Senate
19 October 1955

21st Parliament · 1st Session

  1. Senate
  2. 21st Parliament
  3. 1955

The President (Senator the Hon: A. M. McMullin) took the chair at 3 p.m., and read prayers.

page 543

SENATOR A. R. ROBERTSON

Senator ROBERTSON:
WESTERN AUSTRALIA

– by leave- I desire to inform the Senate that I have been accepted as a member of the Country and Democratic League of Western Australia and that, in that capacity, I shall continue to support the present coalition Government of Australia.

page 543

QUESTION

GOLD

Senator VINCENT:
WESTERN AUSTRALIA

– Has the Minister for National Development read the rather remarkable press statement in the Melbourne Age of Saturday, the 15th October, to the effect that British scientists have found a cheap method of increasing the output of gold by a new process, under which the gold is passed in solution through synthetic resin and which, it is claimed, will recover the whole of the gold in a very pure form, and may revolutionize the Australian gold-fields by bringing abandoned mines back into production ? If so, will he say whether his departmental advisers agree with the important announcement, and whether the details of the new process are available to the industry in Australia ?

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

– I did see the newspaper report to which the honorable senator has referred, and I asked the departmental officers to comment on it. I have received their comments but, unfortunately, I have not got them with me at the moment. As I should not like to do more, at this stage, than say that the professional advice from my departmental officers is not nearly so optimistic as is the report in the newspaper, I should like the honorable senator to put his question on the notice-paper, so that an answer in technical terms that his technical question requires may be supplied to him.

page 543

QUESTION

ROAD TRANSPORT

Senator TANGNEY:
WESTERN AUSTRALIA

– My question is directed to the Minister for Shipping and Transport. Recently, while on a country trip, I was having tea at a wayside inn when I heard two drivers of long-distance vehicles discussing whether they had enough pep drugs to see them through the return trip to the eastern States. They were counting out these drug tablets on the table. In the interests of public safety on the roads will the Minister take steps to ensure that drivers of large transport vehicles on interstate trips are physically fit to undertake such long journeys? Can anything be done to ensure that sufficient relief drivers are provided on such vehicles, and that the schedules are not so unduly onerous as to render it necessary for drivers to take pep drugs to combat weariness on the road? The taking of such drugs is a menace, not only to the physical wellbeing of the drivers themselves, but also te all other road-users.

Senator PALTRIDGE:
Minister for Shipping and Transport · WESTERN AUSTRALIA · LP

– Apart from the provisions in various State acts, that relief drivers shall be available, and I do not know the full nature of such legislation, I cannot give the honorable senator any information about the matter. Therefore, I ask her to put the question on the notice-paper so that I may have detailed inquiries made, and inform her of the result.

page 543

QUESTION

TASMANIAN SHIPPING SERVICE

Senator HENTY:
TASMANIA

– Has the Minister for Shipping and Transport considered representations made to his department to provide a regular freight service from the north-west coast of Tasmania to Newcastle and Brisbane for the potato trade, similar to the excellent regular service maintained by Enfield from Ulverstone to Sydney? “Will the Minister consider inaugurating this service from the port of Stanley, which could serve both the Table Cape and Circular Head municipalities, and where ample labour and adequate wharf accommodation exist to enable a regular service to primary producers to be maintained?

Senator PALTRIDGE:
LP

– I must confess that I have not yet seen any representations submitted to me in respect of the provision of a service for the potato trade from the north-west coast, of Tasmania to Newcastle and Brisbane.

However, I shall investigate the matter and give the honorable senator an answer to his question as soon as possible.

page 544

QUESTION

VISIT OF PRIME MINISTER OF CEYLON

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

– My question to the Minister representing the Minister for External Affairs has reference to the forthcoming visit of the Prime Minister of Ceylon, Sir John Kotelawala, to Australia. Is it a fact that Sir John will visit every capital city on the mainland of Australia with the exception of Brisbane, and therefore every State on the mainland with the exception of Queensland? If the arrangement of this distinguished visitor’s itinerary was left in the hands of the Australian Government, will the Minister explain why Queensland was excluded from it? In view of the climatic similarity between north Queensland and Ceylon, the close parallel in the field of primary production between Queensland and that dominion, and in view also of the fact that a considerable number of Colombo plan students are taking courses at the Queensland University, is it not important that Sir John be given an opportunity to visit the. northern State? Even at this late stage will the Government endeavour to have Brisbane and, if possible, north Queensland, included in the itinerary of the visiting Prime Minister? Will the Government ensure that the projected visit of the Prime Minister of India., Mr. Pandit Nehru, shall include the State of Queensland?

Senator SPICER:
Attorney-General · VICTORIA · LP

– I am not familiar with the details of the itinerary it is proposed that the Prime Minister of Ceylon should follow in Australia. His time will be limited, and there is also a limit to the distances over which the visiting Prime Minister can be asked to travel. However. I shall bring to the notice of the Prime Minister and the Minister for External Affairs the suggestion made by the honorable senator, both with regard to the Prime Minister of Ceylon and to any visit bv the Prime Minister of India that might follow.

page 544

QUESTION

VICKERS VISCOUNT AIRCRAFT

Senator ROBERTSON:

– Is the Minister representing the Minister for Civil Aviation aware of the unsatisfactory ser vice that the Vickers Viscount airliners are providing for the travelling public between the eastern States and Western Australia? Will the Minister call for a detailed report on the delays and mishaps that have taken place during the past six weeks? Is the Vickers Viscount airliner fitted with an automatic pilot? Does the Minister consider that these machines are satisfactory and suitable for the long distance flights from east to west of the Australian continent?

Senator PALTRIDGE:
LP

– I shall refer the honorable senator’s questions to the Minister for Civil Aviation, and obtain a reply.

page 544

QUESTION

BUTTER,

Senator GUY:
TASMANIA

– Will the Minister representing the Minister for Commerce and Agriculture direct the attention of the Minister to a statement made by the general manager of the Farmers and Graziers Co-operative Society that » spectacular rise in the price of butter overseas in recent weeks, amounting to about 5d. per lb. Australian currency, and the agreement of the Australian Government to distribute the full amount’ of the subsidy, had made an immediate rise in interim payments a necessity? Will the Minister ask the Minister for Commerce and Agriculture to make n statement to clarify the position?

Senator PALTRIDGE:
LP

– I shall refer the honorable senator’s question to thiMinister for Commerce, and Agriculture, and ask for a reply.

page 544

QUESTION

RAIL TRANSPORT

Senator CRITCHLEY:
SOUTH AUSTRALIA

– Shortly before his death, the former Minister for Shipping and Transport informed the Senate several times that the Govern-, ment expected the delivery in October of more diesel engines for use on the northsouth railway and the Trans-Australian Railway. Will the Minister for Shipping and Transport inform the Senate whether the contract for the supply of the engine? will be fulfilled on time so that improvement in the transport services on both those important railway routes will not be retarded?

Senator PALTRIDGE:
LP

– I am not aware of the details of the situation, but

I shall make inquiries and furnish a reply to the honorable senator as soon as possible.

page 545

QUESTION

WATERFRONT EMPLOYMENT

Senator WARDLAW:
TASMANIA

– Will the Minis- ter representing the Minister for Labour and National Service inform the Senate whether it is a fact that a serious situation has arisen at Australian ports, particularly in Tasmania, as a result of the waterside workers’ nation-wide 24-hour stop-work meetings? Is it a fact that this stoppage may develop into a prolonged strike at all ports in Australia? If so, what action does the Minister propose to take to meet such a serious development ?

Senator SPICER:
LP

– I am sure the honorable senator agrees that it would be unfortunate if the position on the waterfront developed in the way he has indicated. We all hope that the men operating on the waterfront will abide by the principles of arbitration, and endeavour to have differences settled by the methods provided by law. The honorable senator can rest assured that if that course is not followed, the Minister for Labour and National Service will take whatever steps are necessary to ensure t hat proper services are maintained.

page 545

QUESTION

COMMONWEALTH SHIPPING LINE

Senator SANDFORD:
VICTORIA

– In view of the fact that several questions have been asked recently regarding the future of the Commonwealth shipping line, will the Minister for Shipping and Transport assure the Senate that a statement will be made in this chamber before any hasty and, perhaps, irrevocable decision is made in connexion with this very important matter?

Senator PALTRIDGE:
LP

– If any decision is made in respect of this matter, the manner of announcing it will be the manner usually adopted in such cases.

page 545

QUESTION

SHIPBUILDING

Senator LAUGHT:
SOUTH AUSTRALIA · LP

– Can the Minister for Shipping and Transport say whether the Government pays a subsidy on ships built, at Australian shipbuilding yards and, in particular, on ships that are built at Whyalla, in South Australia! Can he also state the manner in which such subsidy is calculated ?

Senator PALTRIDGE:
LP

– The amount of the subsidy paid in respect of ships constructed at Australian shipyards is at the rate of 25 per cent., and I think that it is calculated on the cost of construction.

page 545

QUESTION

UNITED NATIONS

Senator WORDSWORTH:
TASMANIA

– Will the Minister representing the Minister for External Affairs give the Senate the latest information concerning the deliberations of the United Nations disarmament sub-committee on the letter of the Soviet Premier to President Eisenhower, regarding the “ open-skies “ arms inspection plan?

Senator SPICER:
LP

– I shall bring the honorable senator’s question to the notice of the Minister for External Affairs and ascertain what information can be supplied.

page 545

QUESTION

WAR SERVICE HOMES

Senator TANGNEY:

asked the Minister representing the Minister for Social Services, upon notice -

  1. How many war service homes have been made available to war widows in each of the States?
  2. What is the proportion of applications so granted to applications received?
  3. What is the average rental of such homes?
Senator SPOONER:
LP

– The Minister for Social Services has supplied the following answer: -

2.65 per cent.

  1. The question of rental does not arise.

The house becomes the property of the widow and she repays the loan from the division by equal instalments over a number of years.

page 546

QUESTION

OCEANOGRAPHY

Senator VINCENT:

asked the Minister for National Development, upon notice -

  1. Has the Minister been informed of the findings of the meeting of the Australian Academy of Science relating to the oceanography of Australia, held in June last?
  2. if so, will the Minister comment upon the findings of this meeting as they affect Government policy?
Senator SPOONER:
LP

– The following answer is now supplied: -

I understand that the convenor of the meetinghas completed his report to the Australian Academy of Science, but that this report has so far only received preliminary consideration by the council of the academy.

page 546

QUESTION

AUSTRALIAN PRISONERS OF WAR

Senator SANDFORD:

asked the Minister representing the Minister acting for the Treasurer, upon notice - 1.It it a fact that a payment was made to prisoners of war in 1952, under the heading of prisoner of war subsistence’ payments?

  1. Are any further such payments to be made?
Senator SPOONER:
LP

– The Minister acting for the Treasurer has supplied the following answers: -

  1. A payment of £32 to each ex-prisoner of war or dependant was made in 1952 under the provisions of the Trading with the Enemy Act 1052. This payment was provided from the proceeds of the sale of Japanese assets in Australiaand the circumstances of the payment were described at length in the second -reading speech made on the 16th October, 1952, by the Vice-President of the Executive Council.
  2. In May, 1955, Japan paid an amount of £4,500,000 sterling to the International Committee of the Bed Cross in Geneva in full settlement of its obligations under article 10 of the Peace Treaty. The Australian share of these and certain other moneys held by the committee will be distributed for the benefit of former prisoners of war and their families as soon as it is received. The amount and possible date of receipt of the Australian share are not yet known.

page 546

QUESTION

BRITISH IMMIGRANTS

Senator O’FLAHERTY:
SOUTH AUSTRALIA

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

Why is the British Migrants Association not allowed to use the Assembly Hall at Finsbury, South Australia, for meetings amongst British migrants residing in that area?

Senator SPICER:
LP

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

The question of permitting entry to Commonwealth migrant hostels is a matter which has received careful consideration since the setting up of Commonwealth Hostels Limited and a defined policy has been observed. Residents of a migrant hostel may, of course, hold meetings for social, sporting, recreation, welfare and similar purposes and indeed are given every encouragement to do so by the hostel management. Bequests from organizations outside hostels to hold meetings in a hostel are examined on their merits by the hostel manager, taking into account the purpose for which the meetings are to be held and the convenience and interests of the residents. Requests from outside organizations to hold mass meetings in migrant hostels which would be attended by persons not resident in the hostel, or meetings which would be of a political character or for political purposes are not approved. It was in accordance with this policy that the hostel manager at Finsbury refused an organization known as the Federal British Migrants Welfare Association permission to hold a public meeting in the Assembly Hall at Finsbury hostel.

page 546

QUESTION

PUBLIC SERVICE

Senator BENN:
QUEENSLAND

asked the Leader of the Government in the Senate, upon notice -

With reference to the Minister’s statement that in June, 1949, there were 55,852 permanent public servants in the service of the Government, and that in June, 1955, the number employed was 82,330, will the Minister advise whether the temporary employees, stated to be 19,196 on the 30th June last, and the 50,372 workers, stated in a column of the statement under the heading of “exempt”, are governed by the Public Service Act?

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

– I now supply the following answer: -

Temporary and exempt employees are employed under the Public Service Act 1922-1955. This act provides for -

Temporary employees: These have no permanent status but are entitled to normal Public Service conditions of pay, leave, &c, while they are employed. Departments may dispense with their services at any time. A temporary staff component has always existed in the Public Service to perform functions of short or undecided duration to meet fluctuation in the work load, &c., and

Exempt employees are also temporary but are not subject to the restrictions in the act governing temporary employment.Rates of pay and conditions of employment are fixed by the board but the employees are engaged and terminated by the employing departments.

page 547

QUESTION

TIMBER

Senator HENTY:

asked the Minister for Trade and Customs, upon notice -

  1. What were the values of (a) undressed timber, and (b) dressed timber imported during 1950-51?
  2. What were the import values during the July-September quarter, 1955, for such timber?
Senator O’SULLIVAN:
through Senator Spicer · LP

– The answers to the honorable senator’s questions are as follows : - 1. (a) £A. 10,1 76,209, which includes logs to the value of £A.401,595. (b) £A.3,861,254. 2. (a) £A.3,229,269, which includes logs to the value of £A.180,588. (6) £A.324,364.

page 547

QUESTION

CANBERRA

Senator McCALLUM:
NEW SOUTH WALES

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

  1. Why has a number of trees been felled in King George-terrace?
  2. Was the Chief Town Planner consulted before this was done and, if so, did he advise the department to fell the trees?
  3. Was the National Capital Planning and Development Committee consulted before the trees were felled and, if so, did it approve or disapprove of the proposed action?
  4. Does the felling of these trees foreshadow an intention to vary the approved plan of Canberra ?
Senator PALTRIDGE:
LP

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

  1. To allow for the construction of an improved junction of King George-terrace and the roadway from the western end of the new administrative building.
  2. The improvement was designed in the Department of the Interior by the Chief Town Planner. The removal of the trees is necessary to carry out the improvement.
  3. The National Capital Planning and Development Committee endorsed this alteration before the work was commenced.
  4. A minor variation of the city plan will be involved, in effect it is a widening nf the entrance to the short length of un-named road leading from King George-terrace to the new administrative building.

page 547

BILLS RETURNEDFROM THE HOUSE OF REPRESENTATIVES

The following bills were returned from the House of Representatives, without amendment : -

Repatriation Bill 1955.

Seamen’s War Pensions and Allowances Bill 1955.

page 547

TARIFF BOARD

Report of Item - Annual Report

Senator SPICER:
LP

– I lay on the table the following Tariff Board reports : -

Euclid rear-dump wagons.

Annual Report for year 1954-55, together with summary of recommendations.

The Tariff Board’s annual report is accompanied by an annexure which summarizes the recommendations made by the board and sets out the action taken in respect thereof. It is not proposed to print the annexure. I move -

That the reports only be printed.

Debate (on motion by Senator McKenna) adjourned.

page 547

TARIFF BOARD

Reports on Items.

Senator SPICER:
LP

– On Thursday last, the 13th October, the Minister for Trade and Customs (Senator O’sullivan) presented the following papers: -

Tariff Board reports -

Aluminium and aluminium alloy sheets; sections and other shapes; aluminium foil and foil paper.

Direct current mill type motors.

Fuel injection equipment.

Household aluminium ware.

Lubrication nipples.

Motor vehicle parts - front axle assemblies.

Pen nibs.

Phenothiazine and diphenylamine.

Phosphorus derivatives.

Plumbers’ vises.

Ribbons, trimmings, ornaments, &c.

Vegetables

I now formally move -

That the papers be printed.

Debate (on motion by Senator McKenna) adjourned.

page 547

APPROPRIATION BILL 1955-56

In committee: Consideration resumed from the 13th October (vide page 501).

Clauses 1 to 4 agreed to.

First Schedule agreed to.

Second Schedule.

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

.- I move-

That the Votes in the Second Schedule be considered in the following order: -

Department of the Treasury, £8,537,000.

Miscellaneous Services - Department of the Treasury, £762,000.

Refunds of Revenue, £22,000,000.

Advance to the Treasurer, £16,000,000.

Department of Works, £3,535,000.

Department of Social Services, £2,614,000.

Miscellaneous Services - Department of Social Services, £1,631,000.

Department of National Development, £843,000.

Miscellaneous Services - Department of National Development, £312,000.

Defence Services -

Department of the Navy, £48,834,000.

Department of the Army, £63,128,000.

Other Services - Recruiting Campaign, £384,000.

Department of the Interior, £3,633,000.

Miscellaneous Services - Department of the Interior, £291,000.

Australian Capital Territory, £2,367,000.

Defence Services - Other Services - Civil Defence, £234,000.

Department of Civil Aviation, £7,719,000.

Department of Commerce and Agriculture, £1,952,000.

Miscellaneous Services - Department of Commerce and Agriculture, £911,000.

Department of Shipping and Transport, £1,034,000.

Miscellaneous Services - Department of Shipping and Transport, £2,093,000.

Defence Services - Other Services - Reconditioning of Marine Salvage Vessels, £135,000.

Commonwealth Railways, £3,336,000.

Department of Air, £50,926,000.

Department of External Affairs, £1,853,000.

Miscellaneous Services - Department of External Affairs, £1,004,000.

Miscellaneous Services - International Development and Relief, £5,500,000.

Attorney-General’s Department, £1,547,000.

Miscellaneous Services - Attorney-General’s Department, £8,000.

Commonwealth Scientific and Industrial Research Organization, £4,449,000.

Miscellaneous Services - Commonwealth Scientific and Industrial Research Organization, £100,000.

Department of Territories, £180,000.

Northern Territory, £3,386,000.

Norfolk Island, £27,100.

Papua and New Guinea, £8,943,900.

Self-balancing items, £836,000.

Department of Immigration, £1,543,000.

Miscellaneous Services - Department of Immigration, £8,963,000.

Department of Labour and National Service, £1,931,000.

Defence Services - Other Services - Administration of National Service Act, £222,000.

Department of Health, £1,362,000.

Miscellaneous Services - Department of Health, £1,030,000.

Payments to or for the States, £1,750,000.

Australian Atomic Energy Commission. £582,000.

Department of Supply, £14,134,000.

Department of Defence Production, £11,253,000.

War and Repatriation Services, £15,977,000.

Postmaster-General’s Department. £79,265,000.

Broadcasting Services, £5,352,000.

Parliament, £827,000.

Prime Minister’s Department, £2,486,000. Miscellaneous Services - Prime Minister’s Department, £3,143,000.

Department of Trade and Customs. £3,905,000.

Miscellaneous Services - Department of Trade and Customs, £55,000.

Department of Defence, £750,000.

Bounties and Subsidies, £16,070,000.

This is a new procedure. The list covers all the items in the second schedule, but instead of placing them in the order in which they are printed in the bill, they are grouped according to the departments for which Ministers in the Senate are responsible. If the committee agrees to the motion, the various departments for which I, for instance, am responsible in the Senate, will be dealt with together, and the same procedure will be followed in respect to the departments for which other Ministers are responsible. That will facilitate the passage of the bill through committee, and will conserve the time of departmental officers who need he in attendance only while the Estimates affecting their departments are under consideration.

Yesterday, I circulated to honorable senators a copy of the schedule, hut to-day that has been replaced by a more concise list of items. I mention that so that honorable senators may be certain of having the right schedule before them. It is in a more concise form, and in addition to the page numbers, the amount of the proposed vote involved is given, so that items may he more readily identifiable.

Senator McKENNA:
Leader of the Opposition · Tasmania

– The proposal of the Minister for National Development (Senator Spooner) is an interesting one which the Opposition recognizes will be for the benefit of all. It is undeniable that the proposed grouping of departments will be of very great convenience to departmental officers. We of the Opposition will not object to the proposal at all; in fact, we shall support it. We shall watch it as an interesting experiment. At the moment, without seeing the new system in operation, we believe that it should work well.

I am glad that the Minister has revised the original list, and I point out that it will be necessary for all honorable senators to take care so that they will not be confused. I, too, desire to issue a word of warning to honorable senators by pointing out that it does not necessarily follow that the Estimates that were circulated earlier in the session of the Parliament will have the same page numbers as appear in the schedules to the bill now before us. I ask honorable senators on this side of the chamber to remember that the references will be to the pages in the schedules to the bill, and not to those of the Estimates circulated some time ago.

Question resolved in the affirmative.

Department of the Treasury.

Proposed vote, £8,537,000.

Senator LAUGHT:
South Australia

– I desire to refer to Division 42, and to the details on page 166, but before doing so I desire to say a few words about the administration of the Taxation Branch. I refer, first, to the excellent work that the Taxation Branch is doing by sending men to country districts to help taxpayers in the preparation of their returns. As honorable senators are no doubt aware, persons in receipt of wages and salaries have to submit income tax returns by the 31st July in each year. Many of them do so as soon as possible after the end of the financial year, so that they may have their assessments prepared quickly, and receive early refunds of taxes overpaid. The Taxation Branch has been of great assistance to taxpayers by sending experienced officers to country towns and cities to assist taxpayers in the preparation of their returns, thus enabling them to obtain refunds quickly. I compliment the branch on what it has clone in that way.

I also desire to focus attention on the work that the branch is doing in connexion with outstanding taxes. On page 26 of the Auditor-General’s report, under the heading “Department of the Treasury”, the Auditor-General refers to outstanding taxes. In this connexion, it is interesting to note that two years ago income taxes outstanding amounted to about £150,000,000. At the 30th June, 1954, outstanding income taxes totalled only £81,000,000, and on the 30th June, 1955, the amount outstanding had been further reduced to £68,000,000. The department has done well in reducing the amount outstanding, because when there is no large backlog of outstanding taxes, more accurate budgeting is possible.

If honorable senators turn to page 166 they will find an amount of £95,113 to cover salaries and allowances payable to 66 officers of the Taxation Branch shown as “ advising officers, inspectors, Australian taxation representatives, research officers, finance officer, senior sampling officer, administrative assistant and clerks “. The amount ‘represents an average of approximately £1,450 for each officer. The total staff at the head office of the branch in Canberra consists of 107 officers. I believe that those officers are of great value to the Commonwealth, particularly those who are engaged in taxation research. I fear that the Government, when preparing its budget, did not avail itself of the work of these taxation research officers to the degree that it might well have done. In making that comment I am not unmindful of the fact that, in presenting the budget, the Treasurer (Sir Arthur Fadden) said that there could be no change whatsoever in taxation law so far as revenue was concerned. He gave as a reason for that statement the economic situation confronting this country. I submit thai changes would not have involved much in the way pf either gain or loss to revenue. Changes, however, would have meant a great deal of difference to taxpayers by treating them more fairly. I am afraid that the Government has not acted on the advice which I have no doubt these research officers gave to it. I point out that it is about 19 years since there has been any marked change in taxation law. Honorable senators may recall that in the middle 1930’s a royal commission was appointed to deal with the whole question of taxation law. As the result of its report, the Income Tax Assessment

Act of 1936 was passed. Honorable senators may be interested to know that that act, which was printed in the normal type used in the printing of acts of Parliament, occupied 81 pages. That act has not been redrawn, but amendments, some simple and some not so simple, have been made to it from time to time, with the result that the consolidated act now contains 224 pages. In other words, the act in its present form is now a thing of “shreds and patches”, with huge patches about throe times the size of the original garment. I submit that this fact presents a strong case for some drastic reconsideration of our income tax assessment law.

I draw attention to the matter, not from the stand-point of the amount of revenue involved, but from the standpoint of re-drawing the legislation to fit in with clear interpretation and modern conditions. The legislation itself, and the amendments of that legislation which are twice the size of the original act, should be given some further consideration.

I nsk that the Minister representing the Treasurer will give some consideration to this aspect of taxation research, as there is an efficient staff at the central head-quarters of the Taxation Branch which can be used for this purpose. I ask hi in to bring to the notice of his colleague the Treasurer the request that consideration should be given to establishing a royal commission to inquire into the whole matter of taxation. I ask that because there are most noticeable aspects of this matter that require urgent consideration. Without developing those aspects in detail, I shall indicate some of the lines upon which I consider that research should be made. We must realize that within the last twenty years the whole face of Australia has changed. Twenty years ago this country was mainly primary producing and, consequently, the incomes of the people came mainly from primary production. I admit that at the present time our main income also comes from primary production, but secondary industry has grown apace and, I am pleased to say, is continuing to grow. Consequently, the taxation legislation that was drawn up approximately twenty years ago, is, in many major respects, outmoded. One of the first things that should be considered apposite to a royal commission is the question of the taxation of company dividends, thus giving consideration to my contention that the present system is wrong because it taxes dividends without regard to the tax that has already been paid by the company.

Another matter, which is a minor one, but which interests many people these days because of the shortage of housing and the fact that there are more elderly people now than there were twenty years ago, is that there should be an allowance for parents-in-law who are maintained by the taxpayer. The present law provides only for allowances in respect of the maintenance of parents, but quite often parents-in-law are maintained by the taxpayer. There is a whole field of inquiry there. Another field of inquiry on the personal side of some taxpayers is that the ex-wife and the children of a divorced taxpayer might well be admitted as dependants of the taxpayer.

An important matter which should be given a good deal of research, and the Government of South Australia has recently given attention to it, is that there should be a rebate of estate duty where estate duty has been paid on a particular property and such property again becomes dutiable within a short time following the death of the person who succeeded to it. There should be research into the question of whether we should have a taxation treaty with dominions such as Canada or New Zealand, in order to avoid the payment of double taxes. About eight or ten years ago a Labour government originated a similar arrangement with the United Kingdom with great success, and all credit to that government for doing so. About three years ago this Government made such an arrangement with the United States of America. I believe that the United Kingdom has about 41 of these arrangements with Commonwealth countries and foreign countries written into its taxation law, so there is further scope for research into that aspect of taxation in Australia.

I believe that we should build up in Canberra a corps of trusted experts in our Taxation Branch who should conduct serious research into the matters that I have mentioned. I also suggest that we, as the members of the Parliament, should be able to learn quickly the result of that research. Therefore, I express disappointment with one aspect of the budget because it is completely barren in its approach to the improvement of our taxation law. I do not criticize the fiscal angle of the budget, but I do criticize the fact that it failed to tidy up a quite a few noticeable anomalies that have been brought to my attention. I suggest that there must have been a number of other such anomalies brought to the notice of the Government. 1 hope that research will continue to be carried out on the important matter of depreciation, because I believe that the Government must face up to giving a fair and equitable allowance for depreciation in industry. The Government has faced up to the matter of depreciation among primary producers, and by so doing has given great emphasis to the development of our primary industries. In complimenting the Minister for the way in which his department has carried out its work, I do ask him to give earnest consideration to the suggestions that I have made.

The CHAIRMAN:
Senator the Hon. A. D. Reid

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

Senator BENN:
Queensland

.- I desire to refer to the proposed vote for the Department of the Treasury, Division 47. That division relates to the Superannuation Board. It is not possible for honorable senators to ascertain by examination of the papers before us what are the exact ramifications of the Superannuation Board. . We know that it was established to deal with the superannuation funds contributed to by public servants, to invest those funds as best it could and to administer them to the best advantage of retired public servants. I stress the fact that we cannot ascertain exactly what is done by the Superannuation Board, and I believe that every honorable senator is clear on that point. We know that we cannot go to the officers of the Treasury and say that we desire to find out how the affairs of the Superannuation Board are being conducted, but there is nothing to prevent us from examining the report furnished by the authority whose duty it is to investigate the affairs of the board. That authority is the Auditor-General, and I refer to page 27 of the AuditorGeneral’s annual report, which indicates that superannuation funds have been overinvested. Over-investment means in this case that more money was invested by the Superannuation Board than the board actually had, and the Auditor-General’s report makes clear that that is what occurred. At page 27, the report reads -

During the period of October, 1953, to May, 1955, the investments of the Superannuation Fund exceeded the credit balance of the fund in each month for periods of from two to thirty-one days. At the end of seven of the months of 1954-55 the over-investments were as follows: -

These over-investments were off-set to some extent by advances of £250,000 each from the Consolidated Revenue Fund in November, 1954, and March, 1955, under the authority of section 10 of the Superannuation Act 1922-1955.

It has been pointed out to the Treasury that the lack of authority for these overinvestments rests not only with the Superannuation Board in making investments in excess of available funds, but also with SubTreasury Authorizing Officers in permitting such payments.

The Superannuation Board attributes the over-investment substantially to the fact that contributions by officers and employees which were estimated to be available immediately after the close of each pay period were delayed in being credited to the Fund. The Treasury has acknowledged that this delay has occurred, and has instructed Departments to expedite the payment of the salary deductions to the Fund. Notwithstanding the reason advanced by the Board, the substantial amounts of the over-investments suggest that the methods of estimating funds likely to be available for investment is at fault.

The Treasury does not agree that the SubTreasury Authorizing Officers are responsible for the excess payments by way of investments. There is no procedure for the issue of warrant authority for the purpose of investments since an investment of Trust Fund moneys which remains in the hands of the Treasurer is not a drawing from the Commonwealth Public Account within the meaning of section 31 of the Audit Act.

I would point out, however, that it is open to question whether the Superannuation Fund is a Trust Fund within the meaning of the Audit Act. All contributions to the Fund, although recorded In the Treasury ledgers, are controlled by the Superannuation Board and not the Treasurer. The investments are held by the Board and not the Treasurer. The expenditure of any amount in excess of the credit in the Superannuation Fund, and the two advances of £250,000 each under section 10 of the Act, are therefore payments from the Commonwealth Public Account requiring Governor-General’s Warrant under sections 32 and 33 of the Audit Act 1001-1055 and warrant authority under the Treasury regulations.

I do not propose to take up the time of the committee by examining the whole of the report fully, but I remind honorable senators that the people of Australia believe that, in the Department of the Treasury, there are highly-qualified accountants and a specially trained staff to do all the work of the department efficiently. It is astonishing, therefore, to learn that one board under the administrative control of the Department of the Treasury is able to over-invest the funds that come under its control. The report of the Auditor-General is damning because it shows that there is a higgledypiggledy state of affairs in the department. Evidently the officers, whose duty it is to know exactly how the funds should be allocated, how they should be invested and what sums should be invested and are available for investment at various times, are not aware of their obligations. Evidently they do not understand fully the fundamental principles of their office. “We look forward to a better report on this matter next year.

Senator CRITCHLEY:
South Australia

– -For many years, when the committee has been dealing with the Appropriation Bill, I have directed attention to the amounts that are paid for temporary and casual employees. On the last two occasions, the Leader of the Government in the Senate (Senator O’sullivan) promised me that he would cause a review to be made to determine whether anything could be done to ease the lot of persons who had been classed as temporary employees of various Commonwealth departments for many years and were still virtually permanently temporary. I was hoping that the committee would be told that the right thing had been done on behalf of many thousands of public servants who have been doing valuable work in the departments while classed as temporary employees.

I have- criticized the attitude of governments of various political colours in connexion with this matter, and I will not accept any statement that there are not large numbers of persons employed under such conditions. The committee is now considering the proposed appropriation of £8,537,000 for the Department of the Treasury. Of that amount, more than 25 per cent, is to be provided for temporary and casual employees. I am not referring to pay for extra duty. That is unavoidable, particularly in the Taxation Branch. I have had long experience of both Commonwealth and State public services, and I know that many men and women have spent the best years of their lives as temporary or casual employees and are denied, wrongly in my opinion, the mental comfort and security to which their years of service entitle them.

I do not wish to be misunderstood. I know that there are many seasonal tasks. Some work in the Taxation Branch of the Treasury calls for extra labour and assistance at various times of the year, particularly when assessments are received and money paid. Generally, however, 1 believe it is time the Government initiated a proper investigation into this matter. In one department alone, between 25 per cent, and 30 per cent of the proposed vote is to be earmarked for the payment of temporary and casual employees. All sorts of reasons and excuses are given for maintaining these staffs of temporary and casual employees, but the fact is that many men and women who are now reaching middle age have .been working on that basis for a long time. It should not be beyond the capability of the Public Service Board or the Government to ensure that those persons are given full human rights. Providing they do not die or become ill, those persons will still be doing their work in five years’ time. I submit that no credit is reflected on the Parliament by continuing to classify as “ temporary “ or “ casual “ people who have given year after year of service to the Commonwealth. Although these people have been working satisfactorily for the Australian nation for a period of years, they are denied the right of security of employment. I hope that when the Minister is replying to this debate he will refer to the action that has been taken by the Leader of the Government in the Senate and the Government concerning the promise made to me two years in succession that something would be done in this respect.

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

– I direct my remarks to the votes relating to the administrative staff of the Treasury and the Taxation Branch, because the growth of those departments, both in the number of personnel and the scale of the personnel employed, brings into point the whole question of the financial relationships between the Commonwealth and the States as they exist to-day. t do not think it can be denied that this is one of the outstanding fiscal, social and political problems that face Australia. We find, year after year, the Premiers of the States, and the Treasurer and Prime Minister of the Commonwealth, involved in very unseemly public wrangling. This wrangling between two political groups, one in the Commonwealth and one in the States, is indulged in, although all concerned are trying to get on with the job in the interests of the people. 1 feel I should take this opportunity to point out how inequitably the present financial relationship between the Commonwealth and the States is operating in relation to the States, particularly in relation to the State of Queensland.

As is generally known, prior to the war, and prior to uniform taxation, the States received 60 per cent, of the total income tax collections of the Commonwealth. Of course, we recognize that, in the intervening years, the Commonwealth assumed new and more extensive functions, but the fact is that, to-day, the States are receiving only 30 per cent, of the total income tax collections in Australia. I think everybody must admit that that? is completely disproportionate to the responsibilities which the States have had imposed on them in the intervening years, even allowing for the additional responsibilities that the Commonwealth has had imposed on it or has assumed. Following the introduction of uniform taxation, it was found that the basis was inadequate, and immediately, re-imbursement grants and additional grants had to be made. Again, the matter had to be looked at, and finally, a formula was arrived at according to the terms of which payments should be made to the States, lt is becoming obvious that the formula itself cannot operate to run parallel with the very vast and radical monetary changes and changes in economic conditions in Australia during the last ten or fifteen years. The States are continually - and I think quite genuinely and honestly - finding themselves short of money, and the Commonwealth is finding itself surfeited with finance.

I interpolate here that the formula was originally devised, and the system of uniform taxation was originally adopted, on the basis that the collection of revenue was contemplated as purely for fiscal reasons, to finance the operations of the Commonwealth and the States, but now, with the new theories of economics, stemming back to Lord Keynes and men of that character, the collection of revenue, and the skimming-off of money from the community, has become a weapon of economic policy which is used, if necessary, to stabilize the economy, either by stringency or relaxation, when the economy is in trouble in one way or another. If the States, when they originally agreed to uniform taxation under the financial agreement, really thought the day would arrive when these tremendous revenues would be available and would be taken by the Commonwealth, not purely for Treasury reasons but for economic considerations, it is doubtful whether they would have entered into the agreement. I wonder whether the whole basis and the fundamentals of the formula have not been completely abrogated by what is the real purpose of much of the recent heavy levying of taxation.

In the budgets of the last few years, the Government has come out into the open, a fact that we appreciate, and has justified the taking away of excess spending power of the community on the ground that it was done not for expenditure purposes but as an economic measure. In doing so, although such action may have been in the economic interests of the country, the Government probably has violated both the spirit of the Constitution and the idea in the minds of the States when they concluded the financial agreement with the Commonwealth, or when they subscribed, perhaps reluctantly, to uniform taxation.

There has been a continuous deterioration in the financial position of the States compared with that of the Commonwealth. If I may be permitted to do so in the very few minutes available to me, I wish to refer to some tables which illustrate fairly conclusively, and rather compellingly, the extent of this deterioration. The amount by which the Commonwealth has been prepared to supplement the formula payments, subsequent to 1952, has declined rapidly. For example, in 1951-52 the total amount of additional financial assistance given to the States, in round figures, was £33,000,000. Then it fell to £27,000,000, then to £21,000,000, and again, to £19,000,000. In the year 1955-56, it will be £13,400,000, or £6,000,000 less than for the previous year. This decrease in the supplementary grants has offset, to a great degree, any increase to which the States were entitled under the formula. That is one indication of how the economic and financial position of the States is deteriorating gravely, compared with the position of the Commonwealth, and how justifiable are the continuous, though perhaps unseemly, protests of the States, having regard to the overall relative financial positions of the two sovereign authorities.

Now let us have a look at Commonwealth revenue. We find that, for the financial year 1955-56, the Commonwealth expects to receive £577,000,000 from income tax, which is £60,700,000 more than it expected to receive in 1954-55, and very much more than was budgeted for in the previous year. In the same year, the additional payment by the Commonwealth to the States was only a matter of £5,000,000, plus £2,000,000 additional to New South Wales which had had the misfortune to be involved in very serious floods. That lends point to my contention that revenue is being levied not for fiscal reasons but for purely economic purposes. In other words, the Commonwealth is determining, rightly or wrongly - and we on this side of the chamber say that it is doing so wrongly - the economic climate of the country and is then compelling the States, under gross financial disabilities, to try to exist in feat climate. Fc? that reason. I consider that under the matter of Commonwealth and State financial relationships is brought up to date, if necessary, by alteration of the Constitution, grave continuing injury is going to be done to the relations between the Commonwealth and the sovereign components of the Australian union, and that will not be to the benefit of either party to the union.

There are some other figures which I should like to cite to the committee, concerning the net indebtedness position of the Commonwealth compared with that of the States. For the last financial year, the net indebtedness of the Com.monwealth was reduced by £125,000,000, and that followed four previous years in which there was a net decrease of something like £300,000,000. The Commonwealth, in addition to that, has been advantaged in other ways. For example, its capital works have been undertaken out of revenue, and the Commonwealth is not required to pay interest on money borrowed for that purpose. In addition,, the Commonwealth has been able, year by year, substantially to redeem war savings certificates - last year, to the extent of £3,600,000. All these result in a net reduction of the indebtedness of the Commonwealth, but, in the case of the States, we find a radically different and distressing picture. As is shown in the White Paper that was presented in association with the budget, while the Commonwealth has reduced its net indebtedness by £756,000,000 over the last nine years, the States and local governing authorities ‘ have increased their net indebtedness by £1,411,000,000. This is a most significant thing. I notice that Senator Wood is interested when I include State and local governing authorities, because the position of local authorities in Australia to-day is becoming extremely bad, and even desperate. It shows that this constant process has resulted in a deterioration of the position of the States in relation to the Commonwealth. When we come to another aspect of the matter and consider the question - going back to the very foundations of the Constitution - in relation to customs and excise duty, we find that under the Constipation, when the States vacated the field of customs and excise duty, certain arrangements were made by which, in exchange for surrendering those rights, the Commonwealth had to make certain financial payments to the States. The net result in Queensland in the year immediately following federation was that Queensland gained, possibly, £1,000,000. That figure has remained constant during the 55 years since federation. But, in the same period, the receipts from duties of customs and excise have risen, and amounted last year to £200,000,000. Thus, on the one hand the position is static, whilst on the other hand there has been a buoyant and progressive increase of revenue by the Commonwealth in one field of revenue raising. Just how that is to be got over I do not know. Year after year, the States complain to the Commonwealth that they are not getting enough money. The increase in wages and the other components of the formula are not being allowed for in the application of the formula, or in the application and the distribution of special grants. I know that the Minister in charge of the bill will probably point to some surpluses in’ certain State funds. I think that we will all agree that it is wise and careful housekeeping for the States to pay any surpluses into trust accounts against bad days. Only recently, we had the spectacle in Brisbane of the Brisbane City Council asking for special financial assistance, and the Queensland Government being unable - I think fairly and reasonably, unable-

Senator Kendall:

– The Queensland Government just will not provide the special assistance sought.

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

– The Queensland Government has told the council to approach the Commonwealth early next year to see what can be done about the matter. That was not because of any desire on the part of the Labour Government in Queensland to bring about the displacement of any persons from employment. This is one thing that the Labour Government feels very keenly, and is very sensitive about. The position has been brought about because of the careful husbanding of finance against a .situation that might easily arise in Australia, and over which the State Government has little or no control.

Having made these observations, ] urge honorable senators to consider the serious situation that is developing. It can become very, very dangerous to the relationship between the Commonwealth and the States ; it does not make for competent finance in either sphere, or for a unified national effort to develop Australia. The Commonwealth has both the power and the money, but there is no reason why that power should be wielded autocratically, or that money should be accumulated and denied to the States. J realize that my remarks are not strictly related to the proposed vote. At the same time, it is, perhaps, the most appropriate one on which to base my comments. I appeal to the Government not merely to alleviate the position of one State or all the States but to consider the whole question of the financial relationships between the Commonwealth and the States. I think that such a review would certainly result in a greater national effort, and benefit the whole of the people of Australia. It would assist development and - what goes inseparably with it, and is absolutely necessary - our security. J realize, Mr. Chairman, that I may have transgressed a standing order in making these comments, but I commend them to honorable senators, and urge the Government to take positive and sympathetic action in this matter.

Senator BENN:
Queensland

– Opinion is divided on the question of uniform taxation. Some States favour the retention of the uniform system, because it is beneficial to them. On the other hand, other States would be willing to accept again responsibility for taxation. I believe that there has been a good deal of shadow-play on the subject of uniform taxation. Some states contend that they were better off when they exercised taxing rights and collected their own taxation revenue, and therefore want to regain those rights. Of course, Western Australia, South Australia and Tasmania cannot lose, no matter what happens, because they receive annual grants to make good deficiencies in their finances. But, no matter how much consideration we give to the question of uniform taxation, we always arrive at the conclusion that uniform taxation will remain for ever and ever. I firmly believe that to be so. The States will never get their taxing powers back again. The report furnished by the committee that was appointed to look into this matter supports my contention.

Just as we shall have uniform taxation forever, so will income tax be imposed forever. These are irrefutable statements. One would think that such an important branch of government as the Taxation Branch would be provided with its own premises in which to perform its duties. In some States, however, the Taxation Branch is dependent on other departments, or the State Government, for accommodation. A statutory body has investigated the necessity for the provision of a. taxation building in Brisbane, and I understand that the Government intends to commence the construction of the building at some future time. I think that, the decision to construct a taxation building in Brisbane was a good one, because of the continuing and permanent nature of the work of the Taxation Branch. As I said a moment ago, the Taxation Branch is a most important branch of the Government. For that reason, it should be provided with buildings of its own, designed to facilitate efficient operation.

Senator WOOD:
Queensland

.- I wish to refer to an aspect of the proposed vote for the Department of the Treasury that was mentioned by Senator Byrne, as it affects the State of Queensland. I am sorry that the honorable senator is not now in the chamber. He gave the impression that Queensland is being unfairly treated under its financial arrangements with the Commonwealth.

Senator Sheehan:

– The honorable senator gave it as an example. All States are being unfairly treated.

Senator WOOD:

– He featured it as an example. Under the present uniform taxation system Queenslanders are very fortunate. It is amazing to consider the figures for the State of Queensland. Before the introduction of the uniform taxation system in 1942, Queenslanders paid £G 3s. a head of population as against £3 6s. in Victoria. To indicate the heaviness of taxation in Queensland T shall quote a few interesting figures from a table published in the Courier-

Mail on Tuesday, the 11th October, 1955, by Mr. W. E. Betts who is a chartered accountant and secretary of the Queenland Taxpayers Association. He said that it would be silly for Queenslanders to go away from uniform taxation. After I quote figures showing the heaviness of taxation when the State Government had the right to tax, honorable senators will agree with me that the people of Queensland are very fortunate under the existing arrangement. Before 1942, a person earning a taxable income of £300, paid in Federal and State income tax, and State development tax which then operated in Queensland, £77 4s. lOd. To-day under the uniform taxation system he is paying only £27 ls. 8d. Prior to 1942, a person on £600 a year paid £106 15s. 6d. whereas, to-day, he pays only £39 lis. Sd.

Senator Courtice:

– What about the relationship of costs?

Senator WOOD:

– The cost of administration and of public works in both Federal and State spheres is higher now, yet we have this very low taxation in Queensland. In 1942, the cost of government was much cheaper but a man with a taxable income of £700 paid £140 12s. Id. in tax whereas to-day he pays only £53 15s. On a taxable income of £S00, the tax was £185 0s. lid. in Queensland prior to 1942, but to-day it i3 only £69 ls. Sd. On an income of £900, the tax was previously £229 5s. 8d. whereas under the uniform taxation system it is £87 ls. Sd. and when we take the round figure of £1,000, the tax previously was £280 13s. 4d. whereas to-day it is £106 5s. Because of the increase in the cost of administration, there is no question that if uniform income taxation were abandoned, taxation in Queensland to-day would greatly exceed that ruling in 1942.

Senator Courtice:

– Has the honorable senator got the figures for the other States?

Senator WOOD:

-Prior to 1942, Victorians paid £3 10s. a head in income tax whereas in Queensland income tax averaged £6 3s. a head. There is no doubt that the people of Queensland are very fortunate under uniform income taxation compared with their position before it was introduced. I recognize that Queensland is a big State and requires much more money, proportionately, for development and other projects, ft has a wider scope for such expenditure than have some of the other States.

The Leader of the Opposition (Senator McKenna) referred to the increasing amount of loan indebtedness by State governments. It must be realized that this indebtedness arises as the result of capital invested in developmental projects. If the principle of investment in developmental works is right, the State and the Commonwealth should gain in the long run. I, therefore, look upon that increase in loan indebtedness, not as expenditure involved in running a current account, but as an investment in the future development of the State. I believe that Queensland has a grand opportunity for development and that it should receive a greater share of loan money.

I cannot agree that under uniform income taxation, the people of Queensland are being unfairly treated. There may be methods by which Queensland could share in grants which at present it does not receive. It should receive a greater proportion of the loan money which is available for development. However, when taxation rates which were in operation before 1942 are considered, it must bo admitted that a State like Victoria, is undoubtedly helping considerably to keep taxation low in Queensland. If uniform income taxation were abolished, the Queensland Government, if its past record can be taken as a guide, would load the people of the State with a very heavy taxation burden. Probably, they would be obliged to pay the heaviest taxation in Australia, as they did prior to 1942.

Senator ARNOLD:
New South Wales

– On the proposed vote for the Treasury, I want to make some comments on current propaganda that is being spread by honorable members in another place and by the press regarding the relationship of the central bank and the Commonwealth Trading Bank. It has been said that the Commonwealth Trading Bank has an unfair advantage over the private banks because of its relationship with the central bank. I point out, first of all, that the Commonwealth Trading Bank cannot trade other than within the capital that has been allocated to it by this Government. It has no advantage at all, as far as capital is concerned, as the result of being close to the central bank. However, it is being freely said that the Commonwealth. Trading Bank, having easy access to the Governor of the central bank, is in a favoured position compared with the private banks. Of course, the very opposite is the case. Some of my friends opposite do not seem to agree with that, but the Minister for National Development (Senator Spooner) had this to say when presenting the Estimates and budget papers to the Senate -

The need for restraint under present conditions is not confined to public authorities alone. Obviously, such restraining influence as Government policy can exert will easily be overborne if the private sector continues on a headlong expansive course. The current need is for restraint on the part of the banking system. . . .

When Labour was in office a few years ago it put the private banks largely under the control of the central bank and gave to the Parliament the right to dictate national financial policy for Australia.

Senator Gorton:

– It did not.

Senator ARNOLD:

– If my friend does not believe that, he will have every right, later, to dispute what I am saying. The Treasurer of the Commonwealth has the right to confer with the Governor of the Commonwealth Bank, and to suggest to him what ought to be banking policy throughout Australia. The Governor of the Commonwealth Bank has then to suggest to the private banks that they should apply that policy. There is no question that the Commonwealth Trading Bank regards whatever policy the Governor of the Commonwealth Bank determines to be correct, and it has to follow it religiously. There is no escape for it, because it is under the control of the Commonwealth Bank Board. But in the case of the private banks it is different. The Treasurer (Sir Arthur Fadden) in his budget speech said that the private banks have not been responding tn the wishes of the Government to the extent necessary in the interests of Australia.

What happens when the central bank determines the policy? Suppose that it, decides there is too much credit in the community and wishes it to be curtailed.

Lt is easy to issue a direction to the Commonwealth Trading Bank that it must shorten credit and reduce its overdraft limits, and to know that that will be done immediately, but it is not so easy to persuade the private banks to forgo the profits that they can make from the expansion that is taking place throughout Australia. No direct control can be exercised over them.

At the other extreme, when the limit in the control of credit has been reached and the country is sinking into a recession or a period in which expansion has been checked, and it is desired that that expansion should revive, the problem is to get people to borrow money for use in their businesses to promote such expansion. The organization which will respond most readily, and be compelled to make loans on probably the riskiest terms in order to check the downward trend in the economy, is the Commonwealth Trading Bank, because it is under the close control of the Governor of the Commonwealth Bank. Credit should not be Mowing out at a time when it ought to bc checked promptly.

I agree with the Treasurer when he admonishes the private banks for not exercising desirable restraint in the present, period of expansion. This pinpoints the problem for the Government. In this period of rapid change and great expansion in our economy, when so many people are coming to our country and there is need to build up all our industries, a rigid control is to be placed on credit flowing out to the community. The only way in which credit can be reasonably controlled is to have a powerful section of Australian banking under the control of the Governor of the Commonweal ih Bank. It is useless for him to try to maintain a reserve bank unless he has the full facilities to supply the credit attractive to the customers or to curtail it when it is considered to be too great.

The Government should not be influenced by propaganda to divide further the Commonwealth Trading Bank from the Central Reserve Bank. The central bank should exercise restraint over the trading bank, that most useful instrument in the control of our economy, and it should be directly subject to the Gover nor of the Commonwealth Bank. By using it wisely, the Government will have in its hands a powerful weapon to maintain financial stability in Australia.

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

, - In the Treasury Estimate under the heading “ Taxation Branch “, I wish to refer to a matter that affects the important apple industry of Tasmania. I wish to devote attention to the incidence of sales tax on a very important section of that industry - fruit processing. Apples generally-

Senator Spooner:

– I rise to order, with reluctance, to point out that the business before the committee is the Estimates, which are being considered item by item. One of the last speeches dealt with Commonwealth-State financial relations. Senator Arnold has just made a speech on banking policy, and Senator O’Byrne appears to be embarking on a discussion of the fruit industry in Tasmania.

Senator McKenna:

– And sales tax.

Senator Spooner:

– The debate on the Estimates will be greatly prolonged if the discussion is to range wide and wild. Surely each speech should be related to an item of expenditure in the Estimates. I favour orderly debate, and there was ample time at the first-reading stage to engage in general discussion. I ask your ruling whether the committee should not proceed strictly with a discussion of the appropriation of the finance as set forth in the Estimates.

Senator McKenna:

– I regret that the Minister has raised the point of order at this stage. When the committee is considering the Estimates, it is the perfect opportunity for the Opposition, as the watchdog of the public, to review the activities of the Government and also to consider the salaries paid to staff in any of the departments. This opens the whole question of the administration of matters under departmental control. For example, the Department of the Treasury controls trust funds. The expression “trust funds “ does not appear anywhere in the Estimates before us, but it would be a complete negation of the rights of the Opposition if it could not open the question under that head if it so desired. Senator Arnold’s speech on the subject of control by the Commonwealth Bank flows, incidentally, from the Treasurer’s power to issue directions on banking policy. The whole question of administration is opened up under Division 42. I submit that there is nothing that the Treasury either controls or directs that is not open to review. I have been in the Senate for a number of years, and I say now that a ruling in favour of the Minister’s contention that all the activities of the department are not open to review would be to break with the tradition of the Senate and of the Parliament.

Senator Spooner:

– In view of the remarks of the Leader of the Opposition (Senator McKenna), I shall not press the point, and accordingly I withdraw my point of order. I think that I have made my point - that we are in danger of getting’ more into a second-reading atmosphere than a committee debate.

The TEMPORARY CHAIRMAN (Senator McCallum:
NEW SOUTH WALES

– It may be well if I draw the attention of the committee to a relevant ruling which reads -

On the first reading of an Appropriation Bill wide latitude is allowed in debate, but at the committee stage discussion must be relevant to an item in the schedule and, within the discretion of the chairman, may be confined strictly to that item.

While I am in the Chair I shall exercise a wide discretion. I do not rule out of order any of the speeches that have so far been delivered. However, I ask honorable senators to confine their remarks as closely as possible to particular items. If too wide a discretion is allowed, and the discussion becomes, in effect, another second-reading debate we shall not make much progress.

Senator Arnold:

– May I ask you, Mr. Temporary Chairman-

The TEMPORARY CHAIRMAN:

– Order ! Senator O’Byrne has the floor.

Senator Arnold:

– I rose only to ask you, Mr. Temporary Chairman, to be a little more explicit. However, if you will not allow me to ask a question, I shall sit down.

The TEMPORARY CHAIRMAN.The point of order was not upheld, and, accordingly,’ Senator O’Byrne may continue.

Senator O’BYRNE:
TASMANIA

– I do not want to depart from the usual procedure, but I do desire to refer specifically to page 167, where a sum of £30,517 is provided for salaries and allowances of officers administering sales tax in Tasmania. If I were to embark on a discussion on spies I should probably be out of order, but I wish to refer to apple pies and the sales tax on them, because a discriminatory tax, affecting an important section of the Tasmanian fruit industry, is involved. The processing part of that industry is valued at approximately £1,000,000 a year, which is a considerable sum for a population of about 300,000 persons. Tasmania is the principal, supplier of processed apples in tins for the apple pie industry of Australia. Apple pies are subject to sales tax at the rate of 12-i per cent. Honorable senators will agree that most people, men particularly, are pleased when they see “ apple pie “ on a menu placed before them.

Senator Hendrickson:

– Apple pie and cream.

Senator O’BYRNE:

– Cream is free of sales tax, whereas apple pies are subject to a tax of 12$ per cent. Tasmanians generally regard that as a discriminatory tax, the effect of which is to cause many pastrycooks to feature other pies, such as meat pies or pumpkin pies, which are not subject to sales tax, in preference to apple pies, which are a most delicious and succulent delicacy. This matter has been raised on other occasions. Indeed, the Treasurer (Sir Arthur Fadden), two years ago, said that he would give consideration to it when the next budget was being prepared. However, nothing has been done, and for that reason I now draw attention to it again, in the hope that the Minister will give immediate consideration to removing this discriminatory sales tax on processed apples.

Senator ARNOLD:
New South Wales

– I desire to refer to Division 48 - Bureau of Census and Statistics - for which a sum of £524,000 is to be expended under the heading “ Salaries and payments in the nature of salary “. The Bureau of Census and Statistics prepares a great deal of information which the people of Australia would find useful if they knew the sources from which it could be obtained. Personally, I find great difficulty in finding out where information concerning various activities within Australia is obtainable. I know that the bureau compiles a great amount of material in the form of statistics, and that the preparation of those statistics takes a great deal of time. I ask the Minister to consider the preparation of an index or catalogue, so that members of Parliament and the public may know what publications are available, where they can be obtained, and the quickest way by which the benefit of the work of the officers of the Bureau of Census and Statistics can he given to the people.

Senator COOKE:
Western Australia

– This bill covers a proposed expenditure of £1,114,775,000 and ordinary expenditure estimated at £1,114,605,000, leaving £170,000 as the expected balance in hand at the end of the year. It is Australia’s biggest peace-time budget. I am concerned that £4S, 670,000 is to be placed in trust funds. That means that that sum will be taken from the national revenue and put into special funds earmarked for certain purposes, which include about £500,000 for war service land settlement, £3,000,000 for the redemption of war saving certificates and £3,500,000 for emergency wheat storage. These trust fund accounts are signs of the times. It may be that the Government has in mind using some of these moneys to finance its loan programme to assist the States. We are given so little information that we are entitled to know how this sum of £4S,670,000 is to be disbursed. The Senate is a house of review, and part of its function, is to represent the various States in this Parliament. However, we cannot adequately represent the States unless we have all the relevant information before us. From time to time, both [ and other honorable senators have been at a disadvantage because we hav-3 not had all the information about Commonwealth and State financial relations before us. The government of the day has refused to furnish that information to us, but I submit that such refusal by the government, no matter what political party may be in office, prevents the Senate from carrying out its constitutional duties.

In the matter that I am dealing with a huge sum of £48,670,000 will be allocated to the States out of revenue, but very little information about it has been furnished to the Senate. I desire to know how that money will be used, and what relation it bears to the loan programme of the Australian Loan Council. For example, the question arises as to whether the Commonwealth is to be the lender of the whole or part of this money, whether it will charge interest, and whether the Commonwealth and the States are to be in the relationship of. mortgagee and mortgagor. In my opinion, the whole position is thoroughly unsatisfactory, and I suggest that at the earliest opportunity the Government should allow the Senate to discuss this matter fully and freely. I again ask the Government to furnish specific details in relation to this amount of £48,670,000, particularly details of the allocations to the States, so that honorable senators may be sure that one State has not been given an advantage over another State.

Senator SHEEHAN:
Victoria

– I desire to refer to Divisions 44 and 45, which relate to the Taxation Branch and the taxation boards of review of the Department of the Treasury. The vote for the Taxation Branch is £7,190,000, and for the taxation boards of review £15,200. I should like to know whether, out of those large sums, any money has been devoted to ascertaining whether it is possible to allow fares incurred by workers in travelling to and from their work as deductions from assessable income. I suggest that it is high time that the Taxation Branch, with its multitude of officers, considered this important matter. Nowhere on the income tax assessment form is there any mention of these important matters being deductions, and I suggest that they should be. The wages of the workers are at present largely pegged because of the freezing of the basic wage by the Commonwealth Court of Conciliation and Arbitration, but very soon in Victoria the workers will have to pay substantially increased rail and tram fares when travelling to and from their employment. However, if there were no public transport, and they could not pay the fares, they would not be able to attend for employment, and they could not earn any income. Moreover, their employers would not be able to get any employees, and their incomes also would be affected.

The TEMPORARY CHAIRMAN” (Senator Wood:
QUEENSLAND

– Order! The Senate is at present discussing the expenditure of money on administration. The honorable senator’s remarks do not apply to the matter under consideration, but would apply to a bill relating to taxation which will be before the Senate later.

Senator SHEEHAN:

– With all due respect to you, Mr. Temporary Chairman, I point out that you have only recently taken the Chair. Matters similar to those that I have been mentioning have already been discussed by other honorable senators when different temporary chairmen were occupying the Chair.

The TEMPORARY CHAIRMAN:

– The point is that the honorable senator mentioned Divisions 44 and 45 of the Department of the Treasury. Those items relate to a matter that is not at present before the Senate.

Senator SHEEHAN:

– I am merely asking the Government to inform me whether any money will be expended in ascertaining whether fares paid by employees in travelling to and from work can be allowed as deductions from assessable income. I suggest that it is essential that such deductions should be allowed, and if no consideration has been given to that particular matter then the Government should allocate money for the purpose. The workers travelling to and from work should be given the same consideration that is extended to employers for advertising, and to commercial travellers for their travelling expenses. Another aspect of this matter that should have some weight with the Government is that if fares were deductible from assessable income, the workers would be encouraged to move out of congested slum areas to the outer parts of cities where their health and general standard of living would benefit. I again request the Minister to give me some information about this matter.

Senator O’FLAHERTY:
I desire to refer to Division 42 of the Estimates for the Department of the Treasury, General Financial and Economic Policy Branch, and L.-::n.s and General Services Branch. For the first branch the proposed vote is £39,005, and for the second branch it is £21,412. I wish to know whether the first branch or the second branch I have mentioned is responsible for the policy of the Government in connexion with overseas loans. Does the branch of the department itself deal with these matters ? Is the General Financial and Economic Policy Branch responsible for the policy which has resulted in the Government borrowing millions of dollars from the United States of America and other hard currency nations, including Switzerland? I believe that that policy has resulted in Australia being squeezed out of the sterling dollar pool and that, as a ‘ result, it cannot get all the dollars it requires to meet its commitments. Now the Treasurer (Sir Arthur Fadden · South Australia 1 [5.5].

has returned from a visit to Canada, where he borrowed 15,000,000 dollars more. Is this branch responsible for the policy that has caused Australia’s representative to borrow Canadian dollars to meet the nation’s commitments? I believe that overseas funds are falling.

The TEMPORARY CHAIRMAN:

– Order ! The item under discussion by the honorable senator comes within the functions of the Loan and General Services Branch.

Senator O’FLAHERTY:

– I am speaking of the General Financial and Economic Policy Branch.

The TEMPORARY CHAIRMAN.The honorable senator is relating his speech to the payment of salaries?

Senator O’FLAHERTY:

– That is correct.

The TEMPORARY CHAIRMAN.Order! The honorable senator has referred to loans and hard currency. That does not come within the scope of the item under discussion. The committee is discussing expenditure on various branches of the Department of the Treasury.

Senator O’FLAHERTY:

– I am asking the Minister for National Development (Senator Spooner) to give me some information about the work that is done by the officers employed in these branches of the Treasury.

The TEMPORARY CHAIRMAN:

– That is in order, but the honorable senator should not divert his remarks towards government policy.

Senator O’FLAHERTY:

– Am I at liberty to continue ? I am referring to the General Financial and Economic Policy Branch. I have referred to several matters that have been put into operation as matters of policy. I have also referred to the bad effects of that policy. I want to know whether the branch under discussion frames the policy that the Government has put into operation. If it does, I say, without backing or filling, that we should abolish the branch and cease paying its officers.

Apparently officers of the Loans and General Services Branch are being paid for work in connexion with the raising of loans. I should like to know whether that branch has been used to raise loans in hard currency countries overseas because, as I have said, those loans have landed us in an awkward position. We are unable to meet our commitments in dollar areas. Does the General Financial and Economic Policy Branch formulate policy in connexion with our overseas funds? I believe tha.t our overseas funds have dropped by £25,000,000 in the past month. Was this branch responsible for the policy that brought about that decline of overseas funds? It is an extraordinary state of affairs when we propose to appropriate a sum of £39,005 for a branch of the Treasury that appears to have formulated a policy that has resulted in our overseas funds declining by £25,000,000 in a. month. An amount of £21,412 is to be appropriated for the Loans and General Services Branch which handles loan funds and similar matters. Which of those two branches was responsible for the relevant part of our financial policy in the first place? Are these branches used to obtain dollars against the best interests of Australia?

Senator O’BYRNE:
Tasmania

– I wish to direct attention to the proposed appropriation for the administrative section of the Department of the Treasury. I refer in particular to the proposed appropriation of £5,500 for the Secretary of the Treasury compared with the vote last year of £4,875.

Under the heading of the Budget and Accounting Branch, there is an item, “First Assistant Secretary, £3,600”. The vote last year was £2,742. Provision is also made for various clerks and other officers of different branches of the Treasury. I should like to know whether allowance has been made for a decision in favour of officers of the Commonwealth Public Service in the appeal against a decision of the Public Service Arbitrator that is now before the Commonwealth Court of Conciliation and Arbitration. The Government proposes to make some alterations in the amounts to be appropriated for the payment of junior officers in various branches of the Treasury, but the Government’s action in sponsoring an appeal against the award of the Public Service Arbitrator should not be passed over lightly when the committee is considering the salaries of officers of Commonwealth departments.

In view of the rising cost of living and the increasing demands upon public servants, the deprivation of the rights of public servants has become a scandal. They are being deprived of their just rights through the opposition to the Public Service Arbitrator’s decision. I should like to know whether provision has been made to meet the situation in the event of a decision favorable to the Commonwealth Public Service employees in the matter that is now before the court.

Senator ARMSTRONG:
New South Wales

.- Whether this is the appropriate time to speak about the matter I have in mind, I do not think matters, because it applies to every department of the Commonwealth. The first point I wish to deal with is concerned, like Senator O’Byrne’s remarks, with the question whether the Castieau award, if approved by the court, has been taken into consideration in compiling the Estimates for the various departments. I should like to know how much will be involved in that award, because it will be spread over approximately 152,000 Commonwealth public servants. According to the budget speech of the Treasurer (Sir Arthur Fadden), the estimate of departmental expenditure in 1955-56 reflected the full year cost of the marginal salary and wage increases granted to Commonwealth employees last December. Largely as a result of these increased margins, it was stated, departmental expenditure on salaries and wages was expected to increase by £3,647,000 in 1955-56. I am convinced, however, that that figure does not take into account the payment that will be involved should the Castieau award be approved by the High Court.

We are now examining estimates that give an incomplete picture of the economic problems of the country. Since the budget speech was delivered, certain factors have developed, and although there is an element of surprise about them, the Government must have known, at the time the budget was introduced, that such factors were likely to develop, In other words, since the budget was introduced, the Government has decided to cut the public works programmes of the departments by £10,000,000, a cut which must be felt, in one way or another, by every department, either by way of a decrease of the number of employees, or by way of a decline in the amount of supervisory work. I ask the Minister whether these Estimates reflect the fact that £10,000,000 less is to be expended on public works during this year.

I also ask the Minister whether the Government has taken into account the probability that wages will be unpegged. Wages must be unpegged, automatically, in Kew South Wales in the immediate future, and there is no question that such action also will have to be taken throughout Australia before very long. I think that, in common justice, wages can no longer be kept pegged, in view of increasing costs and rising profits. Perhaps the Minister would be good enough to give a supplementary report showing the way in which the approval of the Castieau award will affect the Commonwealth budget and the increased expenditure that will be involved throughout Australia in the unpegging of wages.

It is extremely difficult to discuss the Estimates at . this stage, in view of the recent decisions of the Government, subsequent to the introduction of the budget. I do not know whether the Prime Minister (Mr. Menzies) wants to make an announcement concerning these matters the subject of another gala occasion, but in justice to honorable senators and the people of the community, the least we should have had when the budget was introduced was a complete picture of the economic position of the Commonwealth, and not, as it now turns out, a partial picture that has been affected by subsequent decisions of the Government.

Senator McKENNA (TasmaniaLeader of the Opposition) [5.20 ). - Under item 47, I refer to the annual report of the Auditor-General, in relation to the superannuation fund. I was very interested in the matter raised by Senator Benn, regarding over-investment of funds from time to time. It rather intrigues me that a body administering a fund should be able to invest money it has not got in hand. I cannot imagine any other way in which it could do that than by going into overdraft. When the Minister is replying to Senator Benn, I should like him to indicate just how the superannuation fund over-invests, in this way, funds that it has not got in hand. Am T correct in assuming that it arranges a temporary overdraft? I imagine that, subscription to a Commonwealth loan would require the actual deposit of cash.. It is not possible to use one’s credit for the purpose of subscribing to loans. The actual mechanics of how these very large sums come to be over-invested, even if only temporarily, is what interests me.

I refer the Minister, also, to paragraph 36 on page 26 of the report of the AuditorGeneral, still dealing with the superannuation fund. In the first part of that paragraph, the following statement appears : -

Financial statements for the years ended 30th June, 1951 and 1952, were submitted by the Superannuation Board during 1954-55 and certified by me. Audit is proceeding on the statements for the year ended 30th June, 1953, which were forwarded to me at the time this report was being prepared.

I direct the attention of the Minister to the enormous lag in time. The Parliament is now being advised of audits that took place up to June, 1952, more than three years ago, and apparently, the accounts for June, 1953, have only just now been put in the hands of the AuditorGeneral. There is no specific complaint beyond the recording of the facts by the Auditor-General, but I should like to know from the Minister why this particular fund should be so far in arrears in the presentation of its accounts. It is not a matter of the audit being delayed, but a complaint because of the accounts not being ready. I cannot imagine anything very complicated about the superannuation fund accounts. After all, they involve receipts, through the departments, of the Commonwealth contribution, and amounts deducted from employees. On the other side, they involve the investment of those moneys. The transactions might be large in. amount, but they would not be over-onerous so far as the fund is concerned. Why there should be this delay is quite beyond my comprehension.

Continuing with the Auditor-General’s report, we find, on page 27, an indication that the fund grew from £34,000,000 to £38,000,000 in the twelve months ended June, 1955. The figures show that the revenue was £9,250,000 - I am giving approximate figures - and that the payments were only £4,500,000. The fund has been accumulating suhstantially year by year and the indications are that that process will continue. I point out to the Minister that, as the current expenditure is only £4,500,000 and the current revenue £9,000,000, it is now about time that something was done to raise the benefits in favour of the superannuated persons. I think serious consideration should be given to that matter, in the light of the rapid growth of the fund and the excess of current revenue over current expenditure. After all, the superannuated officers, on retirement, are the very class, almost above all others, who feel the full blast of inflation. They are the victims of every cost rise. On the face of the figures presented in the Auditor-General’s report, I urge the Government to consider reviewing the value of the units. I join with Senator Benn in seeking an answer on the question of over-investments, which I notice applies to another fund as well, referred to by the Auditor-General on pace 28 of his report - the Defence Forces Retirement Benefits Fund.

The only other matter I should like to take up very briefly with the Minister is the question of the administration of trust funds by the Treasury. I refer him to pages 76 and 77 of the budget papers. I should like the Minister to furnish me with some information in relation to four of the trust accounts enumerated. At the 30th June, 1954, the credit balance of the Debt Redemption Reserve Account was £56,270,964, and in the financial year just ended amounts totalling £70,150,925 were credited to the account, making a total of £126,421,889. It is, I suggest, common knowledge that the amounts that have been paid into this trust account have not been used for the specific purpose for which they were appropriated, that is, to redeem debts, because there has been no expenditure at all from the fund. What I assume has happened is that the fund hasbeen invested in Commonwealth loans which, in turn, have been used to support State works programmes and other activities of that kind.

I should like to ask the Minister, amongst other things, whether the fact that the redemption of treasury-bills is down by £30,000,000 indicates that £30,000,000 has been paid from the total of £126,000,000 to retire treasury-bills. If that has been done, I assume that it occurred after the 1st July, because there is no record in Table No. 8 of any expenditure up to the 30th June, 1955.

I now refer to the Defence Equipment and Supplies Account. The balance brought forward from the 30th June, 1954, was £12,000,000, and there was paid in during the year ended the 30th June, 1955, an amount of £8,000,000. The statement shows that there was no expenditure whatever from the account during the last financial year. In each case, the Parliament was given to understand that these moneys were required to meet outstanding commitments. Tt will be seen from the figuresIhavecited that there is a balance of £20,000,000 in the fund for this item. Is there a real need, in fact, for that fund at all, or is it a mere repository for an amount that would otherwisefigure in the surplus over the year’s transactions?

I come now to the Korean Operations Pool Account, in which there is a credit of £10,390,013. Is there any real or potential commitment that has to be met from that account, or does it serve a similar purpose? Finally, I refer to the Strategic Stores and Equipment Reserve Account, in which £48,875,802 remains untouched. If my memory serves me correctly - I am relying on it for the moment - this amount has remained almost unaltered for a number of years. Is it true that that account is really required for the purpose that its name indicates - that is, for the purpose of establishing a strategic stores and equipment reserve? If this account, or any other accounts of the kind are not required for the specified purposes, why are they not re-transferred to Consolidated Revenue, as was done with quite a number of trust accounts during the last twelve months? I refer to accounts such as Defence Clothing Material Account, the Liquid Fuel Equalization Account, the Public Trustee and Custodian Account, and the Works Suspense Account, which aggregate some millions of pounds. I should like the Minister to inform the committee whether the real purpose of those funds still exists - if it existed at the time of their creation.

Senator WILLESEE:
Western Australia

– I want to refer to what is known as the General Financial and Economic Policy Branch. It would appear that, since 1951, the yields of every kind of taxation - direct taxes, sales tax, pay-roll tax and the like have increased. It is true that there have been some alterations of the amounts, which have sometimes increased and at other times decreased. In 1951, certain proposals were made to the Government in relation to special taxation concessions for people living north of the . 26th parallel, but to date the Government has not announced any decision in the matter. There have been no public statements on the Government’s attitude towards that particular proposal. Is it not nearly time that some statement was made on it? As I pointed out during the general debate on the budget, a special taxation consideration, unique in Australia-

The TEMPORARY CHAIRMAN:

– Order ! The honorable senator is referring to the actual expense of running the General Financial and Economic Policy Branch. The taxation policy of the Government does not come within the functions of that branch.

Senator WILLESEE:

– If you will give me an opportunity to do so, Mr. Temporary Chairman, I shall relate my remarks to the item. I have noticed with dismay that the number of officers employed by the branch is being increased by only two, and that they are in the realm of finance officers - not senior research officers or research officers, lt is perfectly obvious that research must be conducted in connexion with this delicate question. I urge the Government to appoint additional research officers to deal with this important matter.

As I said at the outset, every section of the Australian community has been affected by the general economic and financial policy of this Government since 1951 with the exception of the section that was specifically mentioned in the fiscal policy of the Government. I refer to persons living in zone A and zone B, which are north of the 26th parallel - that is, in Western Australia, the Northern Territory and some sections of Queensland - who receive concessions in respect of income tax.

Senator O’Byrne:

– And for residents of a portion of Tasmania.

Senator WILLESEE:

– Yes, as my colleague points out, in a part of Tasmania as well. As long ago as 1948, it was laid down that a man in receipt of an income of £15 a week was entitled to a concessional zone allowance of £19 17s. if he lived in zone A, and £4 if he lived in zone B. It is obvious that more research must be undertaken in relation to this aspect of the Government’s economic policy. Is it not nearly time that this area was brought into line with what appears to be the economic policy of the Government of granting tax concessions in order to improve the lot of people living in certain zones. I make a request to the Minister to tell the Senate whether he will make a statement on this matter on behalf of the Government and whether the Government has any-

The TEMPORARY CHAIRMAN.Order! The matter to which the honorable senator is referring does not relate to the item under discussion.

Senator WILLESEE:

– The point I am trying to make, as I think I have pointed out-

The TEMPORARY CHAIRMAN:

– Order ! I point out that the item which the honorable senator is discussing is the proposed expenditure in salaries and wages of officers of the department; the matter of Government policy does not come within the ambit of the debate at all. It must be clear to honorable senators generally that the question before the Chair is whether the committee agrees to the payment of certain salaries.

Senator WILLESEE:

– It should be perfectly obvious to everybody that we are dealing with payments to a number of officers who take part in research work relating to the Government’s general economic policy.

The TEMPORARY CHAIRMAN.Order! The committee is now dealing with salaries payable to those officers. It is not dealing with Government policy. That is my ruling. Senator McCallum, who preceded me in the chair, gave a similar ruling, which was clear. The committee has before it a statement of proposed expenditure, and it is only common sense that that is what honorable senators should deal with. There is nothing to argue about. I have given my ruling.

Senator WILLESEE:

– Surely, sir, you would agree that the volume of work must determine the number of officers and, therefore, the amount of the expenditure required.

The TEMPORARY CHAIRMAN. That is correct the volume of work in relation to the number of officers, but not in relation to the policy of the Government.

Senator WILLESEE:

– My very point is that I wish to criticize the policy and to get some idea of what is in the mind of the Government in that respect. What is to be its policy during the next twelve months in regard to research officers? That point must involve the amount of work. If we cannot discuss that, then what can we discuss?

The TEMPORARY CHAIRMAN.Order ! The proposed vote before the Chair relates not to general taxation policy, but to the work and salaries of particular officers.

Senator WILLESEE:

– I hope I have made myself clear. The point I am making is that it was the specific policy of the Government to provide for sixteen research officers last year. In the present Estimates it is planning to provide for the same number of research officers for the ensuing year, in spite of the fact that the Government has had placed before it something unique in financial and economic taxation policy for Australia. I desire to know whether the Government intends to deal with this policy, or to ignore it completely as it has done ever since 1951. I am only making a suggestion to the Government. After all, the only possible way in which it can determine this expenditure is to decide whether the economic and financial policy that has been placed before it by the Government of Western Australia should be incorporated in its own policy. The only way that can be decided is to consider the amount of work to be done by the officers in the department. Therefore, I ask the Government to make additional financial officers available. I close with a request to the Minister to give a promise that the number of officers will be increased. Research work could be carried out by these men and the Government could then give some indication whether persons living north of the 26th Parallel can expect to receive some concession in taxation, such as has been received by other sections of the Australian community.

Senator O’Byrne:

– I rise to order. In a discussion of the schedules of salaries and allowances, are honorable senators to take it that they may discuss only the officers concerned and the rates of their salaries, or are they entitled to discuss the work these officers are doing in order to earn their salaries? Is the discussion to be confined specifically to the amounts that are to be paid? It appears that the ruling you have given, Mr. Temporary Chairman, limits the discussion, to the actual salaries to be paid.

The TEMPORARY CHAIRMAN.I make it clear to honorable senators that the committee is discussing the Estimates, in which a series of financial statements are set out. It is the financial statement applying to this particular department that we should discuss. A section of the staff is set out and the committee can discuss the work it performs and the amount expended on salaries. That is what the debate should relate to. Senator O’Byrne’s question relating to the work of the staff is to the point. That comes within the scope of the debate. It is open to the committee to discuss whether there are too many officers employed, or not sufficient. Honorable senators may not speak about higher or lower rates of taxation or about the general policy of the Government. That is outside the scope of this debate. It is for the committee to decide whether it approves of the proposed vote. That is the true purpose of the debate, and honorable senators may refer to the work of the officers of the department concerned, but not to the general policy of the department.

Senator McKenna:

– I rise to order. In the light of what you have just said, Mr. Temporary Chairman, I should like yon to inform the committee how you, when speaking to this debate, related the subject of uniform income taxation to the payment of salaries, if uniform taxation is a matter of policy? I am sure the committee would be very interested to hear you on that point in your present capacity as Temporary Chairman. If you had been in the chamber earlier when the Minister for National Development (Senator Spooner) took a point of order, you would have heard him withdraw his point of order which was along the lines of the ruling you have just given. I repeat that traditionally a debate of this nature provides the Opposition with an opportunity to canvass policy. I also suggest to you with very great respect that as Temporary Chairman you would be acting quite safely if you were to leave the care of the debate in the hands of that very competent Minister. When he is embarrassed by honorable senators raising any irrelevant matters, he will not be slow to take appropriate action. Might I suggest, Mr. Temporary Chairman, that you should function as the referee in this matter rather than as the director of the whole debate, that you may as well leave the debate to the contestants with the assurance that ou your right hand is a gentle man who can take complete care of himself, as we all know, and who has at his disposal all of the remedies. He can move that the question be put, or apply the “ guillotine “ - he has all the resources, and I suggest that you would be well advised to allow him to determine the scope of the debate.

The TEMPORARY CHAIRMAN:

– It is true that earlier I took part in the debate in order to reply to a point made by another Queensland senator. If the Chairman allows me to get away with a thing like that, I shall get away with it; but while I am in the chair I believe that the correct way to direct a debate is to insist that the rulings of the Chair shall be observed. If a chairman keeps to that rule he will not go far wrong. However, I do not blame any senator for raising a matter in a debate if he can get away with it.

Senator Courtice:

– The Temporary Chairman is prepared to do wrong as long as he is not found out.

The TEMPORARY CHAIRMAN.If a chairman is prepared to allow me to get away with something, I shall get away with it; but I have always made it my purpose, as Temporary Chairman, to conduct the business of the committee in the manner in which I consider that it should be conducted.

Sitting suspended from 5.45 to 8 p.m.

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

– I take this opportunity to reply to matters raised so far in the debate. The Leader of the Opposition (Senator McKenna) referred to four of the items in the Trust Fund which appears on page 76 of the budget papers. The first of these related to the Debt Redemption Reserve, and in order to deal with this matter in its proper perspective it is desirable to turn to page 82 of the budget papers where a record is found of the manner in which trust funds are invested. At the foot of that page is a tabulation showing General Trust Funds totalling, in round figures, £26S,000,000. That includes the Debt Redemption Reserve which was created by legislation as a repository for the surpluses from the last two financial years. The Government decided and Parliament approved that if those surpluses were paid into this reserve fund the money would then be available for large loans which will mature in the not-distant future. It is difficult to identify particular items under the heading of “ General Trust Funds “ because they are all included in the total amount.

The Leader of the Opposition was correct in saying that £17,900,000 from the Debt Redemption Reserve was being invested in loans which are included under the heading “ Commonwealth Government Inscribed Stock “. That money was made available to support States works programmes. The honorable senator was correct also in saying that £30,000,000 was used for treasury-bills redemption. Both those figures are included in the total of £59,400,000.

The next point raised related to Defence Equipment and Supplies in the Trust Fund, which totals £20,000,000. It is correct that in the view of the Government there is a need to maintain that amount in trust because of overseas commitments such as goods purchased but not paid for. There are responsibilities under the defence programme which the Government considers should be covered by special appropriations. I do not wish to create the impression that if the obligation to meet these overseas commitments arose within the next couple of months they would be automatically paid for out of that amount of £20,000,000. One of the recurring problems in the defence programme each year in the ordering of defence requirements is the long period taken to build ships and aircraft and, consequently, the long time that liabilities take to crystallize. The Government considers that, because of underspending in certain years, it would be unwise not to keep that underspending in the form of a trust fund to cover a situation which might arise at any period in which the annual appropriation fell short of requirements. It is not an easy task to make the defence expenditure run smoothly, because of the difficulties that are inherent in obtaining equipment as and when it is needed.

The Korean Operations Pool in the Trust Fund stands at approximately 10,400,000, and its purpose is to meet a real liability that will accrue. The amount of this liability may be greater than that now in the fund. It is in respect of Korean operations when arrangements were made for the pooling of liabilities and various commitments. The accounts in respect of those commitments have not all been rendered by authorities in the United States of America, but when they are received this fund will be a provision to meet them.

The Strategic Stores and Equipment Reserve is, in the opinion of the Government, necessary. The Leader of the Opposition doubted this. In 1950, when the Government embarked upon a three-year programme, it was considered necessary to have materials and stores running side by side with the defence programme, and when the international position eased - and, indeed, when there was any difficulty in obtaining some of the materials - purchases for the reserve were not carried forward with the speed that was originally contemplated when it was established. But some transactions are still occurring, and goods are being purchased, which the Government considers are necessary in the national interest.

The next point raised by the Leader of the Opposition and other honorable senators was the comment in the Auditor-General’s report relating to the Superannuation Fund. Although it is not altogether satisfactory, it is difficult to do anything more than to recapitulate what the Auditor-General said. Payments into the Superannuation Fund from the various departments are received by the Treasury. All the funds are under the control of the Treasury, but the Superannuation Board itself makes investments, drawing on the funds held by the Treasury in order to do so. Unfortunately, there was a lack of liaison between the Treasury and the Superannuation Board. The board proceeded to make investments on the assumption that all instalments had been paid to the credit of the fund. As all the superannuation cheques are drawn on the Treasury, obviously, they were met on presentation, and it was not until later that it was found that, at times, departments had not remitted to the Treasury the instalments collected by them from their employees as promptly as they should have done. It was the Auditor-General’3 function- to draw the attention of the responsible authorities to the matter, and he did so. The Auditor-General’s report sets out his criticism and his views as well as the departmental replies to his criticism and they are, as we would expect, expressed impartially.

There are many other matters to which honorable senators have referred. I hope it will not be held against me that I would have difficulty in answering some of them. The debate this afternoon was interesting, and contained a series of observations. Taking them at random, I refer to the remarks of Senator O’Byrne and Senator Laught. The latter advocated the establishment of a royal commission to review the Income Tax Assessment Act. I do not feel that I am in a position, at this stage, to make an observation on behalf of the Government in relation to such a far-reaching proposal, particularly when, until recently, we had a consultative committee on taxation which submitted a. series of reports on various aspects of taxation law. In regard to that matter, as well as other matters mentioned during the debate, I can only say that I noted with interest the contributions made.

Senator Cooke raised a basic matter when he referred to the surplus disclosed in the budget papers, and drew attention to that portion of the budget speech which said that special action would have to be taken to deal with a sum of about £48,000,000. The world is moving on, and we have reached the stage where the determining factor is the overall tax position, rather than the division of the budget into two separate compartments - one the budgeting of revenue items, and the other the budgeting in respect of capital items. My reply to Senator Cooke is that he will have an opportunity to debate the matter at length, because, as was forecast in the budget speech, special legislation will be introduced seeking the approval of the Parliament to the establishment of a special fund into which money will be placed, pending the determination of its ultimate use, as circumstance’s may warrant during the year.

Senator Armstrong and Senator O’Byrne:

asked what the position would be if, as the result of the present Arbitration Court proceedings, public servants were granted increased salaries.

The CHAIRMAN” (Senator the Hon. A. D. Reid).- Order ! The Minister’s time has expired.

Senator McKenna:

– I should he happy to move that the Minister be granted an extension of time.

The CHAIRMAN:

– As no other honorable senator has risen, the Minister may continue.

Senator SPOONER:

– In reply to Senator Armstrong and Senator O’Byrne, I say now that public servants need not fear that payments will not be forthcoming should increased salaries be awarded by the court. The position is, however, that the Government must prepare the Estimates in the light of circumstances that exist at the time of their preparation. The Estimates now under consideration are based on the situation existing at the present time. Should there be alterations in any direction, the proper procedure will be followed, and the Government will bring forward supplementary estimates to cover the payments, as has been done in earlier years.

I could cross swords with Senator Byrne about the treatment of Queensland, but I shall deny myself that privilege. However, when he talks about the tax reimbursements to Queensland being less than that State should get, I cannot forbear from saying that, apart from the special payment made in the coal-strike year of 1940 this Government has, I think I am correct in saying, given to the States amounts very substantially above those to which they were legally entitled.

Senator McKenna:

– Can the Minister comment on the delay in the presentation of accounts by the Superannuation Beard, and my suggestion that, in view of the growth of the fund, some attention might be given to increasing the value of units payable to superannuated officers?

Senator SPOONER:

– I regret that I overlooked that matter. The delay is due to the fact that records were destroyed in a fire which occurred at Civic Centre some time ago, and the Superannuation Board is at some disadvantage. When the honorable senator was speaking about increased benefits I restrained myself, with great nobility, from pointing out that in the paper from which he was reading there was a statement to the effect that the fund is subject to actuarial examination every five years, and that legislation governing the fund provides that benefits must be justified by such actuarial examination. As the last examination was made in 1950, the time for a further actuarial examination is now approaching.

Senator Arnold:

– Has the Minister considered whether it is possible to give the -information I asked for in connexion with the Bureau of Census and Statistics ?

Senator SPOONER:

– I have every sympathy with the honorable senator in his efforts to find his way through the numerous publications that come from the Bureau of Census and Statistics. I have followed a very simple rule, which I now pass on to the honorable senator. I obtain a copy of the Year-Book.

Senator Arnold:

– The Tear-Boole is so far behind.

Senator SPOONER:

– Yes, but if the honorable senator takes the Tear-Booh he will be able to find from it the publications upon which the information in the book is based. All the various publications are listed there, and I regard the Tear-Booh as my guide, philosopher and friend. Honorable senators may look upon it as a guide that will point out the way for them to follow.

Proposed vote agreed to.

Proposed votes - Miscellaneous Services, £762,000; Refunds of Revenue, £22,000,000; Advance to the Treasurer, £16,000,000- agreed to.

Department or Works.

Proposed vote, £3,535,000.

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

– With reference to Division 68b, General Expenses, item 16a, Fees of Private Architects and Consultants, I notice that the proposed vote is £179,500. Apparently, because this item now appears in a new section of the Appropriation Bill, no corresponding figures appear for last year. Is the Minister for National Development (Senator Spooner) in a position to indicate the vote and expenditure for last year?

Senator Spooner:

– Last year, £110,000 was provided and £71,000 was actually expended.

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

– I thank the Minister for that information. Was there any particular reason for not showing those figures in the Appropriation Bill? I thought, perhaps, that the amount voted for this year was probably much higher than the amount provided last year, and the Minister’s reply appears to indicate that that is so. Will the Minister now say whether those figures represent a change in policy on the part of the Government involving the employment of private architects to an extent greater than previously, or is it attributable to a shortage of technical staff In the Public Service ?

Senator SPOONER:
LP

– It is principally due to a shortage of technical staff in the Public Service, particularly quantity surveyors.

Senator GORTON:
Victoria

.- I desire to pursue the matter raised by Senator Byrne. I understood the Minister to say that the increase in the vote in respect of fees for private architects employed by the Department of Works was due to a shortage of staff in the department. Perhaps I am correct in inferring from that statement that it is the policy of the department to remedy that shortage as soon as possible. If that is so, it seems to me a retrograde step, indeed, because I had thought it was the policy of the Department of Works to keep on hand sufficient staff, planning and otherwise, to do the bulk of the work that might be expected to come in, but not to do all of the work because, after all, the volume of work going through a department such as the Department of Works must increase and decrease in accordance with many conditions including the finance available. I urge on the department, and on the Minister, that there should be a definite aim to secure some reasonable proportion of national works of all kinds - bridges, public buildings and all the manifold works of the Commonwealth Government - for private architects. In that way the work of the department and the work of private architects will both be improved, and the buildings and other construction work done for the Government will, in the long run, be done better by that sort of competition, which, indeed, is in accordance with one of the deepest political tenets of the Government parties.

Senator McCALLUM:
New South Wales

– I support Senator Gorton’s remarks. I believe that the stodgy architecture of Canberra is largely due to the limited field among architects. While I have the greatest confidence in the architects employed by the Department of Works, I think that we need, particularly for the larger and better buildings, the largest field available. The best architects should be obtained, whether from the Department of Works or from private employment, and whether here or abroad.

Proposed vote agreed to.

Proposed votes - Department of Social Services, £2,614,000; Miscellaneous Services - Department of Social Services, £1,631,000- agreed to.

Department of National Development.

Proposed vote, £843,000.

Senator ARNOLD:
New South Wales

.- The Department of National Development has a very big staff of officers doing research work in the Bureau of Mineral Resources who, I am sure, render valuable service to the national economy. However, I believe that I might well be allowed now to raise a matter that I raised some time earlier in the year about whether the department might not use the services of those officers to provide against some of the natural disasters that sweep through the country from time to time. I put it to the Minister that the Department of National Development might render valuable assistance in the event of further floods like the recent floods in New South Wales. While that has been ruled to be largely a State responsibility, I believe that the tremendous technical knowledge that his officers have in national development and the planning of our resources could well be used in overcoming the many hazards which from time to time we are called upon to face, and which have such disastrous results for us. Therefore, now that the political heat may have gone off that matter, I askthe Minister whether he will make every endeavour to use the services of his officers wherever possible. I also ask him to have their activities coordinated with the activities of the State officers, and to render all assistance possible in order that we may mitigate the disasters that from time to time overtake us and leave many tragic results behind them, and many millions of pounds worth of damage. We tend to hope that when a flood or a bushfire is over, it will not occur again, but we know that these disasters come in cycles. It is dreadful to consider that we have not enough resources, particularly in the States, to repair the damages of disasters. Therefore, I ask the Minister for National Development to give an assurance that every effort will be made to provide the services of his officers to assist the States in the direction I have suggested.

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

– I wish to direct attention to Division 99 - Administrative, and Division 100 - Bureau of Mineral Resources. The vote last year for that bureau for salaries and allowances was £214,800 and expenditure was £165,739. The proposed vote is £246,000. The increase is due principally to the increase of staff, so far asI can ascertain from a quick glance, for the Petroleum Investigation Section. The staff has been increased from 158 to 175, and no doubt there are other incidental increases of personnel. In view of the extremely large increase, represented both in salary and staff, will the Minister for National Development (Senator Spooner) give some indication of the work that has been undertaken by the section, and the new activities in which it is now engaged and which warrant an increase of staff and expenditure? All honorable senators know that the discovery of oil-bearing areas - and, we hope, the ultimate production of flow oil - is a matter of tremendous importance to Australia. Therefore, I would not discourage the expenditure of money or the engagement of personnel for that purpose. It would be interesting if honorable senators could be informed just what additional work the Bureau of Mineral Resources has undertaken. Perhaps the Minister couldinform the committee what opinion is held by officers of that bureau as to the prospects for success in the search for oil?

Senator McKENNA:
Leader of the Opposition · Tasmania

– When the Minister for National Development (Senator Spooner) is replying I should be grateful if he would indicate just how far the Department of National Development is concerned with the search for oil i.u Australia. I believe that its activities have been extended to embrace a search by officers of the Department. What is the scope of those activities, and does the Government contemplate expanding them? The Minister knows of my great interest in the search for oil. Success would be vital to Australia,

Senator ARNOLD:
New South Wales

– I wish to direct attention to Division 99 - Administration, and the item “ Publications, £1 1,500 “. Last year, the expenditure was £7,964. The publication issued by the Department of National Development is a credit to those who compile it. I have received issues of the publication for some time, and I look forward to it with great interest. It gives a picture of the activities of the department and the development of Australia, and it is very encouraging to read the articles and study the pictures. 1 express my congratulations to the Minister and those who are charged with the task of compiling the publication. If it costs a few thousand pounds more this year, the money will be well spent.

Senator WILLESEE:
Western Australia

– I agree with Senator Arnold that the publication issued by the Department of National Development is very fine, and I should like to know whether only one publication is covered by the proposed vote. I direct attention to the item “Kimberley Research Station -Contribution to Cost, £18,000”. I believe that the Government of Western Australia makes a similar contribution to the work. I am very interested in that project, because I believe that we should endeavour to develop the Kimberley area. It appears that we are proving beyond doubt that we can grow rice and sugar cane there.

Senator Benn:

– Cut it out.

Senator WILLESEE:

– I was about .to point out when Senator Benn from Queensland interjected that already in Queensland we could produce more sugar if we needed to do so. If we proceed with the production of rice, it is doubtful whether we would have a good prospect of selling it on an economic basis. I am not disparaging the work that is being done, but if we can spend £11,500 on a publication, I suggest that we could spend more money on a risky proposition such as a research station to discover whether we can produce commodities that are not produced in Australia now. It may be that rubber or something of that sort could be produced in Western Australia without interfering with production in other parts of the Commonwealth. What would be the reaction of the Minister for National Development (Senator Spooner) to such expenditure? The proposed vote of £1S,000 for the Kimberley research station is not a lot compared with other items.

Another item in which I am interested is the proposed vote of £18,000 for northern Australia surveys. Some of the statements that I made with regard to the Kimberley research station might apply to the northern Australia surveys.

Another item to which I wish to direct, attention is the proposed vote of £3,000 for water resources investigations. Last year the vote was £5,000, and the amount is to be reduced this year. I am surprised at the proposed reduction as the discovery of water resources, the conservation of water and its distribution has been important since the first settlement in Australia. It would be good business for the Department of National Development to move into some of the settled areas, which have been proved worthy of economic development, and experiment in water conservation and avenues of production. That would mean that the work would be carried out in proved areas, and work of that kind could be treated as an investigation. I should be grateful if the Minister would make some comment in this connexion when he is replying.

Senator MATTNER:
South Australia

– I refer to the proposed vote for the Bureau of Mineral Resources. Per1 haps the Minister will be good enough to inform the committee whether cooperation exists between the Commonwealth and the States regarding the testing, by means of boring and other measures, of our iron ore potential. I refer not only to the quantity of our resources of iron ore, but also to the quality of it. I should also like to know whether experiments have been undertaken in Australia to determine whether it is possible successfully to treat haematite quartzite.

Senator CRITCHLEY:
South Australia

– I notice that the sum of £18,000 is to be set aside for northern Australia surveys. I should be glad if the Minister would indicate the nature of these surveys. During the previous week, Senator Willesee made a very earnest plea for the development of the northern parts of Australia, and I am sure that all honorable senators would like to have some information regarding the work that is to be undertaken in this connexion.

Provision is also made for expenditure of £3,000 .on water resources investigations. Expenditure in this field last year was £2,945. I should like the Minister to explain the smallness of these amounts. I am sure that all honorable senators will agree that, in a vast country such hs Australia, water conservation is one of the most necessary aspects of development.. Judging by the amount that has been allocated this year and the amount expended last year, these investigations must be on a very minor scale. In what parts of Australia are the investigations taking place? I hope that the Minister will be able to assure the committee that even these very limited sums are being expended in localities where water is at a premium.

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

– I wish to make a few remarks in relation “ to the Division of Industrial Development. During the budget debate, we heard a very interesting speech from Senator Paltridge, who had not then been elevated to the treasury bench, in the course of which he directed attention to the economic difficulties which face Australia and suggested that, as we are finding the markets for our primary products somewhat limited, it is becoming increasingly important to find alter native markets, particularly markets that might attract the products of our secondary industries. Of course, that ia highly desirable, but the proposal has its limitations, one being the high cost structure in Australia which makes it very difficult to sell our products, particularly our secondary products, on markets which, perhaps, are available to producers in other countries of the world where costs are lower. In those circumstances, it becomes particularly important, if we are to exploit our secondary industries, to have the maximum efficiency in their production.

From time to time, we are visited by leading industrialists from other parts of the world, and they make the general comment that the standard of managerial efficiency and industrial technique in this country leaves a great deal to be desired. America, of course, has brought its technology, to a very high point.. In addition, it has available, for the products of its factories, a very big homeconsumption market. American products are paid for at high prices, and therefore, America can afford to absorb the bulk of the products of its immense and widely distributed factories. We have not that advantage. Australia has a small population, and for that reason the American system is not available to us. Therefore, there should he a tremendous concentration, in this country, on improving the efficiency of our secondary industries by management training, and the introduction of the most modern machinery and methods of technology and industrial techniques, so that we may obtain entry to a field which is now denied to us for a number of reasons.

Senator Henty:

– And incentive payments? Does the honorable senator agree with that?

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

– I am directing my attention particularly to the Division of Industrial Development. I am suggesting that industrial techniques should be improved. Unfortunately, the solution that is sometimes posed, and it is posed invariably from the Government side, is that longer hours should be worked. It will be found, throughout the industrial history of the world, that if that solution always had been accepted, there would have been no advances in technology in industry. The gradual reduction of working hours has been a continuous challenge to mechanical minds to devise alternative means to obtain production, in view of the shorter hours worked. I think it is dangerous for the doctrine to go abroad - and, unfortunately, it is abroad in government circles - that a longer working week could produce goods at lower cost and solve all our difficulties. That method has not been adopted in America, and because it has not been adopted, America to-day leads the world in industrial techniques and the development of technology.

I do not know the exact province of the Division of Industrial Development, but I understand that its officers interview those who intend to set up in industry, acquaint them with prospects and industrial conditions, the degree of availability of raw materials, the availability of transport, and all that technical information which is necessary for an investor to have before he commits his capital and his future. If that is the limit of the activity of the division, I think it is inadequate, particularly in view of the current problem in Australia. I ask the Minister whether the division could not be employed to examine industrial techniques, the provision of managerial training, and everything that might tend not merely to extend our industrial development, but also to increase efficiency and the modernity of our industry. Unless the division does that, I feel that it is not doing the job for which it could and should be used. I should be pleased if the Minister would inform the Senate exactly what this particular division does, and whether it understands its functions to be along the lines that I have mentioned.

I remember that two or three years ago an expert on business management visited Australia. After delivering only one or two lectures, unfortunately he became ill and had to return to his own country. He told me that his first impression of Australian techniques was that they were far behind the times. Australia cannot possibly compete successfully on the markets of the world, which, are completely free and open, if it continues to employ methods which are years behind the times. I should like the Minister to indicate the limits of activity of the division to which I have referred. If the suggestions that I have made are not already embraced with its activities, I urge the Minister to establish within the Division of Industrial Development a sub-division to operate along the lines that I have suggested, in an endeavour to raise the standard of Australian industry to the highest possible degree of efficiency, in the interests not only of the workers, but of the nation as a whole.

Senator SEWARD:
Western Australia

– I refer to. Division No. 201, Miscellaneous, item 3, Advisory panel on air transport of cattle or beef - Expenses coal-miners’ amenities, Western Australia - ‘Contribution towards cost, on which £5,738 was expended last year. The proposed vote for this financial year is £5,500. I should be pleased if the Minister would inform me what progress has been made by the inquiry that is being conducted into the air-lift of beef. How much longer does he expect the inquiry to last?

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

– I shall deal seriatim with the points that have been raised by honorable senators. The proposition that Senator Arnold advanced would not be so easy to implement as appears at first sight. Let me illustrate the position in this way : If there is a function relating to, let us say, mining, which requires the exercise of special skill, it is attended to by the Bureau of Mineral Resources, which is an acknowledged Australian authority on all mining and geological matters. If the matter relates on some degree or phase to industrial efficiency, it is handled by the Division of Industrial Development. The honorable senator referred to floods and other occurrences of that kind. I always say, “ Every man to his trade “, whether in relation to flood prevention or any other matter. This work is entrusted to skilled professional men who have had experience in the particular areas concerned. In the Department of National Development there are officers who possess a good general fund of knowledge, but when we get down to tin tacks we find that engineers in the employ of the Department of Public

Works in New South Wales possess special knowledge and skill in relation to river? in that State. The problem goes very much deeper than that ; these engineering problems cannot be solved after only a quick “ look-see “. They must be examined in the light of records kept over a long period of time in relation to rainfall, high flood levels in the past, and so on. I should think that, logically, the State people should handle these matters ; indeed, 1 do not think that I should be over-stating the matter if I said that they are the only people who can handle them. If the Commonwealth decided to participate in a certain scheme, I should think that it would be necessary for its professional officers in the Department of Works, who are of very high standing to consult with the State officers, not because of any lack of professional knowledge, skill, and standing, but because the basic knowledge and data are contained in the records of the State department.

Senator Byrne referred to the activities of the bureau in relation to the search for oil. I think it might be appropriate for me to read to the committee the departmental notes that have been prepared on that subject. The department has shown tremendous interest in the search for oil. Indeed, a very fine tribute was paid to it by officers of the Texas Oil Company Limited, who said that it was the quality of the foundational work done by the department which encouraged them to come to Australia. As I understand the matter, the work is divided into two categories. First, there is the drilling - the actual work which might or might not lead to the discovery of oil. To be efficiently commenced, this work must be based on surveys that have been conducted over wide areas to ascertain their potentialities. . The bureau’s function is restricted to these basic surveys, ft surveys parts of Australia from time to time, and issues maps on which certain findings are indicated. All relevant information is collated in accompanying reports, which are available for perusal by all persons who desire to read them.

This year, there will be an airborne magnetometer survey over portion of the sedimentary basins of South Gippsland. There will be a continuation of surveys of the Fitzroy and Canning basins, and a detailed gravity survey of parts of Gippsland in Victoria, including under-water gravity surveys. There will be seismic investigation in the Fitzroy basin, the Perth basin, and another sedimentary basin in Western Australia. Seismic surveys will be conducted in the Fitzroy and north-west basins, as well as in the Canning basin, in order to determine the possibilities of oil occurring in the basins and to indicate likely targets, as to both sequence and locality. There will be scattered boring in the Fitzroy basin. This work will be carried out by contract labour using departmental equipment, under the direction of the Petroleum Technology Section. Shothole boring will be carried out in connexion with seismic surveys. I confess that is a fairly bald and attenuated description of the work that the bureau is doing.

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

– Apparently, there is some extension of activities from last year which warrants the extra staff.

Senator SPOONER:

– Yes. It is always very difficult to say that one section of the staff is working on uranium surveys and another section i3 working on iron-ore surveys. The staff is interchangeable and there is a fair bit of come and go in the way they work.

There seems to be a. little confusion about publications. They come under two headings, one relating to those issued by the Bureau of Mineral Resources, and the other related to publications issued by the department as a whole. The publications that are issued by the bureau are of an extraordinarily high value. They are the only publications of their nature in Australia, and to us who are not technically, or scientifically, minded-

Senator Benn:

– They cannot be dispensed with.

Senator SPOONER:

– That is so. I am talking now of the publications of the Bureau of Mineral Resources. There is also an annual review and quarterly notes published in connexion with the mineral industry. On most occasions when a particular investigation is made the findings are published and reports are issued. Maps are prepared and attached to the reports. Maps are also prepared covering the air-borne surveys. The department has two fully equipped aircraft which are used on uranium and other exploratory surveys. It also has a third aircraft under hire. The two main aircraft are Dakotas, and the third is an Auster. The latter is able to fly at lower altitudes and can carry out more detailed surveys than can the two larger aircraft.

Some confusion has arisen in respect of water surveys. A water survey is not related to any investigation of water resources within Australia but concerns a scientific investigation which is proceeding overseas into the possibilities of converting salt water into fresh water for commercial or other purposes. Honorable senators will realize the tremendous significance such experiments, if they are carried to a successful conclusion, have for Australia. The experiments are being carried out in Holland and a group of countries, including Australia, under the auspices of the United Nations, are contributing to the expenses.

Senator Mattner:

asked about what is being done to establish the existence of iron ore reserves. As I said previously, at present an air-borne survey is being carried out in South Australia. At the end of the wet season in the Northern Territory by arrangement with the South Australian Premier and the South Australian Department of Mines, an aircraft that was being used in the Territory is now carrying out a special air-borne survey, searching for iron ore deposits in South Australia. The same thing is happening in Gippsland and in the northern part of Tasmania. _ Senator Mattner asked for information about northern Australian surveys. My recollection is that a special expedition, arranged by the Commonwealth Scientific and Industrial Research Organization, has been made into the gulf country. The original survey undertaken by the organization was inaugurated following a recommendation in 1946 by the Northern Australia Development Committee. I have here a report setting out the objectives of the survey, but I shall not read it at this juncture. Areas that have been suggested for survey are Katherine-Darwin, the Barkly Tableland and the Townsville-Barron region of Queensland. Field work is also being completed near the Ord and Victoria Rivers. That work requires patience; it has to be spread over a period of time. Much tabulating and compiling takes place in order to provide a foundation for activities in the future.

Senator Seward:

asked about the result of the inquiry into the air-beef scheme. The panel which inquired into that project has completed its report and has tendered it to the Treasurer (Sir Arthur Fadden), and the report awaits his attention. It will not be available for discussion until the Treasurer has seen it.

The CHAIRMAN:

– Order! The Minister’s time has expired.

Senator ARMSTRONG:
New South Wales

-I should like to ask the Minister for National Development (Senator Spooner) about the procedure of the department in regard to the knowledge that it obtains as a result of airborne surveys and scout-borings that are taking place throughout Australia? How quickly is that knowledge made available to the public ? What methods are used to disseminate it? Is it retained in the department? Are individuals permitted to approach the department to ascertain this information? The Minister will appreciate that if favorable reactions are obtained in certain districts where the land is not held under lease, it would be of tremendous value to anybody to acquire prior knowledge of that information. What procedure is adopted to make public the results of these surveys? The Leader of the Opposition (Senator McKenna) was concerned about a survey that took place in Tasmania, and the Minister answered his question. Tasmania is only a small State, and such a survey could probably be made during a week-end. I was wondering whether there was any likelihood of surveys being made in New South Wales. They would take a little longer to carry out. One of the outstanding features of the Snowy River development is the incredibly efficient road-making organization. One wonders whether some of the great potentialities of that organization are being wasted during the winter months when much of the local country is under snow. In New South Wales and the Australian Capital Territory, between Canberra and the coast, there is a tremendous need for roads to be built, but it is beyond the capacity of either local government or main roads authorities to undertake the work. Would there be any possibility, during the winter season, of diverting road-making machinery and experts to operate it into these areas for the purpose of building muchDeeded roads?

Senator SPOONER (New South Wales - Minister for National Development) [9.12 . - I assure honorable senators that reports of mining surveys are public documents, and are never published for any particular interest or party. They are always available for those who want to inspect them. They are sent first to the Mines Departments of each State by the bureau, because those departments are entitled to first knowledge. They are made public as soon as possible afterwards. I have asked the department the question that an honorable senator asked this evening - how can the department feel assured that the reports cover as wide a field as possible and that everybody knows that the information is available? The departmental reply is that they notify any professional associations or mining groups or bodies that would be interested. A public statement is made when the report is available, and also an outline of what it contains. There is no real danger of some one having a report, particularly with regard to oil prospecting, and taking an advantage of early information. These reports are based on geological information, and are only indications to professional people of what conditions underground may be. It is upon that information that the geologists have to form their judgment as to where are the advantageous places to risk sinking a bore. Surveys for uranium have been made in various places in New South Wales - one at Broken Hill and others in the northern parts of the State.

I am not keen about moving roadmaking plant from the Snowy project to other parts. I confess that I have a single-track mind concerning that project. A great deal of road work still has to be done there, and until that is completed I should not favour the plant being used elsewhere. However, experience gained in many trades and activities at the Snowy project is being taken to other places because employees leave to take positions elsewhere, and their places are filled by newcomers.

Senator Armstrong:

– Is the roadmaking equipment used as fully in the depth of winter at the Snowy as in the warmer season?

Senator SPOONER:

– No, it could not continue at the same rate in the cold season, but it is not easy to shift the plant and equipment to other areas. The Division of Industrial Development has become recognized as an authority upon surveys of secondary industry in Australia. I have been intrigued to notice that its half-yearly surveys are accepted and quoted by most financial journals. I doubt the wisdom of expanding that sphere of the department’s activities by asking it to deal with production techniques, management skills and similar activities. Few people are able to visit some one else’s business premises and improve on the management by the owner. This organization enjoys a high degree of respect and support, and it would be a mistake to force its development by taking it into a sphere of activity into which one would be hesitant to go. The standard of industrial efficiency in Australia is a debatable subject. It is certain, however, that Australian secondary industries must find ways and means to export if the nation is to continue to import at the present rate. Sufficient exports cannot be found in primary products alone ; secondary industries must make a contribution. I am inclined to the view that the internal market has been so easy in recent years that there has been little incentive to look for external markets, but when manufacturers realize the need to get export business they may not find it so difficult as is now generally supposed.

Senator Willesee:

– Has the Minister any comment to make about the Kimberley research station?

Senator SCOTT:
Western Australia

– Division 100 concerns the Bureau of Mineral Resources. I notice in the schedule on page 196 that salaries and allowances total £246,000, and that last year the bureau employed 158 people as technologists or persons with technical training. Some of the categories mentioned are, Chief Petroleum Technologist, Supervising Petroleum Technologist, Senior Petroleum Technologists, Petroleum Technologists ; Chief Geologist, Assistant Chief Geologist, Supervising Geologists. Senior Geologists, Geologists, Chief Geophysicist, and so on. NO mention has been made of a party that I saw in the territory. It was a geochemical party, and evidently is a new branch of the Bureau of Mineral Resources, which is carrying out prospecting work at Coronation Hill. It is using chemical methods to find ores that may be present below the surface, and it does so by taking samples of soil from the surface, and having the soil carefully analyzed in a complicated laboratory. The analysis shows as little as a one-millionth part of certain minerals that may be present, and that gives the geochemist an indication of what lies underneath. I do not want this opportunity to pass without paying a tribute to the men of the Bureau of Mineral Resources, especially those working in outback areas, for the great work that they are doing in attempts to discover rare minerals and metals in Australia. During a most interesting trip through the Northern Territory I met many officers of the department, and at all times I found them most willing to answer my questions. I confess that I was somewhat amazed to find in an outback area, 180 miles from Darwin, the geochemical outfit that I have mentioned. I had not previously heard of it searching for tin, lead, copper and uranium by this new process. I understand that the party I have mentioned spent some time in Queensland in the Cloncurry-Mt. Isa area, and played a big part in finding extensive deposits of lead at Mr Isa. It also found copper in the Cloncurry district, or at least indications which it was thought revealed big deposits of copper. I firmly believe that the Government must pay more attention to the search for minerals. That work is being undertaken by the Bureau of Mineral Resources, but I should like to see greater collaboration between that body and the State Departments of Mines. I read recently that India is employing about 200 geologists to undertake a survey of India’s mineral deposits. We must spend more time and money in surveying our deposits.

I should like the Minister to say whether he intends to make a statement, regarding the work that the geochemical party is performing, whether its activities have been confined to Queensland and the Northern Territory, and especially whether it is the Minister’s intention to send the party to Western Australia, which I believe contains our greatest supplies of minerals.

Senator ARNOLD:
New South Wales

– Last year the sum of £5,000 was voted as a contribution towards the cost of amenities for coal-miners in Western Australia. I notice that no similar provision is made this year. Is that an indication that all the amenities needed in Western Australian mines have been provided?

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

– I am afraid that I cannot give Senator Willesee much information about the Ord River in addition to the information made available to him recently in a report of a committee concerning the research establishment there. The information I have obtained from the department does not add much to what .is contained in that report. It is merely a recital of how the money is made up, and how it is apportioned between the Commonwealth and the States. I do not think that the honorable senator is particularly interested in those aspects.

Senator Willesee:

– I have seen the report.

Senator SPOONER:

– I know that the honorable senator is more concerned with the research station. I cannot give him a great deal of detail, because no final conclusions about the productive capacity of that area have yet been arrived at. It would appear that sugar cane is well suited to the area, and that the yield of cane sugar compares favorably with the yield from irrigation areas in Queensland. Promising results have also been obtained with rice. Experimental work is continuing over a wide range of products including cotton, various seeds and pasture. However, I know that the honorable senator is aware of those matters.

I have spoken to senior officers of the Bureau of Mineral Resources about the point raised by Senator Scott, and have been advised that the geochemical party to which the honorable senator referred consists of a specialist geologist. This is a new scientific sphere of activity and is in the nature of experimental or pioneering work. The scientist concerned has undertaken preliminary work in Queensland and the Northern Territory, but so far only the Scottish verdict “ not proven “ is all that can be said. No final judgment has yet been reached, but the fact that this officer is employed by the bureau is an indication of his scientific qualifications. He would not be there if he was not well qualified. The story about the subsidy for “Western Australia is quite short and clear. “We paid the subsidy in 1951-52, 1952-53 and 1953-54. However, no request has been received for the subsidy for 1954-55, and consequently uo provision has been made for it.

Proposed vote agreed to.

Miscellaneous Services, Department of National Development.

Proposed vote, £312,000.

Senator ASHLEY (New South Wales) [9.31J. - I direct the attention of the Senate to items 3 and 4 under Joint Coal Board. In respect to item 3, Prospecting, research and other expenditure, last year £43,000 was expended, and this year it is estimated that £35,000 will be expended. I ask the Minister for National Development (Senator Spooner) whether his department is still prospecting for coal. I understand that we have an abundance of coal at persent; in fact, that there is a Quantity of about 2,000,000 tons at grass. The description of the item itself is very vague. Item 4 refers to stockpiling and related expenditure. Last year, it was £100,000, and this year it will be £70,000. Is it still proposed to stockpile coal, and what is the general position in regard to the two items I have mentioned?

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

answer the honora’ble senator’s question is to give details of the way the £35,000 is made up. The item is listed as “ Prospecting, research and other expenditure, £35,000 “. For prospecting and drilling £2,600 is provided ; research grants amount to £2,0u0, payments to outside laboratories £3,000, and coal marketing and utilization £3,000. Geological work, district laboratories and other functions utilize the balance.

Senator Ashley:

– Is the Government still prospecting for coal ?

Senator SPOONER:

– Yes, we are still carrying on geological and prospecting work because we have to look ahead. Coal mines cannot be opened up overnight, and much preliminary work must be done beforehand.

Senator Ashley:

– A lot of coal mines have closed down overnight recently, I understand.

Senator SPOONER:

– Some geological work is at present being undertaken on the south coast of New South Wales, and on the northern coal-fields. We are doing that so that we shall know how to plan for the future. The item referring to stockpiling relates to expenses that we have incurred in regard to the 1,000,000 tons of coal at grass. The quantity in the stockpile has been reduced during the last eighteen months or so. The Commonwealth meets all the expenses relating to that stockpile.

Senator Ashley:

– Does the Government intend to stockpile more coal?

Senator SPOONER:

– The expense of maintaining our stockpile is a continuing one. The Commonwealth is liable to pay money to the New South Wales mining company that cares for the stockpile. Provision is made under this item for claims by the Joint Coal Board for charges, cartage, wastage and overhead; also for reimbursement of New South Wales mining companies, reimbursement of the cost of insuring the coal and of the maintenance of plant in the open cuts, which is not now being used. The total costs amount to £172,000, plus £3,000 for maintenance of plant. The appropriation is £70,000 for this year, but the running costs amount to about £175,000.

Senator Ashley:

– No provision is made for future stockpiling of coal, the present provision being for interest and maintenance. Apparently it costs £70,000 a year to keep the coal in the stockpile, although it is coal which will probably never be sold.

Senator SPOONER:

– In any event it is a very useful asset.

Senator SCOTT:
Western Australia

– I direct the attention of the Minister for National Development (Senator Spooner) to Division 201 B, item 3, “Advisory Panel on Air Transport of Cattle or Beef - Expenses, £5,500 “. Does that refer to the inquiry that has recently taken place under the chairmanship of Mr. Davidson, and if 30, has a report on the matter yet been received ?

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

– I have already informed Senator Seward that I understand that the panel has tendered its report to the Treasurer (Sir Arthur Fadden), but I do not believe it will be dealt with until the Treasurer has had time to consider it.

Senator LAUGHT:
South Australia

– I desire to refer to the same item as has been mentioned by Senator Scott. The amount of money involved is rather large, and I invite the attention of the committee to the possibility of a further inquiry concerning the transport of cattle or beef. Recently, a transport service for carrying cattle by air from the Northern Territory and the north of Western Australia to the Philippines has been started, and it is earning a considerable sum in dollars for this country. If the Department of National Development is setting up an inquiry about the transport of cattle or beef it could also investigate the possibilities of the transport service that I have mentioned, because I understand that in its very limited way it has been quite successful. If experiments were to be made with the correct type of ship, our trade with the near east could be considerably increased. I invite the attention of the Minister to the possibility of setting up an inquiry of that sort to consider our export trade in cattle and beef.

Senator SCOTT:
Western Australia

– I . direct attention to the item under Division 201, Wool Textile Technical Schools - Payments to States of New South Wales and Victoria. Last year, the vote was £134,000 and expenditure was £80,513. The proposed vote for this year is £50,000. I note that the expenditure is to be made in the favoured States of New South Wales and Victoria. Is this amount to be expended to educate persons for the textile industry? If so, why does the vote relate only to New South Wales and Victoria? There are woollen mills in other States, and I should like to see this payment spread beyond New South Wales and Victoria.

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

– This arrangement goes back into history, and I am not certain that I can give full information. It was a wartime arrangement that was carried over after the end of World War II. During the war, an arrangement was made with Victoria and New South Wales to provide training in textiles. The Australian Government initiated an arrangement in 1.945 to introduce facilities in New South Wales and Victoria for textile technical training in advance of the programmes of the State technical schools. The Australian Government agreed to advance the funds required by the States for the necessary buildings and equipment. A sum of £100,000 was provided for each State, £50,000 for buildings and £50,000 for equipment. It was not possible to get sufficient buildings, staff or equipment, but some arrangement was made in that direction and, until 1952, the vote was administered by the Department of Labour and National Service. In 1953, the Department of National Development entered into a new arrangement to finalize the arrangement that had been operating since 1945. The new arrangement provided that the Australian Government would lend £100,000 each to New South Wales and Victoria, and the advances already made would be regarded as part of that amount. A grant of £30,000 was made by the Australian Government, and the balance is to be repaid to the Commonwealth by December, 1956.

Senator Scott:

– Will that end the arrangement?

Senator SPOONER:

– Yes, we are bringing the arrangement to finality.

Senator HENTY:
Tasmania

.- I direct attention to the item, “ Advisory Panel on Air Transport of Cattle or Beef - Expenses, £5,500 “. In my opinion, the cost of this panel is excessive compared with the amount of work that it has to do. The Public Works Committee spent £3,400 last year on all its meetings and investigations throughout the Commonwealth. That committee of nine members of Parliament spent £3,400 but this panel, which is inquiring into only one aspect of transport of cattle or beef, expended £5,738 last year, and the proposed vote for this year is £5,500. It is excessive.

Senator Benn:

– The panel had to sit in the Northern Territory and the Kimberley area.

Senator HENTY:

– They could hatch something in the Northern Territory on the money they expended last year. The Public Works Committee sat in the Northern Territory, and it takes a great deal of evidence each year in many parts of Australia. If Senator Benn does not agree with me, he can rise and tell the committee so, but I believe the expenditure of this panel is excessive, and that the Minister for National Development (Senator Spooner) should have another Look at the project to ascertain whether the expenses can be kept within reasonable bounds. I do not think they are within reasonable bounds at present.

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

– I cannot give much more information than the details I have already provided about the Advisory Panel on Air Transport of Cattle or Beef. The Chairman of the panel is Mr. C. W. Davidson, M.P., and the members of the panel are Sir Hudson Fysh, Messrs. Malcolm Newman, R. G. Dumas, W. A. Gunn, J. L. Shute, A. S. Bingie, D. J. Hiberd, and the secretary is Mr. G. Rudduck. The Department of National Development provides the secretary. The panel reports to the Treasurer (Sir Arthur Fadden). There are eight mem bers of -the panel in addition to the secretary, and they have to- meet expensive air fares as they travel into the Northern Territory and other distant places.

Senator HENTY:
Tasmania

.- It is interesting to compare’ the Advisory Panel on Air Transport of Cattle or Beef with the Public Works Committee. The Public Works Committee consists of members of Parliament and a secretary, and all its work is done on the amount provided for it. The panel, with one exception, consists of men who are outside the Parliament. Criticism is constantly levelled at members of Parliament. They are accused of being spendthrifts when dealing with public money, but the Public Works Committee of nine members, which travels over Australia and conducts investigations in every State, does it works on £3,400 whereas the panel with eight members, drawn from what I might term the laity of the taxpayers,, spends almost twice as much money on a much smaller job. This experience shows where the spendthrifts are, and they are not among members of Parliament.

Senator ROBERTSON:
Western Australia

– I disagree entirely with Senator Henty. A good many of the meetings of the Public Works Committee are held in Canberra and cost nothing at all. In my opinion, this .is one of the most valuable pieces of work that the Parliament has done. I think that the future of the cattle industry lies in the air. I also think that the future of our trading with the Far East depends on our development of air transport. This committee has done very valuable work, and the Government is to be commended on appointing it to investigate something which may affect considerably the treatment of our cattle industry and the extension of our trade with other countries. I said in my speech during the budget debate that I thought the air-beef scheme was one of the most fascinating stories of our time, and second only to the Royal Flying Doctor Service. For those reasons, I wish to dissociate myself from the criticism made by Senator Henty.

Proposed vote agreed to.

Department of the Navy.

Proposed vole, £48,S34,000.

Senator MATTNER (“South Australia) [9.51 “J. - I refer to Division 117, which relates to naval construction, and also to Division 118, which relates to aircraft and aero engines. As honorable senators are no doubt aware, a certain nation of the world has more submarines than has any other nation, and they may also be aware that the speed of that nation’s submarines is extraordinarily fast. Indeed, it is almost as fast as the speed of some of the surface craft which were used to destroy submarines during World War II. In my humble opinion, the type of surface craft used in the last war is hardly suitable to deal with submarines of that kind, and I wonder whether the use of helicopters has been considered for the detection and destruction of under-water craft.

Senator SANDFORD:
Victoria

, - I notice that last year, miscellaneous expenditure, under Division 120, was £24,097, and that the vote was £44,000. No provision for miscellaneous expenditure has been made this year. I assume that the defence research and development referred to in Division 120k, the proposed vote for which i3 £130,000, is devoted to research into the improvement of the Navy and the introduction of the latest scientific naval developments. Would the Minister be good enough to indicate why only £24,097 was spent of last year’s vote of £44’,000, under the heading of miscellaneous expenditure, and why £130,000 is to be voted this year for defence research and development, although nothing was voted for this purpose last year?

Senator SPOONER (New South Wales - Minister for National Development) [9.53 1 . - The note I have is a little cryptic and does not say a great deal concerning research and development. It merely states that this is a new division, and that provision is being made to meet the cost of special naval projects. I think that indicates in pretty plain terms that those projects are on the secret list.

Senator Sandford:

– Then, what is the idea of there being no vote for miscellaneous expenditure, although £24,097 of a vote of £44;000 was expended under this head last year? What would those miscellaneous items include?

Senator SPOONER:

– Division 120 is now included in Division 115, item 7, the proposed vote for which is £248,000, compared with expenditure last year of £70,638.

Senator Sandford:

– That is more than three times as much.

Senator SPOONER:

– Yes. As I have said, Division 120 has been eliminated this year and has been included in Division 115. It is really a recasting of the bookkeeping arrangements.

Senator CRITCHLEY:
South Australia

– I refer to Division 124, Acquisition of Sites and Buildings. I notice that, last year, the vote was £150,000, whereas only. £86,633 was expended. This year, the vote is £200,000. I should like the Minister to inform the Senate where these sites are being acquired and the buildings erected or purchased. I point out that only a little more than half of the allocation was expended last year, and I think the proposed vote of £200,000 this year seems rather high.

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

– At the end of June, 1955, there were four main properties which had been purchased and not paid for. They were a storehouse at Woolloomooloo, extensions to the dockyard at Williamstown, extension of a magazine area at Somerton and an air gunnery and firing range at Nowra. The total amount involved, at the end of June, 1955, was £290,000. It is intended to enter into new proposals during the course of this year. They will be: Jervis Bay, compensation to tenants; Melbourne, the purchase of a property; and Byford, Western Australia, purchase of land. The cost of these now proposals will be £138,000. If we add £138,000 to £290,000, we get a total of £428,000. It is expected that £200,000 will be expended on those projects this year and that £228,000 will be carried forward into next year. Put in brief terms, apparently there are seven major properties: Those at Woolloomooloo, Williamstown, Somerton, Nowra, Jervis Bay, Melbourne and Byford, in addition to a number of smaller properties.

Senator SEWARD:
Western Australia

– I refer to Division 115, item 7, Miscellaneous expenditure. As the Minister has explained, Division 120 is now included in this item. Last year, under Division 120, £44,000 was voted and £24,097 expended, whereas in respect of item 7 of Division 115, the vote was £55,000 and expenditure £70,638. Now that Division 120 has been included in Division 115, the proposed voted for the combined miscellaneous expenditure is £248,000. In my opinion, it is misleading to include this expenditure in “ Miscellaneous expenditure “. It seems that there is a tendency on the part of many departments to put down large sums to miscellaneous expenditure, incidental expenditure and so on. In my opinion, it would be much better to split up such expenditure under various headings.

I also refer to the fact tb at. last year, the vote for oil fuel, under Division 115, was £1,440,000, and expenditure was £1,437,376, whereas this year the proposed vote is only £902,000. I wonder whether the Minister could say why that reduction has been made.

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

– This is one of those things that gets worse as we go along. As I mentioned previously, Division 120 has been eliminated this year as such, and added to Miscellaneous Expenditure. Furthermore, I am now advised that item 8 of Division 114 is included in the proposed vote of £248,000. Last year, £226.007 was expended under that heading. This year, the proposed vote for item 8 of Division 114 has been reduced to £108,000. I understand that, for bookkeeping purposes, that has been added to item 7 of Division 115. For that reason, the proposed vote for item 7 of Division 115 is somewhat large, because one of last year’s items has been cut out altogether and part of another item has been included under that heading. The proposed vote of £248,000 for item 7 - Miscellaneous Expenditure - under Division 115 includes £62,000 for the maintenance of barracks in Victoria Park and Albert Park, £35,000 for the hire of tugs and mechanical equipment, £24,000 for pilotage, deliveries and laundry charges, £9,000 for the removal of refuse and vermin research in connexion with fouling organisms, and £69,000 for miscellaneous items. Expressed briefly, the position is that the amount appears to be high, compared with last year’s figure, but, as I have mentioned, for book-keeping purposes, two other items have been included in it - one wholly, and the other in part.

Senator ARNOLD:
New South Wales

– I know that when we are dealing with proposed votes for the Defence Services, the responsible Minister and the service chiefs are reluctant to reveal information that might impinge on security. Of course, one must accept that. One does not want to draw out public statements on matters that impinge on security. However, I notice that the proposed vote for Division 117 - Naval Construction - is £5,544,000. In this age of modern warfare, I do not think that that amount of money will provide much new naval shipping. Does the Minister for National Development (Senator Spooner) feel disposed to reveal the programme that it is intended to carry out in this financial year, and whether the naval construction programme is spread over a period of years? I am apprehensive, because of the relative smallness of the proposed vote, that the money will be expended on out-of-date war equipment, and I wonder whether we should expend more money on this item in order to obtain effective equipment. As the new types of weapons now available can destroy even fairly large ships, the present naval construction might be already out of date. On the other hand, of course, certain types of ships might be required for convoy work around the Australian coast, and elsewhere. I should like the Minister to inform me of the type of naval construction that is envisaged with the proposed vote of £5,544,000.

Senator SPOONER (New South Wales - Minister for National Development) [10.7 . - The construction programme which was formulated to keep the Navy in balance is proceeding. It covers the requirements of new ships up to 1961, including three new Daring class ships of the destroyer class, which are in course of construction. One of them, Voyager, has been launched at the Cockatoo Island dockyard in Sydney, and the other, Vendetta, at the naval dockyard at Williamstown. The third will be launched at Cockatoo Island about the middle of next year. Most of the main machinery, and some of the auxiliary machinery for these ships has been made in Australia. Four anti-submarine frigates will be built - two at Cockatoo Island and the other two at Williamstown. A large proportion of the main and auxiliary machinery will be of advanced design, and that for the Daring class ships will be of Australian manufacture. The conversion of two Q class destroyers, which were built during World War II. for fast anti-submarine work, has been completed, and the ships are in operational service. As I said earlier, one of them, Queenborough, is at present in the United Kingdom. The other is Quadrant. Two other ships of the same class are also being converted. Provision has been made in the proposed vote for the purchase of H.M.A.S. Melbourne and a fleet tanker, in addition to the items .1 have mentioned.

Senator SANDFORD:
Victoria

– I refer to Division 11S - aircraft and aero engines - for which the proposed vote is £3,972,000. Although this amount is larger than the amount that was expended under this heading during the last financial year, it seems to be only a very small percentage of the total amount of £190,000,000 that it is proposed to expend on defence, particularly in view of the fact, that within a few months, an additional aircraft carrier will be placed in the service of the Royal Australian Navy. Can the Minister give any information as to why the proposed expenditure under this heading is so low ? Apparently, that amount covers the whole expenditure for naval aircraft, but having regard to the importance of naval aircraft in a modern navy, £3,972,000 seems a very small amount out of a total proposed vote of £190,000,000 for defence.

Senator KENDALL:
Queensland

– Following Senator Arnold’s question I gather that for the expenditure of £5/500,000 we are going 1”> get an aircraft carrier, three Daring class destroyers and four converted Q class destroyers, Quadrant, Queenborough, Quick:match and another one. I feel sure the department must have made a mistake in supplying that advice to the Minister. I do not think that one modern destroyer could be built for £5,500,000.

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

– In relation to Senator Sandford’s question, I am advised that the £3,900,000 covers 75 aircraft. The same thought occurred to me as occurred to Senator Kendall. The position is that that amount does not cover the whole cost of the 75 aircraft, but is this year’s payment in respect of those aircraft. Similarly, the £5,500,000 is this year’s payment in respect of the naval programme which I outlined.

Senator ARNOLD:
New South Wales

– I should like to know how the rates of pay for the armed services are assessed. I am led to believe that the Navy, as well as the other armed services, is having some difficulty in recruiting sufficient officers, and in retaining trained personnel who have acquired a certain degree of skill. I understand -the same problem is facing Great Britain where a much longer term of compulsory national service exists. In Great Britain those who go into the permanent service are paid a higher rate as an inducement for them to carry on after their three years’ service. They then attend an officer training course and become the nucleus of the standing army. I understand that re-enlistments in Great Britain have dropped to something like 5 per cent., and that in Australia great difficulty is being experienced in inducing men to sign on for a long period of service in the armed forces. Consequently, we have not sufficient trained personnel to accept positions as officers and to become the core of any expanded defence force in a time of emergency. Just what inducements can be offered to attract a good class of man to take up the armed services as a profession, I do not know. I should like to know how the Navy assesses the value of the men who accept permanent service. Is the present method satisfactory? Is the remuneration sufficient to attract suitable men to the service? Are we retaining sufficient men to build up the necessary quota of skilled men that we require ? In general, I ask whether sufficient inducement is being offered to young men in Australia to take up a profession in the Navy, Air Force or Army and become the nucleus of a standing force suitable for the defence of Australia?

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

.- I find it very difficult to answer Senator Arnold’s question. It is a difficult task to maintain the strength of the armed forces, and I do not feel adequate to discuss the pros and cons that are involved. I know that the matter is continuously under review by the services departments with the full support of the Government.

Proposed vote agreed to.

Department of the Army.

Proposed vote, £63,128,000.

Senator BENN:
Queensland

– The Department of the Army is an important one from the financial aspect, as is shown by the anticipated expenditure of £63,128,000 during the current financial year. The department has been functioning for a number of years and one would imagine that it has built up a fairly efficient staff to handle its stores and its accounts. The keeping of accounts and the recording of stores has been referred to by the Auditor-General in his reports over the years. I do not think that anybody in the community imagines for a moment that the AuditorGeneral comments upon something about which he knows nothing. Honorable senators do not have an opportunity to examine the affairs of any department thoroughly. They can look at certain items contained in the Estimates and ask the appropriate Minister questions about expenditure in the past year and anticipated expenditure during the current year; but as to the inner workings of a department, it is not possible for any honorable senator to know very ranch. It is not possible for any honorable senator to penetrate below the surface of a department in order to see. what is going on. There is. however, an authority in the land which has the statutory right to go into a department and examine its accounts and all the documents which it is required to keep in respect of its stores. What do we find? I quote from the last report of the Auditor-General, at page 66. Under the heading of “Department of the Army, Stores and Store Accounting “, he says -

Unsatisfactory accounting and ineffective control over Unit Stores, the subject of adverse comment in previous reports, are still evident notwithstanding continuous efforts by the Department.

I have no doubt that the department has done its best. I also appreciate the fact that there was a time during recent years when the department could not recruit sufficient man-power capable of doing the work which had to be done in this respect. The position in respect of manpower has been improving over the years and, surely to goodness, it has been possible for the department to build up its staff and train it so that it can attend to these matters. The report goes on -

Recently, court-martial proceedings were instituted against the former commanding officer of a unit where large stocktaking discrepancies were revealed.

I do not wish to comment upon that matter, for the simple reason that I do not know anything about the courtmartial proceedings. The officer may have been entirely innocent and, therefore, . I have nothing whatsoever to say about that portion of the AuditorGeneral’s report. It continues -

Following Audit representation, the Department among other things appointed Committee? to conduct investigations into the matters raised. Reports of the Committees were examined by the Minister for the Army and the Military Board and remedial measures taken included the following: -

This is worth noting -

  1. establishment of a Peace Administration Wing at the School of Tactics and Administration ;

One can see that they were on the right read ; they were intending to establish an organization that would safeguard the interests of the public. Other remedial measures were -

  1. revision of Unit Stores Accounting Instructions; and
  2. more frequent visits to Units by the checking staff of the Army made possible by an increased establishment.

Theoretically, that was grand. At last they were on the right way to eliminate entirely malpractices and bad storekeeping. But I invite the attention of the committee to this sentence -

Despite this action the position is still far from satisfactory.

Notwithstanding what they had done - and I have no doubt that the department acted with the best intentions and did its utmost - the position is far from satisfactory. Where are we going? This Senate and the House of Representatives were established to safeguard the interests of the public, and to ensure public money is properly expended. The report continues : -

In one Command there are arrears in the departmental stocktaking programmes and delay in the submission of results. Prompt and effective action to remedy unsatisfactory features is not possible in such circumstances.

That is not my comment, but the statement of the Auditor-General. He concludes that paragraph with these words -

In three Commands action has not been taken adequately to protect certain vehicles from the weather.

Could anything be more condemnatory of the inefficiency of the Army generally or of those officers who are responsible for looking after these things? What a simple matter it is to protect vehicles from the weather, and how important it is to do it ! Everybody knows that. Officers do not need to go to Duntroon or some other military college to learn that military vehicles - and motor vehicles particularly - will deteriorate if they are not protected from the weather. But evidently it was not the duty or the obligation of anybody to protect the vehicles. To what stage of inefficiency is the Army degenerating when its officers cannot even attend to these elementary matters? Perhaps the Minister will have something to say in answer to that damning report.

Senator SANDFORD:
Victoria

– Division 133 relates to forces overseas. It appears that this year the vote for the maintenance of forces overseas is £3,000,000, but last year it was approximately £3,500,000. The amount is £500,000 less; although Australia now has forces in. Malaya- and it is public knowledge that the wives and families of some of those men are to go to Malaya to join them.

The second item in this division provides an amount of £3,000,000 for currency advances and other expenditure to be charged to this division pending recovery. Oan the Minister inform the committee how that money is to be recovered and what are “ currency advances and other expenditure “ ?

Senator CRITCHLEY:
South Australia

– I support all that Senator Benn has said concerning the condemnatory remarks of the AuditorGeneral relative to Army administration. I wish to obtain some information on Division 127, which deals with the Australian Regular Army. From the schedule on page 201 of the Estimates it seems that the chances of promotion from the ranks are small. I should like to hear the comments of ex-servicemen senators on this matter. In the list of Army personnel, the Chief of the General Staff and the numbers of lieutenant-generals and major-generals remain the same as they were last year. However, brigadiers have been increased by one, colonels by nine, lieutenant colonels by thirteen and majors captains, lieutenants arid second lieutenants by fifteen. It appears that reductions have taken place in the numbers of officers down to the lowest ranks. The number of warrant officers has been reduced by ten, staff sergeants by twelve, sergeants by 35, corporals by 241 and lance-corporals, privates and so-on by 241. Honorable senators will agree that those figures reflect the need to expand the Army, but it is obvious that a private must be very good or very lucky to rise from the ranks. I should like the Minister to say why there has been such a fall-away in the number of men in the Regular Army who join as privates. Obviously, there is not much inducement for them to join.

Division 129 deals with Citizen Military Forces and Cadets, and Division 130 with General services. Last year, compensation for death, injury or illness on duty amounted to £55,448 in the case of Citizen Military Forces and cadets, and in the general services under the same heading £20,000 was paid.

Consideration interrupted.

The CHAIRMAN:
Senator the Hon. A. D.Reid

– Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -

That the Chairman do now leave the chair and report to the Senate.

Question resolved in the affirmative.

The Chairman having reported accord

page 587

ADJOURNMENT

The PRESIDENT (Senator the Hon. A. M. McMullin). - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -

That the Senate do now adjourn.

Question resolved in the affirmative.

Senate adjourned at 10.31 p.m.

Cite as: Australia, Senate, Debates, 19 October 1955, viewed 22 October 2017, <http://historichansard.net/senate/1955/19551019_senate_21_s6/>.

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