbane, the break is granted upon request to the supervisor. A roster system is not necessary to ensure that breaks are granted and the desirability of rostered breaks is examined in the light of the particular circumstances at the centre concerned. Existing arrangements in Brisbane are operating quite satisfactorily and the provision of additional staff to enable the rostering of breaks, besides serving no useful purpose, would be economically unjustified.

page 1413

QUESTION

MACHINE TOOLS

Senator ARMSTRONG:
NEW SOUTH WALES

– I preface my question to the Minister representing the Minister for Defence Production by stating that the Minister for Defence Production, in his speech on the budget last week, stressed the importance in war and in peace of the tool-making industry and said that it was the intention of the Government to establish central tool rooms throughout Australia, and that it had authorized the purchase of precision tools to the value of £856,000 to enable the tool rooms to be operated. Is the Minister aware that McPherson’s Limited is the biggest tool-making concern in the Commonwealth? Does he know that, despite the importance of the tool-making industry, as stressed by the Minister for Defence Production, the Capital Issues Board refused an application made by that company for the issue of new capital to the amount of £610,000 to provide for the extensions of its plant and limited the amount to £250,000, which is insufficient for the developmental purposes of the company? In view of the urgency of the extension of the tool-making industry, as stated by the Minister for Defence Production, will the Minister convey to the Capital Issues Board the opinion of the Government expressed by his colleague in the House of Representatives, or is it the policy of the Government to establish socialized tool-making industries while it is restricting legitimate expansion by private enterprise already in the field?

Senator COOPER:
CP

– I appreciate the urgency of defence preparations, particularly the provision of tools. I shall be pleased to bring the honorable senator’s question to the notice of the Minister for Defence Production and obtain a considered reply at an early date.

page 1414

QUESTION

WHEAT

Senator REID:
NEW SOUTH WALES

– Can the Minister acting for the Minister for Commerce and Agriculture inform the Senate whether any funds are available for distribution in respect of No. 12 wheat pool? If so, what is the amount, and when does the Government intend to finalize the finances of the pool and make the distribution?

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

– When I last discussed this matter with the chairman of the Australian Wheat Board, he indicated that a small sum, representing .304 pence a bushel, was available for distribution from the No. 12 pool, and that the proposal was to add that amount to the £12,500,000 tax refund to be made this month. In that way it is hoped to save approximately £700,000. That will be the final payment from the No. 12 pool.

page 1414

QUESTION

TELEPHONE SERVICES

Senator COOPER:
CP

– On the 25th October, Senator O’Byrne asked the Minister representing the Postmaster-General the following question: -

I understand that the present delay of four, five or six hours in the trunk line service between Tasmania and the mainland is due to the limited number of channels in the submarine cable. Will the Minister representing the Postmaster-General seek an investigation of the possibility of introducing the newest technique of filtering and repeating on the present channels in the Bass Strait cable - I understand that this technique has been developed in England - and thus provide improved trunk line services and reduce delay?

The Postmaster-General has now furnished me with the following information : -

The Postal Department has been making exhaustive investigations for some time with the object of providing more telephone trunk line channels between Tasmania and the mainland both by increasing the number of circuits in way of Flinders Island.

The provision of the extra channels in the submarine cable will involve the use of improved filtering and amplifiers whilst consideration is being given also to the installation of submerged carrier repeater apparatus which has been developed in the United Kingdom.

Although the provision of additional circuits between Tasmania and the mainland is a project of some magnitude it is expected that an improvement will have been effected by the end of 1932.

page 1414

QUESTION

RICE

Senator SCOTT:
WESTERN AUSTRALIA

– In view of the acute shortage of rice in Western Australia, can the Minister acting for the Minister for Commerce and Agriculture tell the Senate what is the home consumption price for rice, and what is the export price? Has there been any increase of the home consumption price since the last adjustment of the basic wage and the recent increase of the basic wage ?

Senator McLEAY:
LP

– Speaking from memory, the home consumption price is £45 a ton and the export price approximately £75 a ton. Yesterday I received a deputation which complained that substantial increases of wages and rail freights had made it difficult for rice producers to sell at a profit on the home market.

Senator FRASER:
WESTERN AUSTRALIA · ALP

– It was not a deputation of “ Commos “, was it ?

Senator McLEAY:

– No. The ricegrowers came to see me ; the “ Commos came to see some Labour men. The unwarranted publicity that has been given to the rice problem has caused some panic buying, but I assure the Senate that the rice crop this year has been a record and that there will be plenty available for the home market. I understand that the producers intend to approach the State Prices Ministers in an endeavour to secure a higher home consumption price.

page 1415

QUESTION

COMMONWEALTH AND STATE FINANCIAL RELATIONS

Senator GUY:
TASMANIA

– Will the Minister for Trade and Customs inform me whether the Government proposes to give early consideration to a review of the financial relations between the Commonwealth and the States, in order that the authorities which expend the money shall carry the responsibility of raising it?

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

– I have nothing to say at this stage in reply to the question of the honorable senator.

page 1415

QUESTION

PARLIAMENT HOUSE

Senator MORROW:
TASMANIA

– I address a question to you, Mr. President. Is it a fact that members of a delegation representing trade unions and other social bodies who came to Canberra yesterday in order to interview members of the Government were refused permission to enter Parliament House? If that is correct, will you be good enough to inform the Senate why lustra lian citizens were prevented from entering the public section of the building?

The PRESIDENT:

– My reply is that there is a certain amount of honour among all men. When an agreement is entered into by responsible members of both parties, and at the same time there is an agreement between Mr. Speaker and myself concerning the control of this building, those agreements stand. As long as I am President of the Senate any agreement into which I enter for the well-being and the good conduct of the Parliament will be upheld. People who disregard the terms of those agreements must accept the consequences that befall them. For the information of the honorable senator, I inform him that it is not permissible for members of the press to interview persons in King’s Hall. That is one of the conditions laid down for’ the conduct of the Parliament.

Senator Hendrickson:

– It has been going on for a long time.

The PRESIDENT:

– Irrespective of whether it has been going on for a long time or a short time, those are the conditions which exist. If Senator Hendrickson is not cognizant of them, I. now give him the facts. In addition, it is not permissible for members of the press to interview persons in the corridors. Perhaps the question of the position of members of the press and their rights in the Parliament had better be clarified at the earliest possible time. I repeat that I respect an agreement, that I honour the sincerity of the men with whom I deal, and that I shall uphold their decisions.

Senator MORROW:

– But they were refused permission to enter before the press interviewed them at all.

The PRESIDENT:

– Order !

page 1415

QUESTION

WATERFRONT EMPLOYMENT

Senator WRIGHT:
TASMANIA

– I direct the attention of the Minister for Shipping and Transport to the fact that waterside workers have refused to work on the Hobart waterfront, thereby causing six vessels to be tied up, in protest against a decision of the local representative of the Australian Stevedoring Industry Board that one gang should be suspended. I make the comment that this ia not an isolated instance. It seems as though repeated failure to obey the decisions of constituted authority demands attention. I ask the Minister whether he will inquire into the circumstances of this dispute and consider the matter in conjunction with other similar instances, which are strangling Australian sea-borne trade. Will the Minister make an early statement regarding proposals which may be under consideration for the reorganization of waterfront control?

Senator McLEAY:
LP

– As the Australian Stevedoring Industry Board comes under the jurisdiction of the Minister for Labour and National Service I shall confer with him during the day on the matter raised by the honorable member. I read about the trouble yesterday, and have called for a report from my department. I shall make a statement on the subject at the first opportunity.

Later:

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

by leave - I have received the following teleprint message from my department in relation to the waterfront dispute at Hobart : -

I am advised that the strike commenced on the 25th October, was called off on the 29th, but resumed on the same date, and settlement prospects are now very doubtful. The cause of the strike was wharf labourers refusing to take fork-lift trucks outside the shed doors to the ships’ hooks as they prefer double handling by transferring cargoes from fork-lift trucks to four-wheeler hand trucks, on which they are transported to ships’ hooks. It appears mcn fear reduction in number of men in gangs if. fork lifts used throughout. There are seven vessels involved, including one overseas vessel and two government-owned ships.

I repeat my promise to confer with the Minister for Labour and National Service on the subject, with a view to obtaining a further report as soon as possible.

page 1416

QUESTION

COPPER

Senator RYAN:
SOUTH AUSTRALIA

– Having regard to the serious shortage of copper, which is retarding defence preparations and hampering industrial development, will the Minister for National Development immediately investigate all aspects - national, technical, financial, and economic - associated with the resumption of copper-mining in the Moonta and Wallaroo areas in South Australia?

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

– My department is already trying to stimulate existing mining companies to increase the production of copper. I have no knowledge of the area mentioned by the honorable senator, but I shall bring his question to the notice of my departmental officers, and ask for their advice.

page 1416

QUESTION

RAIL TRANSPORT

Senator NASH:
WESTERN AUSTRALIA · ALP

– On the 24th October, I asked the Minister representing the Minister for the Interior whether sleepingberth accommodation would be provided on the trans-Australia railway for employees of the Western Australian Government travelling on long-service leave. Will the Minister say when I may expect an answer to that question?

Senator McLEAY:
LP

– I shall make inquiries, and let the honorable senator have an answer as soon as possible.

Senator TANGNEY:
WESTERN AUSTRALIA

– When I asked the Minister for Shipping and Transport, some months ago, to provide a new refrigerated van on the “ tea and sugar “ train which carries food supplies to workers on the Trans-Australian railway, he replied that he did not think that such a van could be provided for some time. I under stand that the Minister intends to make a visit to Western Australia next week, for which the people of Western Australia will be very grateful. I now ask the Minister whether he is prepared to make the return journey by the “ tea and sugar “ train in order to see for himself the hardship occasioned to workers because of the lack of a proper refrigerated van?

Senator McLEAY:

– In reply to the honorable senator’s question, I invite her to accompany me on the suggested rail journey, and, if she is not satisfied with the facilities provided, to join me in approaching the Commonwealth Railways Commissioner.

Senator McLEAY:

– On the 24th October, Senator Nash asked me the following questions : -

  1. Is the Minister representing the Minister for the Interior aware that employees of the West Australian Government Railways are often precluded from travelling at concession rates on the Commonwealth line from east to west while on long service leave because sufficient berths are not available?
  2. Is he also aware that, as a result of this shortage of accommodation, those employees frequently have to pay full fare because otherwise they may not travel?
  3. In view of the economic hardship that is imposed on the employees mentioned, will the Minister take steps to make available more accommodation on the trans-continental line?

The answers to the honorable senator’s questions are as follow: -

  1. Due to the consistently heavy demand from the public for accommodation on TransAustralian trains, which can only be met with difficulty, the number of privilege tickets which may be issued to employees of the Western Australian and other State railway departments is limited to certain denned quotas. In the case of employees of the Western Australian Railways, the quota is=. five first-class and six second-class per week.
  2. If a State railway employee wishes to travel at a time when the quota of privilege tickets allotted to his State has already been issued, and he is not prepared, or is unable, to wait until a privilege ticket is available, he must pay the ordinary fare.
  3. In the circumstances which exist when intending passengers desirous of paying full fare are frequently unable to obtain accommodation on the train by which they wish to travel, and are sometimes obliged to wait for several trains later, it could not be agreed to increase the number of privilege tickets issuable. This would result in more full-fare passengers being shut out of trains.

The matter will be reviewed when the delivery of additional diesel electric locomotives permits of the train service to and from Western Australia being received, and, it is hoped, increased.

page 1417

QUESTION

POLIOMYELITIS

Senator TANGNEY:

– Recently, I asked whether the Commonwealth Department of Health would investigate the Kenny method of treating poliomyelitis, with a view to establishing in Australia a clinic similar to those already operating successfully in other countries. I was told that this was primarily a matter for the States, one of which was about to establish such a clinic. I now ask the Minister representing the Minister for Health whether the Government will reconsider the matter in view of the fact that the Department of Health has at its service so many skilled scientific workers with all necessary research facilities, and that the results of research might be of inestimable value to the people of Australia as a whole? In the event of research proving the value of the Kenny method, will the Minister consider the establishment of a clinic in Canberra to which sufferers from all States could be brought for treatment? If that is not practicable, will the Government consider subsidizing those States that are willing to establish Kenny clinics?

Senator COOPER:
CP

– I shall bring the honorable senator’s suggestion to the notice of the Minister for Health, and a considered reply will be furnished later.

page 1417

QUESTION

ROAD SAFETY

Senator CRITCHLEY:
SOUTH AUSTRALIA

– Can the Minister for Shipping and Transport inform the Senate whether the representatives of State and Commonwealth authorities concerned with road safety are giving consideration to the absolute necessity for insisting upon uniformity on the part of the Commonwealth and the States in respect of the permissible loads that may be hauled by trucks, lorries and trailers, the maximum width and weight of load and length of vehicles? If these matters are not already receiving attention, will the Minister undertake, in the interests of road safety, to bring them before the committee. Will he also inform the Senate whether there is any truth in the report that the limits of loading capacity and dimensions of Commonwealth vehicles that use the State roads do not conform with the regulations of certain States?

Senator McLEAY:
LP

– A committee representing the seven parliaments of Australia is sitting almost continuously to consider the whole problem of road safety, and the reports and recommendations of the committee are submitted to the appropriate State Ministers for the introduction of the necessary regulations or legislation. Although some States have already acted to conform with the recommendations of the committee, we have not been able so far to obtain agreement on uniform standards. However, at the recent conference that I attended in Sydney all Ministers and representatives agreed on the need for taking immediate and concerted action. Concerning the honorable senator’s remarks about inconsistency in the permissible limits of the weight and dimensions of loads, I think that one has only to drive along the highway to realize the menace to safety inherent in that inconsistency. I can assure the honorable senator that the representatives of the seven parliaments are giving this matter immediate and careful attention.

page 1417

QUESTION

ROADS

Senator SHEEHAN:

– Will the Minister representing the Treasurer advise the Senate of the amount of money made available by the Commonwealth during the past five years to the several States to assist local authorities to maintain their roads ? Have the several States accepted the full amounts allocated to them? Has the Government at any time stipulated the purpose for which money so allotted should be used either by the State governments concerned or by their local authorities?

Senator SPOONER:
LP

– I do not think that it is the practice of the Government to make grants direct to local authorities. My recollection of the procedure followed in Commonwealth grants is that, with one exception, the Commonwealth makes a grant to each State to be expended by the State government as it thinks fit. Tha only exception to that practice that 1 recall is that a stipulation is usually made by the Commonwealth to the effect that portion of the grant is to be expended upon rural roads. However, since my answer is based on recollection, I cannot regard it as satisfactory, and I suggest that the honorbale senator place his question on the notice-paper so that I can obtain an authoritative answer for him.

page 1418

QUESTION

PARLIAMENTARY RETIRING ALLOWANCES FUND

Senator GRANT:
NEW SOUTH WALES

asked the Minister representing the Treasurer, upon notice -

  1. What is the total amount at present standing to the credit of the Parliamentary Retiring Allowances Fund?
  2. What is the total amount received and paid out each month?
Senator SPOONER:
LP

– The Treasurer has supplied the following answers: -

  1. The credit balance of the fund as at the 30th September, 1051, was £61,321 fis. 3d.
  2. Current receipts from contributions by senators and members are £2,379 per month. In addition, the Commonwealth’s contribution in respect of pensions is £114 <ls. 10d. per fortnight. The Commonwealth also contributes in respect of lump-sum payments made from the fund, and the amount so contributed during the quarter ended the 30th September, 11)31, was £3,f>45 17s. 3d. Interest derived from investments is expected to amount to £1,8~00 for the year 1931-52. Current expenditure is £1!)0 8s. per fortnight, being pensions paid to ex-members and senators. In addition, during the quarter ended the 30th September, 1951, lump-sum payments totalled £4,400 9s. 3d.

page 1418

QUESTION

REPATRIATION

Senator CAMERON:
VICTORIA

asked the Minister for Repatriation, upon notice -

  1. Is it a fact, as reported in the Argus of the 10th October, 1951, that the dismissal of staff from Heidelberg repatriation hospital has adversely affected disabled exservicemen, and that the diet of patients with tuberculosis has been so cut down as to interfere with treatment and threaten prospects of recovery?
  2. Is it a fact that an official hospital inquiry confirmed the reported complaints in this connexion ?
  3. Is it a fact that the retrenchments were made against medical advice and that the hospital was already short of staff?
  4. Have similar retrenchments been made at other repatriation institutions?
  5. Will the Minister visit Heidelberg repatriation hospital and interview patients and investigate the matter personally, instead of relying on official reports?
  6. If retrenchments have been made, who is responsible, and will be give an undertaking that the position will be rectified forthwith.
Senator COOPER:
CP

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

  1. The article in the Argus of the 10th October, 1051, conveyed the impression of an overall discontent which did not exist. The article contained general comment not necessarily related to the Repatriation General Hospital, Heidelberg. Some of that which related to the hospital was incorrect or exaggerated. Dismissals of staff from the Repatriation General Hospital, insofar as essential medical treatment is concerned, have not adversely affected disabled ex-servicemen. The diet of patients with tuberculosis has not been cut down in quantity or quality so as to interfere with treatment or affect the prospects of recovery. The choice of meals from a menu had to be temporarily discontinued.
  2. An inquiry conducted at the hospital confirmed that some complaints had been made by a few patients.
  3. Medical opinion was expressed that hospital staff could not be reduced without lowering some of the standards prevailing in repatriation hospitals, but that the standard of medical treatment itself could be preserved. It was not possible to effect the Repatriation Department’s quota of staff reductions without reducing institutional staffs. The larger hospitals at Concord and at Heidelberg were short of estimated requirements of certain categories of staff at the time reductions in staff were made. However, no reductions were made in various categories of staff concerned in actual medical treatment, e.g.. doctors, nurses, in which there were shortages.
  4. Some retrenchments have been made at other repatration institutions.
  5. It has been my policy and practice to visit repatriation medical institutions whenever possible, and this has been done, and as opportunity offers I will visit the hospital at Heidelberg. During my visits I invariably discuss matters with both patients and staff, and this I will naturally do when next at Heidelberg.
  6. The retrenchments have been made as » result of the Government’s policy to reduce the numbers employed in the Commonwealth Public Service. A certain quota by which staff was to be reduced was allotted to the Repatriation Department. To achieve this, staff reduction-‘ had to be made in institutional as well as State branch office staffs. The details of the reductions to be made were the result of deliberations .between a staff committee appointed from Repatriation Commission Head-quarters and senior officers of the branches in each State. Appropriate medical opinion was represented at all discussions. All essential facilities for medical treatment in repatriation institution? have been preserved, but it has been necessary to curtail some of the desirable, though less essential, features. I cannot give an undertaking that there will be any change in Government policy in this matter.

page 1419

QUESTION

GOLD

Senator FRASER:
WESTERN AUSTRALIA

asked the Minister representing the Treasurer, upon notice -

  1. How far have negotiations proceeded between the Australian Government and the International Bank for a review of the price of gold in Australia?
  2. Is it a fact that South African producers of gold may sell 40 per cent, of it on the open market ?
Senator SPOONER:
NEW SOUTH WALES · LP

– The Treasurer has furnished the following answers to the honorable senator’s questions: -

  1. Gold policy has been under discussion for some time in the International Monetary Fund, and not in the International Bank. The latest available information on the outcome of these discussions and on the attitude adopted by the Australian representative was given by the Treasurer in a statement made on the Oth October. A copy of that statement has been Bent to the honorable senator.

    1. It is understood that, immediately before the announcement .by the fund on the 20th September of a revision of its previous attitude towards sales of gold nt premium prices, South Africa was selling gold on free markets at a rate representing approximately 40 per cent, of its current production. No information is to hand on whether the South African authorities have varied their policy in any way since the fund announcement.

page 1419

LEAVE OF ABSENCE

Motion (by Senator MCKENNA) agreed to-

That Senator Finlay be granted two months’ leave of absence on account of illness.

page 1419

WHEAT INDUSTRY STABILIZATION (REFUND OF CHARGE) BILL 1951

Second Reading

Debate resumed from the 31st October (vide page 1311), on motion by Senator McLeay -

That the bill be now read a second time.

Senator McKENNA:
TasmaniaLeader of the Opposition

– The Opposition offers no objection to this measure. The money involved in it ha3 accumulated in a trust fund, it having been taken from the wheatgrowers by means of a tax to’ implement a wheat stabilization plan that was sponsored by the Government and supported by the governments of the States. The fund appears to be adequately provided with reserves. The bill proposes to refund £12,496,000 to the wheat-growers, plus accrued interest since 1948-49. One cannot but deplore the fact that the distribution of this money will give some impetus, no matter how slight it may be, to the inflationary tendencies in the community. The money unquestionably belongs to the wheatgrowers, and as it is not required for the purposes of the stabilization plan it should be returned to them. That being the purpose of the bill, it has the support of the Opposition.

Question resolved in the affirmative.

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

page 1419

LOAN (HOUSING) BILL 1951

Bill received from the House of Representatives

Standing Orders suspended.

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

Second Beading.

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

.- I move-

That the bill be now read a second time.

This bill seeks parliamentary authority for further loan raisings totalling £27,000,000 for the purpose of advances to the States under the Commonwealth and State Housing Agreement Act 1945. The following statement shows the continued increase in advances made to the States by the Commonwealth since the inception of the agreement: -

The works programme approved by the Loan Council in August last included £26,547,000 for rental housing under the Commonwealth and State Housing Agree- _- , ment and this bill gives effect to the Loan Council approval. Last year, the Parliament appropriated £26,000,000 for the

Commonwealth and State Housing Agreement. The actual expenditure by the States was £21,640,000, or £4,360,000 less than the amount appropriated.

This year the appropriation of £27,000,000 is £5,360,000 more than the actual expenditure last year. The increased appropriation is necessary partly because of increased building costs and partly because of the need to pay for houses that the States are importing.

The Commonwealth has agreed to meet the difference between the average cost of houses imported by States and the cost of comparable Australian-built houses, up to a maximum of £300 a house on 30,000 houses. The aid is limited to houses imported by the State housing authorities and public utilities. During the financial year 1950-51 approximately 3,000 houses were imported by State authorities, of which 2,066 will probably be the subject of claims for subsidy. A somewhat lower number, 916, came under the Commonwealth and State Housing Agreement. It is expected that, during the current financial year, approximately 7,000 houses subject to subsidy will be imported, of which probably about 5,000 will come under the housing agreement.

Because of delays in negotiating contracts and other factors such as lack of shipping, this scheme has not so far yielded as many houses as was expected. New South Wales, Victoria, Queensland and Western Australia are operating under the housing agreement. South Australia . has not operated under it. Tasmania withdrew from the agreement on the 31st August, 1950, and has since repaid all advances. To the end of June, 1951, 48,117 dwellings had been commenced under the agreement in the four States operating under it. Of these, 37,617 had been completed, and 10,500 were under construction at the 30th June, 1951. During the year ended the 30th June, 1951, 8,148 dwellings were completed, of which 3,069, or 37 per cent., were in country areas.

Though rising building costs have caused the economic rentals of recentlycompleted houses to be higher than those of houses built earlier, the provision of rental rebates has helped tenants who would have faced a hardship in meeting these rentals in full. Under the rental rebate scheme, families whose incomes equal the basic wage do not have to pay more than one-fifth of their income in rent, whatever may be the economic rent of the dwelling they occupy. As the family income rises above the basic wage, or falls below it, the rebate decreases or increases. Up to the 31st March last, rebates granted totalled £275,000. Under the housing agreement any house may be sold to the tenant in occupation., It is Commonwealth policy to encourage sales, but the States determine the basis of sale. Commonwealth approval is neceasary only if a State desires to sell a house at below capital cost. To the 30th June, 1951, approximately 1,200 housing agreement dwellings had been sold to tenants. No house was sold for less than its capital cost. Sales during the financial year 1950-51 totalled more than 750.

Debate (on motion by Senator McKenna) adjourned.

page 1420

ESTIMATES AND BUDGET PAPERS 1951-52

Debate resumed from the 31st October (vide page 1349), on motion by Senator Spooner -

That the following papers be printed: -

Estimates of Receipts and Expenditure, and Estimates of Expenditure for Additions, New Works and other services involving Capital Expenditure, for the year ending 30th June, 1952 ;

The Budget 1951-52 - Papers presented by the right honorable Sir Arthur Fadden on the occasion of the Budget of 1051-52;

National Income and Expenditure 1950-51

Senator WILLESEE:
WESTERN AUSTRALIA · ALP

– When this debate was adjourned last night I was at the point of refuting the allegation that had been made by the Attorney-General (Senator Spicer) that no serious suggestion had been made by the Opposition for a solution of the problem of inflation, except Commonwealth prices control. We believe, of course, that Commonwealth prices control should be restored. If anybody ever thought that prices control could be efficiently administered by the States, to-day even the most died-in-the wool tory must be convinced that State prices control has proved absolutely unworkable. The suggestion has been made from thi* side’ of the chamber on several occasions that in order to ease the inflationary tendency in this crazy world we should try to establish for the people of this country an equitable balance between prices and wages. As I pointed out last evening, although it is relatively easy to buy luxury goods in our capital cities it is almost impossible to buy essential commodities such as building materials. [ consider that it is the bounden duty of the Government to prohibit the exportation of building commodities such as timber until the housing requirements of the Australian people have been met. Contrary to the statement of the Attorney-General this is not the first time that such a suggestion has been made from this side of the chamber.

Yesterday and to-day the claim has been made in this chamber that too much rice is being exported. During question time this morning we heard that the export price of rice is £75 a ton, compared with £45 a ton on the home market. Although Australia is traditionally a protectionist country, it is time that our tariff policy was reviewed. After all, a nation can only import goods to the value of its exports; to that degree, imports and exports are self-balancing. Our overseas credits are -established from the proceeds of sales of our commodities abroad. They are utilized to purchase -consumer goods needed in this country. The tariff wall operates to limit the quantity of goods that can be purchased with our export credits. Although there were sound reasons for the introduction of tariffs to protect our manufacturers, I suggest; that the tariff system has operated to make it difficult for us to get enough, goods into our country to sop up the quantity of money that is held by sections of our people. We should review the -operation of tariffs in relation to certain goods. Australian manufacturers enjoy the triple protection of being 13,000 miles closer to the home market, disequilibrium ,0/ the £1 sterling and the £1 Australian, and the Australian tariff wall. Yet certain articles of Australian ‘manufacture are more expensive than similar articles imported from England. Supporters of the Government have claimed that the -Opposition is barren of ideas, and that prices control is the only “ shot “ in our locker. I suggest that the Government might very fruitfully have a look at the tariff wall.

Last night the Attorney-General sought to justify the imposition of increased sales tax on refrigerators by stating that the people cannot obtain homes and refrigerators as well. I do not consider that a refrigerator is a luxury. As I have already pointed out, by abolishing control of capital issues, the Government paved the way for a considerable amount of money to flow into luxury industries, which were enabled thereby to compete unfairly with essential industries. No profit limit was imposed in respect of luxury goods. By comparing the relative necessity for refrigerators and homes, the measure was badly astray. The subject of sales tax on refrigerators is annoying supporters of the Government from its top members to its back benchers. Perhaps I should not bring the back benchers into the matter in view of the newspaper reports that are being bandied about. To try to justify the increase of sales tax on refrigerators, the Treasurer (Sir Arthur Fadden) stated that 37,000 refrigerators were produced in Australia in the year before the war, and that 207,000 were manufactured last year. To me that is a cause for joy rather than sorrow. I am glad to know that out of the sorrow of war at least there has- emerged a prosperity that enables people to buy refrigerators. If not a necessity, a refrigerator is at least a highly desirable article to have in the home. The Treasurer has apparently picked on this item to bear increased sales tax because only 37,000 persons of the upper set were able to purchase them in the year prior to the war. I hope that during the next year 507,000 refrigerators will find their way into the homes of Australian families. The Australian Government should not curb the ambition of people who are trying to establish their homes.

As I have already mentioned, the only reason that the Attorney-General advanced for .the present inflation was that the enormous cheque received by the wool-growers last year had been responsible for increasing the spending power of the community. During the last general election campaign Labour promised the wool-growers that if it was elected to office it would refund to them the prepayments of tax that were wrongly taken from them last year. We made that promise because we believed that it was wrong in principle to single out a section of the Australian community that was temporarily receiving high incomes to bear a special tax. We believe that when higher taxation becomes necessary it should be levied on all persons who are making large profits, such as those engaged in the motor car industry and the lucrative business of book-making. Although I am very glad that the Government has made a complete volte face in connexion with this matter, it now proposes to extract approximately the same amount of money from the wool-growers by a modification of the averaging system of taxation.

The Minister has defended Mr. Chifley’s views about inflation. It is most refreshing to hear supporters of the Government admit that our late leader was a great man, in view of the misrepresentation that they indulged in during the 1949 and 1951 general election campaigns. It is very good to know that at long last they recognize his worth.

Senator Spicer:

– Does the honorable senator agree with what Mr. Chifley said?

Senator WILLESEE:
WESTERN AUSTRALIA

– I agree with a great deal that our late leader said, and I am glad that a born dyed-in-the-wool conservative like the Minister should now also agree with Mr. Chifley’s views. This proves that one is never too old to learn. The Minister has now agreed, in effect, that Mr. Chifley was right, but when the right honorable gentleman introduced his last budget he was accused of seeking to impose excessive taxation, and it was contended by the opponents of Labour that the then Government wanted to take too much money out of the hands of the people. Now that this Government as budgeted for a surplus it claims that that is what Mr. Chifley said should bo done. Perhaps I should now proceed with my speech, after having devoted so much time to the Attorney-General. I leave “the honorable senator with the thought that his remark last night that two years ago uncontrolled inflation was almost unknown will convey far more to the people of Australia than he meant it to convey.

Senator SPICER:
LP

– I did not say that.

Senator WILLESEE:

– The only way in which this Government can achieve some degree of equality of prices and wages is to swallow every word spoken by its supporters during the general election campaign in 1949. When that is done, and when the Government decides to follow the advice of the late Mr. Chifley even more closely, equilibrium will be achieved. However, because the members of the Government are proud men who do not wish to swallow their pride and the unfortunate and silly statements that they made when they were attacking the very man whom they now praise, that equilibrium may be a long time coming. I trust that in accepting the advice of Mr. Chifley this deviation from the party line will be followed further.

The Parliament has had an excellent opportunity to examine this budget because a record number of speakers have spoken during the budget debate in the House of Representatives, and probably a record number of senators have spoken in this chamber. However, it is very difficult to gauge the spirit of the budget. It is also difficult to find out what was the dominant thought of the Government when the budget was being prepared. Since the signing of the Pacific Pact we have been warned repeatedly by the Prime Minister (Mr. Menzies) that we must be prepared for heavy defence expenditure. I believe that that is one of the most important problems of governments throughout the world to-day. One side of the international bloc which has been formed holds that the democracies carry within themselves the seeds of their own destruction, that they cannot survive, and that in a time of slump following a time of boom they will disintegrate under their own weight. That is the allegation of the Communists. It has been recorded that when Stalin meets a representative of the western democracies, his first question is, “When do you expect a depression in your country ? “ One of the great problems of democratic governments to-day is to set aside sufficient money for intelligent defence in addition to setting aside sufficient money to ensure that the living standards of the people are maintained and, if possible, improved. It is one of their obligations that they should give the lie to the Communist allegation that the democracies are heading for a depression and will collapse under their own weight. That is one of the obligations of this Government. It will also be an obligation of the next government, which will certainly be a Labour government. The governments of other countries, such as the United Kingdom, the United States of America, India, Pakistan and South Africa, will be obliged to do the same thing.

I have endeavoured to look at this budget in the light of defence preparations. The proposed total expenditure for the year is more than twice as great as that proposed by the last budget of the Chifley Government. I find that this budget, which visualizes the expenditure of approximately £262,000,000 more than was expended last year, allocates only £34,000,000 of that £262,000,000 for defence purposes. In view of that fact, I do not think that the Government can reasonably claim that this is a defence budget. In fact, the Government was unable to spend all of the money that was provided for defence expenditure in the previous budget. When that budget was being debated in this chamber, the Minister for National Development (Senator Spooner) stood in his place and said that the budget was a heavy one because it was proposed to spend £50,000,000 on defence stockpiling, which was a nonrecurring item. I also remember that Senator Armstrong, who has great knowledge of such matters because he was Minister for Supply in the Labour Government and was concerned with expenditure of that kind, said, “ You will have that again next year “, to which the Minister replied “ No. We are going to stockpile “.

Senator Robertson:

– It is only £34,000,000 this year.

Senator WILLESEE:

– But it is still a recurring item.

Senator Robertson:

– The figure* am perfectly correct.

Senator WILLESEE:

– Nevertheless, the item appears in the budget. I do not doubt that the Government honestly thought that it would be a non- recurring itf-m.

Senator Robertson:

– The honorable senator should appreciate that there is a war on. The Opposition does not recognize that fact.

Senator WILLESEE:

– The honorable senator speaks of a war. I consider that there is a war in the Government parties at the present time.

Senator Robertson:

– Rubbish !

Senator GEORGE RANKIN:
VICTORIA · CP

– The South Australian Labour party seems to be doing pretty well in that direction at the present time!

Senator WILLESEE:

– I do not know about that, but I know that the Australian Labour party is always in fighting trim at election time because it upholds the democratic right that its members may disagree among themselves. It is the only political party in Australia which has survived for half a century, still with the same name and the same policy. Senator McCallum was at one time a member of that party. The limbs may fall off, but like a sturdy oak the trunk lives on.

Senator Robertson:

– From all accounts, disintegration has already commenced within it.

Senator WILLESEE:

– I repeat thai the Government cannot claim that this is a defence budget. It is therefore worth while to ascertain whether, if it 13 not a defence budget, it is an antiinflationary budget. I contend that one must have always in mind the overall picture throughout the world. To my way of thinking, the functions of government must be carried on at the same time as defence preparations are made and action taken to prevent physical and ideological battles. It is the duty of the Government to ensure that the country shall not return to depression times, and it is also its duty to give the people confidence in democratic government. I suggest *hs.t the most effective weapon we can ‘ > in the hands of the enemy is the knowledge that the Government has lost the confidence of the ordinary men and women in the street. If that is done, all the money that is spent on defence, and all the screaming and ranting against communism and Russia, will be of no avail.

There has been a great deal of discussion about whether the proposed surplus of £114,500,000 will result from wise and legitimate governmental methods, or whether it will in fact be inflationary. The Treasurer (Sir Arthur Fadden) has stated that that money is to be taken and put “where it can do lease harm “. The right honorable gentleman has also said that if the people of Australia refuse to subscribe to Commonwealth loans, as they did on the last occasion, he intends arbitrarily to take the money from them. -The Minister for National Development has said that that will be done only over his dead body. I remind him that if he falls a victim to a stab in the back he will not be the first member of the Liberal party to do .so. If this surplus money is to be placed on ice, it will support the argument that the effect of the budget will be deflationary. It may also be argued that if there is a deficit, whilst large surpluses have been hidden, and an endeavour is made to raise money by means of bank credit, the effect will be inflationary. That is a legitimate argument.

Senator Pearson challenged the Opposition to point to one item of revenue in the budget which should not be taken from the pockets of the people. I suggest that £114,500,000 should not be taken from them.

Senator Spicer:

– The honorable senator does not agree with Mr. Chifley ?

Senator WILLESEE:

– The AttorneyGeneral, is prepared to take out of their context a few words spoken by a wise and clever man, and to use them in an attempt to justify the actions of the Government. Of course, this is not the first time that the Liberal party has “ pinched “ something from the Labour party, and it probably will not be the last. The Attorney-General challenged me to point to one item in the budget that ;could be reduced. Tn answer I point to the esti mated surplus of nearly £115,000,000, which should never be collected from the people. What would have been the response from the Liberal party if a Labour government had said to the people : “ You are not fit to handle your own money. We shall take it off you, and put it where it will do least harm, but if you do not subscribe to government loans we shall .use the money we have taken from you for works which would otherwise be paid for out of loan money “. I am certain that members of the Liberal party would have shrieked about socialism gone mad, and that there would have been references to bureaucrats pushing the little fellow around. I can almost hear the mouthings of a “ John Henry Austral” and his fellows. When a Labour Treasurer introduced ,a budget for £471,000,’000 honorable senators opposite, then in opposition, accused us of taking too much money from the people. It was honorable senators opposite who said that of Mr. Chifley.; we did not say it.

Senator ROBERTSON:

– Yes, but he was heading towards socialism.

Senator WILLESEE:

– And would not the honorable senator have said of a £1,041,000,000 budget that it was tending in the direction of socialism?

Senator ROBERTSON:
WESTERN AUSTRALIA · LP; CP from 1955

– No.

Senator WILLESEE:

– Then the honorable senator must be slipping. There seems to be a great deal of doubt among honorable senators opposite ‘as to what is causing inflation. The PostmasterGeneral (Mr. Anthony) put the blame on high >export prices, and the AttorneyGeneral agrees with him.

Senator Spicer:

– I said that export prices were an important element.

Senator WILLESEE:

– The AttorneyGeneral said that they were the main element. The Minister for Commerce and Agriculture (Mr. McEwen) went overseas in order to get still higher prices for our exports, and the young Liberals said that he did not get enough. Senator Maher puts the blame on the 40-hour week, and the provision for automatic adjustments to the basic wage. If Government supporters could only ‘get together and agree on .something they might make some progress.

Senator Spicer:

– Let the honorable senator tell us the cause of inflation. He seems to know all about it.

Senator WILLESEE:

– I was telling the Attorney-General last night but he walked out of the chamber. If he comes around to my office later I shall explain the matter to him. A modern budget is not merely a statement of accounts. It reflects the mind of the Government, and its attitude to the problems of the day, and it affords an opportunity to make comparisons between election promises and parliamentary performances. Some honorable senators opposite have tried to make capital out of the fact that taxation is lower in Australia than in other countries, but that is not a particularly good defence of the budget. Such a comparison is valueless unless we take into consideration economic conditions in the countries concerned. Nothing is gained by pointing out that taxation is lower in Australia than in Great Britain unless we also have regard to the population of the two countries, to their industrial development, and to the amount spent on defence. During the war, the people were heavily taxed, but that was unavoidable. The parties which support the present Government declared after the war that if they were returned to power they would reduce taxation. Now, when the people should be getting some relief from the burdens which they bore during the dark days of the war, they have been loaded with new and heavier taxes. In 1949, the anti-Labour parties, through. newspaper advertisements, declared that the Labour budget of £471,000,000 was astronomical, that it was evidence of a socialist plot, and an example of waste and extravagance under socialism. The advertisements pointed out that the then Treasurer, Mr. Chifley - the man whom honorable senators are now praising - was collecting £61 a head in indirect taxation. To-day, under a non-socialist government, indirect taxation amounts to £123 a head, and direct taxation has been increased by 10 per cent., in spite of the fact that “ socialist extravagance “ has been replaced by a conservative budget.

I am prepared to make all kinds of allowance for a coalition government, but I cannot .understand why this Govern ment, in this democratic country, consistently attacks the family unit. It is an axiom - indeed, almost a shibboleth - that the family is the corner stone of a free society ; yet in the two budgets which this Government has introduced serious attacks have been made on the family unit. We hear a good deal of talk about the Labour platform, particularly from people who have not read it, but have read only excerpts published at election time in the newspapers. They are like the football fans who criticize the umpire in an Australian Rules game without ever reading the rules. One of the planks of the Labour party platform is that indirect taxation should be abolished.

Senator Spicer:

– The Labour party has had plenty of time to do it.

Senator WILLESEE:

– And it will have plenty of time in the future. The wheel will certainly turn. Why does the Labour party wish to abolish indirect taxation? Direct taxation can be controlled in such a way that the burden falls on those best able to bear it. Rates can be adjusted so that the single man who earns so much will pay so much tax, and no more. If he marries, he will pay something less. Concessions can be allowed to persons who give money to charities. Indirect taxation, on the other hand, .hits blindly at every one in the community. A man with a wife and six children may pay six times as much indirect tax as does a . single man. Because sales tax has been imposed on ice cream, the father of that family must pay out five or six times as much tax on 4d. ice cream licks as does the single man. When sales tax is .placed on clothing, footwear, chocolates and other articles used constantly in the home, an extra burden is placed on the family. Indirect taxation is the coward’s way out, because it is directed against the weakest and least articulate sections of the community. That is why the Labour party is pledged to abolish indirect taxation. The tax on refrigerators is a blow at the family. I am sure that Senator Robertson and Senator Wedgwood will agree with me that for a large family a refrigerator is not a luxury, but a necessity. The Treasurer said that the taxation which was to be imposed would reduce spending on luxuries. However, it is apparent that the Treasurer has not given any real consideration at all to that matter. He proposes to increase indirect taxation by 100 per cent., which means, of course, that the Government will receive twice as much revenue during the current financial year as it did last financial year. Consider, for a moment, the nature of the goods on which it is proposed to levy this crippling sales tax. They include wireless sets, razor blades, cosmetics, ice creams and ice blocks. Those goods are all every-day necessaries for ordinary people and cannot, by any stretch of imagination, be regarded as luxuries. Surely, we will have arrived at the end of the road of despair when we increase indirect taxes on razor blades and cosmetics! The proposal to levy sales tax on ice creams and ice blocks is wholly ludicrous. For one thing, how does the Government hope to check the payment of tax on the purchase of such trifles for little children?

Senator Henty:

– It is obvious that the honorable senator does not know anything about such matters.

Senator WILLESEE:

– I have had to fill in tax returns, and, incidentally, I do not suggest that I was the odd man in 5,000 who filled in his form correctly. Looking further at the list of items on which it is proposed to increase sales tax, we are driven to the conclusion that this is the first administration that has put dogs before babies. Although a luxury tax of 50 per cent, will be imposed on baby powder and on oil for babies and one of i 2-J per cent, on soap for babies, no increase of tax is proposed on flea powder or soap for dogs. Not even babies’ rattles and dummies will escape the ruthless demands of this Government! They, too, are to bear their fair share of the burden of restoring the national finances ! Somehow, this all strikes one as a modern and perverted version of the scriptural adjuration, “ Suffer the little children to come unto Me”. No doubt, the Treasury experts will endeavour to explain the inexplicable discrimination between the treatment of babies and of dogs by pointing out that dogs, and their needs, are not luxuries but necessities on the ground that the poor graziers cannot continue to earn their wool cheques without dogs to round up their sheep !

It is abundantly clear that the 5s. a week, endowment that the present Government so generously gave to the first child of families will be recovered from them by the Government, and with added interest. It is interesting also to speculate on the attitude that the anti-Labour parties would have adopted if Labour had been in office and had introduced such extraordinary taxation proposals. Of course, if Labour had been responsible for the introduction of such proposals I have no doubt that the lady senators opposite would not have been so inarticulate as they have been during this debate. I do not make that remark in any sense of malice, because I believe that those ladies opposite know the facts and are profoundly disturbed by the Government’s proposals. Indeed, it is a great misfortune that the leaders of the coalition do not listen more carefully to the criticism of their supporters.

Although . the Government is undoubtedly confronted by the necessity for raising substantial revenues, that necessity does not justify it in resorting to punitive taxes against the most deserving sections of the community. I remind the Government that even if its proposals yield sufficient revenue, they will defeat its objective, because the discontent that will be aroused amongst the people by these proposals will certainly not induce them to make any real effort to defend the country.

If the Prime Minister (Mr. Menzies) has ever been right in public matters, ] suggest that he was right when he said, during the election campaign in 1949. that the major problem that confronted the incoming administration was to reduce prices, restore value to the fi, and bring the cost of living within the compass of ordinary people. Undoubtedly, he was perfectly right when he said that. But is he right to-day? What will be the effect upon the ordinary working people of this country of the punitive and discriminating taxes proposed to be levied upon them? In particular, I criticize most strenuously the vicious system of indirect taxation proposed by the Government, which will place the simple luxuries, such as light motor cars, washing machines and radio sets, which many working people have aspired to purchase for years, farther away than ever from them. But that is not the full extent of the evil of the Government’s proposals. The Government is not content with restricting the standard of living of the ordinary people of this country, but it has decided, quite irresponsibly, I suggest, to reduce even the present standard by increasing the price of such everyday household goods as razor blades, cosmetics and babies’ dummies. On top of all that, it has decided to increase the present rates of income tax by 10 per cent.! Of course, any sensible person will realize, on reflection, that no administration, not even the present Government, would, of its own volition, embark wilfully upon such an arbitrary and absurd policy. The explanation of these utterly illogical tax proposals is to be found, first, in the state of desperation engendered in members of the Government by the necessity to raise a record revenue to finance a record expenditure, and, secondly, in its utter dependence upon the allegedly expert advice of Treasury officials .and other so-called financial authorities.

One very illuminating circumstance that surrounds the Government’s tenacious defence of these indefensible proposals is the complete and utter chance in the catch-cries of the antiLabour parties. Until etu ite recently the Government was telling us, quite boldly, and with apparent confidence, that excessive taxation was warranted because of imperative defence requirements. Then, when the hollowness of that attempted justification was exposed, the Government seized desperately upon a second line of defence that its extraordinary proposals were justified because this was an “ antiinflationary budget “. Now, the political parties opposite have abandoned even that defence, and attempt, half-heartedly, to beat off the universal storm of criticism by challenging their critics to propose alternative methods of raising this huge revenue. Even in that respect their attitude is utterly illogical. Is any one who is aware of the facts prepared to assert that it is really necessary to raise such an enormous revenue as the Government proposes to raise? Of course, wo never hear nowadays anything about the need to restore value to the £1, the neces sity for the utmost economy in govern ment expenditure, or the desirability oi restoring incentive to workers. All thos,lovely catch-cries of the anti-Labour parties, with which they belaboured us so constantly when we were in office, have been jettisoned.

I very rarely interject when an honorable senator is speaking, but when Senator McMullin was making his contribution to the debate I felt impelled to do so. Following the party 1 line, he attempted to defend the Government’s proposal to increase interest rates by asserting that an increase of interest rates would check inflation, and alleged that that was tin* view held by the world’s economic authorities. Well, that view may have been in accordance with accepted economic theory in the days of crinolines and hansom cabs, but it is certainly not the view held by responsible authorities to-day or for many years past. One needs only to read cursorily the views of such, authorities as the late Lord Keynes to realize how completely such a view is contradicted by contemporary facts. The speculator, who is usually quite untroubled by economics and ethics, is always prepared to borrow money at any rate of interest in order to invest it in luxury industries, because he knows that the return from those industries, particularly in a time of general austerity, will handsomely repay him. One needs only to look about him in. Australia for verification of that fact. The most serious defect of the policy of increasing general interest rates, however, is that the solid type of businessman, on whom the development of this country ultimately rests, will become so discouraged by the prevailing restrictions that he will tend to throw up the sponge altogether, thereby depriving the nation of the benefits of his ability and enterprise. I repeat that T disagree profoundly with Senator McMullin in his support of an out-moded, discredited and absurd theory.

The Government’s proposals for the taxation of companies reveal a similar unreality of approach to the problems of to-day. The figures cited by my colleague, Senator .Armstrong, show that n small company which ears a. profit of up to £5,000 a year will be required to pay as much as S3 per cent, in tax.

Senator SPICER:

-That is sheer nonsense. The rate is nothing like that.

Senator WILLESEE:

Senator Armstrong was at some pains to present his analysis of the application of tha Government’s proposals, and I believe his statement to be correct. The rate of taxation on big companies, which earn huge profits, is much lower than the rats for small companies. Surely, the Government could not have realized the implications of these proposals when the Treasury officials put them forward and I appeal to the Government, even now, to withdraw and reconsider them. After all, most small companies are co-operative enterprises, and almost every company has sprung out of the enterprise of one man, who devoted years to building up a business, and then desired to share his success with those who worked for him.

Another contribution by a supporter of the Government to which I am constrained to reply is the extraordinary and illogical case against the Colombo plan that was presented by Senator Wordsworth. The honorable senator complained bitterly that the Pakistanis, whom he believes to be the chief beneficiaries under the plan, have not rallied to the enthusiastic support of Great Britain in the Middle East, by taking & stand that would have to be, of necessity, diametrically opposed to that taken by almost all the other member countries of the Moslem League. I have no. desire to be personally offensive, but it is apparent that the illogicality of the honorable senator’s views on matters relating to coloured peoples stems from the military mentality developed through his many years of service in the East. The honorable senator suggested that the actual cash value of our contribution to the backward nations of the East would be negligible because Australians would contribute only approximately 4d. per head of population. Of course, that naive statement completely overlooks the fact that all the other nations taking part in the Colombo plan will also mak-i a financial contribution to the fund, and the financial contributions of some of those nations will be very considerable. The honorable senator also complained that the money paid to the Eastern countries would be wasted by them. I suppose there is always a possibility that money given to any person or nation will be wasted; but surely it is the duty of the Australian Government, along with other governments concerned in the plan, to ensure that the money will not be wasted. That leads me to stress the need for the appointment of an all-party par.liamentary committee to inquire into such matters.

The DEPUTY PRESIDENT (Senator George Rankin). - Order! The honorable senator’s time has expired.

Sitting suspended from 1247 to 2.S0 p.m.

Senator SEWARD:
Western Australia

– I rise to indicate my general support of the budget that was introduced by the Treasurer (Sir Arthur Fadden). The right honorable gentleman must have had a very arduous task in preparing it. I have no doubt that irrespective of what the budget contained, it would have been criticized. Having regard to the inflation that exists at present, and the amount of money available in the hands of the people, it was the obvious duty of the Treasurer to check the spending of money on luxury goods. In budgeting for a surplus, the Treasurer has followed sound financial principles. If I might draw a parallel, would anybody suppose for one moment that if a client who was earning the greatest amount of profit he had ever earned, went to a bank and made application for an advance; the bank would be likely to entertain it, whether he required the money for capital or for ordinary expenditure? Such a person would be immediately told by the bank to meet his commitments out of revenue, and if he had an overdraft he would be told to reduce it. Consequently, with money flowing to the community in great volume, as it is at present,, the obviously sound action for any Treasurer to take is to collect some of it - indeed, as much of it- as possible - and use it to pay off the national debt or place it in reserve to meet adverse times which, as we know, must come in the future. There is a proviso that some of the surplus might be used by the Govern^ ment to meet the commitments of the States. If honorable .senators study the commitments of the States they will ascertain that they . represent, in the main, urgent public works. Speaking of Western Australia, those works are as inescapable and necessary defence works, as are any defence works that are included in the Commonwealth programme. If a portion of the surplus were used to finance some of those works some contribution would be made to the inescapable defence expenditures of the States.

It is astonishing to hear the budget criticized because the Treasurer proposes to collect revenue in excess of anticipated expenditure. What position would we be in if we allowed the surplus spending power in the hands of the people to be frittered away on the purchase of luxuries, as it otherwise undoubtedly would be? In financial matters the nation does not differ from the individual. If an individual has money in his pocket, he will spend it; likewise, if a Government has money in the coffers of the Treasury, italso will spend that money.

I shall not attempt to make a detailed analysis of the budget because that task has already been essayed by other honorable senators. I have been amazed at the complaints that have been made by honorable senators on the other side of the Senate about prices control. If Opposition senators favour prices control by the ‘Commonwealth, why did they deliberately throw away that control when they were in office ?

Opposition senators interjecting,

Senator SEWARD:

– Why did the Chifley Government deliberately throw responsibility for prices control on the States?

Senator O’flaherty:

– Because it was legally impossible for the Commonwealth to continue to exercise that power.

Senator SEWARD:

– I was present at the conference that inquired into that matter and I pointed out that Western Australia had given the Commonwealth Parliament control over prices many years before, and that the bill to transfer the power to the Commonwealth still remained on the statute-book of- that State! Let us be clear concerning the facts about prices control. The electors did not refuse to vest power to control prices in the Com monwealth; they merely refused to give the Commonwealth permanent power to control prices. The power asked for was to control prices and “ charges “. It will be remembered that the Leader of the Opposition (Dr. Evatt) refused to define the term “ charges “. That term “ charges “ might mean anything. If the Labour Government had asked for temporary power to control prices the people of Western Australia would have granted it because, as I have said, a bill for that purpose was already on the statute-book of that State. The States have done their best to meet the obligation that was thrown on to them by the Commonwealth in this matter.

I propose to refer to only two financial aspects of the budget. The first is the Government’s rather unfortunate proposal partially to abandon the averaging system in relation to the taxation of the incomes of primary producers. Many years ago it was agreed that the incomes of primary producers should be averaged over a period, of five years. That was a very fair arrangement because in some years a primary producer may have a surplus of income over expenditure and in other years he may experience a bad season and have difficulty in meeting his commitments. The averaging system compensates him to some degree for fluctuations of his earnings due to conditions over which he has no control. In partially abolishing the averaging system the Go*vernment appears to have committed a breach of faith. The Government was compelled to take action to ensure that the surplus spending power of the community shall not be frittered away on the purchase of luxury items. I think that 1 can prove that if surplus money were left in the hands of the people it would be spent on the purchase of luxury goods. A few weeks ago a review that was made of the agricultural industry in Western Australia revealed that 57 per cent, of the motor cars on Western Australian farms had been purchased within the last two years. I admit frankly that the farmer is entitled to have a good heavy motor car, because in most instances he has to travel long distances over bad and corrugated roads, and a good, serviceable motor car is indispensable to him.

Senator Aylett:

– The honorable senator would not regard a new motor car as a luxury on a farm?

Senator SEWARD:

– No ; on the contrary, I have said that a farmer is entitled to have a new or fairly new motor car. The point I make is that many farmers bought motor cars during the last two years with money that they would have spent on the purchase of implements and machinery if supplies had been available. I trust that the partial abolition of the averaging system is merely a temporary measure. If I thought that it was intended to become a permanent feature of the Government’s budgetary proposals I doubt very much whether I should support the budget. I trust that the system will be fully restored as soon as prices have been stabilized. Although primary producers will be called upon to pay higher taxes this year, when the prices for their commodities are high they will benefit from this partial abolition of the averaging system when prices fall again.

The second matter to which I refer is the removal of the 40 per cent, concessional deduction in respect of machinery purchased by primary producers in recent years. It was intended that that concession should operate until 1952. I regret that the Government has decided not to allow it to run its full time. After all, an agreement’ is an agreement and both parties should keep it. The farmer has a grievance against the Government because he accepted in good faith the Government’s promise that the deductions would apply until 1952. He bought certain machinery in anticipation of being allowed a concessional deduction in respect of it only to find that the privilege has been withdrawn. I should have favoured a slight increase of taxes rather than the abolition of the concession because, the breach of an undertaking of that kind by a government tends to lessen the confidence of the people in it.

That brings me to the subject of taxation. These are abnormal times and they demand abnormal measures, but in my opinion the primary producers a’re now being cruelly taxed. I shall give an illustration to prove the truth of that statement. I know a farmer in Western Aus tralia who, after farming for 40 years, reached the age at which he could no longer carry on. Unfortunately although he had five or six daughters, he had no sons to take over his farm. He was forced to sell his property and then he sold the stock. He was a good sheep man and had built up a very fine flock. He sold his property. He then sold the stock for £18,895, but the Taxation Branch took from him no less than £11,040, or 60 per cent, of the financial result of his lifetime’s work. If any honorable senator can contend that that is not robbery, I have yet to understand the meaning of the word. That is one of the reasons why I believe that the agricultural community is being too heavily taxed. Indeed the Australian people generally are too heavily taxed. In the early days of federation it was estimated that the revenue required to meet all the commitments of the Commonwealth would amount to no more than £5,000,000. Those days have gone forever, and to-day the budget has reached astronomical proportions. Nothwithstanding the demands that are now made on the Treasury, and despite the taxes that are imposed in other countries, 1 contend that when a man, after working for 40 years, sells his property and stock and finds that he has to hand to the Government 60 per cent, of the value of his assets, he is being taxed much too heavily. In an earlier debate I cited the case of farmers who transferred their farms to their sons who had helped in their development. After paying gift duty and income tax they had no capital left and became eligible to apply for the age pension. The average value of the properties was accepted for income tax purposes but gift duty and subsequent income tax was levied on the actual sale value and as a result they were left with nothing on which to live.

I propose now to deal with another matter that has received a little attention in recent months, but the sort of attention, I am sorry to say, that will not improve the reputation of this country. I refer to statements that have been made in the Senate, in the House of Representatives and outside the Parliament that if the flow of immigrants continues at its present rate, or even on a reduced scale.

Australia will not have surplus foodstuffs available for export overseas and that we might not even be able to feed ourselves. Of all the rubbish I have ever heard, that statement is the limit !

Senator O’flaherty:

– The Treasurer himself made that statement.

Senator SEWARD:

– If he did so, I cannot understand it nor do I believe it to be true. I want to make it clear that I am commenting on the statement solely from the West Australian viewpoint. I do not contend that what can be done in that State can also be done in the eastern States, nor do I contend that what can be done in the eastern States can also be done in Western Australia. A few weeks ago, on a visit to Lake George, about 25 miles from Canberra, L witnessed a sight that I had never seen before and I hope I shall never see again. I saw paddoc!k3 in which every tree had been ring-barked and the ground was literally covered with dead timber. I saw one paddock of about 100 acres in which not 50 acres was growing grass because of the quantity of dead timber lying on the ground. Some attempt had been made to plough contour drains in an effort to prevent soil erosion, but from the tussocks that were there it was obvious that the ground had never been turned over. Nearby, two paddocks that had been sown to pasture and were covered with luscious green feed stood out from the surrounding country like a Mount Kosciusko in the Sahara Desert. Unfortunately, they covered only a small area. I saw a similar spectacle near Captain’s. Flat. If the land to which I refer bad been sown to pasture it would carry three or four times the number of stock it is carrying at present. The owners of the land are probably producing fine merino wool, but if it were sown to pasture it would be eminently suitable for the raising of fat lambs which would be of infinitely greater value to the State. That is all I propose to say about the eastern States because I frankly admit that I know little about them.

Food production in Australia is declining and will continue to decline until somebody wakes up. In Western Australia and Victoria primary production depends upon the use of large quantities of superphosphate, but how are we faring for that commodity to-day ? Last Friday a newspaper report stated that importations of sulphur from the United States of America during the current quarter would be 10,000 tons less than during the corresponding quarter of 1950-51. In the first quarter of the current year imports were 10,000 tons short of what they were in the corresponding period last year. If thos* deficiencies continue, as I believe they will because the United States of America has announced that exports of sulphur are to be cut, by the 30th June, 1952, we shall have received 40,000 tons of sulphur less than we got in 1950-51. That in turn will mean a loss during the year of 320,000 tons of superphosphate. Is it any wonder that the production of wheat and other primary products is beginning to decline? Western Australia, receives approximately 25 per cent, of the superphosphate used in this country and Victoria gets about 45 per cent. Obviously the maintenance of adequate supplies to those States is of great importance. If Western ‘ Australia’s share of the deficiency of superphosphate is to be 25 per cent., that State will be S0,000 tons of superphosphate short of its requirements next year. That quantity, added to this year’s shortage of approximately 100,000 tons, will mean that next year Western Australia’s superphosphate deficiency will be almost 200,000 tons. Is it any wonder that production is declining? What is the remedy? In answer to a question, the Minister for National Development (Senator Spooner), who, incidentally, is not responsible for this matter, stated recently -

A very strong inter-departmental committee, consisting of both technical and administrative officers, is watching day to day developments.

That committee was appointed about a year ago as a result of a report submitted by an inter-departmental committee constituted in the dying days of the Labour Government. A committee that proposes only to watch “ day to day developments “ will be of little use. We want a committee that will take action to ensure that Australia shall have adequate superphosphate by hastening the change-over from the use of sulphur to pyrites in the manufacture of this fertilizer. As I have said. the shortage of imported sulphur this year will amount to 40,000 tons. I predict that there will be an even greater cut next year. The American suppliers will not announce beforehand what the allocations for the ensuing quarters will be. Therefore we shall not know until the third or fourth quarters of the current year what the allocation for those periods will be. There is some talk at present of importing Russian superphosphate. That would be all right if we could get it, but I should like to know the chemical analysis of the Russian product, because superphosphate that suits the Russian climate might not suit Western Australia. However, apart from that aspect of the matter what would happen if a war occurred, and we were depending on overseas supplies of superphosphate and sulphur ? We might not be able to import any of those commodities at all. I believe, therefore, that we should develop our own resources. What wo want is not a committee that will watch day to day developments, but a committee that will act. So far as Western Australia is concerned, I should like to see the matter “placed in the hands of the Government of that State, because it knows the requirements of Western Australian farmers and could do the job better than anybody else. I fear that even the Prime Minister is not aware of the true position, because he was quoted by a newspaper as having said -

Now the farmers have won their fight for recognition of a just retail price I hope the incentive will be provided for the increased production of dairy products which Australia so badly needs.

But how can production be increased if farmers cannot get adequate supplies of superphosphate? If I were in Western Australia, I could produce dozens of letters from farmers to the Western Australian Farmers Union and to the interdepartmental committee appealing for 3, 5, or 7 tons of superphosphate in addition to their present inadequate ration. They cannot get the extra quantities because the superphosphate simply is not (here. This problem must be tackled. Addressing a meeting of the Phosphate Co-operative Company of Australia in Victoria recently, the chairman referred to the declining production of superphosphate and said that the co-operation of the State and Commonwealth govern- ments was required to rectify the position. There can be little doubt about that, but the interdepartmental committee should investigate other aspects of the problem. For instance, there are large deposits of gypsum at Lake McDonald, in South Australia. I understand that the deposits are estimated at 134,000,000 tons. Sulphuric acid and cement, two vital commodities, can be produced from gypsum, but plant cannot be provided for this work overnight. Expensive and delicate machinery is needed in addition, of course, to power and labour. Although the production of sulphuric acid from gypsum may not have been economic when the price of imported sulphur was about £10 a ton, sulphuric acid produced from pyrites will be much above that figure, and therefore further inquiry into the economic use of gypsum is called for. That is a matter that might well be investigated by the interdepartmental committee. I understand that the gypsum deposits at Lake McDonald are not far from the coast and that a wharf is available, but even if treatment there is not practicable, it might be possible to carry the gypsum to Adelaide for treatment. In any event the possibilities should be closely investigated. The Minister for National Development also said he hoped that Australian sulphuric acid manufacturers would not slacken their efforts to convert their plants to the use of pyrites. We all hope that. I have no doubt at all that efforts will not be slackened in Western Australia, but the manufacturers must have governmental assistance. It is the bounden duty of the State Government to ensure that sufficient superphosphate will be produced to meet the demands of agriculturalists. The Government of Western Australia would be only too pleased to accept that duty if it were given an opportunity to do so.

Senator Aylett:

– Why not leave it to private enterprise?

Senator SEWARD:

– Private enterprise is actually producing the superphosphate. I am not suggesting that the State Government should do that, but surely there is an obligation on the State to ensure that there will be sufficient superphosphate to meet the needs of the farmers. There are many things that the manufacturers of superphosphate do not know. For instance, in Western Australia 1,000,000 acres of new country is to be opened up in the next five years and probably much more will be opened up after that. The Western Australian Government knows how much land is to be settled each year, and how much superphosphate will be required by the new settlers. The Government should work in with the superphosphate manufacturers and the producers of pyrites to ensure that there will be no shortage of superphosphate. Little assistance can be given by a committee meeting on this side of .the continent, which knows little about Western Australia. For instance, I met one member of the committee, and when I suggested that Western Australia would require 600,000 tons of superphosphate annually by 1955 he laughed at me. He said, “ You will never want that “. But Western Australia could use 500,000 tons this year. There are, of course, other difficulties. For instance, the conversion of fertilizer works to the use of pyrites instead of sulphur requires some thought. The Minister for National Development said he hoped that the companies concerned would not slacken their efforts; but they have been trying for the last twelve months to convert their works. They have not been able to do so because of the lack of steel. Another difficulty will arise from the fact that when fertilizer works are converted to the use of pyrites, their capacity is reduced by about 30 per cent. Therefore, the plants will have to be not only converted, but also extended to keep the supply of superphosphate up to the demand. In Western Australia two years ago plans were drawn up for the erection of new superphosphate works at Albany, but the project has been delayed because of the shortage of steel and other materials. Some imported steel is being used, but if the new works have to use imported steel instead of the local product simply because the miners will not produce sufficient coal to maintain steel production in this country, not only will the works cost more to erect but also f.l’e superphosphate that ultimately will be produced will be dearer. Therefore,

I appeal to the Government to facilitate the despatch of steel to Western Australia for this job. The Government surely has sufficient authority under the Defence Act to direct steel to undertakings of national importance such as the construction and extension of fertilizer works. If the United States of America suddenly decided that we could not have any more sulphur, or if war interrupted our imports of this commodity, agricultural production in this country would not merely decline ; it would simply collapse. There is no time to be lost. This is one of the most important problems facing the- Government to-day, and I urge it to consider the matter earnestly in conjunction with the States. The Commonwealth should give Western Australia the assistance and information that it requires. There are three questions to which I should like an answer. They are: What quantity of sulphur will be available to Australia in the next two years; what has been done in the last twelve months towards substituting pyrites for sulphur in the production of superphosphate; and what proportion of superphosphate will be made from pyrites this year compared with last year? Before any real steps can be taken to increase food production, the superphosphate problem must be solved.

Senator O’FLAHERTY:
SOUTH AUSTRALIA · ALP

– Is pyrites being used to produce superphosphate in Western Australia now?

Senator SEWARD:

– Yes, to the extent of approximately one-third of our production, but the problems are great. We have a deposit of pyrites that is estimated to be sufficient to meet our needs for 100 years; but it is 470 miles from Perth, and SOO miles from Albany. Those are long distances to haul the raw material. The deposits are mined solely for pyrites; they have no other mineral content. Consequently, production costs are high. The sulphur content is about 25 per cent, compared with approximately 10 per cent, or 11 per cent, in the South Australian deposits. Reference was made by the Minister for National Development recently to a British, committee that had been appointed to search for new supplies of sulphur. I am much more interested in the possibility of getting elemental sulphur out of pyrites. At the present time, with us it is 25 per cent. By the flotation process it is brought up to 48 per cent. That is going to confront the superphosphate manufacturers with a big problem, because there is an equal amount of residue to be disposed of after the pyrites has been roasted. There are many problems associated with this matter, which demand early investigation.

Wheat-growers have had to sell a certain proportion of their crops at a low price for stock feed. I hope that the States will pass legislation to rectify that position, because this is one of the things that is hurting the primary producers. A few years ago, when there was another government in office, somebody who knew nothing about dairying was responsible for the issue of a regulation to compel farmers who sold even 1 lb. of butter to register as producers and send in returns every week. The result was that about SO per cent, of the farmers in Western Australia sold their cows and bought factory butter. That is one of the things that helped to ruin the dairying industry. Humorously enough, the object of the regulation was to increase the amount of butter exported to Great Britain. However, the result was that the local people used more factory butter and there was less then available for export.

I shall now deal with the export lamb business that has been mentioned. In Western Australia we set about to evolve the best lamb for this purpose. The Swandown lamb was found to be better for the London market than the New Zealand lambs. However, when the meat contract was entered into it was found that the same price was paid for first grade as for second and third grade lambs. As a result the sheep-farmers are not prepared to break up their merino flocks in order to produce crossbred lambs. Therefore, the number of Swandown fat lambs produced is decreasing every year. High rates of taxation also play an important part in connexion with production. About two years aso, at the Royal Show in Western Australia, I met a lady who was one of our leading Jersey breeders. I said to her, “I am glad to see you here again”. She said, “ This will be the last year that I shall exhibit “. I said, “ Why ? “ She replied, “ I want to retire, but what am I going to do? I will have my house, but if I sell my cattle the taxation people will take so much that I will not have enough left on which to live.” Is it any wonder, in the light of these difficulties, that many people are giving up farming in disgust ? They are faced with shortages of farming machinery and fencing wire, as Senator Piesse has already mentioned. The year before last, on a blisteringly hot day, I visited the farm of a soldier settler in the eastern district of Western Australia. I was told that he had a fine crop if only he could get it off. Why could he not get it off? When I reached the place there did not appear to be anybody about. Then I noticed his wife sitting in the crop with a gun to keep the emus out so that her husband could get the crop off. He had an abundance of water and feed, but through lack of fences was unable to run sheep and gain the advantage of high wool prices. Unless we do something to rectify this state of affairs I do not know where matters will end. Speakers on the other side have suggested that we should use the National Welfare Fund to establish men on the land to increase food production. They omitted to say what the farmers were going to do when they got on the farms.

Senator Aylett:

– Who said that?

Senator SEWARD:

– A member of the Opposition made that suggestion when Senator Aylett was absent from the chamber. Senator Piesse has already referred to the shortage of farming machinery. A farmer is unable to cultivate his land unless hs has the necessary implements. It has been estimated that there is a shortage of more than 64,000 miles of plain wire and more than 26,000 miles of barbed wire for farmers in Western Australia.

Senator O’flaherty:

– Has the honorable senator ever handled barbed wire ?

Senator SEWARD:

– Yes.

Senator O’flaherty:

– Why put barbed wire around properties? ^ Senator SEWARD. - Apparently Senator O’Flaherty does not fully appreciate the damage that is caused to crops in Western Australia by dogs and emus. Give us the 64,000 mile3 of plain wire-

Senator O’Flaherty:

– We will see that you get it when Labour regains office in Western Australia.

Senator SEWARD:

– A recent survey Of agricultural requirements revealed that there is a shortage of 2,808 headers and 2,136 harvesters in Western Australia. From those figures, it is reasonable to assume that on at least 3,000 properties rattle-trap machines from ten to fifteen years old are scattering around more grain than they are putting into the box, or breaking down continually. There i3 also a shortage of seed drills and small ploughs. If the coal-miners produced more coal for use in the manufacture of steel, the production of machinery and wire could be increased.

I have heard a lot of criticism about the proposed importation of Japanese toys into Australia. Had it not been for supplies of Japanese barbed wire, wire netting and galvanized iron, the farmers in Western Australia would be worse off than they are to-day, although they have had to pay three times the price of Australian materials. These matters are vitally affecting the production of food in this country. I hope that active steps will be taken in the near future to overcome these shortages.

I was very amused to hear honorable senators opposite make an appeal for more money to be granted to the States for roads. They claim that the heavy transport vehicles that travel over our roads regularly are knocking them to pieces. This is not the first time that I have heard this suggestion. From time to time during the last ten or fifteen years the States have appealed to the Commonwealth for more money from the tax on petrol for roads. Under the ten years agreement Western Australia made wonderful advances. Subsequently a three years agreement was all we could get from the Labour Government. Therefore, honorable senators opposite must accept responsibility for the state of our roads.

I am sorry that to date there has bean no indication that the Government intends to assist the gold industry, which is of very great concern to Western Australia. I understand that the Treasurer (“Sir Arthur Fadden) intends to meet a representative from that State soon. I hope that the Treasurer’s health will enable him to do so. He has been under a big strain lately. The Government should pay urgent attention to the serious position of the gold-mining industry, which has been in a serious plight for years. I hope that active steps will be taken without further delay to place the industry on a sound footing. While South Africa has been able to sell gold at premium rates, Australia has not been permitted to do so. An early decision in this connexion is of vital importance to Australia, because the demand for gold at premium rates may not be unlimited. We would look very foolish if, when it was agreed to sell gold at premium rates, we found that the market’s capacity had been fully absorbed by South Africa and Canada. I trust that this matter will be considered urgently.

Senator AMOUR:
New South Wales

Senator Seward has condemned the Government for failing to ensure that an adequate supply of farming machinery and wire was made available for the farmers. The honorable senator also claimed that our late leader, Mr. Chifley, had transferred prices control to the States. The honorable senator should know that the Liberal party strongly advised the people not to approve the referendum to alter the Constitution to permit the Commonwealth to continue to control prices in time of peace. Prior to the referendum the Labour party was practically unable to obtain advertising space in the newspapers, and radio broadcasting time, in order to inform the people of the real position. Everybody knows that without prices control and control of profits there can be no stability of our economy.

Senator Seward raised no objection to the importation of superphosphate from Russia. He was concerned only about whether the quality of Russian fertilizer is suitable for Western Australia. If the Government is very concerned about this aspect of the matter it should make representations to Mr. Churchill, the Prime Minister of Great Britain, who, I understand, intends to arrange a conference with Generalissimo Stalin. Since their previous meeting at Yalta, world conditions have been vitally disturbed. The honorable senator stated that if the coalminers produced more coal, Broken Hill Proprietary Company Limited would be able to manufacture more wire. Actually a subsidiary, Lysaght Brothers and Company Proprietary Limited, obtains th«i raw material from the parent company and manufactures wire. More coal has been produced in Australia during this year than ever before. Even if Broken Hill Proprietary Company Limited owned ten more coal mines, unless it supplied sufficient raw material to the subsidiary company, more wire would not be manufactured. Yet the honorable senator condemns the coal-miners. He does so because he lacks knowledge of the ability of miners to produce coal and of the ability of the Broken Hill Proprietary Company Limited, to produce steel. I remind him that thousands of miles of fencing were washed away during disastrous floods last year. The farmers had to use steel posts, but insufficient quantities of them could be manufactured, although their manufacture received a certain priority. The result is that many farmers have fences on their properties which consist of only one wire. The Government has done nothing to develop the steel industry of this country. The steel works at Port Kembla and Newcastle are both on the coastline. I suggest that the Minister for National Development (Senator Spooner) and the Government should consider whether, in the interests of decentralization and defence, it would not be advisable to erect steel works in the hinterland, where materials would be available and where the works might at least be safe from initial attack. I remind the Minister that there were once steel works at Lithgow, but they were removed to Port Kembla.

This budget has been condemned by members of the Australian Labour party and by the people as the worst budget ever presented by any government. Instead of making the rich people squeal, as the

Prime Minister (Mr. Menzies) said it would, I suggest that it will take from the tables of the people the commodities that they need. Instead of making the manufacturers, the distributors and the retailers bear the burden of increased sales tax, the budget proposals will place the burden on the workers. They are the people who will be obliged to provide the millions of pounds of revenue by way of sales tax. They also will pay the major proportion of excise duties. The prices of goods are constantly increasing and the people must meet them. The Government says that in order to prevent inflation and stop luxury buying it will withdraw spending power from the people. It is reasonable to ask what the Government means when it speaks of luxury buying. I suggest that it means that the wife of the worker shall not be able to purchase a refrigerator, a washing machine or electrical equipment for her home. The wealthy people already have those amenities. Now the Government says, “We will tax them so that the workers will not be able to have them “.

When this budget was introduced, every newspaper in the country attacked the Government because of it, but the newspapers did not receive support from business interests, because they appreciate that it is the people who will have to pay the increased sales tax. Millions of pounds have been and are being expended in bringing immigrants to this country and in housing them here, but the Australian baby cannot be washed without it involving a tax. One may wash one’s’ dog without being taxed, but if the baby is washed there . is a tax. Prices have been allowed to spiral, with the result that there have been great increases of the basic wage. The last increase was 14s. a week, and the next one will probably exceed even that record. When the Commonwealth Arbitration Court recently estimated the amount of money that is required to buy certain goods within the “ C “ series index it considered that because of increased prices, an additional amount of 14s. a week would be necessary. Yet the Government will take from the people, by means of taxation, some of that 14s.

A very important feature of the budget, according to the Government, is that it will relieve the wealthy of some of their money. I point out, however, that before the presentation of the budget, if a person had three wireless sets he paid £1 for a licence for the first set, and 10s. each for licences for the other two. He therefore paid £2 in all. Under the present budget proposals the worker who has only one wireless set will pay £2 for a licence and the man who is fortunate enough to own three sets will also pay £2. The worker has not the wherewithal or the necessity to obtain more than one set.

We have been provided recently with a fine example of the result of the Australian Government handing over controls to the States. Two State governments would not agree to an increased price for butter. The result was that in New South Wales merchants professed to have no butter for sale but when the increased price was agreed to by the Governments of New South Wales and Queensland, within a half hour .Sydney shops displayed notices saying, “ Plenty of butter available It was possible to go in and buy 4 lb. or 6 lb., whereas only an hour before it was not possible to obtain any butter at all. Previous to that, shopkeepers had been doling out 4 oz. or 6 oz. a week to the public, because they were awaiting the increased price. Tho great butter concerns backed them up in their efforts to rob the people. The State governments cannot control that kind of thing, and until the Australian Government controls prices and profits, and fixes wages, there can be no balanced economy. This Government is merely drifting along towards the day when the bubble will burst. When that happens a lot of good Australians will be hurt. I ask the Government to do something to restore value to the £1. The Government parties promised that if they were elected to office they would reduce taxation, but instead, taxation has been increased. The budget will tend to hurt many people, and those who will be hurt most by it will be the working people, the nation builders.

I now wish to deal with a matter that concerns the Repatriation Department,

And I am pleased that the Minister for

Repatriation (Senator Cooper) is in the chamber. Yesterday I asked him a question regarding the treatment of soldiers in repatriation hospitals. My mind moves back to the time when I was an inmate of the Prince of Wales Military Hospital at Randwick. At that time a patient at the hospital was suffering from a duodenal ulcer which was attributable to war service. He also developed appendicitis and was taken to the Royal Prince Alfred Hospital, where the appendix was removed. After the operation he was returned to the Prince of Wales Military Hospital, where he was operated on for the duodenal ulcer. In reference to another case, I asked the Minister whether something could be done. His reply was to the following effect, “ An exserviceman whose health is in such a dangerous state that it would be unwise to move him to another hospital would be treated at the repatriation hospital “. I have here a letter that has been forwarded to me by Mr. Lamb, the Speaker of the New South Wales Legislative Assembly, to whom it was addressed by Mr. Porter, the acting honorary secretary of the Guildford sub-branch of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia. Mr. Lamb’s letter stated -

Enclosed is a letter from Mr. A. R. Porter, acting honorary secretary of the Guildford sub-branch of the R.S.L., Box 7, Post Office, Guildford, together with copies of documents concerning the case of Mr. T. E. Weekes. Mr. Weekes appears to have been treated rather shockingly, and it is the wish of the Guildford Returned Soldiers that the matter should be ventilated in Parliament.

That letter has been circulated, and the Minister knows all about it because he has received a copy of it. The honorable member for East Sydney (Mr. Ward) has taken action concerning it, and so has the honorable member for North Sydney (Mr. Jack). Others have also taken action. The Minister, however, has done nothing. He has proved in this instance that he is merely a rubber stamp and that the department runs him rather than that he runs the department. I should like honorable senators to listen to the record of the man to whom I refer. The letter is as follows : -

Mr. Weekes is a limbless soldier who was wounded six times during World War I. Throughout his service he was with the 4th

Battalion, “A” Company. The nature of his wounds were as follows: -

Leg wound, Dardanelles, August, 1915; stomach wound, Dardanelles, November, 1915; leg wound, Bullecourt, 1910; head wound, Mouquet Farm, 9th August, 1916; back wound, Passchendaele, 1917; right arm blown off, and burst ear drum, between Royart and Peronne, August, 1918.

On the 12th June, 1951, Mr. Weekes was unable to report for work at the Sydney County Council because of headaches in the region of the old scar wound on his forehead and deafness in the ear damaged when his arm was shot off. After a number of visits to Grace Building, Dr. Grey of the Repatriation Department advised Mr. Weekes that, in view of the past history of his wounds, the ear trouble which he then treated was attributable to his war service. At the same time, Dr. Grey pierced his antrums to relieve the headache in the front of his forehead. Mr. Weekes was advised to go for a holiday and rest. However, his condition became worse and he was brought back from the Mountains and admitted to Yaralla Hospital on the 15th July. Following a head X-ray on Tuesday, the 17th July, Dr. Swane, a resident, diagnosed his complaint as cerebral tumour. This diagnosis was confirmed on the 20th July by Dr. Dowling, visiting brain surgeon. On the same day Dr. Swane informed Mr. Weekes that Dr. Miller - another visiting surgeon - would examine him on the 31st July. Meanwhile, on the 27th July, Mr. Weekes was retired from the Sydney Council’s service on a certificate from Dr. Swane at Yaralla to the effect that he would not be able to resume his occupation.

Following a consultation between Drs. Miller and Dowling on the 31st July, Mr. Weekes was informed that they would operate to relieve his condition on the following Tuesday, the 7th August. Dr. Swane informed Mr. Weekes that Dr. Dowling was of the opinion that for the operation to have a chance of success it must be carried out in a matter of days; this was because of a deterioration of Mr. Weekes’ condition, which would prevent the operation being done if he became much worse. Later the patient’s condition showed some improvement.

On Wednesday, the 1st August, the following letter from the Repatriation Department was left for Mr. Weekes at Yaralla Hospital and picked up by his wife on the same day: -

Repatriation Dept.,

page 1438

R32605(M)AJC/SM. H15655

30.7.51.

Mr. T. E.Weekes, 44 Benelong Rd.,

Cremorne. N.S.W. (In-patient R.G.H.)

Dear Sir,

With reference to your claim for acceptance of “Headaches” and “Debility” as due to war service, it is desired to inform yon that the Repatriation Board was unable to accept your present condition as being attributable to your war service.

You are therefore ineligible to receive medical treatment at departmental expense or to the payment of a war pension in respect thereof. But, if you so desire, you may appeal against this decision to the Repatriation Commission.

If you intend taking this action, your appeal should be lodged in writing, and should set out the grounds on which it is based, together with any fresh evidence you desire to submit.

Yours faithfully, (Sgd.) R. W. Carswell,

Deputy Commissioner

The following morning Mrs. Weekes saw Mr. R. W.Carswell, Deputy Repatriation Commissioner, and lodged an appeal against the department’s decision. Mr. Carswell informed Mr. Weekes that, in view of the urgency of the case, he would arrange for the appeal to be dealt with expeditiously.

Apparently the appeal was rejected, as the papers were forwarded to Melbourne, where subsequent appeals are heard.

On the same morning, Mr. Newington, Repatriation Officer of the R.S.L. undertook to have Mr. Weekes retained in Yaralla pending the hearing of his appeal.

At 5 p.m. on Friday, the 3rd August, Mr. Newington advised that the appeal had been rejected in Sydney and the case referred to Melbourne.

On Saturday, the 4th August, Mr. Jack, M.H.R. for North Sydney, contacted Senator Cooper, the Minister for Repatriation, at Canberra, and informed him of the foregoing facts and asked that, in view of the urgency of the case, and medical opinion that a move would prejudice the prospect of a successful operation, approval be given for the operation scheduled for Tuesday, the 6th August, to be carried out at Yaralla subject to Mrs. Weekes undertaking to indemnify the Repatriation Department for the costs incurred.

Senator Cooper informed Mr. Jack that, after visiting Brisbane on Sunday, the 5th August, he would personally examine the file in Melbourne at 9 a.m. on Monday, the 6th August. Senator’s Secretary, Mr. Honeysett. advised Mr. Jack on the morning of Monday, the 6th August, that Senator Cooper had given instructions for Mr. Weekes’s operation to proceed at Yaralla on the following day. Later on the same day, Mrs. Weekes was informed at Yaralla that her husband’s name had been removed from the operating schedule, on which it appeared at 11 a.m. on the following day, and the position remained the same as it was on the preceding Wednesday, when she had been told that she must arrange for her husband’s removal to some civilian hospital. That. evening Mr. Jack was informed of the Repatriation Department’s decision and he undertook to contact Senator Cooper or his secretary early the following morning. On the same evening, Mr. Jack contacted Dr. Manning at Yaralla, who indicated that he had no knowledge of

Senator Cooper’s instructions. At the same time attempts were made to contact the Deputy Repatriation Commissioner, Mr. Carswell, who had been off duty ill on that day, but the inquiries were referred to his assistant, Mr. Chidgey. Mr. Chidgey was informed of Senator Cooper’s message to Mr. Jack and asked if he could arrange for any nursing preparations for the operation to proceed on the following day, subject to confirmation of Senator Coopers message to Mr. Jack.

Mr. Chidgey indicated that he was unable to give any instructions but that lie would communicate with Dr. Manning, who it had been ascertained, was the Senior Medical Officer on duty on the evening of Monday Oth August.

Meanwhile Mr. E. Ward, M.H.R., who had been making parallel representations to Senator Cooper for approval for the operation, undertook to endeavour to have the preparations proceed. At 9.45 p.m. Mrs. Weekes called at Yaralla in an endeavour to ascertain from Dr. Manning if the operation would or would not take place on the following morning. Dr. Manning, who was in the mess, sent a message that he would be unable to see Mrs. Weekes that night.

On Tuesday 7th August Mr. Chidgey advised Mrs. Weekes that Senator Cooper had informed the Department that he would give approval for the operation to be done at Yaralla if medical evidence was available that it was a matter of life or death. Mrs. Weekes communicated with Dr. Dowling, the surgeon who wag to have operated, and he informed her that if the operation was to have any prospect of saving her husband’s life, it must be carried out within a matter of days.

Meanwhile Mr. Jack communicated with Senator Cooper’s secretary, Mr. Honeysett, who confirmed his message of the previous day, with the proviso that Senator Cooper had given instructions that if it was a matter of life or death the operation should proceed.

On Wednesday, the 8th August, Mr. Newington of the R.S.L. communicated with Mr. Chidgey, who confirmed his impression of Senator Cooper’s instructions. Mr. Newington also communicated with Dr. Saxby, the. Assistant Medical Superintendent at Yaralla, who informed him that in his opinion the operation on Mr. Weekes was not a matter of urgency and that as his present condition was in “no way attributable to his war service and an operation was not a matter of urgency, he could not be done at Yaralla. Dr. Saxby indicated that arrangements were being made for Mr. Weekes’ admission to St. Vincent’s Hospital, but that if Mr. Weekes’ condition deteriorated prior to a bed being available in that hospital then an operation would be conducted nt Yaralla. Mrs. Weekes was then advised to see Dr. Saxby and endeavour to reconcile his opinion with those expressed with the Hon. Brain Surgeon Dr. Dowling.

Mrs. Weekes remained at Yaralla from 1 p.m. until 7.30 p.m. on Wednesday, 8th August, but was unable to see Dr. Saxby. However, on her arrival she was informed that arrangements had been made to transfer her husband that afternoon to St. Vincent’s, and she was asked if she would take the X-ray plates with her. Mr. Weekes was not moved out during the afternoon and Mrs. Weekes was unable to ascertain what arrangements had been made for the following day. When Mrs. Weekes arrived at Yaralla on Thursday, the Oth August, she was informed that no bed could he obtained at St. Vincent’s Hospital and that Dr. Swane was endeavouring to arrange for Dr. Dowling to visit Yaralla and carry out the operation on Friday, the 10th August. Later the same day Mrs. Weekes was informed that a bed had been secured in St. Vincent’s and that her husband would be shifted at 2 p.m.

At 2.30 p.m. on the 9th August Mr. Weekes was taken from Yaralla and admitted to Ward 9 St. Vincent’s Hospital at 3.30 p.m. At 8.30 p.m., on the 10th August Dr. I. D. Miller operated on Mr. Weekes at St. Vincent’s Hospital. Later that day Mrs. Weekes waa informed by a Medical Officer at the Hospital that it was not possible to remove the tumor and that Mr. Weekes would be discharged on some day about the middle of the following week, that is about Wednesday, loth August.

In my opinion, the Minister has put up a very poor show. This man suffered a severe head wound. I do not know what causes a tumour, but I assume that a head wound could be a contributing factor. Bad food supplied to soldiers while on service is accepted as contributing to the development of duodenal ulcers, so I can see no reason why a head wound should not be accepted as contributing to the cause of a cerebral tumour. “When Mr. “Weekes went to hospital, he was juggled about and obtained no satisfaction, because there is an anomaly in the Repatriation Act. I appeal to the Minister for Repatriation to see that the act is amended so that cases like that of Mr. Weekes may be attended to at the hospital without it being necessary to communicate with the Minister. The Commissioner for Repatriation should be given discretionary power, and he should delegate his power to the deputy commissioners. If that were done, there should be no need for an old soldier to be fooled about as Mr. Weekes was. His treatment is a disgrace to Australia. If that is how soldiers are to be treated, I arn not surprised that the Director of Recruiting is finding it difficult to enlist recruits. The Minister for Repatriation has treated this exserviceman in much the same way as the Government, throught its budget, has treated the people. It is obvious that the

Minister cared very little for the welfare of the ex-servicemen, and the Government cares nothing at all for the welfare of the people, but only for those wealthy interests which it represents.

Senator ANNABELLE RANKIN:
QUEENSLAND · LP

– I desire to place on record my whole-hearted support of the Government’s budgetary proposals, because I believe that this is a most courageous budget and because I have a very real appreciation of its strength. It represents, I believe, a really statesmanlike attempt to grapple with the problem of rising prices and inflation that is causing grave concern in this country to-day. Because of the high responsibilities that rest upon the present Government to combat the rising tide of inflation in a time of near economic crisis, I regret greatly that members of the Opposition have not applied themselves earnestly to an examination of the situation that confronts the nation. Instead of listening to a. debate on a high level, and one worthy of the serious issues before us, we have had to listen to the usual party-political insincerity and. manoeuvring. I have listened in vain to hear any analytical reference to the economic health of Australia as disclosed, by the very important paper which sets out the national income and expenditure for 1950-51. Members of the Opposition have chosen, instead, to thump the party drum continuously and to indulge in criticisms of isolated items in the budget. A strong argument in favour of this budget and its formula for restraining the galloping of prices is that Labour is so silent about the’ budget and its impact on the nation. However, I commend to honorable senators opposite a study of the very important information contained in the “National Income and Expediture “ paper, and to give close consideration to the welfare of the nation and to the effect on our economy of rising prices and shortages. Those are the real problems that confront the people of this country to-day. and every responsible person in the community must feel the need to grapple with them. I believe that we should abandon the old line of fiery denunciation of the opposing political party and no longer indulge in ineffective and carping criticism of minor details. Instead, we should grapple with the real problems of- rising costs, which threaten to submerge our standard of living, and of restricted housing, which threatens to alter our whole conception of the family as the unit of society, because I suggest that those are the concerns that are uppermost in the mind of every responsible Australian to-day.

I particularly commend to honorable senators the very important figures showing the aggregate national income that appear on page 1 of “National Income and Expenditure”. In the base year, 1939, our people had an aggregate income of £779,900,000. Last financial year, 1950-51, our aggregate national income amounted to £3,101,000,000. In other words, the aggregate income is now four times the money value of what it was in pre-war days. Although our national income for the last financial year reached the staggering total of £3,101,000,000, little or no reference has been made to that vital fact by members of the Opposition. Probably that was because it did not suit the game of party politics that they are apparently resolved to play. The rapid growth of our national income is a profoundly disturbing indication of the extent of the inflation that has taken place. Again I commend honorable senators opposite to examine and consider the statistics given in the budget papers.

The present Government is confronted by the fact that the real value of our money is rapidly declining as a result of the inflationary influences, internal and external, that are continually affecting our economy. Any administration that is confronted by such a dangerous situation must take the most energetic measures to correct that situation. The Treasurer (Sir Arthur Fadden) has, in the ordinary course of his public duty, presented a budget that is expressly designed to cope with this alarming situation; and I impress upon honorable senators that that situation may become even worse before it begins to improve. I believe, therefore, that the budget represents a systematic and statesmanlike plan to counter inflation. For that reason, if for no other, Labour leaders should support the Government’s proposals, which within the powers possessed by the

Commonwealth, are an honest attempt to curb rising prices, without making any attack on wages. I am convinced that the Government’s proposals will ultimately restore real purchasing power to the wages of the workers. The Opposition, which has failed utterly to voice any informed or enlightened criticism of the budget, has been content to indulge in carping and stereotyped criticism of isolated proposals. Opposition senators have revealed no real understanding of the very significant figures mentioned in the budget, nor have they evinced any serious concern about the plight of our nation, which is faced with the urgent need to re-arm in order to protect itself at a time when inflation promises “ easy money “ to the unthinking.

May I illustrate my point by giving one brief illustration. The Leader of the Opposition in the House of Representatives (Dr. Evatt) stated that the Treasurer had probably underestimated revenue and overestimated, expenditure, and would be passing large sums into trust funds. How naive is that statement! Of course, the right honorable gentleman was probably thinking of the record of previous Labour administrations, and he thought, perhaps quite naturally, that this Government would do just what Labour did when it was in office. May I remind the Opposition now that when Labour was in office it consistently underestimated the national revenue, as I shall prove by citing some figures that have been used in this chamber previously. In 1944-45 taxation was estimated to yield £327,000,000, but it actually yielded £346,000,000- £18,000,000’ wrong! In 1945-46 the then Labour Treasurer estimated that revenue from taxation would yield £341,000,000. He actually collected £358,000,000, so that he was wrong by £17,000,000. In 1946-47 he estimated revenue from taxation to yield £355,000,000, but ultimately collected £381,000,000- £26,000,000 wrong! In 1947-48 he estimated that taxation would produce £364,000,000, but his government actually collected £424,000,000 ; se that the error on that occasion amounted to £60,000,000. I say, therefore, that it is quite clear that Labour consistently avoided showing a substantial surplus in the national accounts by resorting to the disingenuous practice of transferring substantial sums to trust funds. That fact cannot be disputed, because the statistics of Labour’s management of the nation’s accounts are public and are available for all to read. To-day, the Leader of the Opposition in the House of Representatives has accused the present Government of doing just what Labour did when it was in office. How very insincere !

I turn now to the subject of treasurybills. I think that it has been most disappointing that members of the Opposition, who have roamed far and wide in their discussion of a multitude of Commonwealth and State activities, should have had nothing to say on the subject of treasury-bills. What is the treasurybill position to-day? Treasury-bills are generally understood to be short-term securities issued by the Government to meet day-to-day commitments that have to be paid for in advance of revenue. They are impermanent in character, and, theoretically, they should disappear from the Commonwealth accounts at the end of each financial year. Actually, a reasonable but controlled volume of treasurybills seems to be a necessary, if semipermanent, feature of Commonwealth accounts. Unfortunately, during World War II. the Commonwealth had to resort to the issue of treasury-bills to assist to finance our war effort. I want to make it quite clear that I am, at all times, opposed to withholding from the public clear .and explicit information about anything that affects their well-being. For that reason I am sure that it is desirable, even at this late stage, to tell the public the facts., The plain truth, as I see it, is that despite the alleged success of war loans, the imposition of restrictions on all other forms of investments, and notwithstanding terrifically high taxation, the Labour Government that was in office during World War II. did not, and could not, raise sufficient money to meet the enormous costs of that war, and had to resort to treasury-bills to finance the gap between the receipts and expenditure. By the 30th June, 1944, the treasury-bills held by the public, and that means the Commonwealth Bank, reached the staggering total of- £376,000,000. Of course, that is not really the total; it is merely the total of bills issued to the Commonwealth Bank. Another £25,000,000 worth of bills was issued in London, and socalled internal treasury-bills of an even greater value were issued.

The issue of such an enormous volume of treasury-bills constitutes, I believe, a basis of inflation. They represent destruction, not production. They are, in fact, the black cloud on our economic horizon and are a very real danger to the stability of the purchasing power of the Australian £1. Realizing to the full, the menace of this large unfunded debt, what did the then Labour Government do? It did exactly what the right honorable member for Barton (Dr. Evatt) accuses the present Government of doing. It underestimated revenue and overestimated expenditure, and passed large sums to trust accounts to conceal its actual surpluses. It then proceeded, by various careful accounting procedures, to reduce the treasury-bills outstanding. However, I make it quite clear that I do not criticize the former Government for reducing the amount of treasury-bills outstanding. On the contrary, I believe that it was the wisest thing to do. In fact, some people might say that it was the only thing to do. But why keep silent about the fact that those bills were a menace to the stability of our economy, and about the necessity for converting unfunded debt into “funded” debt as quickly as possible? The true situation may not be understood by all Opposition senators. Perhaps not all of them are interested enough to follow the intricacies of the published accounts of the Treasury. The previous government did reduce the huge amount of treasury-bills outstanding at the end of the war. The amount was progressively reduced from £376,000,000 in 1944 to £278,000,000 in 1947, to £20S,000,000 in 1948 and to £123,000,000 in 1949. Further reductions have since been made. On the 30th June last the amount outstanding was £110,000,000.

Honorable senators will observe that the Treasurer has budgeted for a surplus of £114,500,000. I hope that he achieves that objective because I believe that if he does so, treasury-bills outstanding in the hands of the public will be reduced to the amount needed to finance seasonal requirements, the menace of our unfunded debt will disappear from the national accounts and the purchasing power of our money will be substantially stabilized. In all sincerity I say that I am convinced that this is a truly antiinflation budget and that the first step towards the restoration of the stability of our £1 is the redemption of outstanding treasury-bills.

It has been a matter of profound regret to me that no Opposition senator who has taken part in this vital debate touched upon the real problems that face Australia. Honorable senators opposite indulged in carping criticism and thumped the party drum, but they did little else. The problems that confront us are so serious that we all should determine to grapple with them. The greatest problem that faces Australia is caused by rising prices, the diminishing purchasing power of the worker’s £1, and the vulnerability of our economic structure. In this courageous budget, the Treasurer has made a statesmanlike attempt to grapple with that problem because he realizes its extent and its possible effect upon our future. This budget is an honest attempt to check the very serious problem of inflation. If inflation is not checked the economic life of this community will be injured and very seriously disturbed for a long period. I sincerely support the budget and I congratulate the Treasurer upon the courageous action that he has taken in formulating it.

Debate (on motion by Senator Arnold) adjourned.

page 1442

INCOME TAX AND SOCIAL SERVICES CONTRIBUTION 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.

This bill embodies the Government’s proposals for adjusting the incidence of income tax and social services contribution on both individuals and companies in respect of the financial year 1951-52. These proposals are designed primarily to assist in the fight against inflation, by drawing off spending power from both individuals and companies, and enabling the Government to budget for a surplus.

There are five main proposals. The first is that individuals should pay additional income tax and social services contribution. Secondly, it is proposed to exempt from liability to tax persons of pensionable age in the lower income groups. Thirdly, the application of the averaging provisions to the incomes of primary producers is to be modified. Finally, the bill provides for an increase in the rates of tax payable by companies and for the introduction of advance payments bv companies.

As regards individuals, the bill provides for the re-enactment of the rates imposed for the financial year 1950-51 and for the imposition of an additional tax equal to 10 per cent, of the 1950-51 tax. The increased liability for the financial year 1951-52 will apply to income derived during the current year ending the 30th June, 1952. The increased instalment deductions from salary and wages operate, however, as from the 1st November, 1951. In the case of persons who receive income other than salary or wages, the provisional tax in respect of 1951-52 incomes will be appropriately increased.

It is expected that the additional tax of 10 per cent, will yield £38,000,000 on 1951-52 incomes, but because deductions from salary and wages have been made at the 1950-51 rates for four months of the current year, and because all assessments containing provisional tax will not have been paid before the 30th June, 1952, it is estimated that actual collections in the financial year 1951-52 will be increased by £25,000,000.

Schedules have been circulated amongst honorable senators that compare, in respect of taxpayers with varying family responsibilities, the tax payable under the bill with that previously payable and with that payable during war-time. It is apparent that the proposed rates are considerably lighter in their incidence than the peak war-time rates. A schedule comparing taxes payable in the United Kingdom and New Zealand with those in Australia has also been circulated. From this it will be seen that even after the additional 10 per cent, levy, taxation of individual incomes is considerably lower in this country than in either of those countries.

It is a matter of some concern to the Government that at present many aged people are required to pay tax on incomes which are no more than the age pension for which they are ineligible by reason of their income. To remove this anomaly, it is proposed that men who have reached 65 pears and women who have reached 60 years of age on or before the last day of the year of income shall be wholly free from tax if their net income for that year does not exceed £234. In the case of married couples, both of whom meet these tests, tax will not be imposed unless their combined net income exceeds £468. In order to ensure that the tax payable is not excessive in those cases where the income just exceeds the exemption points mentioned, provision is made for a graduation of the liability. In no case will the tax be greater than one-half of the excess of the net income over £234 or £468, as the ease may be. The concession first applies to income derived during the current year by aged persons who have been residents of Australia during the whole of the year.

The bill also provides for the modification of the averaging system as it affects the incomes of primary producers. For 30 years the income tay rates applied to the incomes of primary producers have been determined by reference to the average of the taxable incomes of the current year and the four preceding years. In 1937, following the recommendation of the Royal Commission on Taxation 1932-34, averaging was withdrawn from other taxpayers but continued for primary producers. It was considered that because of their fluctuating incomes, primary producers should continue to be subject to averaging as it resulted in their paying much the same tax over a period of years as other taxpayers deriving the same total income in reasonably even instalments. There has, however, always been a serious drawback to the averaging system in that it operates to the advantage of the taxpayer in years of rising incomes and to his disadvantage when incomes are falling. In this connexion I think I should repeat what the Royal Commission on Taxation said -

In theory the assessment of tax at an average rate appears to be attractive but it is not entirely satisfactory in its incidence. The taxpayer whose income is increasing pays less and he whose income is decreasing pays more than he would if he were assessed at the rate applicable to his income of the year preceding the year of assessment. Assessment at an average rate, therefore, benefits the taxpayer who is in the better position to pay and penalizes the taxpayer whose means to do so have been impaired.

When the royal commission prepared its report, the averaging system did not have any significant effect upon the total liability of primary producers. For instance in 1931, the total tax liability of primary producers on their 1931-32 incomes was less than £400,000. In those circumstances no serious consequences flowed from the deficiencies of the averaging system as outlined by the commission.

Incomes of primary producers have risen to unprecedented heights over the last few years. This is borne out by the national income estimates which were circulated with the budget. These show that farm incomes have increased from £44,000,000 in 193S-39 to £4S5,000,000 in 1949-50 and to £809,000,000 in 1950-51. Because of this upward pressure of incomes, the taxable income oi primary producers has far outstripped the average income upon which the rate of tax is based. As a consequence the tax benefits which have accrued to the recipients of the averaging system have been out of all just proportion to the incidence of taxation borne by other taxpayers. If the present system were allowed to remain unchanged it is estimated that primary producers would benefit to the extent of £62,000,000 when assessments are issued on their 1950-51 income. About £50,000,000 of this amount would be received by primary producers with incomes over £4,000.

If rural incomes decline within the next few years, the average incomes of primary producers are likely to be substantially above their current taxable incomes. In these circumstances, the tax disadvantage which would be imposed on primary producers by reason of the averaging provisions, would be so onerous as to strain their financial resources to the limit.

The Government has carefully considered this problem and now proposes to modify the averaging provisions so that the tax burden upon primary producers will be kept within reasonable limits in future years. The modification proposed is to apply the rate of tas appropriate to the average income to only the first £4,000 of taxable income, but in no case can this rate exceed the rate on a taxable income of £4,000.

The modification will not affect those primary producers whose taxable and average incomes do not exceed £4,000. It is estimated that there are 300,000 primary producers of whom 262,500 have incomes of less than £4,000. The Government’s proposal to modify the averaging system will thus apply to only 37,500 primary producers. Of this 37,500 about 9,500 would not be affected to any appreciable degree. Where both the taxable income and the average income exceed £4,000, the proposal has the effect of requiring primary producers to pay the same amount of tax as a person who ls not a primary producer deriving the same income.

Where the taxable income exceeds £4,000 and the average income is below £4,000 the first £4,000 of the taxable income will be taxed at the average rate. The remainder of the taxable income will bear tax at the difference between the tax on the total taxable income, without averaging, and the tax on £4,000, without averaging. Where the taxable income is £4,000 or less, but the average income exceeds £4,000 the rate of tax payable on the taxable income shall not exceed the rate on a taxable income of £4,000.

The . proposed modification of the averaging system will first apply to the incomes derived by primary producers during the year ended 30th June, 1951, or the substituted accounting period. I cannot stress too strongly the fact that the modified provisions will affect only those primary producers whose taxable incomes exceed £4,000. Those primary producers, who number only about 12£ per cent, of all primary producers, would, if the averaging provisions remained unchanged, receive over and above the benefit already received a further benefit of about £50,000,000 in respect of assessments on their 1950-51 income. The proposed modification will reduce this benefit by £35,000,000, still leaving them with a tax benefit of ‘ £15,000,000. The benefit of £12,000,000 which will accrue to primary producers with incomes of less than £4,000 will remain unaffected. The primary producers affected by the modification will, it is estimated, have a disposable income as follows : -

It will be seen that even after the modification, the 16,500 primary producers with incomes between £4,000 and £6,000 will have, after payment of tax, a net disposable income of £70,000,000, or an average of £4,242 each. The 21,000 primary producers with incomes in excess of £6,000 will have a net disposable income of £130,000,000, or an average of about £6,200 each. Having regard to the burden placed upon other classes of taxpayers, the proposal is simply an equitable adjustment of the tax burden as between the various groups of taxpayers. In addition, however, it will protect primary producers from the full effects of the adverse consequences of the averaging system when incomes decline. The proposal will produce additional revenue of £47,000,000 in the current financial year. Of this amount, £24,500,000 will be paid by way of provisional tax in respect of 1951-52 incomes. It will be noted that those primary producers with incomes between £4,000 and £6,000 will contribute only about £3,500,000, or about 7$ per cent., of the total additional collections, so that by far the greater part of the additional revenue will come from those primary producers whose incomes are in excess of £6,000.

Honorable senators will recall that, when the wool sales deductions were introduced, the Government was inundated with protests from wool-producers, allegina that the deductions were inequitable and unjust. However, it is now apparent that wool-producers are finding that the wool sales deductions are of inestimable value in assisting them to meet their current tax obligations. I confidently predict that primary producers will come to regard the modification of the averaging provisions in the same light when world prices decline from their present abnormal levels. It will relieve them from the overwhelming burden of meeting a comparatively heavy tax out of a much reduced income. To illustrate the burden which would fall upon primary producers in a time of declining incomes typical cases of primary producers whose taxable income and average income both exceed £4,000 have been examined. It has been assumed that 1951-52 incomes will be onethird lower than in 1930-51 and that 1952-53 incomes will be lower again, or at about the level of 1947-4S incomes. Thus a taxpayer whose income in 1950-51 was £16.930 would derive an income of £3,6S6 in 1952-53, with an average income of £8,6S2. If the averaging provisions remained unchanged, this taxpayer would be required to pay in tax £2,174 out of his 1952-53 income of £3,6S6, leaving him with only £1,512 for his other commitments. Under the proposed modification, however, he would be required to pay only, £1,4SS in tax out of his income of £3,6S6. As a result of the modification, his disposable income will be increased from £1,512 to £2,198 or an increase in his net disposable income of 45 per cent. Further, if the averaging provisions were not modified, this taxpayer would pay £755 more tax out of his income of £3,686 than a taxpayer not subject to the averaging provisions. This situation can be avoided only by making an adjustment, such as is now proposed, of the present averaging provisions. As part of the plan of modifying the averaging system, provision is made in the assessment hill, which will be coming before the Senate at a later stage, for a primary producer to exercise an election to withdraw from the operation of the averaging provisions. The election which, once exercised, is irrevocable, may first be made in respect of the year of income ending the 30th June, 1952, or any subsequent year.

The next proposal concerns company taxation. At present there are three taxes on the incomes of public companies, namely, a primary tax at the rate of 5s. in the fi on the first £5,000 and 6s. on the remainder, a super tax of ls. in the £1 on income in excess of £5,000, and a tax at the rate of 2s. in the fi on the undistributed income. The Commonwealth Committee on Taxation has recommended, in the interests of simplification, that these three taxes be amalgamated into one impost. It is proposed to adopt this recommendation and to amalgamate these separate levies into one tax on the taxable income of public companies at the rate of 7s. in the £1. It is proposed that mutual life assurance companies shall pay a special rate of 6s. in the £1 on their taxable income and that this rate shall apply also to the mutual income of a life assurance company. These latter companies will pay the same primary rate of 7s. in the £1 as other companies on their nonmutual income. The special rate of 6s. in the £1 preserves the relative advantages which those companies have enjoyed since uniform taxation was introduced.

Last year when the budget was introduced it was announced that the Government was seeking means to draw off a portion of abnormal business profits as part of a balanced plan to restrain inflation. The question of imposing an excess profits tax was referred to the Commonwealth Committee on Taxation whose reports on this subject have now been made available. The committee has reported that in its opinion any measure to tax excess profits would be fundamentally unsound and would lead to anomalies and injustices particularly in the case of small and new companies. Furthermore, such a tax would be extremely complex and difficult to administer. In these circumstances the committee was unable to recommend that an excess profits tax be imposed. In the light of the committee’s report the Government proposes to impose a special levy of 2s. in the £1 on public companies. This levy will not apply to private companies, to co-operative companies, or to companies which are not carried on for profit, such as lodges, clubs and societies. Life assurance companies will also be exempt from the levy in respect of their mutual income but not in respect of their non-mutual income. It is also proposed that dividends paid to non-resident companies should not be subject to the special levy. These dividends will generally be paid out of profits which have already been subject to the levy and it would be inappropriate to impose the levy again when the dividends are paid. Furthermore, the total weight of the tax on the profits and then on the dividends paid out of those profits would be a serious deterrent to the investment of overseas capital in Australia through subsidiary companies operating in this country.

Private companies will pay 5s. in the £1 on the first £5,000 of their taxable income as at present and 7s. in the £1 on the remainder. The rate of 5s. in the £1 on the first £5,000 of taxable income has been retained as it is considered that a higher rate would impose an unduly heavy burden on small private companies. The rate on the taxable income over £5,000 has been increased from 6s. to 7s. in the £1 to accord with the rate payable by public companies. Private companies were not at any time considered suitable objects for an excess profits tax since their profits are taxed at the graduated individual rates, irrespective of whether or not in fact they are distributed. Profits of those companies, whether distributed or otherwise, will now be subject to the higher rates of individual tax and consequently it is not proposed to subject them to the special levy of 2s. in the £1.

In the past companies have not been required to pay tax upon their income as it was derived and consequently they have held very considerable amounts, representing tax on profits for periods of up to twelve months. This has conferred upon companies an advantage over other taxpayers who are required to meet their tax obligations out of current income. To remedy this position in part, it is now proposed to require companies to make an advance payment equal to 10 per cent, of the company’s tax liability on its 1950-51 income. This advance payment will be credited against the company’s tax liability on its income derived in the current financial year. These changes in company taxation are estimated to increase collections during 1951-52 by £10,900,000 in the case of public companies, and £5,900,000 in the case of private companies. In addition, the advance payments will yield a further £11,200,000 towards the liability of companies to pay tax on their current income.

The variations in the incidence of taxation proposed by this bill have been spread as widely as possible so that the burden of providing the additional revenue will be shared by all classes of the community. Despite this sharing of the burden, it is inevitable that the additional imposts will entail some sacrifice on the part of all groups in the community. However, taxpayers can rest assured that through their sacrifices the fight against inflation is being reinforced and that, ultimately, we shall weather this storm and sail into the less troubled waters of a more stable economy. I commend the bill to honorable senators.

Debate (on motion by Senator Armstrong) adjourned.

Sitting suspended from4.32 to4.49 p.m.

page 1447

COMMONWEALTH EMPLOYEES’ COMPENSATION” 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 chief purpose of this bill is to increase the monetary benefits payable as compensation to Commonwealth employees or their dependants in cases of injury or disease due to their employment. An approach to the revision of these benefits has been made in the light of the more recent legislation of the States and in view, also, of the continued advance in the cost of living since the act was last amended in January, 1949. The increased rates now proposed in their various categories represent, broadly, a 50 per cent, increase on the existing scale of compensation.

The proposals involve the following increases of benefits : -

Incapacity. - The existing provision of £4 a week is to be increased to £6 a week. In the case of a minor, the increase will be from £3 to £4 10s. a week. Provision for a wife or female dependant is to be raised from £1 5s. to £1 15s. a week, and the allowance for each dependent child from 10s. to 15s. a week.

Specified Injuries. - The present maximum of £1,250 will be increased to £1,750, with proportionate increases of the lesser amounts shown in the relevant third schedule to the act.

Maxim um Compensation. - Consistent with increases of the rates already indicated, the maximum amount to which the weekly payments in respect of incapacity may accrue will be raised from £1,250 to £1,750. This maximum is not imposed, however, in cases of total and permanent incapacity.

Medical Expenses. - The maximum in respect of medical, surgical or hospital treatment is being raised from £100 to £150 and, as at present, the maximum may be exceeded in any case of exceptional circumstances.

Death. - The present maximum of £.1,000 will be raised to £1,500 and the additional provision of £50 for each dependent child will be in- creased to £75.

Burial Expenses. - The present maximum is £25 and is payable only where there are no dependants of the deceased employee. This benefit will be raised to £50 and it is proposed to provide for its payment regardless of whether the deceased employee was not survived by dependants.

Corresponding with these increases of the basic monetary benefits, it is proposed to raise from £1,000 to £1,500 the maximum amount of lump sum compensation that is payable to an injured employee who is also entitled to a Commonwealth superannuation pension in respect of invalidity caused by the injury.

The bill includes other amendments which are of relatively minor importance or of a machinery nature. These will be explained more appropriately when the bill is in the committee stage. Wives and children, who by reason of the date of marriage or birth, do not become dependent upon the employee until after the date of his injury, are now to be recognized in relation to the payment of the additional allowances of £1 15s. and 15s. a week respectively. Previously they had to qualify by reason of dependence at the date of the employee’s injury. In the case of an unborn child, however, the allowance of 15s. a week will not commence until the date of its birth.

In conclusion, 1 repeat that the real purpose of this measure is to increase the present compensation benefits payable to injured employees and their dependants. The proposals are generally in line with those provided under the more generous State legislation and have some regard also to the rise in the cost of living since the rates were last reviewed three years ago. The increases of the benefits in their various categories are estimated to cost £125,000 a year, the approximate charge on the budget for the current financial year being reckoned at £70,000. I suggest that the proposals are most reasonable, and I commend the bill to honorable senators.

Debate (on motion by Senator Armstrong) adjourned.

page 1448

DEFENCE FORCES RETIREMENT BENEFITS BILL 1951

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator O’SULLIVAN) read a first time.

Second Reading

Senator O’SULLIVAN:
QueenslandMinister for Trade and Customs · LP

– I move -

That the bill be now read a second time.

The main purpose of this bill is to provide for increases of pensions payable to certain classes of pensioners under the Defence Forces Retirement Benefits Act. These are pensioners who retired after attaining the age of 60 years and those with an incapicity for civilian employment of 60 per cent, or more. The increase provided by this bill to such pensioners will be £6 10s. per annum for each unit of contributions in excess of eight. Honorable senators will recall that in December last year the value of each of the first eight units was increased by £6 10s. per annum.

Widows of members who died whilst on service will receive one-half of this increase and the pension payable in respect of children of deceased members or pensioners will be increased from £13 to £19 10s. per annum. These increases correspond to increases which are being made in respect of pensions payable under the Superannuation Act.

As honorable senators are doubtless aware, most members of the permanent defence forces retire at comparatively early ages and their pensions are based on rank held at retirement and not ‘ on the number of units for which they have contributed. In the Air Force, retirement of officers commences at the age of 41, in the Navy at the age of 45, and in the Army at the age of 47. Because of their age of retirement, these members are generally able to supplement their pensions by accepting some form of civilian employment. They receive cost of living adjustments through the civilian pay structure, and this bill, therefore, does not provide for increased pensions for this class of pensioner. The proposed increases are to be granted to persons who, because of age or infirmity, are unable to supplement their incomes by employment. Widows and children are also provided for, pensions in the latter instance being increased from 5s. to 7s. 6d. a week.

A further matter dealt with in this bill concerns the pension payable to retired members of the defence forces who accept civilian employment with Commonwealth departments or instrumentalities after their retirement. Under the present provisions of the act, when a pensioner is re-employed by the Commonwealth his pension is reduced to the amount that he has purchased by his own contributions. Because of the fact that no such redaction is made when a pensioner accepts any other type of employment, it has been found that the existing provisions have the effect of denying the Commonwealth the services of highly trained and experienced technical men in a civilian capacity within Commonwealth departments. The services of these men are of considerable value to the Commonwealth in such functions as ordnance inspection, dockyard employment and bo on, and it is accordingly proposed in this bill to amend section 69 of the act in order to allow pensioners who accept civilian employment with the Commonwealth to retain up to £6 a week of their pension, or’ half the pension, whichever is the greater.

The amendment should go far towards meeting the needs of the service departments whilst retaining a reasonable limit on the amounts payable to pensioners. The’ existing provisions, however, will continue to apply to pensioners who are re-employed as members of the forces, that is officers who serve full-time on the emergency list or the reserve and to other ranks who again enlist after having been discharged on pension. The’ few other matters dealt with by this hill are of a minor nature and generally concern details of administration. The hill provides for increased benefits for persons with whom all honorable senators, I am sure, have sympathy. I commend the hill to the Senate.

Debate (on motion by Senator Armstrong) adjourned.

page 1449

SPECIAL ADJOURNMENT

Motion (by Senator O’Sullivan) agreed to -

That the Senate, at its rising, adjourn to Wednesday next, at 3 p.m.

page 1449

PAPERS

The following papers were pre sented : -

Lands Acquisition Act - Land acquired for -

Postal purposes -

Rose Bay, New South Wales.

Ryde, New Sou th Wales.

Senate adjourned at 5.2 p.m.

Cite as: Australia, Senate, Debates, 1 November 1951, viewed 22 October 2017, <http://historichansard.net/senate/1951/19511101_senate_20_214/>.