20th Parliament · 1st Session
The President (Senator the Hon. Edward Mattner) took tho chair at J ] a.m., and read prayers.
– Will the Minister representing the Minister for Commerce and Agriculture state whether there is in existence between the several State governments a firm understanding that tho production of rico shall bc undertaken in only one State? Because of the inadequacy of the quantity of rice available for consumption in Australia, and the probability that the shortage of this desirable food will continue for some considerable time unless action is taken by the Commonwealth, will the Minister undertake to investigate the production of rice in Australia with a view to ensuring that an adequate and regular supply will be available in the future?
– T was under the impression that the only region in which any considerable quantity of rice is produced is the Mumimbidgee irrigation area of New South “Wales, but I aru now informed by Senator Robertson that it is also produced in Western Australia, and I understand also that experiments in the production of rice are taking place in the Northern Territory. The Government has not prohibited the export of rice for the reason that people in New Guinea and in certain neighbouring countries in the Pacific rely on rice as an important item in their diet. However, if the honorable senator will place his question on the notice-paper I shall refer it to the Minister for Commerce and Agriculture in order that the latest information may be obtained for him concerning the production of rice in this country.
– Has the Minister for Trade and Customs noticed in this morning’s press, the reported statement by Mr. Winston Churchill, that war was not likely? Mr. Churchill continued by stating that if there was a world war the brunt would come in the first month, and even in the first week. The torments that would fall in increasing measure upon the whole civil population of the world would be indescribable. Will the Minister state whether recent newspaper reports that the Government has abandoned its plans for the safeguarding of citizens in congested areas against an atomic bomb attack are true? If the Minister has not seen these reports will he inform the Senate whether any civil defence measures have been taken to safeguard citizens against attack by atomic bombs? If not, why not?
– A responsible government such as the Menzies Government is always mindful of its obligations to the people. We are praying that there will not be another war but we shall not contribute to the avoidance of war by weakness. We shall be strong and I think that we shall be safe. The Menzies Government will give every consideration to the protection and security of tho people.
– I desire to ask the Minister for Shipping and Transport a question concerning reports that A orangi will be taken off the run between Canada and Australia. Is it a fact that in that event no ship will trade regularly between the two Commonwealth countries? If this will not be so, can the Minister say what other ship or ships will trade?
– It has been reported that Aorangi, which the Government, in conjunction with the governments of Canada and New Zealand, has assisted by way of subsidy, will be taken ofl’ the run next year. I think that that will be due largely to the age of the ship and the cost of its operation.
– Are the Communists not concerned in the matter?
– Nobody would have a better appreciation of what the Communists are concerned in than Senator Ashley. The agents for Lakemba have advised my department that that “hip, which has been operating for the lust four years, will continue to operate between Australia and Vancouver. It has accommodation for 100 passengers. In addition, several cargo ships are operating between the two countries. I do not think that Lakemba will be able to carry all the passengers who wish to travel between Australia and Canada and the Government will try to persuade some other company to replace Aorangi with another ship.
– Has the attention of the Minister representing the Minister for Labour and National Service been drawn to a report in yesterday’s Daily Mirror that the president of the Australian Council of Trades Unions, Mr. Monk, has sent a telegram to the federal secretary–
– I rise to order. I ask you, Mr. President, whether the honorable senator is in order in reading an extract from a newspaper at question time.
- Senator Wright is not in order.
– -I was relying on the rubbishy precedent set by Senator Eraser’s colleague, Senator Brown, who read from a newspaper. .Senator Fraser is behaving true to his type by taking a technical point of order to obstruct me. My question relates to a report that the president of the Australian Council of Trades Unions, Mr. Monk, has sent a telegram to the federal secretary of the seamen’s union asking whether the 24-hour stoppage of work by seamen on the Australian coast was authorized by the federal management of that union.
Will the Minister representing the Minister for Labour and National Service promptly examine the industrial laws to ascertain whether, if no such authority was given, the action of the seamen’s union is a contravention of the laws prohibiting prejudicial activities by illegal combines ?
– I shall direct the attention of the Minister for Labour and National Service to the honorable senator’s question and let the honorable senator have- a reply in due course.
– In view of the serious position which is facing semigovernmental bodies and local authorities in Australia, due to the continued failure of Government loans and the fact that the extent of failure is becoming greater with each loan floated, is the Minister representing the Treasurer in a position to say whether this matter can properly be included in the agenda for the Loan Council meeting to-morrow? If so, has it been included in that agenda? If it is not properly a matter for the agenda will the opportunity be taken by the Government to raise the matter in an informal manner with the State Premiers ?
– The honorable senator’s question surprises me because I thought that the matter to which he has referred was to be the main business of the Australian Loan Council to-morrow. However, if I am wrong, I shall convey the proposal to the Treasurer.
– Has the. attention of the Minister for Trade and Customs been directed to a report in today’s Canberra Times that, in an address to the Australian Institute of Management in Adelaide, Sir Douglas Copland said that since 1949 Australia’s costofliving index had risen more than that of any other country and that whereas costs elsewhere were flattening out, they were still rising in Australia? Sir Douglas also said that although the basic wage had risen by 30 per cent, in 1950-51 and by 23 per cent, in 1951-52, the average weekly earnings of employed persons had risen by only 17 per cent. Will the Minister inform the Senate of what action the Government intends to take to remedy this terrible inflationary condition ?
– I am afraid that I have not as much time as honorable senators opposite apparently have to devote to the reading of newspapers. I have a high regard for Sir Douglas Copland, and I should like to refer the honorable senator to some other statements that have been made by that learned gentleman from time to time. For instance, he has said that if we are to give our workers a better and more secure standard of living, it is most important that there should be a better relativity between what is paid and what is earned. I shall obtain for the honorable senator a copy of the exact text of that statement and I hope that he will appreciate it.
– I should be delighted to read the statement made by Sir Douglas Copland which the Minister has promised to furnish to me. Will the Minister oblige me by answering my question? I asked him whether he had read the statement by Sir Douglas Copland, which I believe to be correct, that the cost of livingin Australia is increasing far more rapidly than in any other country, and that the basic wage has risen-
– Order ! The honorable senator has already asked the question, and the Minister has replied to it.
– The Minister did not answer it.
– Order ! The honorable senator will resume his seat.
– On the 7th October, Senator Henty asked a question concerning a statement published in the Sydney Morning Herald on the 1st October concerning Commonwealth motor cars at Kingsford Smith Aerodrome, Mascot. The Minister for Supply has furnished the following answer : -
I saw the statement referred to by the honorable senator in the Column 8 of the Sydney Morning Herald on Wednesday, the 1st October. It was to the effect that on Friday, the 26th September, 22 Commonwealth cars - twelve Humber Snipes and ten Holdens - were waiting for federal members from Canberra, when one bus could have brought them all into Sydney. The statement is untrue. We do not possess twelve Humber Snipes or anything like it, and 22 cars never were at the airport together as implied. The records show that between 6.10 p.m. and 6.50 p.m. on that day, fourteen cars could have been there about the same time. During that period, three planes came in from Canberra carrying four Ministers, their personal staffs, one senior ex-Minister, several private members and an Air Force officer on special duty. One senior Opposition ex-Minister had a car to take him to his home and two disabled private members also had cars. No other cars were provided for private members. The rest of the cars were used for the four Ministers and their personal staffs and luggage and the Air Force officer. Personal staffs are given transport, which they must share when practicable, because, in addition to their personal luggage, they are encumbered with departmental and ministerial files and documents which have to be taken to and from Canberra each week.
– I direct a question to the Attorney-General. When licences are issued for foreign language newspapers circulating among immigrants, does the Government lay down certain conditions relating to the licences ? If any of these newspapers contain subversive material, can the Government withdraw the licence of the newspapers concerned? If I privately give to the Minister the name of a foreign language newspaper the contents of which I consider might well be subversive, will he have copies of it examined, and, if justified, withdraw the licence granted to it?
– I am not perfectly familiar with the terms upon which such licences are granted. However, if the honorable senator will furnish me with information about the newspaper to which he has referred, I shall cause inquiries to be made to ascertain whether anything can be done about the matter. I suggest that the honorable senator should place his question upon the notice-paper.
– Will the Minister for Shipping and Transport inform the Senate whether the Government intends to proceed with the conversion of the railway line between Broken Hill and Port Pirie from a 3-ft. 6-in. gauge to standard gauge? Have negotiations been commenced with the Silverton Tramway Company in relation to its interest in the portion of the line between Cockburn and Broken Hill?
– Some time ago the New SouthWales Government was asked whether it was prepared to acquire the existing line between Broken Hill and the South Australian border. A reply has been received to the effect that the New South Wales Government is prepared to do so, and negotiations are now proceeding with the Silverton Tramway Company to ascertain whether it is prepared to sell that line, and if so, at what price. My department has considered very closely the proposal to convert the existing line from Port Pirie to Broken Hill to standard gauge. As honorable senators are aware, there is an agreement in existence between the Commonwealth and South Australia to the effect that the line will be converted to the 4-ft. 8½-in. gauge. A decision has not been taken on when the work shall be put in hand. I assure the honorable senator that this matter is receiving active consideration, and that nothing would give me greater pleasure than to see the section of line that he has mentioned, extending over 256 miles, converted to the standard gauge. I make it perfectly clear, however, that the Government has made no decision on when the work is likely to proceed.
– Can the Minister for Shipping and Transport say whether any step has been taken by the Australian Government or the Government of Queensland to commence work on the first link in the railroad proposed to be constructed from either Dajarra or Mount Isa across the Barkly Tableland to Newcastle Waters in the Northern Territory via Camooweal? If so, what progress has been made?
– The matter is at present receiving consideration by a subcommittee of Cabinet, but so far no decision has been made by the Government to authorize the construction of the proposed railway line.
SenatorFRASER. - Will the Minister representing the Minister for Supply inform me when I may expect to receive a reply to question No. 35, which has been on the notice-paper for several weeks? A great deal of investigation should not be necessary in order to prepare a reply.
– I shall endeavour to expedite the furnishing of a reply to the honorable senator’s question.
– I preface a question to the Minister for Shipping and Transport by pointing out that British fruit importers have sustained a loss of more than £1,000,000 sterling on apples and pears imported from Tasmania during this year. That losshas been occasioned by the frequent disorganization of shipping on the Australian coast, and delayed departure of ships. I understand that some ships have taken 101 days to complete the voyage from Hobart to Liverpool. When is it expected that the Government will be able to advise the Australian fruit industry of the steps proposed to be taken to remedy this outrageous state of affairs?
– A report that has been received by the Minister for Commerce and Agriculture from the Australian Apple and Pear Board is being considered by the Cabinet. I hope to be able to inform the Senate very soon of the action that the Government proposes to take to deal with the small “ red “ element that has been responsible for considerable losses to the fruit-growers of Tasmania.
– The honorable senator would be deaf and dumb if he did not have that subject to speak about.
– I assure the honorable senator that, despite the attitude of the Opposition, the Government is leaving no stone unturned in its efforts to solve this problem.
– I preface a ques tion to the Minister representing the Minister for Labour and National Service by stating that from time to time the Treasurer has issued comparative figures relating to increases of taxes in Australia and other British Commonwealth countries which have been most helpful to members of the Parliament. Will the Minister consider making a similar statement in regard to increases of the standard basic wage in other British Commonwealth countries during the last two years, compared with the increases that have occurred in Australia during that period, in order that honorable senators may be able to appreciate the way in which Australian standards of living compare with those of the people of other British Commonwealth countries ?
– I should think it would be very difficult to supply the honorable senator with figures of that kind, for the simple reason that, as far as I am aware, the concept of a basic wage that operates in this country, and I think also in New Zealand, does not operate in other British countries.
– I referred to the standard basic wage.
– That is the whole problem. The matter depends on the comparison which the honorable senator desires to make. It is not possible to make the comparison he has suggested because two sets of comparable matter do not exist. However, I shall bring his request to the notice of the Minister for Labour and National Service, and if figures of the kind to which he has referred can be obtained, I shall let him know.
– On the 9th October, Senator Laught asked whether investigations could be made regarding the possibility of promulgating to troops enlisted for service in Korea the worthy aims and objects of the United Nations cause in Korea. I have been advised by the Minister for the Army that, during his visit to J Japan and Korea in December last, this question was examined by him in the light of enemy propaganda. The Minister arranged for information relating to the cause of the United Nations to be supplied regularly to members of the 3rd Battalion, Royal Australian Regiment, and to personnel of other units of the Commonwealth Division. The measures that are taken include lectures to troops, the organization of discussion groups, and the distribution of pamphlets. Publicity is also given to United Nations activities and the Korean campaign through the Forces edition of Japan News.
– I address a question to the Minister representing the Minister for Civil Aviation and in doing so refer him to the fact that the financial year of most business undertakings in the Commonwealth closes on the 30th June. I understand that Trans-Australia Airlines also observes this practice. As this is the 16th October, can the Minister say when the Senate may expect the annual accounts of that organization to be tabled? Is there any truth in the rumour that, owing to lack of reconciliation of stocks, such accounts have been delayed?
– I have not heard anything of the rumour referred to by the honorable senator. I know that the Department of the Treasury is considering an advance copy of the statement of receipts and expenditure of TransAustralia Airlines for the year which ended on the 30th June last, but if the honorable senator will place his question on the notice-paper I shall obtain the information for him and let him know when the Senate may expect the statement to be tabled.
asked the Minister representing the Treasurer, upon notice -
– The Treasurer has supplied the following answers to the honorable senator’s questions : -
– Is the Minister for Trade and Customs aware that Australia’s great timber industry is rapidly deteriorating? Does he know that the production of timber in Australia has declined by 15 per cent., and that 1,500 timber workers are unemployed? In order to save this great national industry will the Government consider reducing considerably the quantity oforegon and baltic pine imported to this country?
– During my occupancy of the portfolio of Trade and Customs and also during that of my predecessor, Senator Courtice, the officials of the department have been most solicitous for the welfare of this great Australian industry. Because of the occurrence of floods and other unusual circumstances which have resulted in a shortage of timber in this country, permits have been issued for the importation of building timber in order to assist our home-building programme.
– But there is a surplus of timber in Australia now.
SenatorO’SULLIVAN.- -That is so. The importation of timber is necessary because supplies of certain kinds of timber produced in Australia are not sufficient for our requirements. Similarly, we have a surplus of other kinds which we export to make up the deficiency in other countries. So far as the Government is able to regulate imports, it permits the importation of only sufficient timber of particular varieties to supplement the inadequacies of our own production. As I have said, there is a big surplus of timber generally in Australia at present, and the industry is experiencing considerable anxiety. However, I can assure the honorable senator that the Government is well aware of the circumstances and is taking every step to ensure that this vitally important industry shall survive and prosper.
– Will the
Minister for Repatriation submit a report to the Senate before the end of the present sessional period concerning the progress made in the erection of hospitals and institutions throughout Australia for the treatment of ex-servicemen suffering from war neurosis? I remind the honorable senator that some time ago he promised to obtain that information for me. Incidentally, I must say that the position in South Australia is quite satisfactory.
– I shall give careful consideration to the request made by the. honorable senator.
asked the Minister representing the Minister for Air, upon notice -
– The Minister for Air has supplied the following answers to the honorable senator’s questions : -
No. Only as regards the flying training of university cadets. 3. (a) Because of overseas commitments, some reduction in Citizen Air Force activities has been authorized, more particularly in respect of elementary flying training. Howover, this is a small reduction when compared with the overall flying effort of the Active Citizen Air Force. The reductions proposed are the disbandment of country flights of two of the auxiliary squadrons, the curtailment of the flying flight of each university squadron and the cessation of the scheme whereby Reserve aircrew members were provided with flying training in aero clubs. Only the latter activity produced flying instructors. The country flights of auxiliary squadrons were deleted because of their uneconomical operation. When these flights, detached at country centres, were brought into operation, it was assumed that sufficient Citizen Air Force ground staff to maintain the flight would be enlisted from the locality, but the response to recruiting for ground staff was so poor that the parent squadron based near Sydney or Brisbane was required to transport ground staff, aircraft and instructors to the country centre every second week-end to provide flying training for a few cadets. This reduction affects only ten trainees, and will enable the parent squadron to operate on a much more efficient basis with the limited number of permanent personnel allotted to it. Tn some cases, it has been possible, where the distances are not excessive, to transfer the country trainees to the parent squadron to complete their training. Within each university squadron, a flying flight was established whereby members were trained in aero clubs up to Private Pilot’s Licence standard on elementary type aircraft, not as instructors as the honorable senator suggests. When considering tho multitude of other commitments placed upon the Royal Australian Air Force, both at home and overseas, it was considered that the elementary flying of members of university squadrons should be curtailed. Those trainees who have almost attained the required standard will be permitted to complete their course with the opportunity of passing to one of the auxiliary squadrons for advanced training to fully qualified pilot standard. The Royal Australian Air Force introduced a scheme whereby pilot members of the Reserve could bc trained in aero clubs under Royal Australian Air Force sponsorship to become elementary flying instructors, whose services would be immediately available in time of war. However, although the scheme was well supported in the beginning, attendances and interest fell off, and does not warrant the expenditure to maintain it. Arrangements have been made for the most advanced and keener Reservists, to cany on until the 30th November, so that they may complete their course, and in exceptional circumstances, they may continue training after that date. The training already supplied to all these members will not be wasted, as they will be transferred to the Reserve on the understanding that, in the event of their services being utilized, they will be able to take up their training again.
asked the Minisler representing the Minister for Immigration, upon notice -
– The Minister representing the Minister for Immigration has supplied the following reply to the honorable senator’s questions: -
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator MoLeay) read a first time.
– I move -
That the bill be now read a second time.
It will be recalled that the Seamen’s War Pensions and Allowances Act was amended during the last sessional period of this Parliament. The rates of pension were brought up to date to agree with those for corresponding classes of pensioners under the Repatriation Act, and provision was made for pensions equivalent to certain special rates in the Repatriation Act to be granted to a mariner should his incapacity warrant a special rate. That legislation also provided for regulations to be made to enable these ex-seamen to enjoy similar medical and certain associated benefits to those granted to ex-servicemen under tha Repatriation Act. Since the Seamen’s War Pensions and Allowance Act came into operation in 1940, general pensions rates for seamen who suffered war injury have always been kept at the same level as those for the corresponding classes of ex-members of the forces under the Repatriation Act. This was done during the war years either by War Cabinet decision or by National Security Regulations.
The Repatriation Act was amended earlier in the present session to increase the rates of war pensions of certain classes of pensioners under that act, and it is the view of this Government that the Seamen’s War Pensions and Allowances Act should be amended from time to time to ensure that the benefits under this act are not inferior to corresponding benefits conferred by the Repatriation Act. By the bill now introduced the general pension rates for mariners and. certain classes of dependants will be brought into line with those for the corresponding classes of pensions under the Repatriation Act.
Briefly, the increases are as follows : The general pension rate is computed on the basis of percentage of incapacity. The general rate for a mariner whose rate of pay was 22s. 6d. per day or less, and whose incapacity is assessed at 100 per cent., is increased from £7 to £8 per fortnight; the rate for a wife of such a mariner from £3 ls. to £3 lis.; and that for each child from £1 3s. to £1 7s. 6d. The rates for children of deceased mariners are increased in respect of the first child from £2 4s. to £2 13s. per fortnight; for other children from £1 lis. to £1 17s.; and in respect of orphans where the mariner’s wife also is dead, from £4 to £4 16s.
The maximum amount of the aggregate of the pensions payable to all dependants of a totally incapacitated mariner, other than his wife or children, is increased from £4 4s. .to £4 1S.3. 6d. a fortnight. In cases of severe disability in which the mariner needs an attendant, the rates allowed for the attendant are raised from £3 to £3 10s. a fortnight, or in certain cases, from £6 to £7.
I mentioned earlier that provision is now contained in the act to enable regulations for conferring medical and certain associated benefits for mariners at Repatriation Act level. The act at present enables regulations to be made to provide for sustenance allowances for Australian mariners while they are receiving medical, surgical or hospital treatment for war injuries, but, unlike the Repatriation act, it contains no provision to pay fares and travelling expenses where it is necessary for an Australian mariner to travel to obtain medical treatment or for pension purposes, or in respect of loss of wages during such attendances. In order to place mariners on an equal footing with members of the forces, in respect of benefits associated with medical treatment, this bill includes a provision to enable regula tions to be made to provide for such fares, travelling expenses, and loss of wages.
It will be seen, therefore, that the main purpose of the bill is to bring war pension rates for seamen and certain dependants into line with the increased rates recently provided under the Repatriation Act, and to enable regulations to be made whereby mariners, when attending for treatment or for pension purposes, may be granted benefits similar to those which may be granted to ex-members of the forces. I commend the bill to the Senate.
Debate (on motion by Senator Critchley) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator McLeay) read a first time.
Senator McLEAY (South Australia -
Minister for Commerce and Agriculture) [11.50].- I move-
That the bill be now read a second time.
This bill proposes some minor amendments, principally of a technical nature, to the Aliens Act 1947. Since the act came into force on the 1st January, 1948, certain anomalies and weaknesses have become evident. The proposed amendments are designed to remedy these defects so that the legislation will achieve the purposes intended when it was passed by the Parliament five years ago. No new principle or change of policy is involved. When the Aliens Bill was introduced into the Senate in 1947, its two main objects were described as, first, to ensure that we would have knowledge of the aliens in our midst; and secondly, to provide for a periodical analysis of Australia’s alien population so that the Government may plan its immigration policy on sound and practical lines. It was intended that the act should take the place of the National Security (Aliens Control) Regulations which were in operation during the war. The Aliens Classification and Advisory Committee, which had functioned during the war years, had unanimously recommended that some basic control over aliens should be maintained in peace-time in the public interest, and in orderthat necessary security measures could be taken speedily and effectively in a national emergency.
The principal provisions of the act are, briefly -
When the Aliens Act was promulgated, there were fewer than 50,000 aliens liable to register; to-day the number of registered aliens is over 275,000. Consequently, the information recorded in alien registers has taken on considerable importance, particularly in view of our efforts to assimilate the non-British section of the Australian community. I emphasize again, however, that, although quite a number of amendments are contained in the bill before the Senate, they are introduced for no other purpose than to make the present act do more effectively what it was originally intended to do. Section 4 of the act is amended to bring the definition of “ alien “ into line with that appearing in related legislation, such as the Nationality and Citizenship Act and the Aliens’ Deportation Act, and to correct anomalies arising out of the repeal of the Nationality Act, to which the definition was originally related. The definition of “ officer “ is also amended to facilitate the delegation to appropriate Commonwealth officers of powers conferred by the act. For formal reasons a definition of “certificate of registration” has been included. The amendment to section 5 is designed to provide for the removal of entries from the Register of Aliens in circumstances such as the departure from Australia or death of a registered alien or, in the more happy event that he should become naturalized.
Proposed new section 7 deals with the classes of persons required to register as aliens. When the principal act was introduced, it was obviously intended that all alien children resident in the Commonwealth should be obliged to register as soon as they attained the age of sixteen years ; but no provision was made for children who were under sixteen at the date of the commencement of the act or those who entered the Commonwealth while under the age of sixteen, to be registered upon attaining that age, nor was provision made for the registration of persons who lose their status as British subjects, by marriage or other means. The new section is designed to correct those omissions. It will be noted that, in the case of an alien under 21 years of age, an obligation has been placed upon the parent or guardian to see that he is registered. A parent or guardian who fails to comply with this provision will, by virtue of the amendment made to section 17 of the act, continue to be guilty of an offence until registration is effected. Under section 8 (c) of the present act, any alien who does not intend to reside in the Commonwealth, and does not remain in the Commonwealth for more than 60 consecutive days, is exempted from making application for registration. It is not desired that persons coming within this category, mostly business visitors and tourists, should register, but in order that we may be able to ensure that those who do not leave the Commonwealth within the specified period, or who elect to remain for permanent residence are duly registered, it is necessary that they should furnish certain information about themselves upon arrival. New section 8 (c) provides for this to be done. Departure from the Commonwealth is covered by the amendment to section 21.
Proposed new sections 9 and 10 refer to the notification of changes of address, occupation and employment. A literal interpretation of those sections as in the present act means that an alien who moves from one State to another has to notify such changes to the officer in the State in which he is registered, namely, the State which he has just left. The rewording of sections 9 and 10 will make it possible to amend the regulations so that notification may be made to the money order post office, in the case of country areas, or office of the Department of Immigration, in the case of capital cities, nearest to the alien’s new place of residence. I draw attention to the fact that section 10 has been so drafted as to permit of the necessity to notify changes of employment or occupation being reviewed from time to time.
The act at present makes no provision, for the compulsory notification of marriage or change of surname by marriage. In order that the records may be kept up to date, it is essential that this information should be furnished and proposed new section 10a will remedy this defect. Under section11 of the present act, an alien may not change his surname without consent, but, because an offence under this section is not of a continuing nature, an alien could, after paying a fine for changing his name irregularly, continue to use the unauthorized name without fear of further prosecution. Section 11 has been re-drafted with a view to correcting this weakness. In addition, the opportunity has been taken to exempt an alien woman who changes her surname by marriage and certain other classes of persons from the necessity to obtain formal consent. The reasons for those exemptions will be obvious to all honorable senators.
In accordance with section 12 of the existing act, an alien is bound to apply for a certificate of registration, and one must- be issued upon proper application being made, but the alien does not have to accept or sign the certificate which, without the alien’s signature, has no force as a legal document. Moreover, while the original section 12 (2) gives power to require an alien to produce this certificate, it does not require him to retain the certificate in his possession. Experience has shown that for the proper administration of the act and to guard against irregular use of or trafficking in certificates it is necessary to provide for -
New sections 12 and 12a are designed to achieve those objects. It is not proposed that an alien should be compelled to carry his certificate on his person at all times, but that he should be required to retain it in his legal possession. The effect of the amendment of section 14 is that any person, whether an alien or otherwise, who makes a false statement “under the act shall be guilty of an offence. Some minor amendments which are purely technical and incidental to the main clauses of the bill have also been made but they do not warrant special mention at this juncture.
Debate (on motion by Senator McKen n a ) adjourned .
Debate resumed from the 1 4th October (ride page 2997), on motion by Senator Spooner -
That the bill be now reada second time.
Senator CAMERON (Victoria) 12.0. - When the debate on this hill was adjourned, I had been directing theattention of Government supporters to the vast difference between the treatment received by servicemen during war-time and that received by them since demobilization. The members of the fightingforces were properly trained and equipped for active service; they should be similarly trained and equipped to take their part in civilian life. Land acquired for war service land settlement should be ‘properly prepared before it is allotted. It should be fenced, and housing and other accommodation should bc provided. If that were clone, much better results would be achieved by the ex-servicemen and the nation as the result of this settlement scheme. Instead, soldier land settlers have to put up with very primitive conditions. The nation should treat exservicemen better in the future than it has done in the past. Our obligations to them have never been honoured as they should have been honoured.
Several honorable senators opposite have directed attention to the deficiencies of this scheme. Many of the difficulties that confront the ex-servicemen result from the fact that they have not been properly trained and equipped for that kind of occupation. Ex-servicemen are protected against discriminatory action by predatory employers; they should be similarly protected against the avarice of the holders of Government-inscribed stock and bonds. They should not nave to pay high interest rates on money advanced to them for land settlement purposes and have to work, not only for themselves, but also for the bondholders who provide the money to finance these schemes. For the most part those to whom the interest is ultimately paid played no useful part, either in the fighting line or in production. The continuance of this state of affairs naturally makes ex-servicemen dissatisfied. I regret that the ex-servicemen’s organizations have not taken a much stronger stand on this matter. Honorable senators opposite may ask how we are to lighten the burdens placed on those who purchase properties under this scheme. First, suitable land must be acquired for subdivision. No 911 r, will suggest that an abundance of suitable land is not available for that purpose. Secondly, the areas acquired must be situated conveniently close to railways or other forms of transport, so that the settlers will not be practically isolated. The Government is in a position to acquire suitable land in appropriate areas under the provision of the
Lands Acquisition Act. The only obstacle appears to be the provision of the requisite money for that purpose. Honorable senators opposite may ask where the money is to come from. I do not need to remind them that money in itself is not wealth, but merely a medium of exchange. Money could be raised for this purpose without difficulty. As the result of the two world wars hundreds of millions of pounds have been added to the capital increment of the major monopolies and the private banks. In that increment we have a source of taxation that has never been tapped. The shareholders of the wealthy monopolies and the private banks, perhaps more than anybody else in the community, owe an obligation to exservicemen. They should ensure that exservicemen shall not be shackled with a load of debt from, which they may never be able to free themselves. Why should an ex-serviceman become the slave of his creditors ?
This bill does not go far enough. It is a short measure, the principal clause of which reads as follows : -
The Treasurer may, from time to time, under the provisions of the Commonwealth Inscribed Stock Act .1 !)]..! -li)’10, or under the provisions of any net authorizing the issue of Treasury bills, borrow moneys not exceeding in the whole the sum of six million pounds.
That provision indicates that the Government proposes to issue inscribed stock, or to borrow money for this purpose, upon which interest will have to be paid by the ex-servicemen. I fail to see how honorable senators opposite can justify a proposal under which ex-servicemen will be obliged to pay interest rates even higher than those which at present prevail. Assume that a bond is issued at 5 per cent, interest; if prices fall the purchasing nower of the interest paid on such a bond proportionately increases. In such circumstances it becomes almost impossible for an ex-serviceman to meet his ; uteres t obligations. I should like honorable senators opposite who served in the fighting forces to indicate what chey believe should be done to get over that difficulty.
When the members of the fightingforces were on active service the Government assumed complete responsibility for their welfare ; now that they have returned to civil life it has delegated that responsibility to the State governments. Obviously an obligation rests on the Commonwealth in respect of ex-servicemen in those States that have not provided adequately for ex-members of the forces. Many ex-servicemen who have been frustrated, defeated, and discouraged, have abandoned their holdings and returned to the cities. What is the Government prepared to do to try to rectify the position ? Senator Wood has admitted that the ex-servicemen have not been adequately provided for, and Senator Chamberlain has referred to the delay that has occurred in the acquisition of suitable land for the purpose of the war service land settlement scheme. Why should there be delay in this matter? In time of war the machinery of government is speeded up in order to do all possible for members of the fighting forces. When the members of the fighting forces returned to civilian life they found, in many instances, that they were dependent on the goodwill and convenience of the employers. The exservicemen who went on the land have been saddled with the obligations to which I have referred. The Government should be prepared to assist all ex-servicemen speedily to rehabilitate themselves. The natural resources of this country are practically unlimited. There is no real scarcity of materials in Australia, and there is certainly no shortage of money. Indeed, there is now more money in circulation than ever before. The only deficiency is in the degree of understanding that has been exhibited by supporters of the Government. They have revealed a deplorable lack of initiative and constructive imagination. Because of the Government’s obligations to the holders of bonds and inscribed stock, the exservicemen who have settled on the land are neither economically secure nor selfsupporting. Because of the Government’s lack of encouragement to them, they are not producing to the full extent of their capacity.
Back in the ‘thirties, many exservicemen who had settled on the land after World War I. abandoned their properties, returned to the cities, and joined the dole queues. Had they been properly provided for by the Government of the day, many of them would have continued to engage in primary production and to rear families, and they would now be one of the nation’s most valuable assets. In view of the recent increase of interest rates, our tremendous public debt, and the effects of inflation generally, many ex-servicemen of World War II. who have settled on the land will be forced to do as many exservicemen of World War I. did in the thirties. It has been stated that many of the applicants for land are not qualified to engage in primary production. I point out that practically everything in this world depends on management. When management is competent, sympathetic, and constructive, the best results are obtained ; when it is inefficient and lacks initiative, iron enters the soul of the workers, who become dissatisfied and are then branded as malcontents, extremists, and Communists.
I do not consider that the exservicemen have been assisted to the degree that is practicable. In effect, although the Government has failed to honour its obligations to the ex-servicemen, it punishes them as criminals when they express their dissatisfaction. I urge the Government to do more for the exservicemen than is envisaged by the bill. If it fails to honour its moral obligations to these men, it will have to bear responsibility for the consequences. Most of these men experience the same feelings as do honorable senators opposite. They wish to be secure and to be able to provide the best possible conditions for their families, which I have no doubt is also the wish of honorable senators opposite. That being so, I cannot understand why. when the Government has the opportunity to do its best for such men, that opportunity is not taken. If honorable senators who are also ex-servicemen attend meetings of ex-service organizations they will be obliged to admit that the Government has more or less ignored their suggestions. This Government was elected to do its very best for Australians generally. If I were asked to define the real purpose of life, I should say that it is living. The most important part of that purpose is to make life more liveable for ourselves and our fellowmen That is the obligation of the Government, and if it is not prepared to honour that obligation it will ultimately suffer the consequences of its inaction.
Senator REID (New South Wales) 1 12.22]. - I support this bill because I believe that it will help to bring about greater settlement of ex-servicemen on the land. The bill refers mainly to activities which take place in what are known as ;he “ agent “ States. As honorable senators are aware, practically the whole responsibility for land settlement of exservicemen in such States is in the hands of the Australian Government. The administration of the war service land settlement schemes in those States is in the hands of the State governments. In the principal States the reverse position applies. In those States the Australian Government has only minor responsibility, the State governments having, of their own volition, assumed total responsibility for resumption of land. Senator Cameron has stated that, in his opinion, the responsibility for war service laud settlement is that of the Australian Government, which has delegated to certain State governments responsibility for such settlement in order to avoid its obligations. I suggest that the honorable senator knows that that statement is not correct. When the War Service Land Settlement Act was being considered in 1945, the Curtin Government, in consultation with the State Premiers at a conference to deal wi th war service land settlement, made the position perfectly clear. At that conference the then Premier of Victoria asked whether the proposed scheme would apply only to South Australia, Western Australia and Tasmania. The late Mr. Curtin replied, in effect, that it could apply to all the States of the Commonwealth, if they so desired. The Premier of Victoria and the Premier of New South Wales immediately stated, “We will not fi How you, under any conditions, to trespass upon the sovereignty of our States. We claim the right to carry out war service land settlement in our States “. Honorable senators will, therefore, appreciate that the Australian government of the day did not delegate responsibility in order to avoid its obligations. On the contrary, certain State governments re fused to allow the Australian Government to interfere in war service land settlement matters.
The bill before the Senate deals mainly with the provision of the necessary funds for land resumption and settlement generally in the agent States, and the provision of an amount which is essential to carry out the obligations of the Commonwealth in those States. Unfortunately for ex-servicemen, at present the scheme does not work as well in some of the principal States as it does in the agent States. From reports and statements which are made from time to time, it is apparent that, although New South Wales has assumed responsibility for war service land settlement, the present Government of that State is now trying to throw upon the Australian Government blame for its inability to honour the obligations which were accepted in 1945. I wish to deal, for a moment, with the position in New South Wales, with which I am most conversant. Recently the New South Wales Minister for Lands, Mr. Hawkins, stated that the New South Wales Government was unable to proceed with war service land settlement for the simple reason that the Australian Government would not provide the necessary finance. He also stated that the New South Wales Government would be prepared to extend its war service land settlement operations if the necessary finance was forthcoming from the Commonwealth. The New South Wales Government claims that if it were able to obtain all the loan money it requires, and to which it is entitled, it could provide a better war service land settlement scheme than it is at present able to provide.
– The interjection by the honorable senator repeats a stupid statement that is being made frequently in New South Wales. It is said that the Commonwealth provides all the loan money. In fact, the Australian Loan Council fixes the amount of money which shall be borrowed and the rate of interest to be paid. I point out that the States have six votes on the council, whereas the Commonwealth has only two. It is, therefore, obvious that the States may determine the amount of loan allocations, if they wish to do so.
– I know how the Australian Loan Council sometimes works !
– Of course, the principal States claim that they cannot get sufficient money to carry out war service land settlement because the lending public has lost confidence in the Australian Government. As honorable senators are aware, the Commonwealth is entitled to 20 per cent, of loan raisings, in order that the States shall receive the maximum amount to enable them to carry out their various services, including war service land settlement, the present Australian Government has refrained from exercising that option. The State governments, therefore, have been responsible for spending all the loan money that has been raised on the loan market since this Government came to office. In my opinion, the people are not happy with the way in which the State governments have expended such money. The expenditure of money raised by the Australian Loan Council rests, not with the Commonwealth, but with the States, and when the people of New South Wales have regard to what has happened in that State one can understand their lack of foiifiden.ce in land settlement. Of course, some State governments complain bitterly about the shortage of loan funds for their land settlement schemes for ex-servicemen pud contend that because of increased land values they cannot afford to acquire land.
– Because of the inflation brought about by the present Government the States need so much more money to finance their programmes.
– Senator Ashley has mentioned inflation, and I am glad that lie has done so because it gives me an opportunity to cite some informative statistics. During the past three years the basic wage has increased by 78 per cent. During that period the total amount paid to the States by the Commonwealth as income tax reimbursements under the uniform tax scheme has in- i- leased from £25,000,000 to £54,000,000, which is an increase of 116 per cent. During the same period allocations to the States by the Loan Council have increased by £35,000,000, which represents an increase of 120 per cent. In other words, the increased costs of State governments due to rises of the basic wage have been been much more than offset by increase of tax reimbursement nl grants and loan allocations. It is obvious, therefore, that the claim made by certain State governments that they are not obtaining sufficient funds from the Commonwealth to carry out their programmes is not borne out. by the facts. In particular, I point out that the allegation of the New South Wales Government that the Commonwealth has retarded its programme for land settlement of ex-servicemen, is absolutely opposed to the facts.
The Labour Government of New South Wales has uttered a great deal of criticism of the present Government in this matter of returned soldier settlement. Let us examine the amounts actually expended by the Government of New South Wales on this most important phase of rehabilitation. In 1946-47 the New South Wales Government expended on war service land settlement 8.5 per cent, of the money that it received from the Australian Loan Council; in 1947-48 it expended 12.5 per cent, of its grant; in 1948-49 27.7 per cent., in 1949-50 14.7 per cent., and in 1950-51 only 11.2 per cent, on land settlement. During the last financial year it expended only 6.2 per cent, of its loan allocation on war service land settlement, and during the current year it is estimated that it will expend only 2.8 ner cent. The actual expenditure this year will be less than half the amount expended last year. It must be clear from those statistics that the Labour Government of New South Wale3 accords to war service land settlement the lowest possible priority. Is that fair to the exservicemen of New South Wales who rendered such fine service to this country?
Compare the achievements of the Government of New South Wales with those of the “ agent “ States. Of course, ] know more about land settlement in New South Wales-
– What the honorable senator really means is that much more is being done in New South Wales than in other States because the Labour party is in o.’!!fe in that State.
– That is precisely why land settlement in New South Wales is in such a mess to-day. The allocations of the New South Wales Government for land settlement do not compare with those made by other State governments. Since World War II. the Commonwealth has expended approximately £24,000,000 in the “ agent “ States. Admittedly, some of the schemes in the agent States do not approximate the ideal, but the responsibility for recommending resumption of land for settlement rests not upon the Commonwealth hut upon the States. All that the Commonwealth does is to find the money. Although the Commonwealth has expended £24,000,000 in the “ agent “ States, the Government of New South Wales has expended altogether only approximately £26,000,000 and has resumed only 126 properties, including 121 western land leases, in respect of which it had no financial obligation.
Furthermore, there is much less discontent amongst land-holders in the “ agent “ States of the Commonwealth than there is in New South Wales. The practice followed by the Labour Government of New South Wales of compelling land-holders to surrender their properties at 1942 valuations, instead of negotiating fair and amicable settlements with them, does not tend towards amity. I realize, of course, that it would be grossly unfair to ex-servicemen to saddle them with the high costs of land resumed at maximum prices. The conditions of settlement of ex-servicemen should be such as to afford them at least a reasonable prospect of making a financial success of their ventures. However, the practice of compulsory acquisition at low prices followed in New South Wales has aroused intense resistance amongst land-holders. By contrast, the Government of Victoria, which pays a reasonable price for land resumed for settlement, has been able to carry out its programme without arousing the antagonism of land-holders. Land resumed on behalf of the Commonwealth Government by the “ agent “ States is acquired, in accordance with the Commonwealth Constitution, on “just terms “, and the amount expended by the Commonwealth, which is nearly as great as that expended by the Government of New South Wales, has produced an infinitely more satisfactory result. Had the New South Wales Government applied the same principle of resuming land on just terms as has the Commonwealth the total acreage acquired for exservicemen would have been considerably greater than it is.
I say, therefore, that the repeated attacks made by the Labour Government of New South Wales on the present Government of the Commonwealth is not only unjustified but is, in reality, merely an attempt to hide its shortcomings so that the public will not realize its maladministration of this important subject. The Labour Government of New South Wales has not been able to expend a fair proportion of its revenue upon the settlement of ex-servicemen because it has squandered its funds in reckless expenditure to placate the militant trade unions on whom it relies for support. Take, for example, the financial situation of the New South Wales Railways.
– What has that to do with the land settlement of ex-servicemen ?
– The relevance of my remark is that money that would otherwise have been used to finance land settlement has had to be diverted to bolster up the finances of the railways and other governmental undertakings that have fallen by the way. The net effect of its maladministration is that the exservicemen of New South Wales have to pay for it.
As an illustration of the sentiments of ex-servicemen towards the Labour Government of New South Wales, I mention that a recent meeting of intending land settlers unanimously expressed the view that the New South Wales Government has failed to achieve anything for the ex-servicemen of New South Wales in this field. They complained also that that Government was not playing the game, in that it was not returning to the fund for land settlement the amounts repaid by those ex-servicemen who had already received land. Furthermore, the meeting declared that the present Government of New South Wales was incapable of implementing war service land settlement, and recommended that the scheme should be administered by the Commonwealth. I emphasize also that those resolutions were adopted at a meeting of members of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia, and at such meetings party political considerations are not allowed to intrude.
– Where was the con,ference held ?
– In the electorate of the Acting Minister for Conservation of the Government of New South Wales, who addressed the meeting before it unanimously condemned the activities of his Government, lt will lie idle, therefore, for members of the Opposition to contend that that particular meeting was “packed” by Labour opponents, because it was held in the Riverina electorate of a member of the present Labour Administration of that State. Seven sub-branches of the lieturned Sailors, Soldiers and Airmen’s Imperial League of Australia were represented at it.
– Does the honorable senator agree with the resolutions?
– Because I have seen, and heard so much of Labour’s bungling in this matter in New South Wales 1 certainly agree that the administration of the scheme should be handed over to the Commonwealth.
– The honorable senator would be prepared to give the necessary powers to the Commonwealths
– Yep, My opinion now, and ever since the beginning of World War I., is that responsibility for war service land settlement should rest with the Commonwealth. I have never contended that State governments should be responsible for it. However, that is merely my opinion. What happened after the war was that the Labour Government of New South Wales adopted the attitude that the administration of land settlement by the Commonwealth represented an invasion of its sovereign rights, and it insisted that it could do a better job in this field than could the Commonwealth. Now, when it has made a hopeless mess of land settlement, it is seeking refuge in the false assertion that the Commonwealth is denying it the finance to carry out effective land settlement.
I support the bill, with the principles of which I agree entirely. The present Government has already indicated its belief that all money made available by it to the “ agent “ States for land resumption or by repayments by settlers should be used to promote further settlement. That attitude contrasts with the attitude of the New South Wales Government. Four million pounds has already been repaid to the New South Wales Government by ex-servicemen in that State who have been granted land, and that amount has been paid into the Consolidated Revenue fund of New South Wales for the purpose of supporting the tottering finances of that Government, which means that the ex-servicemen of that State are being called upon to subsidize that Government for its incompetence.
Sitting suspended from 12.1/5 to 2.15 p.m.
– There will be no opposition from either side of the chamber to a bill of this kind which authorizes the payment of moneys to the States in connexion with war service land settlement. However, the Opposition decries the continual attempts to make political capital out of this subject and to accuse members of the Labour party of failing to appreciate their duties to exservicemen who seek land from the Australian and State governments. A man of Senator Reid’s experience both in State and Commonwealth legislatures and with his knowledge of land settlement should be interesting and educational to listen to on this subject. But his remarks contained nothing but political condemnation of the Labour Government of New South Wales. Such condemnation will not achieve very much. Since this scheme was introduced there has been continual wrangling between the States and the Australian Government in connexion with it. The one notable exception has been in South Australia, of which I shall say more anon. Senator Reid has placed blame on the Government of New South Wales. Different systems of land settlement have been adopted in each State so that they have no uniformity of action. There are obvious reasons why we should not rush headlong into ventures of this kind. History reminds us of the failures that occurred in connexion with land settlement after the first world war.
I am concerned about the unnecessary delays that have taken place in settling ex-servicemen on the land which have resulted in considerable mental anxiety to nien whose applications have been approved for many years. Many of them have despaired of securing a block of land before they reach that stage of life at which the manual labour necessary for obtaining a good living from this type of undertaking is beyond them. These men were inspired with hope when, in 1949, the Prime Minister spoke of his government’s intention to take action in relation to the land settlement of exservicemen. He said -
The Opposition parties contain a majority of members and an overwhelming majority of new candidates who are ex -servicemen. We shall see to it that there is speed, financial and human justice and understanding in our administration of soldier problems. Current legislation will be promptly overhauled and anomalies adjusted. We will sympathetically review financial allowances, particularly those related to disability or war widowhood, in the light of all the circumstances, including the fall in the value of money. For advice in relation to them and other repatriation matters, we shall establish ex-servicemen’s committees of Cabinet and of Parliament, to confer with representatives of ex-service organizations. We will encourage and speed up Soldier Land Settlement, assist single-farm as well as group settlement, and aim always at proper security of tenure, without which there is insufficient inducement to effective farming.
That is another broken promise. One can easily understand eagerness with which men who were waiting for land rushed that proposal. It appealed to them. In every State, with the possible exception of Victoria, in which I understand the most rapid allocation of blocks, has been made, there has been a period of inaction which has caused applicants grave concern. Governments are trying te benefit by the sad experience of State and Australian Governments after the first world war. But it is a long time since the inauguration of this scheme and it should now be functioning effectively so as to avoid causing delay and worry to anxious applicants.
In South Australia, during the terms of office of the Labour “ socialist “ go- vernment and the present Government, co-operation with the Australian Government has been greater than in other States of the Commonwealth. Mr. Playford has often asserted that he has received full co-operation and assistance from the Australian Labour Government not only on matters of land settlement but on every other matter. In South Australia there are definite signs of advancement. Energetic, busy ex-servicemen are settled in various parts of the State and there is every outward indication of their ventures being successful.
It has been suggested inside and outside of this chamber that unless governments throughout Australia pay more attention to the production of foodstuffs anything but bright days lie ahead. To my mind, the chief obstacle to the effortsof the Commonwealth to place many men on properties is the variation in State laws. This is another example of a national undertaking failing because of the overlapping of State and Federal’ authorities. Tn South Australia, particularly at Kangaroo Island, on the Murray River in the West Coast and South-East districts, there are very practical demonstrations of what can be done by these men during a period of their lives when they are able to engage in the hard manual labour which is essential to the development of these blocks. In South Australia the Minister for Lands is an ex-serviceman who has rendered yeoman service to Australia in the armed forces. There is also in South Australia a land settlement committee. It is an all-party committee the duties of which are to inspect and gain information about lands that may be offered to the South Australian Government as suitable for soldier settlement. The committee has an important task and it has submitted many reports to the South Australian Government during the last few years, not all of them being unanimous. Therein lies the cause of the delay that occurs even in South Australia. I pay this tribute to the Premier of South Australia. As fur as I can gauge, he is eager to discharge every obligation to ex-servicemen as soon as possible and ensure that they are given the opportunity to take up blocks of land. But the difference of opinion thai exists on the land settlement committee has been a retarding factor. One member of this committee who does not hold tho same political beliefs as the Premier oi South Australia or the Labour party stated openly, for publication in the South Australian press, that the Playford brand of socialism could give the Australian Labour party brand of socialism ten yards start in 100 and beat the Australian Labour party brand. That statement illustrates how impossible the position is. The South Australian Premier is not a socialist, though by his actions he should be, and he has made a practical effort to do something for returned men.
In the eastern and more thickly populated States the main factors retarding land settlement of ex-servicemen are the overlapping of State and federal laws and the total inability of the Australian Government to raise finance, not only for this important obligation, but for other ventures. I know from my interviews with applicants that quite a. number of them have despaired of ever getting a block of land. Quite a few of them have withdrawn their applications and taken up other occupations, in which they are not subject to such delays.
According to the Prime Minister’s policy speech of 1949 the Government intended to ensure speed, financial and human justice and understanding in its administration of the problems of ex-servicemen. The Minister said in his second-reading speech that the total Commonwealth expenditure on war service land settlement from the inception of the scheme to the 30th June, 1952, was £23,275,000 and that 741 properties had been approved for inclusion in the scheme in three States. He added that subdivision proposals approved and single unit farms acquired had provided 1,570 holdings of which 1,212 had been allotted. The failure to allocate the balance of those holdings is causing some concern amongst applicants, particularly those who have been waiting for a number of years. In South Australia, along the Murray River at Cooltong, and also on the West Coast, there are positive signs that war service land settlement ventures will succeed in the long run.
– They are succeeding now.
– Every one knows that present day prices for farm commodities will not last forever. When they fall, that will be the testing time for this scheme. Senator Laught has said by way of interjection that the ventures are succeeding at present. He may be right, but who can foretell the future ? It would be a very foolish National Government indeed that refused to face the fact that, inevitably, there will have to be a considerable writing down of capital costs in this scheme. That process has to be faced in any land settlement scheme, but I shall confine my remarks to war service land settlement with which this measure deals. The Minister also stated in his second-reading speech that in addition to the £6,000,000 provided for in this measure, it was estimated that about £1,800,000 which would, accrue from repayments of advances, &c. by settlers, would become available for the same purpose. I take it that the proceeds from the repayments of advances, &c, are to be re-allocated to further applicants. I believe that it would be more advantageous if, for a fixed period, until the settlers are firmly established, some of this money were held to meet any writing down of capital costs that may become necessary. We all hope that such conditions will never arise but they appear to be inevitable. The cost of land to-day is very high compared with pre-war values, in many instances, the productive value of land to-day is not nearly as high as the price that land holders can get for it. 1 am not criticizing all land-holders. I know that in South Australia estates have been offered for soldier settlement at a figure considerably below the open market price, but unfortunately, in some instances, the reverse has been the case. The point I wish to make is that capital costs are very high, particularly in partially developed country, and that the continued success of soldier settlers in those areas will depend entirely upon the market value of primary products in the next few years. The Government would be wise to make some provision - far greater than that which appears to be included in the bill - to ensure that war service land settlers shall not at some future date be faced with bankruptcy or be forced to walk off their properties as so many soldier settlers of World War I. had to do.
All honorable senators who have studied the war service land settlement scheme will concede that, if development is to continue, transport, both road and rail, telephone and educational facilities must be made available to the settlers. In country districts, the practice is to require applicants for telephone services to pay a proportion of the capital installation cost. Throughout the rural areas of this country, one can see ample evidence in recreation halls, parks, playgrounds, and other amenities, of the determination of our pioneers to make existence on the land more congenial. In years to come, to-day’s soldier settlers will be regarded as the 1952 pioneers of the districts in which they are settling, but I believe that the cost of amenities to communal life in the new settlements is rightly a government responsibility, [f land settlement is to be encouraged as a means of increasing primary production then, in addition to assisting settlers to purchase, equip and stock properties, there is an obligation on the responsible governments to ensure that the amenities that are necessary to a modern civilized community shall be made available to settlers. That obligation must be shared by the Commonwealth and State governments because the responsibility for various work is divided. Soldier settlers and their families should not be asked to face unnecessary hardships. It is all very well to say that the early pioneers of this country were not afraid of hardships; but we are living in different times and if our ex-servicemen who are imbued with a desire to help themselves, are prepared to pioneer our undeveloped areas, the various governments of this country are in duty bound to provide them with all possible amenities.
– By and large the Commonwealth Government is doing that.
– No. The Commonwealth Government is concerned only with the improvement of the holdings, the equipping of farms and the sustenance of soldier settlers until the stage of economic production has been reached. Telephone services are a charge on the settlers. They have to pay not only a substantial and annual rental, but also a part of the installation cost. I believe that for the first few years at least no such charges should be imposed. Similarly, soldier settlers have to contribute towards the cost of transport, and educational and recreational facilities which I believe are rightly a government responsibility.
As I said earlier, I do not condemn the soldier settler schemes that have been undertaken in South Australia. My only regret is that the settlement process has been slow. For every successful applicant for a war service land settlement holding, there is another waiting for land. In addition, probably one applicant out of every three gave up hope long a.go. I trust that whilst war service land settlement remains the responsibility of the Commonwealth, no government, regardless of its political colour, will be niggardly in its allocation. We are all in debt to the men who risked their lives for their country, and moreover, land settlement is most desirable if food production is to be increased. I hope that the information that has been sought by one of my colleagues will soon be forthcoming. I trust also that when the time comes to make further provision for the war service land settlement scheme, this Government - if the country is unfortunate enough still to be in the hands of the present administration - will not continue to blame the Chifley Labour Government which the Liberal-socialist Premier of South Australia extols day after day.
– I take this opportunity to congratulate Senator Critchley upon his speech. His approach was objective, and his criticism was offered in a commendable spirit, free from party political colour. I regret, however, that some of his colleagues did not adopt that attitude. Although they supported this measure, they sought to indict the Commonwealth Government for the alleged failure of the scheme in several States. The theme of their criticism was that too little money was being made available by the Commonwealth, and that too few men were being settled on the land. Senator
O’Byrne set the hall rolling by complaining that the financial provision made in this measure was inadequate. In a dolorous voice he complained at great length about the lack of funds, but he did not say why the allocation was inadequate. He reminded me of an Irishman at the wailing wall. That may perhaps he a rather confused picture, but it is not as confused as were the honorable senator’s remarks. Senator Cooke, too, stood at the wailing wall. In a pathetic voice he complained bitterly that too few men were being settled on the land. I do not know how he would suggest that the number of settlers could be increased. The only inference I could draw from his remarks was that the Commonwealth should send an armed force to Western Australia and eject five or six hundred farmers from their holdings and replace them with soldier settlers. The Opposition’s criticism overlooked certain fundamental facts. First, the acquisition of land for soldier settlement is the responsibility of the States and not of the Commonwealth. That aspect of the scheme has nothing to do with the Commonwealth. If too few men are being settled because insufficient land is being acquired, it i3 the fault, not of the Australian Government, but of the governments of the States. If insufficient money is being made available in the principal States, it is the responsibility of the governments of those States.
– Western Australia is an agent State.
– I am referring to the principal States. If Opposition senators contend that insufficient money is being made available for this purpose in the agent States, I can only remind them that in no instance has an agent State requested the provision of additional money. From year to year the money required by the agent States for this purpose is provided by the Commonwealth. To sum up, a great deal of the criticism voiced by Opposition senators is ill-informed.
I refer at this stage to the report of the Rural Reconstruction Commission, which planned the basis of this scheme. Honorable senators will recall that the commission was established by the Labour
Government in 1945 for that purpose. Opposition senators who have been provoked into voicing criticism along the lines I have mentioned, should take note of these statements which appear in the commission’s report -
The commission wishes to reiterate that the manner in which public opinion approaches the question is of the utmost importance. One of the greatest problems governments will have to face in implementing any rural scheme for re-establishment of ex-members of the services will be the pressure of ill-informed public opinion influenced by public statements. Such statements too often emanate from the job seeker, the land seller seeking a profit, the badly informed self-styled patriot-
I particularly invite Senator O’Byrne to take note of those remarks. The report continues -
Such statements too often emanate from . . local interests thinking selfishly in terms of the number of mem settled and the amount of money spent in the district, instead of in terms of the number of men who can bc successfully settled in the district. It is not patriotism, nor is it political wisdom to urge governments to embark upon projects which cannot stand the test of expert analysis, and can only result in hardship and disillusionment for the individual, as well as an immense waste of public money, and a setback to agricultural progress in Australia. Governments and their administrations must approach the task with a firm resolve to resist this type of pressure, and are entitled to look to soldiers’ organizations and the press for support in doing so.
I add that the commission has clearly anticipated the sort of criticism we have heard in this chamber emanating from the members of the Labour party. The report continues -
Properly organized and well informed publicity will go far to assist. The public must be informed and kept informed that it is useless thinking in terms of “ Here is a soldier seeking a farm; let us create one for him at once “-
I invite Senator Cooke to note that remark ! and that successful settlement cannot be forced against the dictates of long-term market requirements and prices, suitability and availability of land to produce for those markets, and general considerations relating to farm finance, farm economics and social conditions.
Those statements appear in the concluding paragraphs of the report. They are particularly apt, having regard to what has been said in this chamber by some honorable senators opposite. If the members of the commission were present in the chamber to-day they would have been impressed by the fact that representatives of the Labour party are now making the dangerous statements about this scheme to which the commission alluded as early as 1945.
– I invite the honorable senator to tell that to the 30,000 unplaced ex-servicemen.
– This scheme has been in progress for six years. It would not be out of place for me to repeat for the benefit of Opposition senators, some of the basic principles upon which it was founded. They are incorporated in the original statute which was passed during the regime of the Chifley Government. The Rural Reconstruction Commission gave some attention to the reasons for the failure of the scheme that was put into operation after the termination of “World War I. It set out quite clearly four- substantial reasons for the failure of that scheme. They were, first, that too little regard had been paid to the selection of settlers; secondly, that too little importance had been attached to the selection of suitable land; thirdly, that farms had been over-capitalized; and, lastly, that the housing of settlers had been inadequate. As we all should know, an effort has been made to eliminate those undesirable factors from the present scheme. Those honorable senators who complain bitterly about the rate of progress of the scheme should have regard to those factors before they voice their criticism. In short, the scheme as envisaged by the Chifley Government was a good one. It endeavoured not only to settle men on the land but also to provide a desirable way of life for ex-servicemen, for whom nothing is too good.
We should now ask ourselves whether these aims are being turned into realities. lt has been urged that too few men are being settled and that too little money has been provided by the Government for this purpose. With all respect, I think we can accept the view that these general criticisms have no great merit. There are two separate schemes, each unrelated to the other. The scheme implemented bv the so-called principal States is quite distinct and separate from that adminis tered by what are called the agent States. Let us examine the progress that has been made by the agent States, in particular, Western Australia, about which I have some knowledge. In Western Australia, by December, 1949, a total of 291 men had been allotted farms. By January, 1952, the total had been increased to 767. During the regime of the present Government, 476 men have been placed on farms in that State in the short space of two and a half years. Approximately 695 men are still awaiting farms. At the present rate of progress their settlement will be completed in from three to five years. Within about ten years of the commencement of. the scheme all applicants deemed eligible for the allotment of properties in Western Australia will have been placed on properties.
– On the land at 40, and under the land at 50 !
– Ten years may seem a long time, but when it is compared with the .progress achieved in some of the eastern States, it is a very short time. Having regard to the many factors involved in soldier settlement, to which Senator Critchley has properly referred, I suggest - and I do not think that my suggestion can be controverted - that the progress of the scheme in Western Australia has been satisfactory. That is also the case in the other agent States.
The story of progress made in the so-called principal States - New South Wales, Victoria and Queensland - is a sad one. I again remind honorable senators opposite that in those States obligation to provide the requisite funds for the scheme rests substantially upon the State governments. In New South Wales, approximately 1,856 men have been allotted farms, compared with the total of 667 in Western Australia and approximately 3,000 are still awaiting farms. At the present rate of progress in New South Wales no less than eighteen years will elapse before the scheme can be completed. In Victoria, the position is even worse. In that State, settlement has been brought to a standstill. In Queensland, the position is worse still. The figures in relation to that State make very interesting reading. To date, 427 men have been settled on farms, or approximately 250 fewer than in Western Australia. That record cannot be cited with any degree of pride by the members and supporters of the Queensland Government. At the existing rate of progress, more than 30 years will elapse before all applicants deemed eligible for land settlement will have been placed on blocks in that State. Labour’s criticism in regard to the slow rate of settlement is most apt when it is applied to the position in the eastern States. Another intesting feature in these figures is the amount of money expended for this purpose in the eastern States. In 1948-49, the New South Wales Government expended £4,500,000 on the scheme. Such an expenditure from its loan funds allocation of £16,200,000 was very commendable. But what is the picture to-day? Of a loan allocation of £70,000,000 during this financial year, New South Wales proposes to expend only £2,000,000, or only 2.S per cent on the land settlement of ex-servicemen. The picture is just as dismal in Queensland. Of a loan allocation of £S,600,000 in 1948-49, the patriotic Queensland Government expended only £172,000, or 1.9 per cent, of its loan funds on soldier settlement. Queensland’s loan allocation for this financial year will be £25,000,000, of which it proposes to expend only £670,000 or 2.6 per cent, on soldier settlement, compared with the proposed expenditure by Western Australia of about 20 per cent, of its loan funds on the scheme for the same year.
– Has the honorable senator the figures in relation to Victoria?
– No, but they are probably worse than those of New South Wales. I repeat that New South Wales proposes to expend only 2.S per cent, of its loan funds during this financial year on the land settlement of exservicemen, an Queensland only 2.6 per cent. I am convinced that neither the Queensland Government nor the New South Wales Government is really concerned with the welfare of the scheme. If the ex-servicemen of New South Wales were aware of the proposed meagre expenditure by the New South Wales Government on soldier settlement during this financial year they would throw the “ 2.8 per cent, patriotic Cahill “ into Sydney Harbour.
– Justifiable homicide ?
– Honorable senators opposite have stated that the Commonwealth has provided the States with insufficient money with which to implement the war service land settlement scheme. I have cited the dismal record of the eastern States in this connexion. Until the governments of those States are prepared to expend a greater proportion of their loan allocations on the scheme, it cannot succeed.
– The honorable senator should confine his remarks to the State that he represents.
– I consider that the funds that have been made available to the agent States for the purpose of the scheme have been adequate. ~No legislative provision has yet been made for the land settlement of exservicemen in the Territory of Papua and New Guinea, which I consider to be ideal for the purpose. Of course, I realize that farming in the territory is not easy. Prospective settlers in the territory need to possess a good deal of the sterling qualities that have been evinced by many ex-servicemen in order to succeed. I understand that the Minister for Territories (Mr. Hasluck) has under consideration a proposal to extend the soldier settlement scheme to the Territory of Papua and New Guinea. I commend the Minister on his initiative and his realization that the Territory must be peopled by courageous men who are prepared to work. The extension of the scheme to that territory will afford to many ex-servicemen who have been unable to obtain farms in New South Wales and Queensland an opportunity to engage in rural pursuits.
– What about Western Australia ?
– I am not so much concerned about Western Australia, because I am sure that that State will be the first to complete its settlement of ex-servicemen on the land.
I believe that the debate on a measure such as this should not be conducted on party lines. I have commended both Labour and non-Labour Governments for their administration of the scheme. The Labour Government of Tasmania has a remarkably fine record in relation to soldier settlement. I do not know what sort of a government is in office in Victoria at present but, irrespective of its political colour, unless it is prepared to make available more money for the land settlement of ex-servicemen in Victoria the scheme will fail in that State. These remarks apply equally to the Queensland Government and the New South Wales Government, but they do not apply to the Western Australian Government, the South Australian Government, or to the Commonwealth. I consider that the Commonwealth has carried out its obligations because its offer to the principal States to take over the administration of the scheme and provide the necessary funds was declined. I support the bill.
Senator GRANT (New South Wales) f3.S’. - It is extraordinary that supporters of the Government have refused to recognize the existence of certain situations ever since the Government has been in office. Both Senator Reid and Senator Vincent have stated that the land settlement of ex-servicemen has practically nothing whatever to do with the Commonwealth. Even a person who has been reared in a lunatic asylum realizes that the state of affairs that has existed in this country since 1949 can not possibly continue. Inevitably, the continued rise of prices and wages must lead to chaos. Honorable senators opposite have bluffed their way through ever since they have been in office. They have been consistent only in saying that costs have not increased any more, relatively, than during Labour’s term of office. However, the figures that have been cited by Senator Vincent were worth absolutely nothing, because figures do not mean anything. Many Australian industries have been costed out of their markets, and, due to increased costs, many ex-servicemen have been unable to obtain land.
Senator Vincent has referred to the Rural Reconstruction Committee. I presume, as the honorable senator is about to leave the chamber, that he does not wish to hear me reveal his ignorance of the subject. That committee has rightly pointed out that no ex-serviceman should have to pay an uneconomic price for land. The New South Wales Government has realized that it cannot take land from the large holders that Senator Reid seeks to protect and the High Court has ruled accordingly. The New South Wales Government has endeavoured to ensure that exorbitant prices shall not be paid for land that is required for soldier settlement. Goods produced in Western Germany are now appearing on the markets of the world again, and, according to to-day’s broadcast news bulletin, a New Zealand banker who has just returned from a trip abroad has stated that Japan is probably now better off economically than is any other country except the United States of America and Canada. India, also, is returning to production. If ex-servicemen are placed on land that has been over-capitalized, how can they hope to dispose of their products? There is no guarantee that their products will even be sold. The New South Wales Government has endeavoured to avoid a repetition of the position that confronted ex-servicemen of World War I. during the last depression.
I challenge the Government to point to one action that it has taken to keep down costs. No matter what subject may be under discussion in this chamber, the Minister for Shipping and Transport (Senator McLeay) always introduces the “ red “ bogy. The Minister is apparently oblivious of the real state of affairs in this country. It is expected that another large basic wage rise will be announced to-morrow. Mr. Chifley pointed out repeatedly that the economy of this country would end in chaos unless the prices of commodities, particularly those that are included in the “ C “ series index, were fixed.
– Order! The honorable senator should confine his remarks to the bill.
– I am endeavouring to show that it is uneconomic for an exserviceman to settle on land that has been over-capitalized. The present Government has done nothing to prevent prices from rising. The price of sugar has been increased again. Tasmanian senators are very interested in the production of jam. I point out that despite the activities of the so-called “ reds “ of the seamen’s union and the Waterside Workers’ Federation, sugar could he imported and sold at a price lower than that of Australian sugar. That would have a disastrous effect on the local industry. Senator Reid has stated that it appears that no more soldiers will he settled on the land in New South Wales. There is no use beating about the bush in this matter. Unless steps are taken to control prices the soldiers who are already settled on the land will be forced to leave their farms, and many more men will be forced out of industry. I consider that the Minister for Lands in New South Wales, Mr. Renshaw, should be complimented for his efforts to acquire land at reasonable prices for the purposes of the land settlement of ex-servicemen. Senator Reid has stated that the New South Wales Labour Government is not interested in obtaining land for soldier settlement. It is interested to the extent that it has recommended that in certain circumstances ex-servicemen should not pay exorbitant prices for land, which would militate against their chances of making a living from it. The sooner the Government appreciates that it has the country in a state of terror, the better it will be for everybody. I suggest that it should try to do something positive in order to stop this terrible inflation that has been with us since 1949.
– In rising to support the bill, I wish to correct some of the rather silly statements that have been made by honorable senators recently. The first honorable senator on the other side of the chamber to discuss this bill lamented the fact that only £6,000,000 will be provided this year for war service land settlement. Apparently, he has read neither the bill nor the second-reading speech of the Minister for National Development (Senator Spooner). If he had done so, he would be aware that additional sums of £1,S00,000 and £1,652,000 must be added to that amount. As the expenditure last year for this purpose was £6,350,000, an additional £3,102,000 is being provided this year. It is, therefore, clear that money is being made available to the degree to which it is requisitioned, as Senator Vincent has stated. Honorable senators opposite have also complained that there are 25,000 men waiting to be placed on the land. Apparently they believe that all that is necessary to place men on the land is to provide an unlimited sum of money. Of course, that is far from being true. It is of little use to obtain a farm and settle a man on it if he cannot produce anything after he has been settled there.
One of the matters which is holding back war service land settlement and also retarding agricultural production is the fact that superphosphate is rationed. I confine my remarks to Western Australia because most of the eastern States do not use anything like the quantity of superphosphate that is used in the west, although I understand that South Australia and Victoria are greatly increasing their consumption. In Western Australia, a definite amount of superphosphate is allotted each year for the use of new settlers. It is not of the slightest use making an unlimited amount available if, by doing so, existing farmers must go short. The availability of superphosphate this regulates the rate at which men may be settled on the land in Western Australia. Another limiting factor is the shortage of agricultural machinery. It is not possible to buy all the cultivators, ploughs and hay balers that are required. Until such machinery is available in the requisite quantities, land settlement must be retarded. It is futile to say that the war service land settlement scheme depends for its success on the amount of money that is being made available. It should be remembered that other very important considerations also apply.
I was amused to hear the lamentations of an honorable senator opposite to the effect that large areas of Tasmania are owned by two or three individuals. If I remember aright, one of the planks in the platform of the Australian Labour party is that land tax should be imposed with the object of breaking up big estates. I point out that for eight years Australia had a Labour government, and there is at the present time a Labour government in Tasmania. If large estates in Tasmania have not been broken up, I suggest that it is because those governments have not wished to do so. 1 do not suggest for one moment that ti cb action should be taken, because
I know of instances in Western Australia when less production has been obtained after estates have been cut up than before. I know of a large estate, of about 20,000 acres, which was subdivided after World War I. Approximately 20 families were settled on it. However, those families did not produce in ten years as much produce as the previous owner had produced in one year.
I I does not necessarily follow that production will be increased merely by cutting up large estates.
– Is the honorable senator referring to the Peel estate?
– No. The property to which I refer is a very good one, and I know it well. I can give some interesting information on the Peel estate, however, for the benefit of agriculture generally. That estate is situated near Fremantle. To put it bluntly, it was a failure. I went down there recently to see a property that had been taken over by a young man, who is the son of a doctor. He is milking 35 cows off 4J- acres. I saw there a growth of pasture that is perhaps unrivalled in any part of the State, and the owner informed me that he is not using a bag of artificial fertilizer. The only manure used is compost. I merely mention that fact in the hope that the officials of the ( Commonwealth Scientific and Industrial Research Organization will take cognizance of it and advocate further use of compost in lieu of artificial fertilizers. I Incidentally, experiments which have been carried out with foodstuffs have shown that disease is more likely to be associated with those grown by the use nf artificial fertilizers than with those grown with compost.
T was somewhat amazed to hear Senator Cooke, who also comes from Western Australia, saying that it will take years and years to improve these places.
– I was speaking of virgin land.
– I recently had the pleasure of taking the Minister for
Health down to Mount Many Peaks, where returned soldiers are being settled, and I was able to introduce him to a man whose property is now carrying two sheep to the acre, whereas eighteen months previously it was virgin soil. Yet Senator Cooke believes that improvement will take years and years.
– One swallow does not make a summer !
– No, but there are more than 1,000,000 acres of such land being turned over to war service land settlement in the west. There are well over 1,000,000 acres of such land in the Mount Many Peaks and Rocky Gully areas alone. At Rocky Gully, >by the use of the highball, 80 acres of timber a day is being felled. There again, the amount of money available is not as important as the quantity of superphosphate which is available, because that country requires a. bag of superphosphate to the acre after it has been cleared. If superphosphate is rationed, naturally it is not possible to fire ahead and to clear willy-nilly such a big area. That country will be cleared and ex-servicemen settled on it just as fast as it is possible to do so.
I was also interested to hear Senator Cooke bewailing the plight of new settlers who have gone into the tobacco industry. He apparently believes that the Government should subsidize tobacco. He seems to think that tobacco is handled by a monopoly. That is entirely wrong. Tobacco is sold on the open market. On the 25th July last the secretary of the Western Australian Tobacco Growers Association, Mr. Felstead, received in- formation that the 3S0 tons of leaf which were offered at the recent Victorian sales realized firm rates. Tops were 5 per cent, to 7 per cent, lower than last year, but the mid-grade leaf was 5 per cent, higher. The top price was 5s. 7d. per lb. If I remember correctly, the honorable senator referred to a price of approximately 2s. per lb. It is true that at the sales to which I have referred some leaf was left over, but it was low-grade leaf. The task which faces us is to give assistance to new tobacco-growers in order to enable them to raise the quality of their leaf to the required standard. If they do so, there is not the slightest doubt that they will obtain the ruling price for their tobacco leaf. 1 wish to level some criticisms at the war service land settlement scheme as it operates in Western Australia. My colleague, Senator Reid, has stated that he would be pleased if the Commonwealth would take over war service land settlement in New South Wales. I do not wish to intrude in that connexion, but I should be very sorry indeed if the Commonwealth ever took over the scheme in Western Australia. As I stated recently, I object to the cold hand of the Commonwealth interfering with Western Australian affairs, for the sole reason that Western Australia is so far away from the eastern States that the Government at Canberra knows nothing of conditions in the west, and accordingly cannot satisfactorily administer it. I object particularly to the limitation of war service land settlement holdings to 2,000 acres. I know of a property of 1,800 acres which was offered to the Western Australian Land Settlement Hoard. The board haggled over the transaction for eighteen months and ultimately decided not to take the property because it was not quite 2,000 acres. I knew the two previous owners, who had done well on the property. When tuc board decided that it would not complete the transaction, a man who had had a tentative offer immediately accepted it and has done so well since that he was recently able to take a trip home. It would have been a better proposition for an ex-serviceman than I lie winning ticket in “ Tatt’s “.
Recently I was speaking to a farmer in Western Australia who said he intended to sell out. I said, “ Good gracious! Have you no sons?” He said, “ Yes, I have a son, but he is not interested in the property”. Later I heard that the property had been offered to the Land Settlement Board, which had refused it because it considered the land was not first-class. The property was typical of the district and consisted of approximately 1,500 acres. The improvements consisted of a very fine cement brick house, with a wide verandah, and two of the finest sheds in the west, one being a shearing shed and the other a machinery shed. At the time at which I spoke to the man he was stripping a 20-bushel crop of wheat, and the property was then carrying 1,000 head of sheep. Yet the land settlement authorities regarded his property as unsuitable.
Another matter to which I wish to refer is the question of ex-servicemen obtaining the freehold of their land. That will not be possible in Western Australia, in my opinion, because of the provision that before ex-servicemen may obtain the freehold of their properties they must pay the whole of the costs involved. I think that all honorable senators will agree that the owner of a property which is being purchased should receive the market value, such value being based on the productive capacity of the property. However, that is not all that has to be taken into consideration. Having cut up the property into two or three smaller properties, it is then necessary to erect houses, to make provision for water supplies, and to provide many other improvements, all of which add to the purchase price. When Senator Aylett was speaking in the Senate recently, he gave the impression that it is his ‘belief that the £1,S00,000 to which I have referred, is to be paid to the owners of properties. I point out that it has nothing to do with the purchase of properties. That money is to go towards writing down the additional ra tie of properties consequent on improvements being added, in order to bring those values down to economic levels. It is on the economic value that the settler will lease his property. If he wishes to obtain the freehold, the position will be very different. If the property was bought for £10 an acre and the improvements increase the value to £15 an acre, the rental will be based on a value of E10 an acre; but if the settler wishes to obtain the freehold of the property, he will have to pay £15 an acre. Of course, most settlers will not be able to do so. In my opinion, provision should be made to enable settlers to own their properties. In Western Australia, as in other States of the Commonwealth, the greatest incentive to men on the land is the knowledge that they own their property.
Sen tor Finlay. - They are assisted with improvements until the land becomes productive.
– If they decide to acquire the freehold they have to pay the total value of the land, including the value of improvements, but if they have only the leasehold the price has regard only to the freehold value without the added cost of improvements.
Another matter on which I have received representations during the last few days concerns the introduction of an allegedly new system of determining the value of land that has been subdivided. When a property is subdivided into four or five farms, as frequently happens, the practice hitherto has been to charge only the block on which the homestead, shearing sheds and other improvements ave situated with the value of those improvements. My correspondent complains that a new practice has been introduced by the State land settlement authorities under which the added value of the improvements on the homestead block is averaged over the remaining blocks, notwithstanding that those blocks do not actually receive any benefit from those improvements. I believe that this new system is causing considerable dissatisfaction amongst soldier settlers, and I ask the Government to take up that matter with the State authorities in order to see if some more equitable arrangement cannot be arrived at.
I am pleased that the Commonwealth is allocating an increased sum of money for land settlement in the “ agent “ States, and I have every confidence that in Western Australia, additional exservicemen will be settled on the land there as soon as new machinery, sufficient quantities of superphosphate and an adequate water supply are forthcoming. Senator Critchley referred to the provision of schools in soldier settlement areas, and I am pleased to be able to inform him that in the Rocky Gully area, where 80 acres of land are being cleared every day, a. school, picture show and other necessary amenities have been provided. Similar amenities are being provided in the Many Peaks soldier settlement area. With the exception of the matter of determining the value of land for resumption, land settlement of ex-servicemen is proceeding satisfactorily in Western Australia.
– I should not have taken part in the debate but for the unfounded criticisms of the Government of NewSouth Wales uttered by Senator Reid and other honorable senators opposite who have sought to justify the paucity of the expenditure by the Commonwealth in the “ agent “ States by attacking the achievements of the Government of New South Wales. One of the misstatements of fact made by Senator Reid was that the Government of New South Wales pays only the 1942 valuation for land that is resumed for soldier settlement. That is certainly not the case. In almost every instance the actual price paid by that Government for land it has resumed has been the 1942 valuation of the land plus 15 per cent.
In his efforts to criticize the New South Wales Government, Senator Reid said that although the basic wage had increased by 78 per cent, during the past three years, the allocation of Loan Council funds to New South Wales had increased by £35,000,000, which was an increase of 120 per cent. He might at least have been honest and told us that the figures he was citing were not official statistics at all, but were taken from some propaganda issued by the Australian Country party. In fact, a statement which appeared in the Riverina Grazier reads -
In the three years from 1949 the basic wage has increased from £0 12s. to £7 53., or 78 per cent. Over the same period the income tax reimbursement from the State and Federal Governments rose from £25,000,000 to £54,000,000, an increase of 116 per cent.
Of course, that is a message from the Australian Country party, and the significance of its similarity to Senator Reid’s assertion is obvious. That is typical of the deception practised by members of the Australian Country party in this chamber.
– Does the honorable senator challenge the accuracy of the figures that I have quoted?
– I do not question the accuracy of the figures, but I do not approve of the manner, in which the honorable senator introduced them to the Senate. The manner of his presentation of those figures suggested that they were taken from official sources-, whereas, in fact, they were pure propaganda disseminated by the Australian Country party.
The honorable senator went to considerable lengths in his efforts to justify ibo inadequacy of the Commonwealth grants to the States of South Australia, Western Australia and Tasmania. Up to the end of 1951 it paid to those “ agent “ States only £4,125,000. Contrast that expenditure by the Commonwealth, with all its resources, with the expenditure by the New South Wales Government on war service land settlement of more than £20,000,000.
Senator Reid also attempted to belittle the expenditure of the New South Wales Government on war service land settlement by stating that the Commonwealth contributed directly to the State’s expenditure. What was the amount of the contribution made by the Commonwealth Government to New South Wales? lt amounted to only £600,000, or 3 per cent, of the State’s expenditure.
– That is the limit of the obligation imposed upon the Commonwealth by the land settlement agreement that it made with the States.
– Quite so, but the point is that no government in this country owes a greater obligation to exservicemen than does the Commonwealth. Surely the honorable senator does not suggest that the Commonwealth contribution of £600,000 to land settlement of exservicemen in New South Wales compares favorably with the amount of more than £20,000,000 expended by the Government of that State? The honorable senator should not have attempted to prostitute such a subject as the welfare of exservicemen in his efforts to justify the Government that he supports. I have not yet had an opportunity to test the authenticity of the propagandist figures that he quoted, but, quite frankly, I doubt them,
I think that the Government of New South Wales has achieved a great deal in its efforts to settle ex-servicemen on the land, and that fact is borne out by the number of ex-servicemen who have already repaid the amount advanced to them. Admittedly the reason why they have been able to redeem their financial obligations so quickly is that they had the benefit of good seasons and unprecedentedly high prices for wool and certain other primary products. Those are matters, of course, that were purely fortuitous, and for which neither the Government of New South Wales nor of the Commonwealth can claim credit.
I cannot help contrasting the liberality of the treatment accorded by Labour to ex-servicemen after World War II. with the miserly treatment given to the exservicemen of World War I. by the antiLabour governments that were then in office in the Commonwealth and most of the States. Senator Seward and Senator Vincent mentioned the favorable progress of land settlement of ex-servicemen in Western Australia, I recall that, thanks to the attitude of anti-Labour parties that were in power after World War I., thousands of returned soldiers in Western Australia walked off their holdings with nothing more than their swags. No land, regardless of whether it is intended for settlement by ex-servicemen or by others, is worth one shilling an acre more than its productive value. I mention that fact in order to expose the insincerity of the vehement complaint of Senator Reid that the Labour Government of New South Wales did not deal fairly with the landholders whose properties it acquired for the settlement of ex-servicemen. The price paid by the New South Wales Government represented a fair price, having regard to the actual productive value of the land it resumed.
Of course, Senator Reid confined his criticism to land settlement in New South Wales, and in doing so he admitted quite openly that he knew nothing about the progress of land settlement in the other States. His confession of ignorance of what is happening throughout the other States- of Australia flatly refutes the dictum of Senator Wright, who castigated the members of the Opposition last night in the course of debate on another measure for not knowing all about every subject under the sun! However, if a member of the Parliament takes it upon himself to make such a vehement attack upon the government of another State as Senator Reid did upon the Government of New South Wales, I think he ought at least to inform his mind of what is happening in this matter of land settlement in the other States. Obviously, Senator Reid was quite incapable of doing so, and he was content to work the old parish pump. He was not qualified to express an opinion about the merits of the New South Wales Government’s administration of the land settlement of ex-servicemen because, I repeat that, on his own admission, he knows nothing whatever of what is happening in Victoria, Queensland, or in any other State, and he could not possibly make a fair estimate of the efforts of the Government of New South Wales.
Senator Reid’s knowledge of land settlement, even in the State which he represents, is apparently confined to something he has seen or heard in the Riverina area. He told us that a convention of ex-servicemen was held in the Riverina some little time ago, at which dissatisfaction was expressed with the activities of the New South Wales Government. What the honorable senator did not tell us, however, was that at that meeting the Commonwealth Government also was criticized most severely; and, in fact, resolutions were adopted calling upon the State branch of the Australian Country party to condemn the attitude of the present Government in this matter.
Irrespective of the political complexion of any administration, its first duty should be to provide the best possible conditions for land settlement of ex-servicemen, and that is the principle that has guided the Government of New South Wales ever since World War II. Government senators have tried to justify the paucity of the money that has been provided for Tasmania, South Australia and Western Australia - a sum of £4,500,000, compared with £20,000,000 which has been used by the New South Wales Government for the purposes of land settlement. No wonder honorable senators opposite have tried to justify the allocation of such a small amount and deflect criticism from the paucity of that expenditure by indulging in condemnation of the New South Wales Government.
Some criticism has been made in regard to the resumption of land for settlement by ex-servicemen. Every person from whom land is resumed should receive its fair value but there must be a line of demarcation. Values must be based* on a given period. It is true that the values of 1942 which were referred to by Senator Reid have been adopted but they have also been varied. They have been increased by 15 per cent, and by even more than 15 per cent. But some of the big land-holders objected to the resumption of their land. They were prepared to give everything for Australia when the Japanese were advancing towards this country but when the servicemen returned from the war they refused to make their land available for settlement. Only a fewobjections have been raised to the prices that have been offered for land resumed by the New South Wales Government. No State government has done a better job for returned servicemen than the Government of New South Wales. T invite honorable senators to canvass the soldiers who have settled on the land in New South Wales and ascertain their satisfaction with their properties. Some of them are free of debt already, thanks to the price of wool and the good seasons that they have enjoyed. I am glad that that position obtains. I should like it to obtain throughout the Commonwealth for all ex-servicemen who deserve the best that this country can give them.
– Honorable senators have heard interesting contributions to this debate, not the least of which were made by Senator Ashley. We witnessed rather a duel between Senator Reid and Senator Ashley, both of whom come from the State of New South Wales. I am still not convinced that Senator Ashley answered the charge of Senator Reid who informed the Senate that he had attended a meeting of ex-servicemen recently at which the State Minister for Lands was present. At that meeting the returned servicemen carried a resolution which requested the Commonwealth to take charge of the land settlement of ex-servicemen in that State. Senator Ashley has not disposed of that charge.
– It is too frivolous.
– Is it frivolous? The State Minister for Lands and a responsible senator from this chamber were both present at that meeting at which each of them made a statement. [ consider that Senator Reid’s charge has gone unanswered. Senator Ashley suggested that honorable senators on this side of the chamber were hard’ put to it to justify the paucity of the funds that had been made available for ex-service laud settlement. I am proud to support this bill which will make money available to the three agent States. I suggest that the amount provided in the bill is entirely satisfactory to those States. Senator Vincent referred to the satisfaction that had been expressed’ with the amount to be allocated to Western Australia for the current year. The expenditure for the current financial year by the Commonwealth in the three agent States will be £3,300,000. As Senator Seward said, the Government has proposed to make available £7,S00,000 for the acquisition of land plus £500,000 for the payment nf sustenance allowances to the men who will be settled on the blocks. The sum of £7.300,000 will comprise £6,000,000 of new money and £1,800,000 which is being reinvested in the scheme, it having been returned to the Commonwealth by way of repayments of advances by soldiers who have already been .settled. Last year only £6,350,000 was expended for this purpose so that this year’s expenditure will represent an increase of £1,450,000 on that amount. That fact speaks volumes for the interest of the Government in this matter. The Governments of South Australia, and Western Australia, and, I understand, of Tasmania, also are satisfied with these allocations. A total of £23,375,000 has been made available by the Government to the States for this purpose since the beginning of the land settlement programme. That investment has been wisely used by the States which have been entrusted with its expenditure under the agreement.
Senator O’Byrne referred to certain estates which he 3aid were not being utilized to the fullest extent in the north-
west of Tasmania. He implied that it was the responsibility of the Commonwealth to acquire those areas and subdivide them for the benefit of returned servicemen. Such action is not a Commonwealth responsibility.
– The Common-wealth could not do that.
– Of course not. Under the agreement to which Tasmania is a party it is the responsibility of the State governments to administer this scheme. They are the only authorities that can acquire land for the settlement of ex-servicemen. They have to submit their projects to the Australian Government for approval and it is only at that stage that the Commonwealth participates in the scheme. Most of the areas that the South Australian Government proposed to resume under any method have been approved by the Australian Government. I suggest that Senator O’Byrne did not know what he was talking about when he suggested-
– He said that it was a pity that the Australian Government could not take that action.
– I do not want to misquote Senator O’Byrne, but I think that it was clear that he charged the Commonwealth with the responsibility of resuming that land. I say that this is the responsibility of the State government which is the only body with authority to acquire the land. I have been tremendously interested in the war service land settlement scheme since its inception. I was closely connected with it in South Australia and have watched with great interest the progress that has been made under it. In introducing the bill the Minister suggested that the Commonwealth had not relied solely on acquiring single-unit farms or on subdividing properties which were already productive but had embarked on the development of large tracts of virgin land. I was very pleased to hear him make that statement which is particularly true of South Australia. The Government of South Australia has made available a considerable area, of Crown land for settlement by ex-servicemen. It has also purchased a few large estates which were hitherto almost entirely unproductive.
The greatest benefit will surely be derived from this scheme when new areas, hitherto unproductive, are developed. South Australia has been particularly successful in this particular type of settlement. I do not need to mention specific areas which may not be familiar to honorable senators, but some areas in the electorate which I represented in the State Parliament for some years once contained virgin scrub which carried nothing more than a few scrub sheep and kangaroos and foxes. Now the scrub has been cut down and when I travel through that area I see luscious pastures growing, houses and fences erected, provision made for water, the settlers happy with their families, and sheep and lambs grazing where hitherto there was nothing to be seen but scrub. That is a real settlement programme which will (benefit not only the ex-servicemen concerned but also the economy of this country in the years to come. I greatly appreciate the sentiments expressed by my South Australian colleague of the Australian Labour party, Senator Critchley. I was not present when he spoke, but I understand that he referred to this particular kind of settlement, and commended the South Australian Government, and particularly the State Minister, for his activity in assisting the development of those areas. Senator Critchley’s commendation of a State government of a political faith different from his own surely proves to all who are interested that South Australia is wholeheartedly discharging its responsibilities under the war service land settlement scheme. I cannot speak too highly of the work that has been done in connexion with the settlement of new lands. Much of the credit for what has been achieved is due to the Land Development Executive of South Australia, under the directorship of Dr. Callaghan, who, I am sure, is known to many honorable senators. The executive has tackled the work of bringing new land into production very well, and settlers in those areas have every opportunity to make good. I emphasize that the production from those holdings will be additional production.
Many foodstuffs of which this nation and the world is in dire need are now flowing from those farms. All of the properties are in good rainfall areas which hitherto, for some reason or other, have been regarded as unproductive. To-day, they are producing fat lambs for export, as well as mutton, wool and dairy products, and in some areas cereals are grown. Along the Murray River a valuable fruit industry is being expanded on irrigation settlements.
With due deference to what has been said by honorable senators about the success of the war service land settlementscheme in other parts of the Commonwealth, I claim that South Australia’s achievements are second to none. Efforts have been concentrated largely upon new production. To honorable senators who believe that Liberal governments are invariably hesitant about acquiring properties because they wish to protect the interests of big landholders, I point out that the Liberal Administration in South Australia has not stood out from that activity. Legislation has been passed to permit the acquisition of what is known as “ under developed “ land. That is a newly coined term, and it is very descriptive. It means land which, although it may be producing something, has not been developed to the fullest possible extent. I was a member of the South Australian Parliament when that legislation was passed, and I am pleased to be able to say that the State Government has not had to acquire such estates compulsorily. The owners have come forward and made a deal with the Government, satisfactory to themselves and to the State! Senator Laught will confirm that some properties in the south-east of South Australia have been acquired in that way. They are referred to as “ dry land “ settlements. There are also very promising irrigation settlements in the course of establishment along the river Murray.
Some recently compiled figures show up the South Australian settlements in their true light. Whilst they may appear to indicate that the number of exservicemen who have been settled on the land is not great, we should not lose sight of the fact that extensive preparation to make the land fit for the new settlers has been carried out. When a holding is handed over, a house has already been built, or is in course of construction. Wherever possible, the ex-serviceman who is to be settled on a property is employed in its preparation, and I pay a tribute to the work that those men are doing. There is, of course, plenty of incentive for them to give of their best because they hope that ultimately they will become the owners of the properties, but I personally have watched them slaving not merely for eight or nine hours a day, but literally from daylight to dark. Many of them are now reaping their reward. Land settlement of this type is very satisfactory indeed. The scrub is rolled down and burned and the properties fenced and ploughed. The wives look forward to living on the holdings because they know that a house will be available to them as 30on as they take possession, or very soon afterwards. The figures that I shall cite speak for themselves. They refer to nonirrigation blocks in the districts to which T have referred as “ dry land “ areas. Up to the 22nd July of this year, the development of non-irrigation blocks involved the provision of S34 bores, wells and dams and the erection of 645 windmills and 1,477 miles of fencing. A total of 115,400 acres has been logged, 145,854 acres ploughed, 131,833 acres “ combined “ and sown to pasture, and 298,117 acres top-dressed. There are many other interesting statistics but I shall not weary the Senate with them. Those figures show the tremendous development that is taking place. Again I express my appreciation of the credit that Senator Critchley gave to the South Australian Government and the Land Development Executive for what has been done in that State. A valuable contribution to war service land settlement in South Australia is also being made by private enterprise. In what has been known hitherto as the “Ninety Mile Desert “, the Australian Mutual Provident Society, under charter from the South Australian Government, is at present engaged in the development of large tracts of country for soldier settlement. In the past, this area has been regarded as unresponsive, and the trans formation that is being made is amazing. I express my appreciation of the work of the Australian Mutual Provident Society in the establishment of what ultimately will be a very satisfactory settlement. This “ impossible “ land will be brought into new production of foodstuffs which will benefit not only the soldier settlers but also the Commonwealth as a whole.
One of the most valuable provisions in the War Service Land Settlement Agreement is the clause providing that any writing-down that is necessary will be borne by the Commonwealth and the States in the proportion of three-fifths to two-fifths. I am convinced that, before the end of this story has been written, that clause will be of great benefit to soldier settlers. However, I emphasize that tolerance must be exercised by all parties. I have met some of the settlers in South Australia who are now facing up to their financial commitments on their holdings. A few of them have said, no doubt in all sincerity, that some of the charges imposed upon them are excessive. I have told these lads that there must be tolerance on their part as well as on the part of the governments concerned. Whilst I believe that some writingdown will eventually be necessary in _ some cases, it should be done only if it can be shown that the charges that are borne by the settlers are excessive. There is an obligation on the settlers to do their level best to maintain their properties on a sound economic basis. Whilst I am quite certain that the South Australian Government and the Commonwealth Government will not shirk the responsibility to write down charges when the need to do so is proved, I suggest to the settlers themselves that they must put their best efforts into their properties. I believe that most of them are doing that. One or two have come to me and said that they do not think the work is worth while; but I believe it is worth while. However, if after a reasonable period of earnest endeavour, they can show that their commitments are beyond them, I am certain, knowing the State Minister concerned and the attitude of this Government, that whatever writing-down is necessary will be done. No settler will be put off his block because of inability to meet his financial burden, provided that he has done his best to attain maximum production. Surely that is to be expected of every farmer, whether he be an ex-serviceman or not. I repeat for emphasis that no settler will be turned off his holding if be can show that he has done his best. Justice will be done, and charges will be written off where necessary and each case will be treated on its merits.
I support this bill whole-heartedly. 1 regret that certain honorable senators opposite have referred to the paucity of the finance that has been made available for war service land settlement. South Australia is satisfied with its allocation, and so, I am sure, are the other States. This year’s provision is £1,500,000 more than was allocated last year. Senator O’Byrne complained that Tasmania, which is an agent State, had not been given a fair deal. I have taken the trouble to obtain some figures relating specifically to Tasmania, and I shall cite them for the information of the honorable senator. An amount of £1,650,000 is to be made available to Tasmania from loan funds this year, which, with repayment of advances amounting to £S0,000, makes a total of £1,730,000. In 1931-52 the amount made available to the State for that purpose was £1,591,615. Thus, the amount made available to the State has been increased by nearly £140,000 this year. The complaints made by Opposition senators from Tasmania of the paucity of the money made available to that State are completely unwarranted.
– The point is, that the State has not been able to settle exservicemen on the land.
– That is the responsibility of the State Government. If the scheme is not progressing satisfactorily in Tasmania, it cannot be said that it is due to the adoption of a niggardly attitude on the part of the Commonwealth. In earlier years the relevant figures were -
Thus, just before the exit from the political stage at Canberra of the Labour Government, only £269,000 was made available to the Tasmanian Government for this purpose.
– It was but a temporary exit from the political stage.
– Responsibility for dissatisfaction with the progress of the war service land .settlement scheme in Tasmania cannot be laid at the door of this Government. Senator O’Byrne should discuss with the members of the Tasmanian “ Labour Government the desirability of effecting an improvement in the progress of the scheme in that State. I have pleasure in supporting the bill which will continue a very satisfactory settlement scheme in the three agent States, particularly in South Australia and Western Australia, where the Australian Government receives the active co-operation of the State governments.
– I discuss this bill with interest because I was a member of this Senate some years ago when the Chifley Government introduced its legislation to establish the war service land settlement scheme. After the passage of years it is interesting to observe what has been accomplished under the scheme. I, too, regret that more money has not been made available to the States for this very worthy purpose. If the £6,000,000 that is to be remitted to wealthy land-owners as the result of the abolition of the land tax ha.d been added to the amount of approximately £8,000,000 to be made available under this bill for war service land settlement purposes, perhaps greater progress could be achieved in the implementation of the scheme. However, I believe that the scheme, as envisaged by the Labour Government, had to hasten slowly. When it was originally introduced all aspects of previous efforts at group land settlement were examined and thoroughly investigated. It was found that previously exservicemen ‘had been settled on land totally unsuited for the purpose. Many of those who were allotted blocks were untrained and were consequently incapable of making the land productive, and the whole scheme was a fiasco and ended in human misery and tragedy. Reference has been made to settlement on the Peel estate in Western Australia.
As honorable senators are aware a large tract of land was granted to John Peel, who arrived in Western Australia in, I think, 1831. Peel found that, with the means at his disposal, he could not possibly develop it. He died a broken and disillusioned man. After his death the land remained in a virgin state for almost. 90 years. After World War I. attempts were made to establish settlers on the area. Ex-servicemen were simply dumped on it with a minimum of requirements and told to make a go of it. Of those who had had some training for that kind of occupation only the hardiest remained ; but the city dwellers, who were completely unsuited to withstand the rigours of life on the land, very quickly left their properties and drifted into the cities and towns. During the depression many of them joined the ranks of the unemployed. I was pleased to hear Senator Seward state that, dairying is now being carried out on some portions of the area with the aid of fertilizers. I should like the Commonwealth Scientific and Industrial Research Organization to undertake more experimental work in the use of humus and other fertilizers that are not so difficult to obtain as is superphosphate. That was one aspect of land settlement that the Labour Government inquired into very thoroughly before it evolved its scheme. It rightly decided that blocks would be allotted only to those who had been fully trained and properly equipped and that, the properties would he developed to a certain degree before allotments were made. That was a necessary precaution. In Western Australia selfstyled patriotic land owners sold some of their worst pieces of land to exservicemen because they thought that the men were “ mugs “, or that the Government would eventually pay for it. In the southwest of the State land that consisted largely of outcrops of rock upon which nothing could possibly grow was sold to ex-servicemen at a high price. Many ex-servicemen who gave up the whole of their deferred pay to secure it, found themselves penniless and heartbroken after they had unsuccessfully tried to work it. We do not want those things to happen again. All properties to be brought within the scheme should be thoroughly developed, and ex-servicemen should be thoroughly trained to work them, lt, is true that, after seven years, large numbers of men have not been settled on the land in Western Australia, but those who have been placed on properties are doing well. Developmental work on properties in the Mount Many Peaks area and in other areas in Western Aistralia has progressed to a remarkable degree.
I cannot over-stress the fact that difficullties are being experienced in Western Australia in obtaining properties for sub-division which have reasonable access to education, health and other facilities that are so necessary for the happiness’ of the wives of the men on the land, lt is all very well for honorable senators opposite to talk about the opening up of areas in remote regions. Men may battle along in the outback areas - many of them do so - but the difficulties of their womenfolk are very great. Surely, large tracts of more suitable land are available. I do not begrudge to any one the land which he works - the food which lie produces is necessary to meet the needs of the community - but I object most strongly to the fact that some persons are able to hold land in areas of assured rainfall, and with, easy access to transport and make no attempt to develop it. The States should exercise their powers to acquire, in the more accessible regions land that is not fully utilized. Not long ago I met a woman who, for some years, had lived on. a property in a marginal area of Western Australia, 400 or 500 miles distant from Perth. She had been away from the property only twice in eleven years, and then only to go to a maternity hospital, situated 150 miles away. Those are the conditions under which the wives of some settlers have to exist, even in these days. The Governments of the Commonwealth and the States should ensure that lands within reasonable access to transport, education and health facilities shall be used to the fullest capacity before they force men and women to go into remote areas where they have to battle for years before they can make a decent living for themselves.
Criticism has been levelled against the governments of the States in connexion with this scheme. I should not presume to criticize the governments of States other than my own, about which I am qualified to speak. I suggest to Western Australian senators, who have criticized the governments of the eastern States, that it is difficult for Western Australians properly to evaluate the problems that face the governments of the eastern States in regard to land valuation. In Western Australia large areas of land are available; but in the other States there is little land to meet the requirements of their comparatively large populations. Consequently, land values in those States are highly inflated. It would be impossible for the government to purchase land for soldier settlement purposes at the highly inflated values that prevail in the eastern States. If ex-servicemen were settled on such land they would have to carry a crippling load of debt for the rest of their lives.
I come now to the consideration of an aspect of land settlement about which not a great deal has been said. A large number of ex-servicemen are partially incapacitated and are not capable of working large farming or grazing .properties, but they are eager to secure small holdings. They could be established on market gardens or in the dairying industry as small operators. When we speak of war service land settlement we are inclined to think in terms of large properties and to ignore completely the possibility of the settlement of exservicemen on small but potentially productive properties. Many partially incapacitated ex-servicemen, who do not receive war pensions, could be economically settled oil small holdings of that’ kind. The food that they would produce would help to meet the needs of the community. Consideration should be given’ to the possibilities of this proposal. The emphasis should not always be placed upon the need for large properties. A scheme of this kind would provide scope for the rapid rehabilitation of many ex-servicemen who wish to be their own masters. During the war, in the north-west of Western Australia, and at Darwin, in the Northern Territory, Army market gardens were established, which made the forces practically self-supporting in respect of vegetables. During the war members of the fighting forces in the Darwin area established good vegetable gardens. To- day, however, the people in the northwestern parts of Western Australia and the Northern Territory have to rely on sea and air transport to obtain vegetables from the south. Although air freights on vegetables are subsidized, the cost of vegetables to the residents of the north-west is very high. For the life of me I cannot understand why it is now claimed that vegetables cannot be grown near Darwin when they were grown very successfully by servicemen during the war. I know of several ex-servicemen who would be prepared to establish vegetable gardens there if they were provided with finance. I do not know whether the present scheme provides for the establishment of small vegetable gardens, or is intended only to finance exservicemen onto large properties. This aspect of the matter should be investigated.
I should also like the Minister to inform me whether the scheme applies to orchards. Many orchards in the Bridgetown and other areas of the southwest could be rehabilitated. As I have mentioned to honorable senators before, during the war a one-armed woman carried on a small orchard there by herself, while her husband was on service. In addition, she made her own fruit cases. I doubt whether I or my male friends in this chamber could make fruit cases by using both our hands. That woman also attended to her home chores, including the preparation of afternoon teas when visitors like myself arrived unannounced. In my opinion, she performed work that had previously been carried out by half a dozen men. She was able to keep the orchard going until her husband returned home. The price of fruit is absolutely shocking. In many of our cities apples cost 6d. each. Fruit is essential to the maintenance of good health, and many “eat more fruit” campaigns have been conducted. I should like the Minister to inform me of the number of ex-servicemen who have been financed onto orchards in Western Australia. I understand that about 600 ex-servicemen have been settled on farms in that State, and that another 600 are awaiting farms. Have applications been received for small holdings? Is any encouragement given to ex-servicemen to apply for small farms ? I am very pleased that a number of honorable senators have acknowledged the success of the war service land settlement scheme, which was inaugurated by a previous Labour government. The development of agricultural industry in this country is a nonparty matter, which should be approached on a national basis.
Senator GEORGE RANKIN (Victoria) 1 4.34]. - I have been impelled to contribute to the debate by the statements that have been made by some honorable senators. Senator Cooke has stated that virgin land remains sour for about eight years. Any one who has worked on the land knows that a record crop is usually obtained after the first occasion on which the land has been properly fallowed. Of course this does not apply to swampy land.
– What about the tuart country in Western Australia?
– I am referring to about 90 per cent, of the land in this country. In Victoria, 1,822 ex-servicemen have been settled on the land. In that State the excellent Soldier Settlement Commission is administered by Mr. L. Simpson, who was previously a member of the Debts Adjustment Board. He is a practical farmer, who has had a wide business experience. He has made an excellent Chief Commissioner of the Soldier Settlement Commission. It has been most fortuitous that good seasons have been experienced since those settlers took up their properties, and that they have obtained exceptional prices for their products. The majority of the exservicemen settlers have obtained incomes from the land which have aggregated more than its capital cost. As a result, they are now in a very sound financial position. They were very well treated from the outset. Homes were built on the land for them. The Victorian authorities did not rob the people from whom the land was acquired, as was done in New South Wales. They paid to the owners a. fair market price for the land. As a result of the decision of the High Court, the New South Wales Government was forced to pay another £200,000 to one family as the vendors of land that was acquired in that
State for the purpose of soldier settlement. The Victorian authorities gave to the owners of the land who were displaced a fair price and a fair deal, and the exservicemen have been charged interest at the rate of only 2 per cent, on their loans, which is the lowest rate of interest that has been charged on loans to soldier settlers in Australia. In New South Wales, which is about three times as large as Victoria, only 1,856 ex-servicemen have been settled on land that has been acquired, much of which was undeveloped. The greater proportion of the land that was acquired by Victorian authorities for the purpose of the scheme was in a safe district and had been developed by the farming community. It produces more per man than comparable areas in other States.
Some honorable senators have claimed, that the soldier settlement scheme that was introduced after World War I. was a failure. In the main, in Victoria, that scheme was successful. The failure of some of the settlers under that scheme was due to the world-wide depression of the ‘thirties, over which the Victorian Government had no control. The honorable senators who believe that that scheme was a failure should have a look at the Redcliffs soldier settlement on the Murray River. Other soldier settlements in Victoria have been equally successful. Many of the soldier settlers in that area are now paying large amounts of taxes in order to help to settle their sons, many of whom are ex-servicemen of World War II., on the land. The percentage of soldier settlers who failed during the depression was no bigger than waa the percentage of other farmers who failed. The Victorian Government has expended £35,000,000 on the scheme, compared with an expenditure of £24,000,000 by New South Wales, which is a much larger State. The New South Wales Government has used the scheme’ as a lever to rob pioneers of that State, including many families who have been on the land for generations. The soldiers do not want that sort of thing. They believe in a fair deal for the country people and the land for which they fought.
Senator Vincent has stated that the land settlement of ex-servicemen in Victoria has been discontinued. Obviously the honorable senator is not aware of the true position in that State. Many good blocks in safe country and on land which has been irrigated, are still available for soldier settlement. The ex-servicemen settlers in Victoria ‘have contributed very substantially to the increase of agricultural production. I am very pleased that the Government has seen fit to make available in this financial year £6,000,000 to enable a continuation of the scheme. However, I consider that a greater amount of finance should be made available and also that there should be an extension of the period during which a qualified ex-serviceman could apply for a block. I believe that that period expired in March Ia.it. I point out that after the war many young ex-servicemen were attracted by the bright lights of the cities and the exceptionally high wages that were being paid in secondary industries. Many of those men now wish to contribute to the prosperity of this country by going on the land. Some who are considering marriage wish to provide homes and security for their prospective wives. I know of several instances in which young ex-servicemen who were reared on the land and who had expected to be given blocks by their parents, have been disappointed following family quarrels. Tn other instances, ex-servicemen who were bank clerks before the war, are unable to follow indoor occupations as a result of having contracted war neurosis. They have been advised by repatriation doctors to go on the land. Although they were eligible, they did not apply for qualification certificates before the qualifying period had expired. An extension of the period would assist them to obtain farms.
T commend the Government for making available to the States money with which to continue soldier settlement, which is the best means by which agricultural production may be increased. Australia needs more agricultural products, and there is a ready market in Great Britain for any surplus production. T very strongly support the bill, and I hope that the Government will continue to make available money to continue the scheme.
– in reply - The debate on the motion for the second reading of the bill has been most interesting. While some honorable senators have contended that insufficient money has been made available by the Commonwealth for the purpose of the scheme of land settlement of ex-servicemen, others have Claimed that no more ex-servicemen should be settled on the laud. I shall reply to several aspects of the matter that have been raised. The scheme applies to two different groups of States. One group consists of the agent States and the other the principal States. There is a considerable difference in the financial responsibility of the Commonwealth in each instance. The principal States are Queensland, New South Wales and Victoria. The agent States are South Australia, Western Australia and Tasmania. I point out, at the outset, that all States of the Commonwealth were given an equal opportunity to enter into an agreement with the Commonwealth. The financial responsibility of the Commonwealth in relation to the agent States is as follows : -
Tn addition, the Commonwealth is solely responsible for the financing of war service land settlement in territories of the Commonwealth. It will be seen that the agent States are in a very good position, because the Commonwealth assumes ‘practically the whole of the financial responsibility for the scheme. Even in the principal States the Commonwealth shoulders 50 per cent, of financial responsibility in respect of the write-off of excess of cost over valuation, 50 per cent, of remission of rent and interest during assistance period, and 50 per cent, of losses on advance to settlers. Although the Australian Government has no say in the matter of land acquisition in the principal States, it bears the total financial responsibility for the training of applicants.
I wish, first, to reply to various untrue statements which have been made by Senator O’Byrne and Senator Aylett concerning the position of war service land settlement in Tasmania. Those honorable senators stated that Tasmania has received very meagre financial assistance for war service land settlement purposes.
– I did not say so.
– I point out that Tasmania, in common with the other agent States, prior to the 30th June, 1953, had been unable to expend all the money which had been made available to it by the Commonwealth for war service land settlement ‘ purposes. In 1 953 -52, the agent States received from the Commonwealth all the money that they requested for such purposes. The amount to be provided during the current financial year has been based on estimates of expenditure submitted by the States concerned. It is, therefore, entirely wrong to say that soldier settlement is being kept back in the agent States.
– I should like the Minister to detail the untrue statements which he has said that I made. I certainly did not make the last statement to which he has referred.
– Even if the honorable senator did not make such a statement, I suggest that I have supplied him with useful information. He will now be able to tell the Tasmanian people the position of war service land settlement in that State.
– The Minister has said that I made statements which are untrue. Having made that allegation, I suggest that he should now back it up.
– I have already backed it up. If I. have made an unsound allegation, I withdraw it. However, I should like the people of Tasmania to appreciate that they have received from the Australian Government, for war service land settlement purposes, all the assistance for which they have asked. It is interesting to note that until the 31st December, 3949. not one ex-serviceman had been settled on the land in Tasmania. By the 30th June, 1952, 9S had been settled.
asked for details regarding the number of ex-servicemen settled on the land between the 31st December, 1949, and the 30th June, 1952. The relevant figures are: New South Wales,. 530, Victoria 735, Queensland 183, South) Australia 315, Western Australia 348,. and Tasmania 98. The honorable senator also asked for information regarding’ the difference between the present allowances during the period of assistance and those paid in 1948. In October, 1948, the allowance paid to a single settler was £3 15s. a week, and for a married man with :i wife and one or more children, £5 15s. a week. In October, 1951, the amount? wore £4 10s. and £6 10s. a week respectively. From the 2nd of this month they increased to £6 and £8 a week respectively.
Senator Tangney referred to the training of applicants before they are placed on the land. Applicants are not selected as settler? unless a competent authority is satisfied concerning their eligibility, suitability and qualifications for settlement under the- scheme, and of their experience1 of farm work. Where training or further experience is considered desirable, this is provided in all States at Commonwealth expense. Adequate guidance and technical advice are made available to settlers through agricultural extension services.
Senator Seward and Senator Chamberlain raised the interesting question of the freehold of war service land settlement properties. The Australian Government has informed the agent States that it is prepared to agree to holdings being allotted on a freehold basis, and the three agent States have so provided by legislation. I am informed that the freehold cannot be exercised until after ten years from the commencement of the lease, and as there is no way of assessing the fair value at that time, the option price is stated as the cost price, any reduction being a matter for consideration at the time when the freehold is being granted. For the information of Senator Seward, 7 point out that it was originally intended that properties would be developed and subsequently sub-divided and allotted. Under this procedure, the total cost of acquisition and development would have been apportioned appropriately over the holdings derived from the subdivision. To avoid leaving developed land idle, the developed portions - usually round the homestead - were allotted at cost before the balance of the estate was cleared and made available. Because of rising costs, subsequent clearing and erection of structures frequently costs more than the value of existing buildings. It has, therefore, been considered fair that such costs should be distributed over all the holdings, in order :to give equitable treatment to all settlers, provided that the total cost does not constitute an unreasonable capital value for such holdings. This arrangement was agreed to by a meeting of settlers at “Wagin, the only complaint being that the arrangement was not stated in the original leases issued to those who obtained homestead blocks.
Senator Critchley referred to the obligations incurred by the Commonwealth in respect of writing off costs. The Commonwealth has never sought to avoid the obligation to write off costs, if necessary. Because it is altogether impossible to foresee the conditions that may prevail in the future, the policy of the Government has been to retain capital values at cost whilst the commitments on such a basis can reasonably be met. Should a recession of prices occur before settlers arc properly established, so that such commitments become a burden, the question of review of property values will be examined by the Government.
It seemed to me that, generally, the speeches of honorable senators were complimentary of the action that has been taken by this Government with regard to war service land settlement. If further questions are asked during the committee stage,’ I shall be only too pleased to deal with them.
Question resolved in the affirmative.
Bill read a second time.
– Clause 3 provides -
The Treasurer may, from time to time, under the provisions of the Commonwealth Inscribed Stock Act 1911-1040, or under the provisions of any Act authorizing the issue of the Treasury Bills, borrow moneys not exceeding in the whole the sum of Six million pounds.
So recently as the 1st May last the Treasurer (Sir Arthur Fadden) intimated to the State Premiers at a meeting of the Loan Council that the Government would not consider issuing additional Central Bank finance in any circumstances. Furthermore, on the 3rd October, 1951, the Prime Minister (Mr. Menzies) as reported in Hansard of the 3rd October, 1951, at page 2S0, had already stated -
The States had already agreed at a previous special loan council meeting that public works ought not to be financed out of treasury-bills - that is to say, by creating new money out of Hie central bank at a time of inflation. We had, 1 say, agreed to that principle. There is no economist in the country who would deny the correctness of the principle.
The right honorable gentleman went on to say -
The Commonwealth will find the money, not by discounting treasury-bills .with the Commonwealth Bank, but by subtracting money which would otherwise be available for spending, that is, by taxation.
Although those statements were made by the Prime Minister in relation to the preceding financial year, they indicate clearly that the Government was then completely opposed to the use of treasury-bills to discharge its obligations.
It is, therefore, all the more extraordinary that in the budget speech delivered by the Treasurer only three months after the statement he had made on the 1st May, he should intimate that the Government then proposed to have recourse to the central bank to finance public works and other activities. The inclusion in this measure of the proposal contained in clause 3, authorizing the Government to issue treasury-bills to a total of £6,000,000, leads me to inquire whether the Treasurer was expressing the view of the Government on the 1st May last when he said that treasury-bill finance would not be used in any circumstances. Can the Minister for Repatriation (Senator Cooper) indicate what caused the Treasurer completely to reverse the Government’s financial policy in the short period of three months?
Clause 4 states -
Moneys borrowed under this Act shall be issued and applied only for the expenses of borrowing and for the purpose of financial assistance to the States in connexion with war service land settlement. ls it, intended to confine the borrowing of money to provide financial assistance only for the “ agent “ States of South Australia, Western Australia and Tasmania, or is it intended that that money shall bo available to all States?
Finally, can the Minister inform me of the progress that is being made in the development of the Montagu Swamp soldier settlement area in Tasmania, the number of allotments that have already been made, and the number of settlers who will be placed upon it eventually?
– Although 1 have no detailed information on the first point raised by the Leader of the Opposition (Senator McKenna), and I am therefore expressing a purely personal opinion, the reason for the inclusion of clause 3 in the bill is that it has a direct relation to Government policy. I point out that it is the purpose of the Government to provide £6,000,000 to promote soldier settlement in the “ agent “ States. It is the Government’s responsibility to find this money, and the Government will accept its responsibility.
– In introducing this measure the Minister for Repatriation (Senator Cooper) stated -
The purpose of this bill is to provide the capital moneys required for the acquisition, development and improvement of properties and for advances to settlers for stock, plant, working expenses, &c. for the purposes related to the War Service Land Settlement Scheme in Western Australia, South Australia and Tasmania.
At no stage of the debate has the Minister indicated that money is to be provided for a similar purpose for the “ principal “ States. I should like the Minister, therefore, to explain exactly what is meant by the words “ the States “ in Clause 4. I should also like him to furnish some estimate of the proposed apportionment of the money between the agent States and the principal States.
– The sum of £6,000,000 is intended to be expended only in the “ agent “ States. The expenditure involved in the payment of living allowances, administrative costs and other incidental expenses of the scheme in the principal States will he provided by appropriation from revenue.
.- The effect of clause 3 will be that if the Government has not sufficient funds the Treasurer may issue inscribed stock or authorize the issue of treasury-bills to provide the money that he needs*
In the course of the speech that I made during the debate on the second-reading of the bill I pointed out that the Government of Victoria, which is not an “ agent “ State dependent upon the Commonwealth, was hampered by lack of funds for land settlement of exservicemen. Notwithstanding that the Australian Government issued £45,000,000 worth of additional credit last year, it is clear that it still has not sufficient liquid or credit resources to pay its way, and that is why it seeks authority to raise an additional £6,000,000 for war service land settlement. Commonwealth loans have not been fully subscribed, and the Government is experiencing great difficulty in providing itself with the funds that it needs to carry on.
I should like the Minister for Repatriation (Senator Cooper) to inform me, first, how the Government reconciles its present attitude with its action in curtailing the allocation of funds to State governments for land settlement of exservicemen? Secondly, if it does issue additional treasury-bills, what interest will it have to pay the Commonwealth Bank for discounting such bills, and what interest does it propose to charge the “ agent “ States for the advances that it makes to them ?
I am glad that the Government has at last realized the need for the issue of additional credit, and I have no objection to it increasing the amount of money in circulation because that may do something to absorb the increasing pool of unemployment in the community. ‘. ‘
Clause 3 authorizes the Treasurer to issue treasury-bills or ‘to “borrow moneys not exceeding in the whole £6,000,000 “. In the” interests’ of. the whole community I think that it would1 bo preferable to omit all words after the words “ treasury-bills “, because we do not’ want to impose any unnecessary restrictions on the expansion of our credit facilities.
– What is a “ treasurybill”?
– It means an issue of credit by the Commonwealth Bank.
– Does the honorable senator mean an issue of bank notes?
– The Government which the honorable senator supports issued treasury-bills totalling £45,000,000 last year in order to enable it to produce a budget with a surplus of £98,500,000. I repeat that I have no objection to the Government using the entire £6,000,000 for the purpose of assisting the “agent” States.
.- -The only information that I can give the honorable senator is that the Government accepts responsibility for finding the sum of £6,000,000.
– What will be the interest rate?
– I presume that the normal interest rate will be paid. I am informed that the rate of interest charged to the settlers is the same irrespective of the source of the money. The interest to be paid on the treasury bonds would be decided at the time that they were issued.
– What is the usual rate of interest on treasury bonds?
– It is variable. I am not au fait with the present rate, which the honorable senator can easily find out himself. In reply to the question of the Leader of the Opposition (Senator McKenna) I would state that the interest rate payable on advances to settlers is 3$ per cent. The Montagu Swamp is being developed in sections. The first section of 25,000 acres will comprise 200 farms and the first of the allotments are expected to be ready about 1954, but this will depend on seasonal conditions.
– In view of what the Minister for Repatriation (Senator Cooper) has said I presume that the whole of the money borrowed will, be paid to the three agent States.
That position should be clarified in clause 4 of the bill. Ha3 the Minister any objection to inserting after the word “ States ‘’ the words “ of Western Australia, South Australia and Tasmania “ -. If this amendment is not made it will seem from the wording of the bill that all the States would participate in this amount. I do not propose to move an amendment to this effect but, for purposes of clarity, why should not the three States he specified? It may eliminate confusion in the minds of the people. There is already a good deal of confusion regarding the basis of war service land settlement as it concerns agent and principal States. The present wording of the clause can only add to the confusion.
– Clause 3 of the bill provides for the allocation of £6,000,000 to the agent States. Could the Minister for Repatriation (Senator Cooper) provide any information as to the amount that was expended by the principal States on war service land settlement last year? Has any approach been made to them to speed up their administration? Is there any way to overcome the deadlock that exists in some States where war service land, settlement is practically at a standstill?
– I have already dealt with those matters, but the honorable senator was not in the chamber at the time. Evidently he has misunderstood the position in regard to the principal States and the agent States. The Commonwealth is responsible for supplying money to the agent States for the specific purpose of war service land settlement. The Commonwealth is not responsible for finding money for this purpose, specifically, for the principal States, where the settlement of ex-servicemen is financed out of general loan allocations.
– I want to know whether the Commonwealth accepts any responsibility for the expenditure of the moneys that it has allocated. Can it overcome the deadlock that exists?
– An agreement has been made with the States and they should approach the Commonwealth if they wish it to be altered. Every State was given the opportunity to enter into an agreement on this subject. Queensland, !New South Wales and Victoria decided to allocate money for this purpose from their general loan allocations, lt was arranged that the Commonwealth should supply them with money for the payment of living allowances and certain administrative expenses and a proportion of the cost of capitalization. But the governments of the principal States have the sole responsibility for providing the land and preparing it for settlement. The Australian Government has no control over the amount that they spend for this purpose from their general loan allocations. But the agent States submit to the Australian Government an estimate of the amount that they will require during each’ year for the purposes of war service land settlement and that amount is granted to them.
– Has the Minister any information as to the amounts that have been expended by the agent States?
– I have already explained that matter to the Senate. U to the financial year 1951-52 the agent States had not spent all the money that had been allocated -to them. Last year they did not ask for more than the amount allocated so that it was evidently sufficient for their needs. In respect of the current year the amount allocated to them will be in accordance with their estimate of the costs of land settlement. In addition to the sum of £6,000,000 these States will be paid £1,809,000, which will come from repayments of amounts already advanced to settlers and also £500,000 in respect of the payment of settlers’ allowances and other costs bringing the total allocation to £8,309,000.
The Leader of the Opposition asked about the expenditure of these moneys. Tasmania has expended £1,651,000, Western Australia £3,520,000 and South Australia £2,638,000, a total of £7,809,000. I presume that the difference between that amount and the amount that I mentioned before would be accounted for by sums granted for the payment of allowances and other costs.
Senator WRIGHT (Tasmania) f5.25]. - ‘Can the Minister give the committee some information that will resolve certain anxieties that have been felt in Tasmania? Soon after this scheme commenced the Government inserted a provision in the agreement which entitled settlers, not to a perpetual leasehold thathad been offered by the previous Government, but to an option to purchase the freehold of their properties after six years’ occupancy. Has the basis of computation of the purchase price of the freehold yet been clarified? There are several references in the Tasmanian war service land settlement legislation to this provision. Under that legislation a settler is entitled to a written offer, one term of which allows him to purchase the improvements on his property at their 1946 value. In many cases those improvements have been made between 1949 and 1951 at a figure which was double the 1946 value. Another term of the offer is that the settler may buy the freehold of the property at its total cost to the State excluding the amount payable by the settler for the improvements at the 1946 value. If, for example, 1946 values were half the actual cost of the improvements, the offer would provide that the settler could purchase the property for the total cost of the holding to the State excluding half the cost of structural improvements. Can the Minister state the figure, excluding, say, half the cost of the capital improvements, at which the settler will be given the option to purchase?
– I am informed that the basis of the purchase price is to be the total cost of the property less the purchase price of the structures. In regard to the six-year period, I am informed-
– That is a matter for the State.
– But the Commonwealth will be concerned in it. If there is a general fall in commodity prices the value of a holding at the end of six years might have to be reviewed but it is difficult to say at present what the position will be then. But that possibility will betaken into account.
– Can the Minister for Repatriation (Senator Cooper) give some information to the committee about the condition under which the issuance of treasurybills will be authorized ? If the treasurybills are to be issued at a discount, what will that discount be, and who will take up the bills?
– Apparently the Minister for Repatriation (Senator Cooper) has overlooked the matter that I raised. I ask him again whether there is any reason why the words “ of Western Australia, South Australia, and Tasmania “ should not be included after the word “States”. If the Minister see no objection to the inclusion of those words, I suggest that he should move to have them included for clarification purposes.
– I am informed that the bill as at present drafted covers what it is designed to express and that the insertion of the words mentioned by the Leader of the Opposition (Senator McKenna) would involve certain legal difficulties.
– I do not wish to harass the Minister for Repatriation (Senator Cooper), but he has stimulated my curiosity. I certainly do not expect the Minister to be able to explain, off-hand, the legal difficulties involved in naming the three States to which these moneys are to be paid, but I should like him to confer with his advisers on the matter. It would be of real interest to me to know what the legal difficulties are.
– I shall make a note of that.
– What about the discounting of treasury-bills? Surely that is a simple matter.
– It is not so simple as the honorable senator apparently believes. I have already given a. lengthy explanation of the clause to the Leader of the Opposition (Senator McKenna) and to Senator Byrne. Had Senator Cameron been present at that time he would have, had much more know.ledge of the purpose of the provision.
– Will the Minister for Repatriation (Senator Cooper) agree to report progress until the matter that I have raised has been dealt with? It is the one point outstanding. I should like to know what the legal difficulties are.
– Would the Leader of the Opposition be satisfied with an explanation at a later stage?
– I cannot promise the Minister that I shall be satisfied with his explanation until I have heard it. I should like to preserve an independent mind on that matter. I said earlier that I did not wish to force the issue. Had I not said that. 1 might be disposed to change my mind. T do not wish to embarrass the Minister on a point of law, or to delay the passage of the measure. . If he will undertake that, in the reasonably near future, he will let me know what the legal difficulties to which he has referred are, I shall be happy to accept that assurance and let the matter rest there.
– I assure the Leader of the Opposition that I shall do everything possible to provide him with the information as early as possible.
Bill agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
Bill received from the House of Representatives.
Motion (by Senator Spooner) put -
That so much of the Standing Orders be suspended as would prevent the bill being passed through all its stages without delay.
The Senate divided. (The President - ^Senator the Hon. Edward Mattner.)
Majority . . 10
Question so resolved in the affirmative.
Standing Orders suspended.
Bill (on motion by Senator Spooner) read a first time.
Sitting suspended from 5.45 to 8 p.m.
8.0. - I move -
That the bill be now read a second time.
The purpose of this bill is to approve the agreement made between the Commonwealth and the Anglo-Iranian Oil Company Limited for the sale of the Commonwealth Government’s interest in Commonwealth Oil Refineries Limited and to repeal the Oil Agreement Acts of 1920. 1924 and 1926. In 1920, the Parliament approved the original agreement with the then Anglo-Persian Oil Company Limited, as a result of which Commonwealth Oil Refineries Limited was established. The agreement provided that the capital of the company should be £500,000, divided into shares of £1 each. In 1924, the capital of the company was increased to £750,000, and subsequently, in 1926, to £850,000. The Commonwealth holds 425,501 of the shares and the Anglo-Iranian Oil Company Limited holds the balance. The original agreement provided that on any increase of capital, the Commonwealth would be entitled to participate in such a way that, at all times, it would hold a majority in number and value of the shares in the company. . It was also provided that of the seven directors of Commonwealth Oil Refineries Limited, three would be nominated by and represent the Commonwealth, and the remaining four, the Anglo-Iranian Oil Company Limited. The technical and commercial management of the refinery company was left entirely in the hands of the Anglo-Iranian Oil Company Limited. These two provisions prevented the Commonwealth from having any real control of the activities of the company, even if it so desired.
Among the objectives of the company was the establishment and development in Australia of the industry of refining mineral oil. Another objective was the erection and operation in Australia of a modern refinery. Soon after Commonwealth Oil Refineries Limited was established, the company erected a refinery at Laverton, in Victoria, which commenced operations in 1924. No other refineries have been erected by the company since that date. Commonwealth Oil Refineries Limited has acted principally as Australian distributors of the products of the Anglo-Iranian Oil Company Limited, and its refining interests have been secondary. Commonwealth Oil Refineries Limited has proved a profitable venture and has earned substantial profits, the great bulk of which have been re-invested in the business. Dividends amounting to £869,750 have been distributed since the inception of the company.
The Australian Labour party objected to the constitution of the company because the Commonwealth, although the major shareholder, was not in the position to control its operations. During the Labour Administration, the Anglo-Iranian Oil Company Limited made proposals under which additional capital would be provided for Commonwealth Oil Refineries Limited. In 1946, it was agreed in principle to raise the capital of the company to £3,000,000, but it was required that, as majority shareholder, the Commonwealth should be more adequately represented on the board of directors. The Labour Government had not obtained agreement with the Anglo-Iranian Oil Company Limited when the present Government came into power. The rapid growth in the Australian trade in the principal petroleum products made it imperative for Commonwealth Oil Refineries Limited to secure additional capital to enable development along the lines demanded by present-day conditions in the oil industry. Discussions between the Commonwealth and Anglo-Iranian Oil Company Limited have continued. Finally, in 1951, it was proposed that the capital of Commonwealth Oil Refineries Limited should be increased by £12,300,000 for the purpose of expanding the distribution facilities of the company. At the same time, the Anglo-Iranian Oil Company Limited undertook to erect a modern refinery in Australia, with a capacity of approximately 3,000,000 tons. per annum, at. an estimated capital cost of £40,000,000. The following alternatives were discussed by the Commonwealth and the AngloIranian Oil Company Limited : - («) That the Commonwealth should provide one-half of the capital for the establishment of the refinery and for the additional distribution facilities required by Commonwealth Oil Refineries Limited ; (b) that the Anglo-Iranian Oil Company Limited should provide all the capital required for the refinery, and that the Commonwealth should share equally with it in the expansion of the distribution facilities of Commonwealth Oil Refineries Limited; (c) that the Anglo-Iranian Oil Company Limited should provide all the capital required for both the refinery and distribution facilities of Commonwealth Oil Refineries Limited.
It will be clear to honorable senators that the erection of such a refinery will achieve one of the principal purposes for which Commonwealth Oil Refineries Limited was established. As the AngloIranian Oil Company Limited had indicated that it was prepared to undertake the erection of the refinery without t! e participation of the Commonwealth, it was decided to continue the Commonwealth’s association in Commonwealth Oil Refineries Limited with Anglo-Iranian Oil Company Limited, and to agree to the provision of the additional capital required for the necessary expansion of the distribution facilities of the company. With the ultimate closing down of the obsolete Laverton refinery, Commonwealth Oil Refineries Limited would then ad merely as a distributing company in Australia for Anglo-Iranian Oil Company Limited. The Government decided that, as a condition of this arrangement, equality of representation on the board of directors of Commonwealth Oil Refineries Limited would be necessary. A satisfactory arrangement in this respect was agreed to by the Anglo-Iranian Oil Company Limited. Having reached such an agreement in general terms, an announcement was made by AngloIranian Oil Company Limited to the effect that it proposed to erect a 3,000,000 ton refinery at Kwinana, in Western Australia. The Commonwealth and AngloIranian Oil Company Limited then proceeded to the preparation of the formal documents incorporating the agreement reached between the Government and the company. Before these documents were signed, they were examined by the Commonwealth law officers who expressed the view that the Commonwealth did not have valid constitutional power to enter an arrangement of that kind. Their view was confirmed by Mr. G. Barwick. Q.C.. who stated that, in his opinion, the proposed agreement between the Commonwealth and the Anglo-Iranian Oil Company Limited was not within the constitional power of the Commonwealth. The Commonwealth had, therefore, no alternative but to abandon the proposed agreement, and to offer its shareholding in Commonwealth Oil Refineries Limited to Anglo-Iranian Oil Company Limited. This was in accordance with the Oil Agreement which provided, in article 15. that neither party to the agreement could sell its holding in Commonwealth Oil Refineries Limited without the consent in writing of the other party.
The Anglo-Iranian Oil Company Limited agreed that the constitutional position in which the Commonwealth was placed was such that the Commonwealth would need to dispose of its shareholding, and that, in the circumstances, the company would agree to take over the Commonwealth’s shares at a fair and reasonable price. The Government immediately arranged for the shares held by the Commonwealth to be valued by the well-known Melbourne firm of chartered accountants,
Messrs. Wilson, Danby and Giddy. That, ti 1’in placed a commercial value on the Commonwealth shareholding of £6 10s. a share, or a total value for the Commonwealth interest of £2,762,506 10s. for the 425,001 shares held by the Commonwealth. The Anglo-Iranian Oil Company Limited agreed to accept the offer of the Commonwealth to sell its holding at £6 10s. a share. The negotiations leading up to the settlement were based entirely upon the understanding that the Anglo-Iranian Oil Company Limited would proceed as rapidly as possible with the erection of the proposed refinery in Western Australia. The Australian Government, regards this refinery as of particular significance, not only to the economy of Western Australia, but also to Australia as a whole. The magnitude of the project is such that its output will be equivalent to 40 per cent, of the estimated demand for petroleum products in this country, which is expected to approach 7,500,000 tons in 1956 - the year in which the Anglo-Iranian Oil Company Limited hopes to commission the new refinery. The refinery will be able to supply the requirements of Commonwealth Oil Refineries Limited. Indeed, it is not expected that the total refinery production will initially find a market in Australia. A portion of the production will therefore be exported.
When the Kwinana refinery is established, Commonwealth Oil Refineries Limited will be able to cease operating its Laverton refinery if it is able to obtain products at a more favorable price from the Kwinana refinery. The refinery to he erected by the Anglo-Iranian Oil Company Limited will he of a capacity greater than could reasonably be expected to be developed by Commonwealth Oil Refineries Limited. There would have been no point, therefore, in the Commonwealth insisting that Commonwealth Oil Refineries Limited should continue to operate as a refining company after the Kwinana refinery had been commissioned. However, the Commonwealth no longer has any direct interest in the activities of Commonwealth Oil Refineries Limited, which is now under the sole control of the* Anglo-Iranian Oil Company Limited. Following the completion of the sale of the Commonwealth shareholding, it was necessary for the directors representing the Commonwealth on the board of Commonwealth Oil Refineries Limited to resign.
It is appropriate at this stage to remove some popular misconceptions about the place held by Commonwealth Oil Refineries Limited in the Australian oil industry. The original and main objective of the Commonwealth in establishing the company was the development in Australia of the petroleum refining industry. The company established its present small refinery at Laverton with a capacity of about 120,000 tons per annum - approximately 2 per cent, of our present annual requirements of petroleum products. Out of a total number of employees of Commonwealth Oil Refineries Limited at the end of 1951, exceeding 2,000, the refinery employs about 40 operatives. The Laverton refinery produces motor spirit, automotive diesel oil and furnace oil. The motor spirit is not of high quality and requires the addition of both benzol and tetra -ethyl lead to reach the quality required by the Australian market. The refinery is twenty years old and is now nearing the end of its useful life in its present form. It is a simple distillation unit, with no added cracking capacity, and it does not produce aviation spirit. The Laverton refinery was closed from March, 1942, to November, 1946. In regard to that closure, a statement was made before the Tariff Board in. .Tune this year to the effect that it was more economic to close the refinery in that way, and to import finished products, than to keep the refinery operating on imported crude oil. These considerations, with the inflexible type of refining and its approaching obsolescence, lead only to the conclusion that the refinery has no defence significance.
The construction of the Anglo-Iranian Oil Company Limited’s refinery at Kwinana will realize the principal objective for which Commonwealth Oil Refineries Limited was established, which was the development of a. modern refining industry in this country. That objective will be attained without the expenditure of Commonwealth funds. The size of the refinery proposed to be erected by any company must be determined by its actual and potential market. It would be unreasonable to expect Commonwealth. Oil Refineries Limited to build a refinery of a capacity in excess of its anticipated market in 1956 or even a little later. On the other hand, in addition to supplying Commonwealth Oil Refineries Limited, the Anglo-Iranian Oil Company Limited has had a large hunker market in Australia and export markets which will be supplied by the Kwinana refinery. The Anglo-Iranian Oil Company Limited has therefore been able to plan a refinery of 3,000,000 tons capacity, which is much larger than any refinery that could have been justifiably erected by Commonwealth Oil Refineries Limited to supply its actual and potential market in the future.
I wish to place on record some facts relating to the proposed refinery at Kwinana. It will be easily the largest in Australia, and will process approximately 3,000,000 tons of crude oil per annum. The operating personnel will number about 1,200. It is hoped that its construction will be completed in 1956. At the peak of the construction it is expected that about 3,000 men will be employed. Some 60,000 tons of steel and 20,000 tons of cement will be required for the building. The storage capacity for crude oil, and intermediate and refined products will be approximately 600,000 tons. The refinery will include substantial catalytic cracking and catalytic reforming capacity, and it will produce a wide range of petroleum products for the Australian market.
The Western Australian Government will make a substantial contribution to the project by the provision of facilities. It has agreed to build 1,000 houses, at an estimated cost of £2,500,000, spread over three years, which will provide employment for 52,000 man-weeks. The dredging will cost about £2,000,000. The Anglo-Iranian Oil Company Limited will pay interest at the rate of 6 per cent, per annum on half the actual cost with a maximum payment of £150,000 per annum. It is estimated that the provision of railway facilities will cost £150,000, and involve 1,500 man-weeks employment. Subject to the unlikely contingency of the company deciding to install its own power plant, the Western Australian Government will provide the power line and reticulation to the township at an estimated cost of £200,000. A water supply of 3,000,000 gallons a day has been guaranteed, and roads and township development, at an estimated cost of £280,000 will provide 7,000 man-weeks employment.
In addition to the refinery to be erected by the Anglo-Iranian Oil Company Limited, other oil companies, with the support anc! encouragement of this Government, have decided to erect refineries of substantial capacity in Australia. The Shell Company of Australia Limited is erecting at Geelong, Victoria, a refinery of approximately 1,000,000 tons capacity, which is expected to be in operation by 1954. The new refinery of the Vacuum Oil Company Proprietary Limited, at Altona, Victoria, will be about the same size. Production is expected to commence in 1956. Caltex Oil (Australia) Proprietary Limited proposes to erect a refinery at Kurnell on Botany Bay, of the same capacity, which is expected to commence production by 1956. When these refineries have been established the refinery capacity in Australia will be about 6,750,000 tons per annum. About 6.300,000 tons of petroleum products will be produced annually. A tentative estimate of our consumption in 1956 will be 7,500,000 tons. By that year we will have achieved a refinery capacity in Australia far in excess of the capacity which could have been envisaged by the continued participation of the Commonwealth in Commonwealth Oil Refineries Limited.
The Government would have been prepared to continue with the Anglo-Iranian Oil Company Limited, with Commonwealth Oil Refineries Limited as a distributing company for that company’s products, had not the constitutional difficulties existed. They are such, however, that the Government could not possibly bring down legislation to expand the capital of Commonwealth Oil Refineries Limited. Consequently, there was no practical alternative to disposing of our interest in the company. The Government has valued its partnership with the AngloIranian Oil Company Limited, and it regrets that the circumstances have forced it to dispose of its interest. We feel certain, however, that Commonwealth Oil Refineries Limited will continue to expand, and that it will play an important part in the future of the oil industry in Australia.
Debate (on motion by Senator MCKENNA) adjourned.
Debate resumed from the 24th September (vide page 1941), on motion by Senator Spooner -
That thu hill he now road a second time.
.- The purpose of the bill is to amend the National Welfare Fund Act 1943-50. It is very limited in its terms, but its effect will be serious. I shall briefly review the history of the fund. It was established in 1943. The 1943 legislation provided that contributions to the fund should be limited to £30,000,000 a year, or onefourth of the total income tax paid by persons other than companies. For the purpose of that provision it was laid down that the amount of income tax received from persons other than companies, in any financial year during which the income tax reimbursement legislation was operative in favour. of the States, should be deemed to be the total amount so received less £21,000,000. With that qualification, the contribution in the financial year 1943-44 was £30,000,000, or one-fourth of income tax paid by individuals. That provision operated not only in 1943-44 but also in 1944-45. The act was amended by the previous Labour Government in 1945 by the insertion of a series of provisions relating to the fund. The 1945 legislation operated for five years from the 1st July, 1945. It repealed the 1943 basis of contribution and provided a different basis for quite a number of years ahead. It was provided that the total contribution to the fund in 1945-46 should be £35,000,000, made up of £15,000,000 in the first six months, and £20,000,000 in the second six months. In the following vear the amount of contribution was raised substantially to £51,000.000. There was a general provision to operate indefinitely in each year thereafter. The operation of the formula that I shall mention extended in fact through the years 1947-4S, 194S-49, and 1949-50. It was intended that the fund should be built up in those three years from the social services contribution tax payable - not the amount paid - and the amount of pay-roll tax collected and actually paid in. That was the position until the present Government amended the National Welfare Fund Act in 1950, but the amendments that were then effected did not disturb the obligation which required payment of the actual collections of pay-roll tax to the fund. Commencing on the 1st July, 1950, collections of social services contribution tax plus £30,000,000 were also payable into the fund. It was also provided that, from the 1st July, 1951, the social services contribution tax payable should be paid into the fund, but in lieu of the £30,000,000 there was to be paid an additional amount which depended for its ascertainment upon fluctuations in the collections of pay-roll tax. The formula, as expressed in legal form in the 1950 act, is rather terrifying. In order to determine this additional amount I think that I should reduce the formula to a simple proportion sum in these terms : If the pay-roll tax in 1950-51, which was to be the basis, was £x, when the social services contribution tax plus £30,000,000 was £y, what is the proportionate amount in a later year when the pay-roll tax is £z? That algebraic equation will avoid the need to mention specific figures.
– And to make it clear?
– Yes. If the amount ascertained .by the formula exceeds the amount of social services contribution tax payable in that later year, the excess is payable to the fund. That machinery is designed to supplant thehitherto arbitrary figure of £30,000,000 When the 1950 legislation was before the Senate, I and other members of the Opposition were critical of the formula. The Minister for National Development (Senator Spooner), who was then Minister for Social Services, defended it very strongly, although not to the dea.th, as he did on another famous occasion. It very interesting to note that the Government itself is now critical of its own formula. The Minister for National Development argued most strenuously in his second-reading speech against the formula that the present Government introduced in 1950.
– One would think that he was a supporter of the Australian Labour party.
– That is exactly what I thought. The Minister stated -
As honorable senators will recall, in 1950, when explaining the present appropriation provisions to the Senate. I mentioned that the formula embodied in the act was decided upon by the Government after many different formulae had been considered. The formula chosen by the Government and adopted by the Parliament was regarded as being a simple one and the best one available.
I hope that honorable senators will note that the Minister concurs in the version of it that I expressed two years ago. He continued -
After seeing the formula in operation and its results, it has been decided that there is a good case for changing the appropriation to the National Welfare Fund. In particular, the Government wants the legislation to provide some more certain determinant of the annual appropriation to the fund. The present formula is deficient in this respect and, as I shall show, is not capable of producing an income from the fund appropriate to all situations. Under the formula which at present operates, the total appropriation, to the fund is determined by the amount of pay-roll tax collections ;
I pause at that point to join issue with the Minister. That statement is not strictly correct. The fund consists of three elements. They are the social services contribution tax, the amount of payroll tax, and the excess amount which is dependent on the formula which I discussed a few moments ago. The Minister continued - that is, the appropriation to the fund is directly related to aggregate earnings.
I agree that that is so. He then stated -
This direct link could, on the one hand, result in too great an appropriation from revenue in some circumstances when, for example, aggregate earnings are rising because of an increase in the volume of employment or rising rates of wages and salaries, and fund expenditure is remaining relatively stable or even declining. On the other hand, however, when aggregate earnings were falling the appropriation from revenue would fall when fund expen diture might have increased substantially. So it will be seen that in producing an income for the fund the present formula has regard only for aggregate earnings, and that it lacks the flexibility necessary to take account of likely calls on the fund in varying circumstances.
I repeat that it is rather intriguing, after such a short period as two years, to find the Government criticizing - just like an Opposition - a measure of its own designing. Of course, the present proposal indicates one more complete change of course by this Government. I think it is fair to say that that shows a lack of forward vision, a matter upon which I have commented in other contexts recently.
In proposing to freeze the fund and to prevent the accumulation of further surpluses, the Government is running true to form, because the accumulation of a surplus in the fund could be used as a very powerful anti-inflationary measure. It is a matter of history that the Government has allowed inflation to run a completely uncontrolled course, until it is now causing the most grave embarrassment, not only to Commonwealth finances but also to those of the various States. I need hardly add that uncontrolled inflation inevitably leads to unemployment. That is inescapable. This bill represents yet another instance of this improvident Treasurer (Sir Arthur Fadden) seeking to drain away from the National Welfare Fund every penny which it is possible to secure. I suggest that that action is in keeping with his action in 1950-51, when he took a pre-payment of £98,000,000 from the wool-growers which normally would have been payable in respect of the following year, 1951-52. If I may use the phrase, that pre-collected tax was also pre-spent. That reference emphasizes and underlines the point I wish to make about the improvidence of the Government, through its Treasurer. Now we have the spectacle of the Treasurer seeking everywhere for money with which to balance the budget in a difficult inflationary situation, for the creation of which a large share of the blame can be laid at the door of the Government.
This proposal to freeze the National Welfare Fund breaks faith with a great many people who regard the strengthening of this fund as a safeguard for social services benefits. In my opinion, it is true to argue that the accumulation of a substantial surplus in the fund is such a safeguard. Investment of the fund was contemplated in section 7 of the original act. I disagree with the argument advanced by the Minister in the course of his second-reading speech that the formula used in 1950 might well be inadequate to provide social services at a time of great unemployment and consequent heavy demands upon the fund when the ordinary revenues of the community would be falling. The revenues of the Government would decline. If the unhappy situation arose that, because of epidemics of sickness or periods of sustained unemployment, there were heavy drains upon the fund, it is perfectly true that the normal revenues of the Government could be expected to fall beca’use the general level of activity in the community also would have fallen. But I put it to the Government that that is the very time when the fund would be needed. That is the time when central bank credit could and should be used. If it is necessary to stimulate activity in a depressed community, at a time when there is a large number of unemployed, central bank credit should be resorted to in order to speed additional money into circulation. As I have pointed out on many occasions, no money has a higher velocity in this country than has that paid out in social services benefits. The recipients of those benefits need every penny for day-to-day and week-to-week needs. The sums that are paid are not banked. They are put into circulation in the community probably faster than any other money which circulates in business circles. The spending of such money becomes a cumulative, snowballing effort which stimulates one activity after another. I repeat that in proposing to freeze the fund the Treasurer is throwing away yet another antiinflationary safeguard that is available to his hand to-day. The annual accumulation of a surplus in the fund has a decided anti-inflationary effect.
In the last five years, the National Welfare Fund has been based on two elements, the first being the social services contribution tax, at one time clearly identifiable by every contributor but now, unfortunately, merged with income tax to make one payment, and the second being the pay-roll tax. Those who paid social services contribution tax did so cheerfully. They had the consolation of knowing that whilst they paid into the fund they were contributing money which was being utilized to help their less fortunate fellows. I have heard satisfaction being expressed by persons in all classes of the community who paid social services contribution tax in a clearly identifiable form. The people who pay pay-roll tax have a somewhat similar consolation, even though that tax has many irritating aspects. It has also an inflationary effect, because it can always be added to the cost of goods, to the percentage of profit, to overhead costs and the like.
The first blow against the National Welfare Fund and all that it stands foi1 was directed when this Government submerged the social services contribution tax in the broad income tax. Incidentally, why the terms “ social services contribution “ and “ income tax “ are preserved in the one bill at the present time I do not know, because in fact they are not separate taxes. There is one tax, which is an income tax. The social services contribution tax has completely lo3t its identity, in the eyes of the Government and of those who formerly paid it in separate taxation.
– I think that the line was always thin.
– But it was very clear. A taxpayer was given two figures on his income tax assessment, one being the amount of social services contribution, and the other the amount of income tax, so-called. Now only one figure is shown, and although it is called “social services contribution and income tax “, the separate elements cannot be identified. On consideration, I am not able to agree with Senator McCallum that the line was thin. In my opinion, the line was very clear and has now completely disappeared. I think that that has destroyed an element of cheerfulness and hope on the part of many people in the community who pay that tax and also pay-roll tax. That unfortunate state of affairs represents a blow at the whole concept of the fund.
The second blow at the fund is in the proposal contained in this bill to freeze the fund at its present surplus an.1, to allow nothing further to be added ‘. by direct contributions except the small accretions for investment at a very low rate which will not enable it to grow beyond its present level of approximately £185,000,000. Rightly or wrongly, that approach will disturb a great many people in the community. There are many who fear that the third blow may be the complete abolition of the fund. It would follow naturally from such a blow that- the surplus in the fund at the time of abolition would be appropriated for ordinary budgetary purposes. Having regard to the record of the Government in relation to the wool tax pre-payment and other matters to which I have referred, there may be some real ground for that fear.
If the Government carries out its 1949 pre-election promise, one of these days it will establish a fund somewhat similar to the National Welfare Fund. That proposal was foreshadowed in the 1949 joint policy speech of the two parties now comprising the Government in which it was stated that a contributory insurance scheme would be established under which the Government would abolish the means test in relation to social services benefits. If the Government proposes to go ahead with that scheme, whether in 1952 or at some other time, it will be absolutely incumbent on it to establish a fund. Once it determines the basis of contribution to that fund it will not be competent for it to limit the accumulations to the fund, because there will be something in the nature of a clear contractual relationship between the persons who contribute to the fund and the Government which operates it. Similar considerations apply to the National Welfare Fund, although, perhaps, their application is not so strong.
– No. The two positions are different.
– They are really very similar. I am not suggesting for a moment that those considerations apply strongly to the National Welfare
Fund, but having regard to the genesis of the fund and its conduct over a long period of years, in my view the characteristics are very similar. I propose to say something now about the investment of the funds, and I regret that the Minister representing the Treasurer is not able to be present to hear the views I shall enunciate. I know that he is unavoidably absent on public business, but I should have liked him to be present, because I know that he has taken a particular interest in the matter that I am about to mention.
Section 7 of the National Welfare Fund Act 1943 plainly contemplated the investment of the fund, because it states -
Interest from the investment of any moneys standing to the credit of the National Welfare Fund shall be credited to the fund.
When the former Treasurer, the late Mr. Chifley, introduced that measure he indicated that any surplus would, be very useful for temporary use for war purposes, and pointed out that it could be replaced by more permanent borrowings when money was needed in the National Welfare Fund. In the interim these funds have been invested in internal treasury-bills. The latest report of the Auditor-General shows that the whole sum of £1S5,000,000 credited to the fund has been so invested. I should like the Minister for Repatriation to tell us something about the operation of those internal treasury-bills, and to give to the Senate the approximate dates of the bills lying to the credit of the fund at the present time. Have the bills been renewed from time to time, or are the bills originally lodged in the fund still there ? What rate of interest do those bills bear ?
In his second-reading speech the Minister indicated that in the immediate future the fund is expected to increase at the rate of £1,800,000 annually, which represents an increase of 1 per cent, on the £185,000,000 now standing to the credit of the fund. I think that the amount credited to the fund some years ago was at the very low interest rate of 10s. per centum, which is only one-half of 1 per cent. Now that the fund has been frozen, is there any good reason why these temporary borrowings should not be consolidated and transferred to some other form of security? Loans made under the aegis of the Australian Loan Council bear a higher rate of interest and would therefore increase appreciably the strength of the National Welfare Fund.
I do not quarrel with the Government about the method of using the funds. Both the present Government and the preceding Labour Administration adopted identical processes for investing the amount to the credit of the fund, but the Government should make the clearest possible statement about how and why the fund operates. I know that many people who contribute to the National Welfare Fund, including the actual and prospective beneficiaries, and many organizations are very concerned about this matter of the investment of the fund. There is a great deal of confused thinking about it, and it behoves the Government to take this opportunity to make a clear statement about the investment of moneys standing to the credit of the National Welfare Fund.
I have had a great deal of correspondence with a body known as the National Welfare Fund Association, that was formed in Sydney and has a very large membership.
– We have all had a great deal of correspondence with that body.
– The association has been most active. The latest letter that I received from it, which is dated the 30thSeptember, urges the Opposition in this Parliament to move for the appointment of a select committee to investigate the whole matter of the investment of moneys in the National Welfare Fund, and failing that to approach the Governor-General and, as a final alternative, to present a petition at the bar of the House of Representatives, as was done by British pensioners in the House of Commons in 1948. I mention those matters, not because I agree necessarily with all those possible approaches or with the criticism of the investment of moneys in the National Welfare Fund, but merely to illustrate that large numbers of people are very disturbed and have no clear understanding of how or why the moneys in the fund are invested.
I invite the attention of the Minister to an excellent publication entitled The Economics of National Insurance, written by Alan T. Peacock, Reader in Public Finance in the University of London. I refer the Senate, and the Minister, in particular, to sections 2 and 4 of Chapter VI., “ Monetary Policy and the Investments of Insurance Reserves”, on pages 81-84 and88. With the concurrence of honorable senators I shall incorporate them in Hansard. They are as follows : -
We have already established that the presence of a reserve fund means that, 30 far as the public sector as a whole is concerned, claims are held against other sectors. The Government, in fact, holds obligations of its own. However, having understood this point and also the part played by the reserve in disinflation policy, further elucidation is needed first of all of the mechanics of the investment of the Funds and also of their significance in debt policy.
When the Funds accumulate week by week the surplus is apparently invested in “ tap “ Treasury Bills issued by the Treasury to all Government departments with funds in hand. Thebills can then be “ switched “ for longerdated securities in accordance with current Government debt policy. It may be asked whether there is not some definite legal restriction on the activities of the Treasury in view of the specific recognition of the Funds in the National Insurance Act 1946, as separate balance-sheets and the elaborate attention paidby the Government Actuary to the process of reserve accumulation. However, apart from the fact that the Ministry of National Insurance has no control over financial policy, as we have rioted in Chapter 11, not only is investment policy controlled by the Treasury, but ‘ investment in “ savings bank funds “ means nothing more or less than any Government securities or Government-guaranteed securities which are available. This is in contrast to other countries. In the United States, for instance, surpluses 011 the Funds for Oldage and Survivors’ Insurance are used to purchase special issues of securities. While, as we hope to show, it is quite clear that insurance reserves can be used in whatever manner suits the Treasury, the defence of the use of these funds for the support of particular issues, as in the Daltonian period, has always been based on the grounds that investment policy has conformed with the canons of sound insurance finance! Thus Mr. Glanvil Hall, the then Financial Secretary to the Treasury, invoked the canons of “ safety, liquidity and yield “ in defence of the investment in Dal tons by the Insurance Funds in the period 1946-48.
In short, all that really happens is that the Government receives currently from the Insurance Funds an additional source of finance for other expenditure. But there is one great difference between this form of Governmentborrowing and other forms. It is compulsory borrowing and the providers of the funds, selected by the incidence of insurance taxation, have no control over the distribution of these holdings, nor any legal right to realize them at any time. There is nothing in the National Insurance Act which records any obligation on the part of the Government to realize the holdings in any particularcir- cumstances. The contributor within the limits to which future governments can be committed by present enactments by constitutional convention, is entitled to certain benefits, hut there is nothing in law to say that these benefits shall he provided in the event of a deficit on the current account of the Funds from the realization of holdings of Government debt. Nor has the citizen qua contributor any moral right to regard these holdings as trustee securities, for the surplus on the Funds is only made possible by the fact that a large part of the finance of the scheme is provided out of general taxation and not by contributions. The exasperated old-age pensioners who call on the Government to use these “ colossal reserves “ in order to increase their rightful claims on Government expenditure cannot he expected to understand the ritualistic nature of Government accounting, but they have surely the right to have explained to them the real reasons why this method of finance would be impossible. How- ever, once the insurance element in the provision of benefits is understood to be a convenient fiction, any Government which has recourse to such an expeditious method of taxation as insurance contributions might find it singularly difficult to justify regressive taxation !
However, this form of compulsory lending does more than provide the Government with additional funds. It allows a certain elasticity to be introduced into debt policy. First of all accumulating surpluses, after initially being invested in tap bills, can be used to purchase new issues of Government stock, so that the latter are kept off the market and thus the gilt-edged market is supported. There is no reason why the funds might not be used to support particular issues, such as Defence Bonds, with a wider appeal thus increasing their sales “ pour encourager les antros “. Again they might he used to purchase maturing stock prior to a conversion operation so as not to allow it to fall into the hands of the billbrokers who are much more likely on conversion to demand cash rather than new issues to replace the old. Finally’, the surplus might be used to buy up a particular Government long-dated issue which has fallen well below par thereby boosting its quotation and perhaps enabling it to be sold later, when the market is more receptive to its qualities. The important point to note about all these operations is that in each case the support given to the market does not involve a credit expansion. The Government receives the cash to support the market from the pockets of taxpayers via the Insurance Funds and not from the Bank of England. All these various operations could be carried out if the Funds “ switched “ their existing holdings in order to support issues with particular maturities, but it would be difficult to give support to interest rates if the switch meant that say, short-term stock sold to the public and the proceeds of sale were devoted to the purchase of existing long-dated or new long-dated stock. As we have seen, the alternatives, sale to commercialbanks via the Treasury would involve the creation of new money, and an inflationary tendency could only be avoided if the public could be persuaded to exchange the additional liquid obligations thus created for Government debt.
By what criteria are we to judge this investment policy? By arguing throughout this book that it is anachronistic to regard the National Insurance Scheme as in any way similar to private insurance, we are precluded from judging it by the “ canons “ of private insurance investment. However, if responsible members of His Majesty’s Government continue to justify policy in terms of these canons, then they must not expect to remain immune from criticism. Regarded therefore as trust funds the avowed policy of investing inDaltons for yield “ could hardly be regarded as commendable if such investment were to involve heavy capital losses. The quotation for this stock, despite heavy support,has fallen steadily since the date of issue and reached 69¼ at the end of 1949. However, no student of public finance is going to judge this policy in this way. So long as any Government is not prepared to use the interest rate as a weapon of monetary policy, and inflation is to be prevented, then this form of compulsory saving by the National Insurance scheme is an expeditions if not entirely honest method by which compensatory policy through the budget can he facilitated. But so far as beneficiaries of the scheme itself are concerned, their main concern should not be the “ losses “ suffered by “ unwise “ Government investment of insurance reserves, but the effect on the real value of their benefits if these reserves are used to support a financial policy which has inflationary consequences.
I emphasize particularly the importance of the second and third paragraphs of section 2, which deal with “ The Investment of the Reserve Funds “. The remarks made by Peacock concerning the British national insurance funds apply equally to our own National Welfare Fund, and support very strongly, 1 think, the point that I made about the degree of confusion that exists in the public mind concerning the investment of the funds. I emphasize also the concluding sentence of section 4, “ Conclusion “, in which the author states -
Hut so far as beneficiaries of the scheme itself are concerned, their main concern should not lie the “ losses “ suffered, by “ unwise “ Government investment of insurance reserves, but the effect on the real value of their benefits if these reserves are used to support a financial policy which has inflationary consequences.
In his second-reading speech the Minister indicated that the Government considered that the surplus in the National Welfare Fund was an adequate reserve. I differ from him entirely on that matter, and I point out that if large-scale unemployment continued for any length of time those reserves could dwindle and dissipate very quickly. Indeed, my personal opinion is that the only reserve that could be regarded as adequate would be one that could provide for two years’ continuous drain upon the fund. The amount standing to the credit of the fund at present would be barely sufficient to cover continuous large-scale payments for one year. One cannot derive much comfort from the fact that the present balance of the fund would cover one year’s expenditure, because in the comparatively short period that has elapsed from 1938-39 until the present financial year, social service payments have already increased from £16,500,000 to £173,000,000 per annum. Furthermore, the Government has foreshadowed the introduction of additional medical benefits and is also discussing the amelioration, if not the abolition, of the means test. It seems clear, therefore, that Australia may look forward to further substantial increases of social services payments. Furthermore, the longevity of our people is increasing and in consequence age pensioners now draw upon the fund for substantially increased periods.
– Has the honorable senator arbitrarily selected two years as the period for which the fund should be able to meet sustained large-scale payments ?
– I selected as the basis for my calculations the longest period of large-scale unemployment that is likely to occur, or, in other words, the longest margin for which we should have to make provision. Taking the over-all maximum number of people likely to be unemployed during that period as 1,500,000, I calculated that if payments were made on the present scale of un employment benefit for two consecutive years the entire surplus of the fund would be dissipated. Of course, I do not think it is likely that such an enormous number of people would be unemployed for such a lengthy period, but in these matters one has to look at the worst state of affairs that can conceivably arise. Of course, it is more likely that extraordinary and unprecedented demands would be made on the fund by the occurrence of a nationwide epidemic of illness, because it is conceivable that an epidemic illness could strike down perhaps 500,000 people who would be incapacitated for some considerable time.
– Could not treasurybills be used to finance payments from the fund to cover such an emergency?
– Quite so, and that is the point made by the Minister in the course of his second-reading speech. If an extraordinarily- large number of people were incapacitated suddenly it is certain that the national income would fall with the consequence that the revenues of the National Welfare Fund would be depleted. In other words, less money would be paid into the fund at the time when it was most needed. I think that such a period would be the most appropriate time to resort to central bank credit. In the meantime we should continue to build up the fund.
If the ordinary revenues of the Government fell at a time when unprecedented demands for social service payments were being made upon it, the natural tendency of the members of the Administration would be to reduce the scale of social services benefits. That is why I emphasize, on behalf of the Opposition, the importance of accumulating a real surplus in the fund. In other words, we believe that it is a sound economic practice to put by during the good years substantial reserves for the lean years. At a time when government revenues are falling and payments are increasing there is the heaviest moral obligation on a government not to cut down on social services benefits. That is at the root of our objection to this bill. We want this fund to be built up. I do not think that I am arbitrary in stating that a two year’s supply would represent an adequate fund. In reply to Senator
Vincent’s question as to what amount would be adequate I have expressed my own view. I do not mind if anybody differs from me. It may be argued that the amount should be three times as much as I have stipulated but the present margin is not enough.
– Is it a fact that no money is actually placed in the fund but that the amount is credited to Consolidated Revenue?
– Yes. In order to clarify that point I have invited the Minister to make a clear statement and have referred the Senate to an excellent little book which covers the matter very fully. I have developed at some length the Opposition’s line of thought on this matter. I have said that when the fund is inadequate it should be built up. “We do not believe in freezing it and we consider that the Government has decided to do so because of the Treasurer’s urgent needs which are due to difficulties which have been created by his own Government. The Opposition opposes the bill and will vote against it. I invite the Government, in the light of the arguments addressed to it, even at this late stage, to reconsider its attitude.
Senator ARNOLD (New South Wales) [9.3 j. - In opposing .this bill I believe that it is time that the Senate should give consideration to the reason why this fund was established in the first place. Moneys for the payment of social services in this country have always been taken from general revenue but attempts have been made over the years to provide appropriate funds outside of general revenue for the payment of social services. In 193S, when the present Minister for External Affairs (Mr. Casey) was Treasurer, a national insurance scheme was prepared and passed through both Houses of the Parliament but it was never proclaimed as the law of the country. The scheme that was proposed would have been financed from three sources - a government contribution, a contribution by employers and a contribution by employees. A great deal of investigation was undertaken before that scheme was brought to the Parliament. One weakness in the scheme was that to make it actuarily sound it was necessary severely to limit the benefits or make the payments extremely high. From that time, social services have grown rapidly until now they take up a substantial amount of the national income. In the last few months the Minister for Health (Sir Earle Page) has developed a social services scheme for which he has asked the people of Australia to pay a flat rate.
The problem of social services has become so important that we shall have to design some method of providing a stable social services scheme. The question arises whether we can do that by means of a contributory scheme under which all recipients will pay the same amount or whether it should be financed by a graduated form of taxation. A decision on that matter will have to be made for all time. This fund emanated from a committee on social services formed of members of this Parliament. The Minister for Repatriation (Senator Cooper) and I were privileged to serve on that committee. We discussed the problems of flat rate contribution systems and examined carefully the possibility of making recommendations to the Parliament. But the six members of the committee unanimously recommended to the Parliament that flat rate contribution systems would be incapable of dealing with the problem. We suggested that the only way in which this problem could be solved was by means of a graduated form of taxation and the building up of a national welfare fund. The complaint was made that people felt that they were receiving charity when they received certain benefits. Although they had paid for them over the years there was still some odium in their receipt. So the committee unanimously recommended that the social services contribution should be separated from taxation so as to show the people how much they were paying for their social welfare and how much they were paying towards the general revenue of the country. This plan was accepted by the Government and for some years the two payments were separated so that people were clearly shown that they were paying for social services.
The committee further proposed that the Government should establish a fund into which moneys could be paid in buoyant years and from which payments would be available if the revenues of the country were to fall. We did not accept the principle of insurance in an actuarial form, but we decided that, as a general principle, the Government should extract sufficient money from the people of Australia in good years to provide for lean periods. “We asked the Government to set up a national welfare fund which we intended should ultimately be capable of paying for social services. The present Government has not seen fit to maintain that fund and in this bill it proposes to restore to the fund each year only the amount that has been drawn from it during that year. The contention of the Leader of the Opposition (Senator McKenna) that this fund could be used as an anti-inflationary measure is important. When the funds of the nation are buoyant we should set aside money for the lean years. Inflation tends to take place when conditions are buoyant as they have been in recent years. So this proposal would serve the dual purpose of extracting a certain amount of purchasing power from the people and of storing up in the good years the funds needed for the lean years. I consider that the Government has not been well advised in bringing forward this bill.
A future government will have to face the problem of finding an enormous amount of money for social services. Whether we like it or not, we are entering the stage of what might be termed the welfare State. We are distributing an enormous amount of our national income through government channels and it is becoming a tremendous problem to governments to finance the payments that have to be made to various social services recipients. I hesitate to look at the problem that the Government will face in a period of substantial unemployment in which the funds available to it from taxation will become considerably less and it will have a bill for social services payments which will possibly amount to £200,000,000. It is clear that more and more social services will become the responsibility of the Commonwealth Parliament. For instance, although hospital finance is primarily a State responsibility, the Commonwealth’s contribution is bound to increase. It is inevitable also that new social services will be added to the existing framework. To-day, approximately one-fifth of the national income is being expended on social services. Probably it will not be long before that proportion reaches one-quarter. In times of economic adversity, that annual bill will present a tremendous problem to any government. It could even cause financial chaos. We may find ourselves in the gravest difficulties if, in a time of economic crisis, social services benefits suddenly have to be substantially reduced. The prudent course for us to follow therefore is to put aside in years of plenty sufficient money to ensure the continuance of social services payments for at least a year. That, in fact, was the purpose of the National Welfare Fund. The Parliament agreed unanimously when the original legislation was passed that the wise course was to establish a stable fund out of which social services payments would be met. This amending legislation will not build up the fund. Certainly it will not destroy the fund, but I believe that in times such as the present the fund could be increased substantially. It should be strengthened against the economic adversity that we may encounter in a year or two. The fund should be maintained at such a level of buoyancy that recipients of social services need have no fear for their livelihood. Honorable senators will recall that, in the early 1930’s, pensions and other similar payments were severely reduced. Those reductions were a heavy blow to the poorer sections of the community. ‘ We shall be very unwise indeed if we do not make provision now to ensure that such a state of affairs shall never occur again. For those reasons I consider that the Government should give more consideration to this problem.
.- The Minister for National Development (Senator Spooner) said in his secondreading speech that, in 1950, the Government had merged the social services contribution with the income tax contribution. That is quite true. At that time, members of the Opposition in this chamber emphasized the danger of that action. One of the reasons given by the Government for the merging of the payments was that the income tax law would be simplified. We said that in our opinion that was not sufficient justification for the proposal. We drew attention to the advantages of having a separate social services contribution. We pointed out that the state of the National Welfare Fund and its ability to meet social services commitments could be checked constantly by the people. Our view was that, with a separate social services contribution being paid into the National Welfare Fund, our social services could be balanced with the capacity of the nation to pay for them. The need for social services is not the only determining factor. Obviously consideration must be given to the capacity of the nation to meet its social services commitments. We cannot continue to add to our social services bill, desirable though new social services may be, unless we make some special provision to meet that bill. The people felt that whilst the social services contribution remained distinct from income tax, the National Welfare Fund would not be depleted and that social services payments would always be met. However, the Government amended the law, and the social services contribution lost its identity. To-day we pay only the income tax contribution and the proceeds go into general revenue. From time to time contributions are made from general revenue to the National Welfare Fund. The other source of payments into the fund is the pay-roll tax, which is levied under the Pay-roll Tax Assessment Act 1941-42. Any student of taxation will condemn that tax, and I believe that it should be repealed at the earliest possible moment Tt was a war-time measure and it has certain very bad features to which T propose to draw attention. First, it is based on expenditure and not on gains. Tt is based on money that employers are required to pay out in the form of wages, and not on what they gain. Obviously, it cannot be assumed that just because an employers’ pay roll is high, the gains from his business are also high. Another bad feature of the tax is that it contributes to higher living costs and that is a serious matter at present. Over the last few years, living costs have increased substantially. Therefore, from that point of view, the pay-roll tax is to be condemned. General speaking, concessions granted by governments in direct taxation, are balanced by increases of indirect taxation. The pay-roll tax this year is expected to yield approximately £40,000,000, compared with £37,000,000 last year. No one can deny that £40.000,000 is a huge sum, particularly in these days when we see unemployment on all sides. That money would go a long way towards improving the Australian economy and alleviating unemployment.
This bill provides for a direct contribution to be made from general revenue into the National Welfare Fund. In other words, money collected by the income tax and other levies will be contributed to the National Welfare Fund. Any one who has a knowledge of governmental book-keeping knows, of course, that the fund does not actually exist. The Treasurer will simply make available to the officials of the Department of Social Services sufficient money to meet social services commitments weekly. I shall not go any further into that matter at this stage because the Leader of the Opposition has already covered the important features of the bill. I join with him in opposing the bill.
– I object strongly to any tinkering with the National Welfare Fund. I have always protested against such interference. It began when this Government amalgamated the social services contribution with the income tax contribution, and paid the entire proceeds into general revenue. I protest now against the Treasurer (Sir Arthur Fadden) taking, with his sticky fingers, another £20,000,000 that should go into the National Welfare Fund this year. We know just how much should be paid into the fund. The Minister for National Development (Senator Spooner), in introducing the bill, told us that the Government proposes to pay into the National Welfare Fund this year approximately £164,000,000, compared with £185,000,000 last year. In other words, this year the Government proposes to filch from the social services contribution, and from the pay-roll tax, which was originally imposed to finance child endowment payments, no less than £21,000,000, and to use that amount to finance its activities in other directions. Ministers of the
Government and their supporters have frequently referred to the need for the introduction of a contributory scheme for social services benefits. The Government has already destroyed the contributory scheme instituted by the Labour Government by interfering with the method by which the National Welfare Fund is maintained. Under the original formula, single persons in receipt of £104 a year or more, and a married taxpayer with a wife and family in receipt of approximately £350 a year contributed to the fund. Social services contributions gave to the taxpayers a right to share in the National Welfare Fund by way of social welfare benefits. This Government has not only destroyed the formula upon which the fund was based, but it is also taking from the fund, on the Minister’s own admission, the excess money standing to the credit of the fund after payments for the year have been made. As the payments from the fund last year amounted to £164,000,000, obviously the Government intends to pay into the fund only that amount this year.
Owing to the maladministration of this tory government, a recession will be experienced in the near future. Already signs of the approach of a recession are apparent on every hand. The degree of unemployment that exists in the community is clear evidence of a business recession. The failure of government and semi-government loans isalso an indication that people fear for the future. The Government realizes that its revenue receipts will fall, and it is paving the way to whittle down social services benefits which have been paid for by the people. The Government is implementing its social services scheme by forcing the people, not only to contribute by taxation to the cost of social services, but also to join approved organizations in order to cover themselves against the cost of sickness and ill health which should be borne by the National Welfare Fund.
We have been told that the Government proposes to institute a master health scheme under which the services of members of the medical and pharmaceutical professions will be made available free to the people. Upon examination of the proposal, however, we have ascertained that such services will be made available only to members of registered organizations who are required to contribute to the organizations concerned amounts varying from 2s. to 4s. a week, according to the cover desired. The Government has destroyed the contributory scheme that was established by the Labour Government after it had been unanimously agreed to by. an all-party committee, and in its place has instituted a scheme under which social services contributions virtually become a portion of the Consolidated Revenue. The social services contribution has gone by the board and only income tax remains. We do not know how much money the Government has filched from the National Welfare Fund since 1950. The figures cited by the Minister in his second-reading speech relate only to payments from the fund. 1 emphatically protest against the destruction of the contributory scheme initiated by the Labour Government, and against the provisions of this bill which will prevent the balance in the fund from accumulating so that ample money may be available to meet emergencies that may arise in future years.
Question put -
That thebill be now read a second time.
The Senate divided. (The President - Senator the Hon. Edwardmattner.)
Majority . . . . 11
Question so resolved in the affirmative.
Bill read a second time.
In committee :
– I should not have spoken during the committee stage but for the fact that when the bill was at another phase no information was furnished in answer to queries raised by Opposition senators. Earlier I remarked upon the fact of the unavoidable absence from the chamber of the Minister for National Development (Senator Spooner). If you, Mr. Temporary Chairman, will permit me to do so, I shall deal briefly with the points made by the Opposition at an earlier stage of the bill, in the hope that the Minister will answer them now. I referred to the investment of money standing to the credit of the fund. Many people are disturbed about the position because they do not understand it. I invited the Minister to make a clear statement about what has happened to the fund, and in particular to the amount of £185,000,000 that was standing to the credit of the fund at the 30th June, 1952. I now invite him to make such a statement. Now that the surplus in the fund has been frozen at £185,000,000, has the Government considered the translation of these internal treasury-bills into a more remunerative form of security.For instance, the money in the fund could be invested in ordinary Commonwealth loans floated on behalf of the Australian Loan Council, in order that it might grow at a faster rate than by only £1,800,000 a year. I should be grateful if the Minister would address himself briefly to the matters that I have raised.
– The amount to the credit of the National Welfare Fund is invested in what are known as internal treasurybills, which carry interest at the low rate of 1 per cent. per annum. The Leader of the Opposition (Senator McKenna) has asked whether the money could not be invested in securities to yield a more remunerative return. Having regard to the substantial amount of the fund, it should be possible to obtain a better return. However, I am not in a position to make a statement on behalf of the Government in relation to the fund. This aspect of the matter was debated about this time last year, when amending legislation was before the Senate. We must face the practical situation that this Government inherited the fund from the previous Administration. To the best of my recollection it then stood at about £135,000,000.
SenatorBenn. - The credit balance of the fund was £120,000,000.
– When we inherited that fund the money was invested in internal treasury-bills. It is no easy matter, even for the Australian Government, to withdraw such a large amount from its available resources and invest it in external investments. For the purpose of these considerations, even an investment in Commonwealth loans would be an external investment. I express the personal opinion that the manner in which the fund should be invested should have been defined when the fund was established. I realize that the opinion of some Treasury officials differs from my opinion. It is one thing to deal with a fund in its early stages, when the amounts, by governmental standards, are only comparatively small; it is quite another thing to attempt to deal with a fund when it reaches the level at which this fund stood when the present Government came to office, or the level at which it now stands.
– I thank the Minister for National Development (Senator Spooner) for his comments. I assure him that there was no controversy on this point during the debate on the motion for the secondreading of the bill. It seems to me that now is the appropriate time to consider transferring the securities from their present unremunerative level to a higher level. It seems certain that the Government will, during this financial year, have to have recourse to a very substantial amount of bank credit. If the quantum of bank credit could be used in the first instance to redeem the treasury-hills, and the substantive amount then standing to the credit of the fund were invested in ordinary loans, the Government’s position would not be worsened but, from the point of view of income, the position of the fund would be substantially improved. I shall not press the matter further, but shall leave that suggestion with the Minister in the hope that some consideration will be given to it. The Opposition is concerned about the passage of this measure and also that the fund is to grow at such a slow rate. We consider that the reserves are not adequate. I hope that the Minister will convey my remarks to the Cabinet and give them earnest consideration.
.t- I understand the suggestion of the Leader of the Opposition (Senator McKenna) to be that we should replace the treasury-bills.
– I did not put it quite like that. I suggested that that should be done, to the extent that the Government proposes to raise central bank credit during this year, which is in contemplation.
– If that were done, surely the position would be that in addition to the amount of central bank credit that it is proposed to raise during this financial year, we should have to raise central bank credit to the amount of internal treasury-bills that would be replaced by ordinary treasury-hills. To reduce my views to an algebraic equation, if we intend to issue “ x “ treasurybills during this financial year, and we call the internal treasury-bills “y”, surely if we desired to transplant the fund into government securities which bear higher rates of interest, it would become necessary to issue “ x “ plus “ y “ treasury-bills. I think that is the mathematical answer. I hesitate to express an opinion on whether or not that would increase the inflationary pressure.
– Of course it would.
– Although I should like to hear the opinion of some one more skilled than I am, it appears to me that if the suggestion were adopted, the resources of the Commonwealth Bank would have to be called on to the amount necessary to purchase the securities. In the present circumstances, I consider that that would be an impracticable proposition.
Senator MATTNER (South Australia”) [9.56J. - We should look at this matter from a practical point of view. We must be frank about it. Irrespective of the political colour of the government in office, the money that is paid into the Consolidated Revenue Fund is expended. Although there may be a book entry showing a credit balance of £180,000,000, in the National Welfare Fund, actually all of that money has been expended, and I O U’s have been placed in the fund. We are trying to deceive ourselves that we have the actual money. It has all been expended. We must face the facts. We are merely splitting hairs by saying that wo have to redeem this and that. We have expended the money. I do not say that the money has been ill-spent by any manner of means, but it has been expended both by the previous Labour Government find by this Government. There is nothing in “ kitty “ but I O U’s I suggest that in the future, instead of crediting £1,800,000 a year to a reserve fund, we should go a little further and place the fund on actual sound foundations, so that there may be a true reserve.
.- No doubt the matter that has been raised will bring all the amateur financiers on the Government side of the chamber into prominence. If the National Welfare Fund is in credit to the amount of £120,000,000-
– It is in credit by £122,000,000.
– We all know that there is not a cash balance of that sum in the fund, because no government keeps its accounts in that manner. If there were £150,000,000 in the National Welfare Fund, the real position would be that the fund was in credit to that amount. The Leader of the Opposition (Senator McKenna) has suggested that the money should be invested to the best advantage of the fund. He has suggested that it should be invested to attract interest and so increase the amount of the fund. The Minister for National Development (Senator Spooner) has explained some of the difficulties that are associated with that proposition. We must face the position that, in the future, the Government intends to contribute to the fund from general revenue. The collections of various kinds of taxes are paid into the Consolidated Re venue Fund, from which it is proposed that a specified sum shall be transferred to the National Welfare Fund. We must not lose sight of the fact that collections of payroll tax will be paid into the fund weekly or fortnightly, according to the method of collection. It is estimated that that tax will yield £40,000,000 in this financial year. That is sound, because it is going into a fund from which there is weekly expenditure throughout Australia. Does it not follow that the fund is not a real fund, that it is really only a credit in a method of book-keeping in government offices? The fund must be fluid. Social services offices throughout Australia work on an imprest system. Credit is made available from the Commonwealth Bank weekly, through the Department of the Treasury in Canberra, and the various social services offices throughout Australia, are able to draw upon that credit. E suggest that when we get back to the point at which I started it will be found that although the fund has a credit of approximately £100,000,000, in actual fact there is nothing in it at all.
– It is not very often that honorable senators have an opportunity to disagree with the President and get away with it, but I propose to do so now because Senator Mattner raised a fundamental point with which I do not agree. I should like the Minister for National Development (Senator Spooner) to inform me whether this fund is an illusory one, or whether it is real. I disagree with the view that it is illusory. In my opinion, money can be taken and used for various purposes, such as to liquidate debts or to destroy treasurybills in a number of ways, or it can be stored away for use at a time when the Government is not able to extract revenue from the people. I submit that the whole purpose of the National Welfare
Fund is to build up in good years a fund that will be available in lean years. If that is not so, there is no purpose in having a National Welfare Fund at all. If it is a purely illusory fund, why have it? Why not wipe it off the books altogether?
– If that were done, there would be additional taxation in the following year.
– As I see it, the whole purpose is to store away a certain amount of money year by year in order to build up a fund. If a real fund is built up, it will be available for distribution at some other period. Senator Mattner and others have said that this fund is a pure illusion, that we gather a certain amount of money each year and destroy it each year. Will the Minister inform me whether this is an imaginary fund or whether in fact there is stored away in the fund a certain sum of money from which the Government can pay social services at any time?
.- I intrude in the discussion merely because of the line of reasoning advanced by the Leader of the Opposition (Senator McKenna). In my opinion, it is sound reasoning that this fund should be made to earn the maximum amount possible. In his reply, the Minister for National Development (Senator Spooner) stated that that matter should have been decided when the fund was commenced. I think that is perfectly correct, but as we are now in the present position, will the Minister consider whether it is not possible to invest future increases in bonds, as suggested by the Leader of the Opposition ? It seems to me that the idea of the honorable senator is to increase the earning power of the investment, with which I thoroughly agree.
– When this Government came to office there was approximately £100,000,000 in the National Welfare Fund. That sum increased to £180,000,000, which Senator Mattner stated has been expended. Then, it was suggested, the amount that had been expended was invested at a low rate of interest. The Minister for National Development (Senator Spooner) stated that the fund thereupon represented “ x “ plus “ y “, and that if we were to increase the fund which was expended to a sum sufficient to invest at a small rate of interest we should be able to invest the whole of the fund at a small rate of interest.
– I wish to explain why the amounts credited to the fund in 1943 were not used in the way suggested by Senator Henty. At that time the country was at war and was marshalling every physical and material resource for war purposes. In fact, some hundreds of millions of pounds of central bank credit were used. I do not think that criticism can be made of the fact that the fund was not then invested to the best advantage. Earlier to-night I referred the Senate to a book in which the author argues against the investment of the fund, even in the way that I am suggesting. He claims that the insurance fund in England is not in the position of an ordinary private trustee fund. If honorable senators willlook at that book they may obtain more light than I ‘have thrown on the subject to-night.
On the “x” plus “y” theory propounded by the Minister for National Development (Senator Spooner), who briefly favoured us with his presence, the proposition that I put was that if the Government was permitted to raise a certain amount of central bank credit this year the proceeds of that raising might be diverted, by way of the National “Welfare Fund, to meet a corresponding amount of internal treasury-bills before the money found its way to support public loans. If that is accepted and practised by the Government it will not involve any “ x “ plus “ y “ proposition at all. It will mean that the one amount of central bank credit, to which the Government is committed this year, will do two jobs ; it will clear internal treasury-bills before it finds its way to public loans to support the works programmes of the States. The idea is to kill two birds with the one stone. A real security will be put into the National Welfare Fund, to enable the fund to earn a much better rate of interest, and at the same time, the loan market will be supported.
– I should like the Minister for National Development (Senator Spooner) tostate the amount that it is proposed to collect this year to take the place of the amount which is being paid into Consolidated Revenue, and the amount that would have been paid into the National Welfare Fund had all social services contributions been credited to it. I suggest that in a year when very little is paid out of the fund very little will also be paid in, although the Government will continue to collect social services contributions at the same rate. The contributions will no doubt then be used for other purposes. If unemployment should increase I have no doubt that the Government willsay that money is not available in the fund to meet the increased demand for benefits.
– There is no money in the fund now.
– If there is no money in it I suggest that some real money should be provided in order to start a proper fund. At the present time, a certain amount of money is collected each year for specific purposes, although it is not used for those purposes. It is likely that we shall be obliged to participate in a national insurance scheme, although the present social services contributions are supposed to provide such benefits. It seems to me likely that a national insurance scheme, similar to that introduced by the Lyons Government, will be instituted, and that widows and similar persons will again be obliged to pay for it.
Bill agreed to.
Bill reported without amendment.
Motion (by Senator McLeay) put -
That the report be adopted.
The Senate divided. (The President - Senator the Hon. Edward Mattner.)
Majority … 11
Questionso resolvedin the affirmative.
Bill reada third time.
The following paper was presented : -
Australian Wool Board - Sixteenth Annual Report, for year1951-52.
Senate adjourned at 10.20 p.m.
Cite as: Australia, Senate, Debates, 16 October 1952, viewed 22 October 2017, <http://historichansard.net/senate/1952/19521016_senate_20_220/>.