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Senate
26 September 1956

22^nd Parliament · 1^st Session

QUESTION
- BASIC WAGE
QUESTION
- DISARMAMENT
QUESTION
- ATTORNEY-GENERAL’S. DEPARTMENT
SUEZ CANAL
QUESTION
- SOCIAL SERVICES
QUESTION
- SHIPBUILDING
QUESTION
- SNOWY MOUNTAINS SCHEME
QUESTION
- EXPORT PAYMENTS INSURANCE CORPORATION
QUESTION
- ROADS
QUESTION
- SHIPPING FREIGHTS
QUESTION
- TAXATION BOARD OF REVIEW
QUESTION
- GOVERNMENT LOANS AND FINANCE
QUESTION
- AUSTRALIAN AIR PILOTS
QUESTION
- QUESTIONS
QUESTION
- WHEAT
QUESTION
- FISHING
QUESTION
- BANKING
QUESTION
- HANSEN’S DISEASE
QUESTION
- SHIPPING FREIGHTS
QUESTION
- EXPORT PAYMENTS INSURANCE CORPORATION
TARIFF BOARD ANNUAL REPORT
- Formal Motion for Adjournment
COMMONWEALTH OFFICE OF EDUCATION
- Report of Public Accounts Committee
QUESTION
- SUEZ CANAL
SOCIAL SERVICES BILL 1956
- Second Reading
POST AND TELEGRAPH RATES BILL 1956
- Second Reading
ADJOURNMENT
POST AND TELEGRAPH RATES BILL 1956

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

page 483

QUESTION

BASIC WAGE

Senator HENDRICKSON:
VICTORIA

– I ask the

Leader of the Government whether, in view of the statement made by him during his speech on the budget that the basic wage was now £14 odd and that most workers take home £17 a week, and in view of his assertion that the figures I had quoted were incorrect, will he have the following information made available to the Senate: -

What is the basic wage in each of the States where no cost of living adjustments are made to the Commonwealth award?
What is the basic wage in those States where cost of living increases are added to the Commonwealth award? 3. What is the difference in the basic wages in these States received by workers under Commonwealth and State awards respectively? 4. What is the amount of margins for skill paid to bricklayers, carpenters, plumbers, printers and other tradesmen?

Senator O’SULLIVAN:
Attorney-General · QUEENSLAND · LP

– I do not know whether the information requested by the honorable senator is readily available, but if it is, I shall obtain it for him. I suggest that he put the question on the notice-paper. My authority for saying that the average adult wage was in the vicinity of £17 a week was, from memory, the Government Statistician. I have seen that figure published frequently. If the honorable senator will put the question on the notice-paper, I shall endeavour to have it answered for him.

page 483

QUESTION

DISARMAMENT

Senator GORTON:
VICTORIA

– This afternoon, Senator Vincent gave notice of a motion in relation to the communication which you, Mr. President, informed the Senate last Wednesday you had received from the Supreme Soviet of the Union of Soviet Socialist Republics transmitting an appeal to parliaments of all countries of the world on disarmament. I now ask whether, in the event of that matter being discussed, it will be permissible to refer to the communication received from the Union of Soviet Socialist Republics. My reason for asking the question is that this communication has been laid upon the table of the library with a notation upon it by Mr. Tregear, the Clerk of the House of Representatives, to the effect that it is not a public document and cannot be quoted from ‘in the House of Representatives. I should like your opinion as to whether that ruling will apply in the Senate.

The PRESIDENT:

– I shall look into thai matter and advise the honorable senator later.

page 483

QUESTION

ATTORNEY-GENERAL’S. DEPARTMENT

Senator MARRIOTT:
TASMANIA · LP

– In view of the fact that applications for the important position of Deputy Commonwealth Crown Solicitor for Tasmania closed in December, 1954, will the Attorney-General endeavour to hasten the announcement of the appointment which, taking all things into consideration, can be said to be a matter of urgency?

Senator O’SULLIVAN:
LP

– I shall look into the matter that has been raised by the honorable senator. If he does not hear from me in the course of a day or two, 1 suggest that he give me a reminder.

page 483

SUEZ CANAL

Senator O’BYRNE:
TASMANIA

– Is the Leader of thi; Government in the Senate aware tha; Egypt has promised equitable compensation to shareholders in the Suez Canal-

Senator O’sullivan:

WHEAT

Senator HENDRICKSON:

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

What advantage will accrue to the Australian wheat-grower as a result of the announcement that the Argentine will relinquish its position as a major wheat exporter until world wheat surpluses have been absorbed?
Is it a cause of considerable concern to Australia that the United States of America is able to sell nearly £200,000,000 of food surpluses to India which, because of its proximity, is a natural market for the Australian primary producer?
Is it a fact that the United States Department of Agriculture has succeeded in selling more than 30,000 lb. of United Stales Governmentowned surplus grade A butter to Hong Kong, where it will be combined with United States-produced non-fat dry milk to make fluid milk?
Is there any reason why our trade representatives abroad have failed to channel some of this Asian trade for Australia, particularly in view of Government statements regarding the necessity for boosting Australian exports in order to improve the balance of payments, and so reduce unemployment in Australia caused by the closing down of certain industries?

Senator SPOONER:
LP

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

If the Argentine were to reduce substantially its exportable surplus of wheat, this could enhance the prospect of Australian export sales.
Our views relating to the United States transaction with India have been conveyed to the United States Government.
Yes.
The disposal of United States foodstuffs is in no way due to any shortcomings in Australian trade promotion efforts.

In answer to the supplementary question, I am not prepared to accede to the request.

page 488

QUESTION

FISHING

Senator WILLESEE:
through Senator Critchley

asked the Minister representing the Acting Prime Minister, upon notice -

Is it a fact that officers of the Commonwealth Scientific and Industrial Research Organization have had encouraging results from their investigations into the fishing grounds in the vicinity of Exmouth Gulf?
Will the Government consider allocating money from the proceeds of the sale of the Whaling Commission assets to establish a snap freeze plant and any other plant necessary to prove the area as a commercial proposition?

Senator O’SULLIVAN:
LP

– The Prime Minister has supplied the following answers: -

Yes. Reports indicate that the fishing grounds in the vicinity of Exmouth Gulf are capable of commercial development.
A large number of applications for assistance and proposals for the development of fisheries has been received since the establishment of the Fisheries Development Trust Account. The possibilities of establishing handling facilities in the Exmouth Gulf area are being considered along with these other proposals, and the advice of the Western Australian Fisheries Authority has been sought regarding this proposition.

page 488

QUESTION

BANKING

Senator MAHER:
QUEENSLAND

asked the Minister representing the Treasurer, upon notice -

What are the main classes of holders of the sums of £1,127,700,000 and £136,400,000 shown in the statistical bulletin issued by the Commonwealth Bank of Australia for the month of July as moneys on deposit and not bearing interest with the major trading banks and the Commonwealth Trading Bank of Australia respectively?

Senator SPOONER:
LP

– The Treasurer has furnished the following answer: -

The only available classification (apart from a classification into States and Territories) of trading bank deposits is between “ Australian Governments “ and “ Other “. The figures for June, 1956, of deposits with the trading banks not bearing interest were as follows: -

Senator WRIGHT:
TASMANIA

asked the Minister representing the Treasurer, upon notice -

What is the amount of special credits of the trading banks lodged with the Central Bank?
What variations in those amounts have taken place in the last three years?
In what manner are the moneys invested, if at all?

Senator SPOONER:

– The following information has been received from the Treasurer: -

Special account balances lodged by the trading banks with the central bank amounted to £255,379,000 on 12th September, 1956.
The following table shows the high and low points of special account balances together with the last Wednesday in June figure for each of the three financial years to 30th June, 1956: -

Investments by the central bank are not dependent upon the amounts held in special accounts and it is impracticable to relate any particular liability to any particular classes of assets in the balance-sheet of the central bank.

page 489

QUESTION

HANSEN’S DISEASE

Senator TANGNEY:
through Senator Critchley

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

Is any research being carried out in connexion with Hansen’s disease - its origin and cause and the possibility of modern scientific medical discoveries resulting in a complete cure?
How many cases of Hansen’s disease are known ‘ to exist in Australia?
How many deaths have occurred from the disease throughout Australia in each of the past ten years?
How .many patients have been discharged from hospitals as cured during the same period?
In view of the sinister connotation attaching to the term “ leprosy “, will the Minister use his influence to see that the medical name - Hansen’s disease - is used in all official documents?

Senator COOPER:
Minister for Repatriation · QUEENSLAND · CP

– The Minister for Health has now . furnished the following replies: -

Research into leprosy in Australia has been limited to study of its epidemiology and of improved methods of treatment. In other parts of the world, with the aid of the new techniques available for the study of cell chemistry, research into the biochemistry of infection and resistance is proceeding. This work may soon permit us to explain why the causal organism is destroyed in the tissues of one individual but multiplies in those of another and why in any One infected person this growth may be subject to long periods of recession. Once this puzzle is resolved indications for prevention and cure may be expected to be revealed. State reports available to my department are presented in different forms and use different dates for the closure of the year. They refer almost exclusively to persons under care in special hospitals, and do not discriminate between deaths from leprosy and deaths from other causes in these institutions. I regret, therefore, that without incurring the delay attending special inquiry for the latest figures from the several States concerned I am unable to provide the honorable senator with the statistical information she seeks in the precise form in which she has requested it. However, I can supply her with certain figures which, I feel, may meet her requirements. If they fail to do this I shall be glad to obtain a supplementary statement for her.
The latest returns available in my department give the number of persons under treatment in hospitals as 652. To answer the honorable senator’s question precisely it will be necessary to add to this figure the number of patients under treatment or supervision in the States outside hospitals. These probably number some 350, making a total of approximately 1,000.
Deaths of persons suffering from leprosy throughout Australia during each year from 1946 to 1954 were 201-

It it to be emphasized that these are deaths of persons suffering from leprosy in institutions for the care of leprosy. They are not necessarily deaths from leprosy, nor do they include deaths from leprosy outside these institutions.

During the same period 463 persons have been discharged from institutions treating leprosy. These are to be regarded as persons in whom the condition has been relieved or arrested rather than cured. From 20-25 per cent, of these persons have subsequently been re-admitted for treatment.
The medical name for this disease is leprosy, not, as suggested by the honorable senator, Hansen’s Disease. The suggestion that the use of the term “leprosy” be discontinued in favour of “ Hansen’s Disease “ was referred by my predecessor to the National Health and Medical Research Council and, on the advice of that body, rejected. The council drew attention to the decision of the International Leprosy Association meeting in Havana, that the use of the name “ leprosy “ should be retained. I am in agreement with the opinion expressed by medical authorities that whilst the advantages of the recommended change may be quite illusory there are real and serious objections to adopting an alternative name in an attempt to conceal the true nature of the disease. More is to be achieved, in my opinion, by re-adjusting the attitude of the public to the disease under its own name. The National Health and Medical Research Council, however, recommended that the use of such words as “ leper “ and “ lazaret “ should be discontinued and my department has since strictly complied with this recommendation in all official documents.

page 489

QUESTION

SHIPPING FREIGHTS

Senator KENNELLY:

asked the Minister for Shipping and Transport, upon notice -

What have been the prevailing freight rates per ton of general cargo from Sydney to London for each of the years 1926 (or the earliest year for which figures are available) to 1956, inclusive?

Senator PALTRIDGE:
LP

– The answer to the honorable senator’s question is as follows: -

The freight rate per ton weight or measure for general cargo from Sydney to London has varied as follows since 1926:-

page 490

QUESTION

EXPORT PAYMENTS INSURANCE CORPORATION

Senator LAUGHT:
SOUTH AUSTRALIA

asked the Minister representing the Minister for Trade, upon notice - .

To what extent has advantage been taken of the legislation passed in May providing for insurance cover to exporters?
Has departmental machinery been fully organized for the smooth operation of the act?

Senator SPOONER:
LP

– The Minister for Trade has supplied the following replies to the honorable senator’s questions: -

The Exports Payments Insurance Corporation Act provides for the setting up of a corporation constituted by a commissioner. The position of commissioner has been widely advertised in all States of the Commonwealth and in the United Kingdom. A number of applicants has been interviewed and an appointment will be announced shortly.
Whilst, under the act, the organization and functioning of the corporation are matters for the commissioner, preliminary work such as drafting of proposal and policy forms has reached an advanced stage.

page 490

TARIFF BOARD ANNUAL REPORT

Formal Motion for Adjournment

The PRESIDENT (Senator the Hon. A. M. McMullin). - I have received from Senator Laught an intimation that he desires to move the adjournment of the Senate for the purposes of discussing a definite matter of urgent public importance, namely -

The necessity for an immediate consideration of the matters contained in the report of the Tariff Board tabled in the Senate on 13th September, 1956.

Senator LAUGHT:
South Australia

.- I move -

That the Senate, at its rising, adjourn till 11.30 a.m. on Thursday, 27th September, 1956.

The PRESIDENT:

– Is the motion supported?

Four honorable senators having risen in support of the motion,

Senator LAUGHT:

– I desire to avail myself of the forms of the House to bring before the Senate a matter that I consider to be of great importance. Questions that have been submitted from both sides of the chamber indicate that other honorable senators also regard this matter as important. I refer to the annual report of the Tariff Board for the year ended 30th June, 1956. The report is dated 28th August last. It was tabled in the Senate on 13 th September, and I believe that copies have been made available to all honorable senators.

I wish to refer to one or two matters of timing in connexion with this report. I believe that the report is almost as important as the Treasurer’s budget and the report of the Auditor-General. The budget is printed and circulated immediately it is delivered. The report of the AuditorGeneral is circulated immediately it has been signed. This year, the AuditorGeneral’s report was signed on 4th September and and we had it in our hands a day of so after. I invite the attention of the Printing Committee to the importance of ensuring that the report of the Tariff Board each year is printed promptly and distributed to honorable senators.

The Tariff Board Act requires the board to present an annual report. The Tariff Board consists of seven members, two of “whom are administrative officers of the Department of Trade. The functions of the board are to assist the Minister in matters relating to trade and customs and, particularly, to advise him after inquiry regarding the need for new, increased or reduced duties, to advise him in connexion with bounty matters, and even to investigate complaints that manufacturers may be taking undue advantage of protection. It is one of the very important bodies functioning under Commonwealth law.

The annual report covers 50 pages, including appendices. Iri every respect, it is a most commendable document. I direct Attention, in particular, to paragraph 7 of the report which refers to the importance of our export industries, because many pri- mary producers look askance at the Tariff Board. They regard it more or less as a tool of the manufacturers. However, it should be remembered that this board pays close attention to the development of export industries. In paragraph 7 of its report, he Tariff Board states - . . as the nation depends so much on exports there must be a full recognition of the damage to export possibilities that have resulted from, and will continue to flow from, the diminution or absence of purchases from good customer countries. Many devices can be suggested for overcoming short-term difficulties, but the Board believes that, in the long term, equilibrium will be leached mainly by increasing export earnings.

We have seen a remarkable drive during the past five years to increase the volume of our exports, particularly our primary products. 1 refer honorable senators to some comments of the board in paragraph 19 of the annual report. I believe that some of my colleagues in this chamber will refer to import controls, but I wish to speak of a matter which, at first sight, might appear to be outside the scope of the Tariff Board. Reference to this matter is contained in paragraph 19, which states -

To the extent that other factors are responsible they should also be corrected. The Board in its Annual Reports has frequently suggested methods which would assist in the reduction of costs in industries competing in the home market with goods from overseas, and of costs of Australian produced or manufactured goods competing in export markets with goods from other countries. More generous allowable deductions for depreciation in arriving at taxable income have been suggested. There must be recognition sooner or later that costs of production from old plant are generally higher than costs from new and modern plant and that any impediment to the provision of modern plant should be removed.

I emphasize the statement, “Any impediment to the provision of modern plant should be removed “. The paragraph continues - - Some countries with which Australia is competing assist their industries by generous depreciation allowances, and the Board believes there is a strong case for similar treatment to our own industries. Pay-roll tax is another example of a Government impost, right at the base of the cost and price structure, which might be considered for removal. It may be true to say that every pound of income received by the Government in pay-roll tax means an increase in price to consumers of at least two pounds. These matters, though not the cause of present difficulties, contribute to them and certainly call for close examination with a view to correction.

This normally is a matter of taxation policy, but I wish to focus attention on it now when we are discussing the Tariff Board’s report because the report of the Commissioner of Taxation, notable though it is, never seems to contain any economic examination of the effect of taxation, or of the depreciation allowances to show whether they are adequate or not. From time to time, members of the Parliament have submitted to the Treasurer that a royal commission should be appointed to inquire into taxation matters. A royal commissioner, Mr. Justice Ferguson, dealt with these matters more than twenty years ago, but there has not been an examination at the royal commission level since that time. So, when such an impartial body as the Tariff Board makes these suggestions, they should be examined very carefully by the Senate.

I now refer to a report that was submitted about two years ago by a committee, the chairman of which was the honorable member for Petrie (Mr. Hulme). That committee was appointed by the Treasurer to inquire into depreciation allowances. I well recall the budget speech in which the Treasurer announced the appointment of the committee. He said -

It seems to us that such an inquiry is a necessary first step if we are to consider this question from the point of view of national interest. To accept blindly the pleas of sectional advocates in such a highly technical field would endanger that high purpose, and this Government will be no party to it.

That speech was delivered on 18th August, 1954,- and the committee submitted its report on 31st March, 1955. I shall deal with the report at some length, because I think it is high time that the Senate gave earnest consideration to the matters contained in it. We are prompted so to do by the stress that the’ Tariff Board has placed on the whole question of depreciation in industry. It might interest the Senate to know that the report of the committee was received and acknowledged most graciously, if 1 may put it that way, by the Treasurer in his next budget speech. He said -

In the course of the year, the committee produced a most able report containing recommendations which, I believe, have gained a very wide measure of support. These recommendations propose solutions for a number of the main issues in this very difficult field and the Government has considered them with a view to adoption in this year’s budget. 1 regret to say, however, that in that year the Treasurer did not adopt any of the suggestions. However, in the budget that he has just presented, he has adopted some of the minor suggestions. He gave the following reason for not having adopted them -

The question of timing, therefore, assumes a very great importance, and if it is clear that investment in plant, buildings and the like is presently run at levels too high for general stability, the wisest course is to defer action at this time.

That was twelve months ago. As 1 have indicated, in the last budget a mediocre amount of consideration was given to the report.

Now, we have the Tariff Board stressing the very great importance of the whole question of depreciation. The Treasurer has been most enlightening in relation to his treatment of primary producers, lt is well known to the Senate that, if a primary producer makes improvements to his property of a structural nature, that is, if he builds houses for his employees, hay sheds, storage sheds and the like, or purchases tractors, implements and other equipment, he may claim a depreciation allowance of 20 per cent, in the year of purchase and 20 per cent, a year for the four succeeding years. As a result of that generous allowance for depreciation, we have seen a most amazing transformation in the Australian countryside. Generous depreciation allowances for primary producers have worked the oracle. It is very interesting to note that, as a result, there has not been undue inflation in the primary industries. Only two or three days ago, one heard over the national broadcasting network that, following a survey in New South Wales, a report had been received stating that expenditure on such items as plant, equipment and wire had tapered off.

Senator Maher:

– Farm incomes have fallen.

Senator LAUGHT:

– Senator Maher has stated that farm incomes have fallen, but what 1 am trying to show is that, after a farmer has rehabilitated his equipment’ and has made necessary structural alterations, he will not continue to spend money for the fun of it. In other words, there will not be the inflation at which the Treasurer rather hinted when he announced his refusal to introduce generous depreciationallowances for industry. Depreciation allowances for primary producers have run a very good course, and I hope that, as a result of the promptings of the Tariff Board, consideration will be given to depreciation, allowances for industry generally.

I shall now refer briefly to certain relevant conclusions of the committee headed’ by the honorable member for Petrie. Onewas as follows: -

That the rates of depreciation for the diminishing value method be increased by SO per cent… such increase to apply to existing plant as well, as future purchases.

Another recommendation was -

That an option be given to taxpayers using the prime cost method to change to the diminishing value- method, and those using the diminishingvalue method to change to the prime cost method, in regard either to the whole of their plant or only to future purchases.

One of the committee’s final recommendations was very important. It reads -

That an allowance for depreciation, on the basis set out in paragraph 100, be given for all buildings used in the production of assessable income.

Hitherto, the pattern has been to allow for depreciation only on rural or agricultural buildings. In the past, industry has not been entitled to an allowance for depreciation of buildings. The Hulme report raisedthat very important matter in great detail. As the report indicates, it had caused theTreasurer a lot of thought. I ask the Senate to bear with me while I refer to some- of the details of the committee’s report on this very important industrial matter. It reads -

For convenience, we will refer to buildings in existence at the commencement of the allowance as “ existing buildings “ and those constructed after that date as “ future buildings “.

And then the committee recommended the following allowances: -

The allowance will apply to all buildings and structures (other than those for which depreciation or other allowances are already given under the law) owned and used by the taxpayer in the production of assessable income.

It seems to me that, in order to get the greatest result from production in this country, we should look at the very fair recommendation that was made by the committee for the granting of an allowance for such buildings. I understand that in overseas countries industrial architecture is an important phase of architecture; in other words, great importance is attached to the shaping of buildings for the smooth working of industry. I think that, until the kind of incentive that is referred to in the committee’s report is included in the law, progress will be retarded. It might interest the Senate to know that the annual rate of depreciation on industrial buildings would be H per cent, for brick, stone or concrete constructions, and 2i per cent, for timber, fibro or iron constructions, calculated on the prime cost method. Obviously, the committee did not recommend an extravagant rate of depreciation for these industrial buildings. The attention of the Senate should be focused particularly on that aspect of the report.

The Tariff Board has some knowledge of these matters because it made 50 visits of inspection to large industrial concerns in New South Wales, Victoria, Western Australia and South Australia. As a South Australian senator, I am pleased to know that it went to the plant of General Motors-Holden’s Limited at Woodville, to Chrysler Australia Limited at Finsbury, and to a tube mill in the Kilburn district. This report, however, does not deal with heavy industries only. The Tariff Board investigated the footwear and shipbuilding industries, the manufacture of record-changing devices, passion fruit juices, tractors, and so on. Honorable senators will realize that when this board makes a report in relation to depreciation it is basing its conclusions on knowledge gained from its inquiries during 50 visits of inspection and, during a period of 68 days, hearing evidence on a wide variety of . subjects. During those inquiries, one fact apparently “ hit the board in the eye “, namely, that the matter of depreciation had to be examined with regard to industry. Its report contains this statement -

Any impediment to the provision of modern plant should be removed.

I feel that I should deal, shortly, with another recommendation on a taxation matter. The report contains this paragraph -

Pay-roll tax is another example of a Government impost, right at the base of the cost and price structure which might be considered for removal. It may be true to say that every pound of income received by the Government in pay-roll tax means an increase in price to the consumers of at least two pounds. These matters, though not the cause of present difficulties-

That is, depreciation and pay-roll tax matters - contribute to them, and certainly call for close examination with a view to correction.

My own view with regard to pay-roll tax is that I have been pleased to see how this Government has given relief from it. When this Government came into office the payroll tax was imposed on all pay-rolls of an annual dimension of over £1,040. Since then, the exemption has been multiplied five or six times, and consequently most of the smaller manufacturers now escape pay-roll tax. It now yields something like £40,000,000 a year, but it still makes a direct contribution to the cost structure. I have been told from time to time by people in industry that if the pay-roll tax were removed the cost of goods would come down proportionately, and I suggest that the Government should at least halve it, and make a close survey of the result. If it is seen that a marked result follows, as the Tariff Board report suggests, the Government could very well consider removing it altogether. We have to realize that about £40,000,000 is involved, and, allowing for income tax deductions, the net revenue from pay-roll tax is possibly £30,000,000. However, I still think that government action on the lines suggested by the Tariff Board is well warranted.

I conclude by referring to another portion of the Tariff Board report under the heading “The Outlook”. The report says -

The real attack on the cost problem must spring from an acute public awareness of the present unsatisfactory position, an acceptance of individual and collective responsibility for correcting it and complete co-operation.

I repeat those words “ complete cooperation “. The paragraph ends with these words -

Accomplishment is well within our capacity.

In a subsequent paragraph the board adds -

Fully co-operative effort can best be sustained where all concerned have developed a sense of responsibility to the community as well as to the industry of which they form part.

In the course of my reading, recently, I came across a document which has been published with a foreword by Mr. Chamberlain, federal president of the Australian Labour party, and an introduction by the Right Honorable H. V. Evatt, who is the Leader of the Opposition in another place. This document is entitled “The Light Glows Brighter “, and is written by Dr. John Burton.

Opposition Senators. - Hear, hear!

Senator LAUGHT:

– Dr. Burton has a different view from that held by the Tariff Board of the fruitful results that can come from management and labour on the cooperative level. It is fair that I should present to the Senate the view of Dr. Burton as well as that of the Tariff Board. I do not subscribe to Dr. Burton’s view, but judging by the “ Hear, hears! “ of honorable senators opposite one would gather that they support it.

Senator Critchley:

– That is hardly fair. The honorable senator heard where the “ Hear, hears “ came from.

Senator LAUGHT:

– Dr. Burton wrote this -

The employer has nothing to lose; the increased wage cost is passed on through higher prices. But this is not a gain to workers generally. Fellow workers in the same trade, but in other industries, pay for the improved conditions of the worker in the monopoly industry, by paying higher prices for the goods they need to buy.

Later he wrote -

More serious is the effect of employer-employee “ co-operation “ upon unionism itself. Workers involved in an industrial dispute are not able to count upon support from workers who are in the same trade, but who are employed in monopoly industries, because these workers do better for themselves by keeping out of disputes in other industries. In this way the trade union movement is being broken up, and “ tame cat “ unionism isbecoming more general.

He adds -

In time “ co-operation “ turns the economy into’ a number of employee-employer corporations each trying to get the greatest return at the expense of consumers.

From that warped attack on co-operation in industry, supported as it is this afternoon by honorable senators opposite, I suggest that that philosophy in the Labour party is doing: great disservice to Australia, because it suggests that co-operation would not mean, greater production and would cause harm to the workers. I suggest that it is rather a bad thing in Australian life that that approach should be made because, in the British economy at the present time teams, of trade unionists have as their watch word. “ increased productivity “. Campaigns take place, trade unionists visit other countries, particularly the United States of America, and thereby learn a tremendous lot for their unions. I commend the reading of thisreport to honorable senators and I trust that the Government will give particular attention to the aspects I have mentioned’ and those mentioned by other honorablesenators.

Senator ARMSTRONG:
New South Wales

– When this motion wasmoved Opposition senators wondered what form the discussion would take. I am. pleased at the form in which the discussion has opened and I hope it will continue on the same level. Senator Laught’s early complaint was that the document was not promptly printed. That is a normal complaint which, I am afraid, will continue to be made. Senator Laught went on to say that this was a most commendable document, and with that I completely concur. Then, he mentioned in passing that he thought paragraph 19, upon which his discussion was concentrated, was outside the scope of the Tariff Board. If we start our discussion bearing in mind that the recommendations and survey made by the members of the Tariff Board are well within their jurisdiction, I think we start on a proper level, and I would commend the Senate’s attention to section 15 (2) of the Tariff Board Act, which provides that the board can investigate any matter which in an) way affects the encouragement of primary or secondary industry in relation to tariffs. We also see that such an investigation can. if necessary, be inaugurated by the board itself without reference from the Minister. That course is provided for under section 17 of the same act.

We should look very quickly at the (calibre of the men who comprise the Tariff Board. One complaint about the (board has been its relative slowness in handling matters of very important moment to industry; but I notice that the chairman in his report says that urgency has been a good deal removed by the impact of import restrictions. The men who comprise the board are of very high calibre. The chairman, Mr. McCarthy, is one of the outstanding public servants of the Commonwealth. In his previous post of Prices Commissioner he displayed a keen grasp of the situation and very great intelligence in the work he ^performed for the Commonwealth. When a board has a chairman of the type and ^nature of this officer we have to take a good deal of notice of its reports. It is impossible for me to deal with the whole of this report in the quarter of an hour available to me as it is most comprehensive and interesting. I should like to deal with the points made by Senator Laught. First, depreciation, in the opinion of the board, is very important. I can never understand why this Government, within a few months of assuming office in 1949, eliminated the depreciation provisions that the Chifley Government had extended to industry. 1 stress, even more than the Tariff Board has done, the importance of depreciation in industry.

As a community of only 9,500,000 people we must make up for our lack of numbers by efficiency in industry. We have not, like the United States of America, a home market of 180,000,000 people. We cannot produce in the same volume or magnitude as larger countries. We have to concentrate on reducing our costs, and the primary problem is efficient depreciation. Without modern machinery costs cannot be kept down. Modern machinery and an increasing rate of replacement is the answer to rising costs of wages and other materials. It is the one thing that can be -done in a major way to counteract rising costs. It is tremendously important to have the very latest machinery in our manufacturing industries, and the Tariff Board is completely entitled to introduce this aspect into its report because, after all, it is the one governmental agency, with due deference to the Department of National Development, that really examines Australian industry. When one considers the inspections made by members of the Tariff Board one obtains an idea of the widespread knowledge those men have, and when one reads further in the report of the type of evidence they receive one must admit that they are very knowledgeable indeed with regard to the problems of Australian industries. They believe that the use of modern machinery is imperative if Australian industry is to be not only efficient but also as efficient as manufacturing industries in other countries. Australia must aim at that goal.

The history of Australian industry has been bad, but I am glad to say that we are rapidly overcoming our difficulties. In the early days, industry commenced by using the rejected, old, and second-hand plants from the industries of the Old World, but gradually Australian industrialists have realized that their future lies in the utmost modernity. Of course, big companies are faced with the problem that the depreciation they are allowed to claim is so small and so inadequate to enable them to replace machinery in view of rising costs. The result is that each year in their balance-sheets a tremendous amount of money is being placed to depreciation reserves. Those funds are not hidden profits; that money must be spent if existing machinery is to be replaced with the most modern machinery available. I concur completely with Senator Laught on that point. In these difficult days, if we are to maintain our export trade we must start at the bottom and do all the things that are necessary to help the development of our secondary industries. After all, we must supplement the income of our primary industries if we are to survive on the same standard of living we enjoy to-day.

Senator Laught pointed out that we can depreciate development in primary industries by 20 per cent, over five years, even in connexion with houses and buildings. Senator Laught pointed out that depreciation for buildings has never been allowed, although it is an important item. That is a relic of the thinking of other days, of British thinking, when a building, once it was erected, was expected to stay put for 100 years. If any honorable senator has a good look at British industry to-day, particularly in many parts of the Midlands, he will see factories that have been in existence for 70 or 80 years. That type of thinking is reflected in Australian legislation. lt is shown by the complete refusal to allow depreciation for plant and buildings. As Senator Laught pointed out, to-day we require buildings of different types for the development of different industries. It is no longer a matter of putting up four walls and a roof and establishing an industry therein. Those days have now gone when we are seeking to achieve efficiency.

I desire to deal shortly with the subject of the pay-roll tax, which is something that has been under terrific pressure for many years. All taxes which are levied at the source are bad taxes, because the final price of the product is thereby accelerated. Each of those who handle it takes a profit, and the customer finally has to pay. The Tariff Board suggests that for every £1 the Government gets, the customer has to pay £2 for the product when finally it gets into his hands. I would say that it all depends on the number of hands through which a particular product has to go to find out how much extra has to be added to its price by the time it is purchased. It might well be more than the amount of £2 mentioned. During last year, nearly £46,000,000 was collected in pay-roll tax. If we double that, it means that £90,000,000-odd is added to the price because of that tax. At the same time, the Government budgets for a surplus of more millions of pounds than the pay-roll tax yields. This year, the estimated revenue from the pay-roll tax is about £48,000,000. Its continued impact on the cost structure is evident. After all, it adds to the cost of both goods for export and goods for home consumption. The time has come for the Government to consider these matters one by one, and to take such action as will increase our export trade, about which honorable senators opposite have talked so much.

I do not think that any member of the Opposition could criticize the Government more severely than has the Tariff Board in its report. I want to read several extracts from the report in order that we can get a picture of what outside people - people not connected with the administration - think of the present Government. The Government parties have talked a lot and devised many plans, but the end result of their activities is well illustrated by this comment in the first paragraph of the Tariff Board’s report -

Economic history will record an impressive list of actions and enactments of internal and external origin having sometimes the purpose and at all times the effects of restricting freedom of trade: but the pages reserved for items encouraging expansion will for the greater part be blank.

During a debate recently, the Minister for National Development (Senator Spooner) stated that all that the Opposition wanted was controls and more controls. Good heavens! By a comparison, Labour does not even know the meaning of the word “ controls “. We are learning more about this subject every day from the effects of controls that this Government has imposed on the community. It has shackled industry with controls. The Tariff Board, which is composed of independent people having no political affiliations, went on to say in its report -

. the passing of the Export Payments Insurance Corporation Act and the organization of a drive for more exports are islets of constructive action in a sea of negation.

That is the sort of criticism that we on this side of the chamber have been telling the people is fair criticism, but on every occasion that we have offered such criticism in this chamber the Minister has said, “All that you think about is controls “. We could learn many lessons from the Government, but the controls that it has imposed have not been effective. This Government’s controls have not achieved the expected results, but have added daily to the worries of ,, the community. The Tariff Board’s report continues -

Measures designed to be anti-inflationary taken by the Government, have still to produce results for there is as yet no sign of stability in economic foundations on which it might be possible with the use of long-term plans to construct an edifice that will ensure national solvency.

I stress that this criticism has been made, not by a Labour politician but by an independent board. 1 should like to say, finally, as time is the great destroyer, and my time is running out, that the board went on to point out in its report that, because of the intensification of restrictions, Australia is gradually being stripped of its prestige in the eyes of countries which regard the freedom of international trade as important. In a relatively few minutes, I have .made a quick survey of the slate of the nation. The Tariff Board has taken* this Government to task because it has made more and more difficult the problems of industry in pulling Australia out of the mess into which not industry, but the Government itself, has got us.

Senator SPOONER:
New South WalesMinister for National Development · LP

– 1 can say with complete honesty that I have always studied the reports of the Tariff Board from year to year. I have always found its annual report most interesting, and 1 have always tried to make time to read it through. However, events have crowded pretty heavily upon me over the last few days, and I have to admit that I do not know as much about this particular report as I know of previous reports by the board.

One of the interesting things that is not sufficiently noticed, and has not been sufficiently commented upon, is the growth of the power and importance of the Tariff Board on the one hand, and of the arbitration courts on the other hand, as a result of which the control and development of economic conditions have, to a material extent, passed out of the hands of the Parliament into the hands of independent authorities. There is a lot of food for thought by political students on what will be the final result of that trend. As far as the Tariff Board is concerned, the Government has control of the situation on matters of policy. In the final _ analysis, the Tariff Board’s recommendations on particular matters are either accepted or rejected by the Government, but it is not within the power of the Government to interfere with findings of the arbitration courts.

Leaving on one side certain statements that are made in the report now under discussion, 1 think that we have to look at these matters against the background of the larger question of the development of Aus tralia, in order to get the Tariff Board’s report in its correct perspective. For instance, our Tariff Board is not the equivalent of the Board of Trade in Great Britain. The functions of the Tariff Board in Australia are fixed by the legislation that created the board, as varied by its transactions and its deliberations over the years. From day to day, the board considers matters that are referred to it by the Minister, having relation to the protection of Australian industries. It has a wealth of detailed knowledge about the level of costs in Australian industry. From the commercial point of view, I find its reports on particular industries that have been the subject of inquiry to be fascinating documents. They compare the efficiency of various industries, and compare Australian costs with overseas costs, in express terms of labour, material, services, plant and machinery. The board has to take into account the effect of international agreements to which Australia is committed, and which may have an effect upon a particular industry. The board performs a specialized task in a special compartment. The Tariff Board is not a board of trade. The Board of Trade in Great Britain looks out widely at imports, exports, trade treaties and trade promotion schemes, and is really a complete commercial entity. It looks at all aspects of British trade. The Board of Trade is somewhat equivalent to our newly constituted Department of Trade Therefore, while it is true to say that on commercial matters the Tariff Board ha> built up a high reputation, that its reportare accepted generally without a great deal of discussion and that it is a fount of knowledge on so many matters relating to Australian industry, its reports are not the views of an authority which has been established to deal with economic conditions.

– In my speech onthe budget, I put my views forward, but I believe that this is a matter of some consequence, and I should like to continue my speech without interruption. Of course,, we never deal with matters on a non-party basis in this chamber, but I suggest that, on occasions, we can deal with matters, pretty sensibly. Consider this part of the report which, I believe, was mentioned by Senator Armstrong -

Economic history will record an impressive list of actions and enactments of internal and. external origin having sometimes the purpose and at all times the effects of restricting freedom of trade; but the pages reserved for items encouraging expansion will for the greater part be- blank.

The Tariff Board has just ignored the situa- tion, or, at least, has made no note of it, that - on the information given to me - there are few other countries in the Western world that are engaged in industrial expansion or private investment to the degree that Australia is. The proportion of the national income that has beenspent on investment in Australia for the last three years has been 18.7 per cent., 23 per cent, and 21.6 per cent. Those figures have been given to me with an accompanying’ statement to the effect that in few other countries of the Western world does the proportion exceed 20 per cent. Honorable senators should also remember that it is not the function of the Tariff Board to deal with economic activities; that is the function of the Treasury.

Last year, the Tariff Board dealt with? only 5 per cent, of the manufacturing industries in Australia, ‘ and the other 95 per cent, would, no doubt, have a much bigger influence upon economic conditions here than would the 5 per cent, with which the Tariff Board was concerned. I do not want to decry the experience and knowledge of the members of the Tariff Board, and I should like to feel myself always a supporter of the board because of the work that it has done. However, it would be utterly . wrong to speak on this matter inthe Senate without expressing my view that- in this particular report, the Tariff Board has made serious errors of judgment in its diagnosis of the conditions we face in Australia, and a serious error of judgment in expressing its views in such a provocative way. I say that because we all look to the Tariff Board as an independent authority, and we all want to accept its views as being impartial.

It is a bad thing to hear Senator Armstrong quoting from the report and saying that no greater political attack could be made on the Government than that made by the Tariff Board. I would take all this more calmly if, in my heart, I believed .that the Tariff Board was right. But it is my view, and the view of the people who advise the Government, that the Tariff Board’s report on the general economic outlook is just about as wrong as it could be. When we examine the report we find an incongruous statement in one paragraph. Very early in my political career, I was told by a wise adviser never to endeavour to use poetic phrases while speaking from the platform. I was advised to stick to plain simple language for I would then not make as big a fool of myself as I probably would if I sought to use poetic phrases. In one paragraph of the Tariff Board’s report we have this beautiful poetic flourish -

. but the pages reserved for items encouraging expansion will, for the greater part, be blank.

When we turn to the last sentence of the next paragraph, we find this statement -

The astonishing thing is that despite all the damping influences the dominating note in business was one of prosperity.

To me that is incongruous; it betrays a complete lack of understanding of the situation.

Let me deal now with the two points that gave rise to such joy and pleasure in the minds of all who read the report. First, we have the recommendation by the Tariff Board for the removal of the pay-roll tax. The Tariff Board is not making any original suggestion, or venturing into any new fields, in putting forward tha: proposal. Those experienced men who constitute the Tariff Board should know that there is hardly a newspaper in Australia, or hardly a political candidate opposed to the Government - indeed, there is hardly an association of any kind - that has not vociferously advocated the removal of the pay-roll tax. There is no law against the Tariff Board’s, expressing that view; the point is that hereagain it is purely a matter of judgment. The Tariff Board must know that a matter like this has already been given the closest, and most careful consideration by the Government. 1 make the point that was made by Senator Laught. There cannot be any doubt that all must be mindful of the progress that has been made in reducing theincidence of pay-roll tax. lt is now paid: over a considerably smaller field than it was previously. Nobody with any sense of responsibility can be unmindful of the fact that pay-roll tax yields £45,500,000 inrevenue each year, and that this presentsa budgetary problem of great magnitude. If we were to abolish the pay-roll tax it would simply mean that we should have to levy £45,500,000 in some other form of taxation. I remind those who complain about the payroll tax of the passage in the Good Book, which reads -

My father chastised you with whips, but I wilL chastise you with scorpions.

If we are forced to obtain that £45,500,000 from some other source, we may find that the effect on. the cost structure is considerably greater than is the effect of pay-roll tax. In my innocence, I believe that most taxes are inflationary and cost-increasing in. their incidence.

The tenor of my remarks in connexion with depreciation is similar to what I havesaid about the pay-roll tax. An extraordinarily valuable report was prepared for and considered by the Government. I cannot go into that report step by step at such short notice as this, but the truth of’ the matter is that if we accepted the proposals relating to depreciation, the cost torevenue would be of the order of £40,000,000 per annum. I may be slightly inaccurate in connexion with the Tariff Board’s proposals on depreciation; but if we add the pay-roll tax and the cost of thedepreciation proposals suggested in theHulme committee’s report, the total cost to revenue would be £85,000,000. Nobody could nonchalantly or light-heartedly walk into proposals that have such tremendous, effects upon the budget.

– That is not to say that the Tariff Board is incapable of running off the rails, just as I and Senator

Hendrickson do from time to time, in reply to his interjection, 1 add that 1 do not comment on the board’s reports only when they suit me. The board deals with great publicquestions which determine the limit of employment and commercial activity in Australia. Therefore - and I am sorry that it is I who have to say this - it is very much to be regretted that, in this particular case, certain views of the board have received wide publicity. We all know that we can make sound statements and no one takes any notice of them, but if we say something : dramatic and sensational, we are in the news immediately, lt is a pity that, in this case, the Tariff Board has been dramatically unsound instead of being safe, sound and solid as we expect all commercial institutions to be.

Senator ARNOLD:
New South Wales

– I feel much sympathy with the Minister for National Development (Senator Spooner) because, to use a cricketing term, he has been batting on a very sticky wicket. I recall that, some months ago, the Public Accounts Committee had occasion to criticize the Minister’s administration. He advanced then much the same sort of theory that he has propounded to-day - that the organization concerned had submitted a report, but had not seen the problem as it really existed. The Senate has had presented to it one of the finest reports that the Tariff Board has ever framed. Its analysis of the situation was presented fearlessly. The Tariff Board, as the Minister knows, is most competent to assess industrial activity in Australia. It has no reason to be partisan. On this occasion, it has presented the results of its deliberations in a most enlightening document. It is worthy of close consideration, and will be most valuable to the Parliament.

The Minister for National Development has- stated that the Tariff Board has completely missed the point, and that it has failed to see what is the real problem. He said that the problem was really one of growth and development, and left the matter there in a delightfully vague manner. The truth is that the Tariff Board has accepted the fact that there is tremendous growth in Australia. Growth and development are natural in a young country and the members of the Tariff Board, who have been appointed as experts on Australian industrial development, must be the first to recognize such development and growth. Certain problems *are associated with that expansion, and the Tariff Board has presented to the Parliament the reasons why it believes the administration of Australia has not been able to cope with the growth and development of the nation.

It is a pity that we have not more time to give this report the consideration it so richly deserves. It contains many thoughts that the Parliament should digest and discuss. I can refer now only to one or two salient points. In effect, the Tariff Board has said to the Government that unless it is prepared to plan the economy of Australia, we cannot expect to reach a stage of development that Australia merits.

I direct attention to the question of import licensing. The board hits pointed out that the Government has not followed any plan in licensing imports of goods. It has directed attention to the fact that the import licensing system is not based on any principle, and that it upsets industry. The Tariff Board has commented that industries which have sheltered behind import licences could tend to become uneconomic, and that when we have a favourable trade balance overseas, some of our industries might collapse because they have been built behind false barricades.

The board has pointed out that there is no settled policy in connexion with import licences. We cannot discover whether the Government permits the importation of essential goods only. Is that the principle that has been adopted by the administration? Are we allowing into Australia only goods that are essential? We know that that is not the case because toys and similar goods are coming into this country. Are we imposing import controls to build up Australian industries so that we can make ourselves self-sufficient in certain directions? We are assured that that is not the principle behind the controls. Are they designed to preserve the business of importers so that organizations will not be made bankrupt and driven out of business? We are assured that that is not the guiding principle.

Therefore, we reach the conclusion finally that there is no definite plan behind import, licensing in Australia. We have seen it grow until it has become the biggest black marketing business in Australia and apparently nothing is being done to stop it. ThiTariff Board has directed attention to thai matter, and I suggest that if the problem is not tackled very soon, it will get completely out of hand. It is reacting against the advancement of Australia.

Senator Laught has referred to depreciation.He advocated substantial depreciation allowances on new plant in the ear’ years of its life. I have read the report ot the committee that was set up to investigate that matter, and I am not satisfied that it goes far enough. I should like an examination to be made of a proposition that 1 have had in mind for some time to this effect: I suggest that a substantial depreciation allowance should be given in the ear, years of the life of the new plant, but in five, six or seven years, after the plant has been written off, the imposing of a penalty should be considered. At the end of that time a penalty ought to be applied to ensure that the advantage that had been given to industry by the Government, with the use of the taxpayers” money, was not lost through the retention of worn-out plant for years and years. A penalty such as the writing back of the depreciation allowance ought to be imposed if industry does not take advantage of the benefit that the Government has afforded it. I suggest that those persons who advocate an extension of depreciation allowances for new equipment ought to consider whether it is not desirable also to ensure that a penalty shall be applied if plant, having been written off, is not brought up to date.

Senator Laught also criticized the relationship between employees and employers in Australia. The Tariff Board has commented on the matter. In Great Britain a large sum of money has been spent over a number of years in an effort to foster better relations between employers and employees. A considerable degree of success has been achieved. Certain persons have been sent to other countries to obtain more technical knowledge and to be trained in methods that will enable them to help industry to advance. But in Australia, and particularly in the Parliament, we hear repeated criticism of the workers and the trade union movement without any suggestion being offered about the means whereby the relations between, employer and employee might be improved.

I suggest that continual criticism of the worker is not of very great assistance in solving this problem.

One of the great benefits that the British employer has extended towards employees has been to co-opt the services of the employees’ representative in the management of his undertaking. In Britain during the war years, production committees, on which both management and employee representatives served, were formed for the purpose of increasing production. In Australia, too, a few employers established that kind of organization in order to improve production. I suggest that a tremendous amount of the antagonism that now exists between . the employer and employee is caused by the employer himself. In a modern community, there is no reason why management should not invite employees to join management or production committees, or any other kind of committee that will give the employee the feeling that he is really participating in the industry in which he is employed. There is no reason why the employer cannot establish better relations with his employees by recognizing that the employee is just as important to the running of the business as is capital or management.

Senator O’Byrne:

– He is more important.

Senator ARNOLD:

– The honorable senator says he is more important. That is a matter about which there might be some dispute. I suggest to the Senate that, if we are to have better relations, the effort to establish them should be made by the employer, because he is in a position to hold out the olive branch and to win the confidence of his employees. He should commence now by saying to his employees, “We want you to help us. We want you to take part in the management.” If that kind of thing were done, I believe we would achieve a great deal of success.

The report points out that coal is Australia’s natural fuel, but that over recent years its importance has diminished. I feel that the Government has been negligent in not ensuring the proper development of the coal industry. The report shows that in the few mechanized mines that exist in Australia production has risen from 3.4 to 4.4 tons a man, and that in the pits that have not been mechanized it has gone down. The Joint Coal Board has been in control of the industry for many years. 1 suggest that, if we were able to purchase the necessary machinery, if the Joint Coal Board were able to mechanize one pit after another, and if the industry were to be made efficient, we would be able, not only, to obtain cheaper coal, but also to use Australia’s natural fuel. If we increase the use of diesel traction in our railway systems and of diesel machinery for the generation of power, we shall have to rely on overseas countries for the necessary fuel, and we might reach the stage, particularly in an emergency, where the country is brought to a standstill. The preservation and extension of the coal industry is vital to Australia.

The PRESIDENT:

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

Senator WRIGHT:
Tasmania

.- The Senate is greatly indebted to Senator Laught for having submitted this motion and for having focused attention upon a very important document that has been tabled. I believe that, over a number of years, the annual report of the Tariff Board has furnished material for very earnest study. The report now before the Senate is couched in terms that do not produce in any one a disposition to become acquiescent with the situation. Indeed, it aggravates one’s anxiety. The Senate would be doing less than credit to even its present status if it passed off this report merely with the suggestion that the board had gone wrong.

The motion moved by my colleague is designed to give an opportunity to honorable senators to stress the prima facie importance of the contents of the report rather than to debate them in extenso. We would be doing very scant justice to a report of the Tariff Board if we were to attempt to debate, argue or reason, and come to a conclusion with regard to many aspects of the economy to which the board very provokingly - I doubt whether Senator Spooner is right in saying provocatively - has directed attention. The Tariff Board is set up for the purpose of moulding the tariff of Australia. We would be much more indebted to this board if we found more information in its annual report describing the trend of the tariff and its direct and indirect incidence on our economy, than is contained in this document. Although I am greatly impressed by the report, I looked, largely in vain, for a comprehensive assessment by the board of the effect of its activities over any relevant past period. Such a statement would be much more germane to the function of the board than an exclusive devotion, in its report, to an analytical criticism of Government economic policy - little as 1 am disposed to deny anybody participation in that national duty.

The board constitutes one of the four most important functionaries of this country. We have established a central bank and a banking board associated with trading banks. If they were running smoothly and progressively, and in the true interests of the country, they would be having a marked effect upon national policy and development. We should then be less daunted by the opportunities’ of development than seems to be obvious from the anxiety of the very valued Minister for National Development (Senator Spooner) who spoke earlier in this debate.

The second functionary associated with government in Australia is the Commonwealth Conciliation and Arbitration Commission, recently translated from a court into a commission, and associated with it, the Commonwealth Industrial Court. I was most interested in Senator Spooner’s observation that the commission has autonomous control of a great section of Australian industry. But its work has to be done in a condition of tanglefoot, due to the constitutional limitations that are placed upon it. We are indebted to the Tariff Board for its reference to that fact in paragraph 9 of the report, timely advertence to which problem would have prevented one of the most exacerbating influences in the Australian economy to-day - the contention between State and Commonwealth agencies for wage fixation on the cost of living issues. The arbitration system has had a most pronounced effect on our economy. An examination of the increases of our post-war costs in relation to those of other countries shows that they have been well-nigh double those of Canada, Great Britain and the United States of America. When we consider the unique position of the Arbitration Court in our economy we need hardly be reminded that the excessive increase in costs is probably due to the unwise management of our wage-, fixing machinery by the court.

One has only to read paragraph 8 of the Tariff Board’s report to realize how profoundly indebted we should be to the board for the examination it has made of this situation. It points out that during the last twelve months to which its report refers, on a base of 1,000 for 1939, the cost of living index has increased by a total of 173 points, whereas the increase for the preceding two-year period was only 92 points.

The Tariff Board is the third functionary associated with government in Australia. I am pleased that it is conscious of the effect that its activity can have upon our cost structure, because in paragraph 15 of its report it says -

Over the years the board has seen and drawn attention to the danger of rising costs with full recognition of the effect of these costs on export industries and with consistent emphasis on the fact that certain elements of cost were largely controlled by the tariff. As its own contribution to national solvency the board has resisted many pressures for increases in protective duties and has kept before it the desirability for new or increased duties only for efficient and economic industries and then only at levels determined after a full examination of the effects on dependent industries and on the economy in general.

Having said that in general, an examination of the report shows that in relation to one specific matter, the protective duty in relation to shipbuilding was at the rate of 37i per cent., but the Tariff Board recommended an increase of the rate to 50 per cent. One has only to examine the chaotic conditions of our shipping industry and the waterfront industry in Australia and their impact upon the transport costs in Australia to realize that the contribution that the Tariff Board is making to the generation of excessive costs is not inconsiderable.

If the Government affords an opportunity for a full debate on this report, I trust that honorable senators will have more information from the Tariff Board about the extent to which its increased protective duties over the last five or seven years has enabled the internal industries that it protects to weather the storm. In the last year it has dealt with industries which provided what it calls a total demand of £300,000,000. That is some indication of the extent to which its increased duties are responsible for increased costs. One remembers the wintry fact that this protection is designed for the benefit of the comfortable suburban and urban dwellers, whereas the farmer is left to fend for himself although he is still responsible for 80 per cent, of our exports and has to suffer the great load of indirect costs which the Tariff Board imposes upon Australian industry and which is reflected in the cost to the farmer of plant and implements. On the other hand, the wages and salaries of people employed in metropolitan areas rose from £197,000,000 in 1949 to £2,562,000,000 last year, an increase of 150 per cent. During the same period the net income of Australian farmers, who remain responsible for our export trade, was reduced from £448,000,000 to £414,000,000.

Senator Maher:

– The ever-widening gap.

Senator WRIGHT:

– Yes. Then the stark reality of the significance of the situation is seen again in a sentence in this most valuable report. In paragraph 7, after all the other preliminary criticism has been expressed, this board says - I think it is an eternal verity -

Many devices can be suggested for overcoming short-term difficulties, but the Board believes that, in the long term, equilibrium will be reached mainly by increasing export earnings.

Restrictions on banks, import restrictions and tariff protection to local industries will not avail us at all except insofar as a situation will be reached similar to that when two crayfish are put in a pot together, and the economy becomes so bare they begin to eat each other. We shall gain prosperity only by cultivating and developing our resources, both primary and secondary, so that the volume and value to the producer will be such as to enable our export earnings to be equated with our import needs. That is what this board says, and I believe that if it said that alone in the context of candid and independent criticism which it otherwise displays, we would indeed be indebted to it. I hope we shall be afforded the opportunity of a full-scale, thoughtful and provoking debate on the subject.

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

.- I think it might be said that Senator Wright has indicated the fundamental importance which this debate is now assuming and which may not have been evident at its commencement. I agree with him that it is impossible in the ambit of time allowed within the Standing Orders on this occasion to discuss in any worth-while detail the content and substance of the Tariff Board’s report. I should have felt that this report, coming from what is obviously a completely independent and a more objective source than might even be expected in the budget speech presented on behalf of the Government, and coming so soon after the presentation of the budget and raising implications and drawing attention to things which were not presented as clearly or as starkly in that document, would have induced the Government to fake the initiative in having the report debated instead of merely dismissing the matter, as the Minister for National Development (Senator Spooner) was inclined to do, with vague references to the fact that it was inaccurate in some respects. The Government is in a position where it must defend its economic thesis as presented in its report to the nation in the budget speech as against the report to the nation and the thesis presented by the Tariff Board in the report that is the subject of this motion. As the Government has not taken the initiative in doing that, 1 feel that the suggestion made by Senator Wright should be adopted and that at some stage this report should again come before this chamber for a complete and detailed analysis of the most important and fundamental questions which it raises.

The Minister said the Tariff Board had misconceived its functions. The implications of that statement are startling to me. It is a body entrusted by statute with certain national responsibilities. If it has misconceived its functions and that misconception is apparent in the report, which it has on this occasion presented, then we mus conclude that it has been executing its statutory functions within the terms of the references to it in the same atmosphere of misconception; and if that is so, then that misconception must be removed, and the onus is upon the Government to re-direct the Tariff Board as to the correct lines along which it should be proceeding.

Senator Vincent:

– r-That does not follow at all.

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

– That follows inevitably, otherwise proceeding in its misconception the Tariff Board commences and continues to make its determinations by assuming responsibility which the Minister says is not its responsibility at all.

Senator Wright has mentioned important instrumentalities which are now basic to the whole of our complex economic set-up in Australia, namely, the Commonwealth Bank, the Tariff Board and the Arbitration Court. It is significant that the Minister denies to the Tariff Board the right and the duty to move as an economic instrument or to have regard for economic considerations. We on this side, at other times and on other occasions, have criticized the Arbitration Court for assuming what we thought was an economic function, or responsibility, which was properly the responsibility of the Government. In that regard we might perhaps join with the Minister in saying, “ Well, at least for the sake of uniformity we might agree that the same principle should apply in relation to the Tariff Board “. But I do not remember the Minister coming into this chamber on behalf of the Government and adopting, in relation to the action of the Arbitration Court in pegging wages, the stand he has adopted in this instance by saying that the Tariff Board has gone beyond the area and sphere of its responsibility.

It is significant that on that occasion the determinations of the Arbitration Court were in consonance with the declared policy of the Government. On this occasion the analysis of the Tariff Board is contrary to the economic analysis in many respects which the Government has made and presented to the nation. I draw attention to that fact because it is very significant. We can accept this report of the Tariff Board as being almost an economic white paper for this year. Possibly, it will be consulted and analysed much more than the budget speech will be. Because of its importance and because of the functions the Tariff Board has assumed, I feel that that is the fundamental feature of this debate.

We are now considering two bodies, the Tariff Board on the one hand, which the Government says has exceeded its responsibility, and the Arbitration Court, which in the opinion of the great body of the people in Australia has exceeded its responsibility in having regard to the whole economic situation and making determinations which are really the responsibility of somebody else. The conclusion that emerges is that there has been in some quarter an abrogation of responsibility which other units in the community, perhaps without power or perhaps incorrectly, but nevertheless pursuing a sense of national duty, have decided to assume. This report of the Tariff Board and the Minister’s criticism that the board has exceeded its authority, are a condemnation of the actions of the Government in these most difficult times when the complexities of the economic situation continue to weigh most heavily upon us. This Parliament cannot afford to stand by indefinitely and allow this abdication of responsibility by the Government of power at the source when other bodies feel that out of a sense of national duty they themselves must accept that responsibility, lt is not correct, as the Minister has said, that the Tariff Board misconceived the economic situation. The Minister said, in effect, “ We are a young country, we are in the process of growth “. That recognition is implicit in the report of the Tariff Board; it is implicit in citations from the report that were r made by the Minister himself. The Tariff Board states in the first paragraph of its report -

Economic history will record an impressive list of actions and enactments of internal and external origin having sometimes the purpose and at all times the effects of restricting freedom of trade; but the pages reserved for items encouraging expansion will for the greater part be blank.

The words “ encouraging expansion “ show an acute consciousness in the minds of the members of the Tariff Board of the necessity to preserve an expanding economy, if we are. to pursue our plan of national development, and if we are to continue to absorb the immigrants in terms of our projected programme, maintain our defence level and, above all, to sustain our standard of living. In view of that statement, it was a complete misconception on the part of the Minister to say that the Tariff Board was not conscious of the fundamental fact that this is a young country which must expand. lt was a complete misconception by the Minister of the attitude and the consciousness of the men who constitute this most important body. I feel that the significance of this document is lacking in the budget speech, lt is the object of a budget speech, at any time, to awaken the acute consciousness and awareness in the community of the actual economic position, to state it objectively, to outline the consequences thai flow from it, and to make proposals. Obviously, the Tariff Board is not satisfied that there is that acute national consciousness of the situation, and, in the paragraph which has so many times been quoted during this debate, that fact is adverted to. It has been quoted in other connexions where the board speaks of the necessity for co-operation between various sections of the community. But the part to which I should like to refer is the part where the board speaks of developing an acute awareness of the responsibility that is ours, and of the situation which exists. Therein, I think, lies the importance of this document. It is not couched in unduly technical terms. It purports to cover, and succeeds in covering, most aspects of the position. It is a document which comes from a completely objective source. It is a courageous document; I do not feel that it can be conceived in any sense as a document in the presentation of which the board has exceeded its duties and responsibilities.

Looking as section 18 (1.) of the enabling statute, which requires the board, in its annual report to the Minister, to report upon certain things, including the conditions of industries, I completely fail to see how any board, trying to discharge that duty logically and faithfully, could either assess the conditions of an industry, or industries, much less to report on them, unless it did so against the background of the economy of the whole nation. I should think that this board would be grossly failing and be subject to the most severe reprimand if it had attempted to make any contrary statement and said, in effect, “ The economic state of the nation is not our responsibility. We have tried to discharge our statutory duties, keeping that completely on one side. These are the steps we have taken in regard to particular industries, and we so report to the Minister and to the Parliament “.

Senator Spooner:

– The board diagnosed the situation and proposed the wrong remedies.

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

– I say that, in my opinion, the Minister misconceives what the board did, and that the board was completely aware of the economic situation and made a quite valid assessment of it. I say that it is within the ambit of the board’s duty for it to make its determinations from month to month in the light of the economic situation that exists. In doing that, the board has acted with an appreciation of its grave responsibility, which it has discharged faithfully. It adopted a courageous attitude in its report. The statutory duties which this Parliament imposed on the board, and expected it to discharge, have been discharged faithfully. I hope that, at a later stage, the substance and content of this report will be completely debated, and that ample opportunity will be afforded to all honorable senators to participate in the debate. I trust that the duty which the Tariff Board has discharged in bringing these facts to our notice will receive the attention and consideration of the Parliament, and that ultimately the Government will take the action that is undoubtedly necessary in view of the very grave situation which is predicated by this report.

Motion (by Senator McCallum) put -

That the question be now put.

The Senate divided. (The President - Senator the Hon. A. M. McMullin.)

AYES: 30

NOES: 23

Majority…… 7

AYES

NOES

Question so resolved in the affirmative.

Question put -

That the Senate, at its rising, adjourn till 11.30 a.m., on Thursday, 27th September, 1956.

The Senate divided. (The President - Senator the Hon. A. M. McMullin.)

AYES: 23

NOES: 28

Majority.. 5

AYES

NOES

Question so resolved in the negative.

Sitting suspended from 5.49 to 8 p.m.

page 507

COMMONWEALTH OFFICE OF EDUCATION

Report of Public Accounts Committee

Senator SEWARD:
WESTERN AUSTRALIA

– I present the following report of the Public Accounts Committee: -

Twenty-sixth report - Commonwealth Office of Education.

Ordered to be printed.

page 507

QUESTION

SUEZ CANAL

Debate resumed from 25th September (vide page 480), on motion by Senator O’Sullivan -

That the following papers be printed: -

Suez Canal - Statement by the Prime Minister, dated 25th September, 1956;

Declaration providing for the establishment of a Suez Canal Users’ Association.

Senator McKENNA:
Leader of the Opposition · Tasmania

– On Thursday last, I asked the Leader of the Government in the Senate (Senator O’Sullivan) for an opportunity to debate the situation that has arisen over the Suez Canal crisis. I intended, if given the opportunity, to press, on behalf of the party that I represent, for a reference of the matter to the United

Nations organization; but on Monday last the matter was so referred to the Security Council by the United Kingdom and France, and I think that a debate at this time is, perhaps, a little unfortunate when the matter is under deliberation on this very day before the United Nations organization. I have no desire to aggravate the difficult position that has arisen, but there are certain issues raised by the Prime Minister (Mr. Menzies) in his statement with which I feel I must deal. Perhaps, it is as well that the Government has severely restricted my time for debate this evening. I can agree at once with the Prime Minister that the Suez Canal is vital not only to Australia but also to all countries both east and west of the Suez. In effect, it is part of the high seas and ought to be so regarded, subject to payment of reasonable dues. I do not propose to develop that theme; it has been adequately dealt with already. I come to the circumstances that on 26th July, exactly two months from to-night, the world was startled at the announcement by Colonel Nasser of Egypt that the assets of the Suez Canal Company had been nationalized on the basis of payment of compensation to the shareholders at the rate ruling upon the Paris stock exchange of some £74 a share. The alarm that was felt throughout the world was attributed to many counts. The first was that late in 1954 Colonel Nasser himself, at the time of the evacuation of British troops, had expressed his confidence in this canal company and had himself drawn attention to the fact that its charter still had fourteen years to run. It was a shock, accordingly, when that was rudely terminated.

The second fact is that it was only on 10th June of this year that the canal company, at the instance of Egypt, agreed to make available £21,000,000 over a period of years for investment in Egypt. It is very clear that this action was provoked through pique at America’s refusal to finance the building of the Aswan dam. The alarm was accelerated and heightened by the fact that Colonel Nasser indicated that he intended to use the revenues from the canal for the purpose of building the Aswan Dam. That carried with it a real fear that the maintenance of the canal would deteriorate and that its very necessary expansion and development would not be properly watched and attended to. A further aspect was the repudiation of a 99-years contract which had only twelve years to run before it came automatically to a termination. There was the factor before the world of Egypt’s breach of the international obligation set up by the 1888 agreement at Constantinople to allow all nations, in peace and war, at all times free usage of the canal. When they denied that international right to Israel, there was great concern and alarm from 1951 onwards, and the nationalization, and the circumstances of it, had presented Russia with an opportunity to make trouble in the Middle East.

Perhaps, the greatest fear of all in the minds of the people of the world was where it would all end. The people of the world were wondering whether this was merely the first step. Again, the thought in everybody’s mind was of oil, probably the most vital single commodity in the world. People began to wonder whether the next step would be in relation to the oil installations. I think that I put the point of view accurately when I say that the world was startled by the arbitrary, unjust and wanton nature of this act. It was arbitrary and unjust for one party to a contract, no matter how armed with power, legal or otherwise, to terminate a contract. It was wanton when, without any possibility of argument at all, the canal would pass, in twelve years’ time, to Egypt as its sole property without any payment other than for stores and equipment that were incidental to the running of the canal. Egypt merely had to pay for working stock and appliances, and the canal fell into its hands under the agreement with the expiration of the 99-years charter.

Unquestionably, I deplore that action on the part of Egypt; but I want to make it clear at the outset that the party that was aggrieved and affected by the nationalization of the assets of the company was the company itself. That act of nationalization was directed at the other party to the contract. This contract was rudely broken, but the aggrieved party was the canal company, and nobody else, at that stage. There was a breach of contract with the company, but there was no breach of any international agreement. The company itself is not international in character. It is an Egyptian company, there registered, with one government - the United Kingdom Government - a shareholder; and the rest of the shareholders are private persons scattered throughout Europe, but mainly in France.

There is an international agreement. It is the agreement signed between some ten nations and Egypt, with the concurrence of Turkey, at Constantinople in 1888. Ii guaranteed free usage of the canal. 1 say very deliberately that that international agreement, was neither threatened nor repudiated by Egypt at the time it nationalized the assets of the Suez Canal Company: in fact, Egypt at that very moment specifically and emphatically affirmed that contract. Further, it has nol been breached by Egypt in any way at all since 26th july. There has been no impedance by Egypt of the passage of ships in the canal.

Senator Gorton:

– Not Israeli ships.

Senator McKENNA:

– In all this situation, unfortunately, there have been many inflammatory elements. The first was the historical reply to statements by Nasser himself. The next was the freezing of Egypt’s moneys and assets by the United Kingdom, United States of America and France. The third was Egypt’s response by the mobilization of its forces. The next was the mobilization by France and Great Britain of their forces, and their concentration in the Middle East area where they were poised at Egypt. All those were inflammatory actions.

Unfortunately, many provocative statements were made by Western leaders, and they did not help the situation. The Prime Minister of Australia, on landing in London from New York, on 10th August, was interviewed and stated -

The nationalization was wrong in every wa> and must be resisted at all costs.

I join issue with the right honorable gentleman on the first part of this statement that the nationalization of the canal was wrong in every way. It was immoral, unjust, arbitrary and wanton, but it has some aspects of right in law as I hope to demonstrate. . The Prime Minister also stated that the nationalization of the canal had to be resisted at all costs, and that meant, simply, war - force and war. The statement had no other meaning, and it was highly inflammatory in a very difficult situation. We. on the Opposition side, claim that the Prime Minister, in making that statement, was not speaking for Australia.

There has been an obvious lack of clear thinking in some quarters. We of the Australian Labour party saw the whole situation leading quickly and inevitably to war, and statements were made on our behalf through our leader (Dr. Evatt), the federal parliamentary executive and officers of the federal executive of the party. From 8th August onwards, statements were made by them publicly, every one advocating reference of this matter to the United Nations organization, where it could be dealt with in accordance with the principles of international law applying to the situation. 1 concede at once - and I promise to return to this point - that much depends on whether the nationalization by Egypt of the canal company’s assets was legal or illegal. The Prime Minister stated, in his speech last night, that it was illegal, but he gave no reasons for his opinion. He also said that that action by Nasser was a grave breach of international law. The Opposition crosses swords with him on both those statements. 1 refer the Senate, first, to the agreement that was made on 19th October, 1954, at the time of the withdrawal of British troops from Egypt. Article 8 stated -

The two contracting governments-

That is, the United Kingdom and Egypt - recognize that the Suez maritime canal, which is an integral part of Egypt, is a waterway economically, commercially and strategically of international importance, and express determination to uphold the Convention of 1888.

The important words in that article, from my point of view at this moment, are that the canal “ is an integral part of Egypt “. Who will deny the right of any nation to nationalize, if it sees fit, any undertaking operating within its borders? I concede that it should not do so when it has already given to the organization concerned a charter for a definite period, but even if it has. I affirm the proposition that it does not lose the legal power to nationalize an undertaking so established.

The Prime Minister, in his statement to the Parliament, expressed horror at the breaking of a contract by Egypt. He entirely overlooked the fact that governments do that with great regularity. He overlooked the fact that on 8th March, 1952, the Government of which he was leader repudiated and cancelled every trade contract for the importation of goods between our nationals and our companies in Australia and countries abroad. That was complete and utter repudiation of solemn contracts by this Government, which so condemns the breach of contract by Egypt. I recall that, on that occasion, I told the Senate 1 was shamed by this first repudiation by Australia of overseas obligations. Pointed reference has been made to this matter’ in the report of the Tariff Board which was before the Senate to-day. When pointing out that import restrictions are inimical to our interests, the board stated -

Australia is gradually being stripped of prestige as a stable member of a group of countries to which freedom of international trade is important.

Senator Spooner:

– There were no such contracts.

Senator McKENNA:

– They were suspended and cancelled. I remember also when all the contracts relating to mortgages in Australia were altered by moratorium, and by legislation in every State. The terms of the contracts, as to rates of interest and when money was repayable, were completely altered. That was during the depression. We have, then, examples of interference with contracts in this country, and they do not differ in principle from what Nasser has done. They differ only in degree of severity.

I concede that it was a compliment to the Prime Minister, and to Australia, that he should be asked to lead the. deputation from the London conference to Nasser in Cairo. When the right honorable gentleman presented those proposals to Nasser early in September, did he suggest to Egypt that it has no right to nationalize the canal? If honorable senators study the letter that the Prime Minister ultimately addressed to Nasser, copies of which were circulated in this chamber, they will find that there is not one word in it condemning Nasser for his act of nationalization. It is taken as an established and accepted fact. There is no query in the letter of Nasser’s right so to act.

Last night, the Leader of the Opposition in the House of Representatives (Dr. Evatt) put the matter dramatically and most powerfully when he said that nationalization was either legal or illegal. If it were illegal and right had to be done, what should happen? The canal should go back to its owners, but what has happened to the canal company? Did the Prime Minister, on behalf of the eighteen nations at the London conference, put it to Nasser that the canal should go back to the canal company? He did nothing of the kind. As Dr. Evatt has said, the Prime Minister said to Nasser, in effect: “ You have it; let us share it with you. Let us join in the fruits of your nationalization. Let us operate this canal with you”. Mr. Menzies did not ask for physical possession of the canal, but gave unequivocal acceptance of the act of nationalization.

How idle it is to say that the act of nationalization was wrong on every count. The canal company was thrown to the winds although it was the aggrieved party in the nationalization.

Many provocative and unwise courses have been followed, but I have only time to say a few words about each of them. There was the fact that the canal company called out the non-Egyptian pilots. It requested them to leave their work by 15th September, and offered them two or three years’ pay as a safeguard. It also assured them of their pension rights. Why was that done? Could it be for any purpose other than to impede the free and easy passage of ships through the canal and to throw the onus back on to Egypt? What has been the result? That action has not had the effect for which it was designed.

With the concurrence of their nations, the British and French pilots left their work on the canal. They were encouraged to do so by their national governments, as was acknowledged in the Parliament of the United Kingdom. What happened? In effect, that action forced Russian pilots into Egypt - 120. of them - to do the work of the other pilots on the canal. Then we come to the next act, the proposal to form a canal users’ association - somebody’s bright concept. That was a proposal that the eighteen or twenty nations using the canal should set up their own organization, but utterly disregarding Egypt’s wishes. It was proposed that they should use their own pilots and that the member nations would pay fees, not to Egypt, but to the association.

Senator Wright:

– Does the honorable senator suggest that that is a correct interpretation of Mr. Dulles’s statement about the association?

Senator McKENNA:

– I am putting forward what the nations finally decided. The third proposal was that they would pay Egypt what they thought was fair. After a second look at the proposal, that was watered down. Moneys are still to be paid, not to Egypt, but to the canal users’ association and are to be kept in trust pending settlement of the whole matter. It was obvious from the outset that that proposal would be repudiated by Egypt, that it would never be accepted. It was repudiated the moment it was put forward. I suggest very deliberately that it was intended that it should be repudiated and that Egypt, through non-payment to it of canal dues, would be forced into holding up ships and that then there would be the cry that Egypt had broken the 1888 agreement. That was definitely a provocative action.

It is little wonder that Mr. Nehru of India pointed to that behaviour as being an assault upon the sovereignty of Egypt. It is perfectly true that it was. What has been Egypt’s position over the last 68 years under the convention of 1888? That solemn convention, signed by ten nations, entrusted to Egypt the task of ensuring that there was no obstruction of the canal. If the other nations discovered that a threat to the canal was developing, they were to tell Egypt, and under that convention Egypt, for 68 years, has been the body - nobody else - that has been charged with keeping the canal clear.

Senator Kendall:

– With the assistance of other nations.

Senator McKENNA:

– With the assistance, if necessary, of Turkey and, if Turkey thought fit, with the assistance of the other nations party to the agreement; but Egypt primarily. I ask: Why the horror at that position being preserved? Now, the .Prime Minister professes horror at the fact that Egyptian pilots were required by Egypt to remain at “their positions under a threat of imprisonment. He conveniently overlooks sections 30j and 30k of the Crimes Act of

Australia which provide that, if there is an emergency, through industrial upset, in overseas or interstate trade, there shall be a proclamation of emergency; and at the moment that proclamation is made it is an offence, punishable with one year’s imprisonment, for a man to leave his job. For anybody to incite him to leave his job is also punishable with a similar term of imprisonment. How many times have we heard members of the Government parties urge the Australian Labour party, when it was in office, to use those very provisions? I have before me the statement of the present Leader of the Government in the Senate when we were in difficulty during the coal strike. If the honorable senator cares to refer to the statement, he will find that on 29th June, 1949, he said- it–

Referring to the Government - had ample time, even between that day and now, to exercise the powers that it already possesses under the Crimes Act and the Coal Industry Act. A state of emergency could well have been proclaimed. Are we not actually now facing a state of emergency?

That statement came from the present Leader of the Government. Over the past six and a half years we have seen those sections dangled by this Government before the workers of Australia.

Speaking on behalf of the Labour party, I feel very strongly that the Prime Minister’s statement, in the terms he saw fit to employ and in the views he put forward, was unfortunate and inflammatory, especially right on the eve of consideration of this matter by the Security Council of the United Nations Organization. To use a term well known to lawyers, it could so easily poison the founts of justice before they begin to flow. Already his statement has been given headlines throughout the world and must have been read in all the countries that are affected by the present situation. After surveying the events of the past two months, I am forced to say that it is more by good luck than good management that we have averted the horror of a third world war. It could so easily have been touched off in a situation where troops were massing and in the circumstances in which the crisis was allowed to develop.

In reply to an honorable senator who earlier in the evening referred to Israel, let me say that it is a terrible pity that the nations of the world did not stand up when Israel was denied its rights to the Suez Canal. The first injustice was when the great nations set aside for their own reasons - I do not want to go into them now; but they had reasons of self-interest - the act that was perpetrated against Israel. They were content with condemnation of Egypt for that particular act, but they did not bring it forward for action. Rather did they stand by and incur an injustice to a small nation, and I should say that to-day they are paying the price. They should have taken the stand then - the stand that is a first plank in Labour’s platform - that is, to fight injustice wherever you find it, not merely in one’s immediate neighbourhood, but anywhere in the world. If one does not do that, the injustice grows and engulfs one. The present situation furnishes a perfectly classic example of that. This situation might well never have arisen if the nations of the world had stood up at that time and decided that Israel, small and insignificant as it was, had to be supported.

War is now outlawed, at least under international law, except in circumstances that are permitted by the United Nations Charter. We have reached a stage of international law where no longer can any nation, to serve any purpose irrespective of how laudable or desirable it may be according to its own outlook or selfish interest, without breaching international law, use force, threaten force, or go to war. There is now in existence a charter that governs all that, and I confess feeling enormous relief that the step that has been advocated by Labour from the beginning has been taken and that the matter has now gone to the United Nations where it will repose in the relative calm of the deliberations of that body. I hope that its consideration will end in control of the canal by the United Nations. That would be a very desirable end. If that cannot be achieved. I hope that the United Nations will have a supervisory, or advisory, body at the canal continuously to report upon any obstruction by Egypt or anybody else of the free passage of any ship upon that waterway. Speaking from our own selfish viewpoint in Australia, I should say that it does not matter very much to us who owns or operates the canal as long as the following four conditions operate: As long as it is freely open, as long as the charges for its Use are reasonable, as long as it is properly maintained and serviced, and, above all, as long as proper provision is made for its expansion and development. It is not very important from our viewpoint who runs the Canal’ if those four conditions are fulfilled. I repeat that, subject to the payment of reasonable charges, the Suez Canal should be regarded as being one extension of the high seas of the world.

Senator Vincent:

– But the honorable senator is not game to fight for it.

Senator McKENNA:

– The honorable senator talks about fight. Let me say to him that every member of the Labour party will put war and fight at the bottom of the list. We outlaw war. As far as the Labour party is concerned, war is gone. It is a completely unchristian and uncivilized way of resolving differences between men. Let us examine every other species in the whole spectrum of nature. Each species concerns itself with assuring its propagation and its continuance. Even the germs adapt themselves quickly to new drugs. In the last 3,000 years the thing that man has done best is to evolve techniques for the mass destruction of his own kind. That sort of thing has gone on too long. It is not only the last resort to-day; it is no resort for the settlement of international disputes, more particularly when there is international machinery to which 76 member nations subscribe. I do not present that machinery to the Senate as being perfect, but whatever its defects may be, its procedures must be used and exploited to the end, and its first intervention must unquestionably be that of mediation and conciliation and the seeking of just settlement.

Senator Vincent:

– What if it fails?

Senator McKENNA:

– It has yet to fail, and there are many procedures to be exhausted. Whether it fails or does not fail, no nation to-day is entitled, with international law as it is accepted, to take matters into its own hands and start war.

Senator Vincent:

– What nation has done that?

Senator McKENNA:

– We have come very close to it. I say, in conclusion, that force and war in the world of to-day are unthinkable. All the horror, misery and suffering and the economic ruin and chaos which must follow in its train are utterly unthinkable, when there are many alternatives available, with which time will not permit me now to detail. 1 finish on the note that the Australian Labour party most resolutely sets its face against war.

Senator McMANUS:
Victoria

.- In the unavoidable absence of my leader, Senator George Cole, who is engaged in the organization of the Tasmanian election, 1 take this opportunity, as a representative of the Australian Anti-Communist Labour party, to make some comments on the Suez crisis. At the outset, I recall that in my maiden speech I said that every important question dealt with in this country should be looked at, first of all, from the point of view of its effect on the external security of our country, and, secondly, from the point of view of its effect on our internal economy.

The Suez crisis is of extreme importance to Australia because it affects both of those principles. In the first place, the Suez Canal, in war-time, is strategically important to our defence, and in peace-time, is economically essential to our overseas trade. To any one who questions those two points of view, may I recall that thousands of Australian soldiers served in World War I. to defend the Suez Canal, in the belief that it was the main lifeline of the British Commonwealth of Nations. Australian soldiers laid down their lives for the preservation of that principle. As far as I know, there was no objection from either the Labour party or the Liberal party when, in World War I., the sovereignty of Egypt was invaded, in the belief that such action was necessary in order to defend our democratic interests against a form of dictatorship. Neither was there any objection from either party during World War II., when similar action had to be taken, and the sovereignty of Egypt was again invaded because it was believed that that course was essential in order to preserve democratic institutions throughout the world.

No doubt, some honorable senators will say that that action had to be taken because we were involved in war, and they will object that at the present time we are not engaged in war. I do not altogether accept that point of view. Although we are not engaged in a shooting war, we are certainly engaged in a cold war in which the Soviet Union has taken up its offensive and defensive positions by forcibly invading the security and the sovereignty of Latvia, Lithuania, Estonia, Finland, Poland, Austria, Germany, Rumania, Bulgaria and Korea, and has established bases for aggression in China, Indo-China, Tibet, Malaya, Indonesia and various other countries. The question we have to decide for ourselves is, since the Soviet Union has taken up its positions, are we to permit ourselves to be forced from strategically important areas under the guise that we should make sacrifices for peace which the people who are the real enemies of peace in the world to-day are not prepared to make?

I remind honorable senators of certain factors in the world position. For two years the Soviet Union has shown intense interest in the affairs of the Middle East, in the Suez Canal and in Egypt, and it has done so for two main reasons. The first is that the oil production of the Soviet Union is barely sufficient for its peace-time requirements, and would be entirely insufficient for war-time requirements. Consequently, the Soviet grand strategy regards as a matter of supreme importance the interruption of oil supplies to the democracies so that supplies may be turned in the direction of the totalitarian States. Secondly, the Soviet grand strategy requires that it shall obtain a land bridge in Asia Minor from Suez into Egypt in order that it may dip its fingers into the seething cauldron of nationalism in Africa. What honorable senators in this chamber do not realize is that Africa is regarded as an essential base for the democracies in the event of the Communist nations provoking another world war.

For twelve or fifteen months, Colonel Nasser has been receiving large supplies of arms from the Union of Soviet Socialist Republics. He has also been promised backing in this dispute by the Soviet Union and, so far as he is concerned, he and that country backing him are in the position at the present time - a special position - to utilize a situation to their own advantage because they are not hampered by those disadvantages to which the democracies are subject. As dictatorships they can take action without regard to the peoples of their countries. They have no parliaments of a democratic character to which they have to answer. They have no necessity to refer what they are doing to an opposition, because in the country of Colonel Nasser and in the Soviet Union, the members of the opposition are in gaol. In our country, we maintain the democratic processes. We allow the foreign policy of the government to be debated in oar parliaments. If we are to oppose the forces that threaten us to-day, it is essential that we should endeavour at least to be fair and, as far as possible, to follow the example of the British Parliament where they have a kind of bi-partisan foreign policy. There, the Government and the Opposition seek to co-operate, and there is a general atmosphere of fairness to the government, and the Opposition is willing to assist it in any difficult situation into which the Government may be forced. I want to make it clear that 1 do not suggest that the Opposition in this Australian Parliament has been unfair to the Government in the present crisis, particularly during the difficult period when our Prime Minister (Mr. Menzies) was conducting negotiations in Cairo. The then Acting Prime Minister (Sir Arthur Fadden) paid tribute to the co-operation that he received during that time from the Leader of the Opposition (Dr. Evatt) and his deputy (Mr. Calwell). But, in the present circumstances, when we are faced with attack from dictatorships, we should try, as far as possible, to preserve unity towards foreign policy in the democracies. I realize that it is the Opposition’s duty to oppose, and to put on the brakes if it thinks that action being taken by a government may perhaps push us further along the road to the precipice. But having examined the statement that was made to us last evening on behalf of the Government, I cannot support the attitude which has been expressed in another place that that was a sabre-rattling statement.

Neither am I prepared to agree that any obligation rests upon the Government of this country, unilaterally, to give an unequivocal undertaking that in the event of negotiations breaking down it will not, in any circumstances, use sanctions or proceed even to more drastic measures. Let us be candid. If the freedom of navigation of the Suez Canal is essential to the vital interests of this country in which we live, no government is entitled to sell out our interests in any circumstances whatsoever.

Let us examine the sequence of events in this matter. First of all, force was used, not by Australia, Great Britain or the United States, but by Colonel Nasser who invaded with troops an area which under contract had been granted to other people. He then issued threats of imprisonment to the employees of the Suez Canal Company to force them to remain at their posts and, in support of those threats, he proceeded to mobilize all sections of his country down to even the last belly dancer. That action, in the opinion of most people would be deliberately provocative. Who would suggest that it was not? Who would suggest that Colonel Nasser did not know that Great Britain and the countries using the canal would not regard that action as deliberately provocative? Anybody who examines the situation can come to no other conclusion than that the action was deliberately provocative and taken in an endeavour to procure a certain result.

I point out that those who were affected by that action endeavoured to deal with it by negotiation. The interested nations met in London and invited Egypt to sit around the table with them in order to determine the issue. That offer was refused. Then, a delegation of five, led by the Prime Minister (Mr. Menzies) proceeded from London to Cairo to negotiate with the Government of Egypt for the purpose of settling the dispute without war. I direct attention to the terms which were offered to Colonel Nasser with a view to settling the dispute. It was suggested, first, that an operating authority, in effect, the tenant of Egypt, constituted of members drawn from a variety of nations, including Egypt itself, but not subject to political direction, should be set up; secondly, Egypt’s ownership of the canal was to be recognized and to its own advantage the canal was to be maintained, improved and made more profitable as the years went on, without financial cost to Egypt itself; thirdly, Egypt alone was to draw the profits from the canal; and fourthly, a just and fair method of compensating the shareholders of the Suez Canal Company was to be agreed upon. Those terms, in my opinion, and I think in the opinion of most fair-minded people, would have settled the issue and provided an ideal way out of the impasse and saved us from war.

Those terms were rejected. Why were they rejected? The next suggestion was that the matter should be referred to the United Nations. I support reference to the United Nations because I believe that every endeavour should be made to deal with the matter on the basis of negotiation rather than on the basis of war. However, I point out that the reference to the United Nations refers this dispute to a body in regard to which we have had unlimited experience of the ability of the Soviet Union to be deliberately obstructive. I predict that on the procedure to deal with this dispute it will be deliberately obstructive, and by the use of the veto will prevent any action from being taken in respect of the dispute.

In those circumstances there is an obligation on those who go so far as I do and say that this matter should be referred to the United Nations to say what they will do if the United Nations, through the veto, refuses to permit action to be taken. What shall we do even if the United Nations reaches a decision and Colonel Nasser refuses to carry it out? T remind the Senate that already a decision has been made by the United Nations in regard to Egypt, that the ships of the State of Israel should be permitted to use the Suez Canal, and Colonel Nasser has refused to accept that decision. If we are going to say that this matter must be referred to the United Nations we must then ask what evidence there is that Colonel Nasser will accept the umpire’s decision. I make no hesitation in saying that when the matter goes before the United Nations there will be complete collaboration between the Soviet Union and Egypt and certain countries that are supporting Egypt.

This is not a matter of a State nationalizing an enterprise which has been taken from it and used necessarily to exploit its people. This is a matter of cold foreign policy. The Suez Canal and Egypt are regarded as potential instruments for Russian imperialism, and anybody in Australia who says that we must continue to give in as we have been asked to give in on issues for so long is not looking the facts of the present-day world in the face. I believe in peace, in peaceful negotiation and in co-operation with other countries; but I also believe that when those other countries indicate by their actions that they are paying only lip service to the noble principles they -are so anxious to talk about, the best thing we can do is to decide that there are certain places where we will make a stand and then proceed to make that stand.

I know that some people say that the Prime Minister or the Government of this country should give a straight-out undertaking that in no circumstances will force be used. When trade unionists have been 4>o>ng into a conference room I have heard -some people say that before they go in they should give an unequivocal undertaking that if they do not get what they want they will . not go on strike; and in most instances I have heard them refuse to give that undertaking. Negotiations will take place in this matter, I suppose on the United Nations level, and there will be a lot of hard bargaining and hard dealing; but I do not see one reason why we should lay our cards on the table when we do not know that the other side is prepared to lay :its cards down too. We have to face the situation that this dispute can go to the United Nations and I desire ‘that it go there : because in order to preserve peace one has to adopt every means in his power; but t have no confidence in the United Nations ito do anything about it. What are we going to do then? If the United Nations finds that it can take no action, because of the veto or for some other reason, are we simply going to accept the situation? If you accept the situation, you have suffered a grave strategic defeat, you have suffered a grave propaganda defeat, and you have put the industries of this country, particularly those exporting overseas, in the hands of people who will be able and will be permitted to charge anything they like for the transport of our exports through the canal. If you are prepared to accept that situation, I think that you will find you have merely consented to one more form of those appeasements which do not bring about- peace.

If Egypt is successful, or Colonel Nasser is successful, in what he has undertaken in this particular matter, you will not avoid a showdown leading to war in regard to it. If he obtains control of the canal, the next move will be that he will receive further large supplies of arms from the Soviet

Union in order ‘to protect the canal, because if there is a prospect of a global war breaking but, obviously those who are associated with Egypt and ‘the Soviet Union will realize that the first thing that will happen will be ‘a descent on the canal by the forces of the democracies. You will find that there will be large supplies of arms made available to Egypt, arid those arms will be used, if they are in the hands of a dictator, within two years, I predict, in an attack on the State of Israel, because do not forget, a state of war still exists between Israel and Egypt, and recent history shows that if you place arms in unlimited quantity in the hands of a dictator, he will use them.

I should like to say this: I am not a believer in the use of force, except as & last resort; but if the position arises, as it easily can arise, that the essential interests of this country are so gravely menaced that we have got to support strong action, then we cannot flinch from supporting that action. If we do not adopt that attitude, then once again we shall be practising appeasement. So far as our country is concerned, we have to preserve those essential interests in the way that other countries have to preserve their essential interests, and if the price of protesting at the idea that any one who supports the essential interests of our country, and who believes in the effective defence of our country, whether in Korea or Malaya or Suez, is to be called a warmonger, we must have the courage to stand up and be called warmongers. I do not regard a man who says that as a warmonger at all. To me, the statement that was made in the paper issued last night that Australia could, in the last resort, envisage that she might be called upon to support drastic action, was a statement that is more likely to make for peace than for war, because if we are going into negotiation to settle a crisis such as this, why not say fairly and squarely where we stand? It has been said of the last war that if some of the nations had stated fairly and squarely where they stood, that they intended to make a last-ditch stand at a certain point, the nations that caused the war might not have been prepared to go on with it. At any rate, this cannot be said in regard to the present case. I conclude, Mr. President, by saying this: In the kind of world that we live in, it is our duty to work for peace, but it is also our duty not to shut our eyes to the facts. It is our duty not to retreat in the face of aggression; it is our duty to set a line, and to say to the people from whom we have to fear aggression that we will make a stand at that point and that we will not continue to retreat, because that inevitably leads to war.

Debate (on motion by Senator Spooner) adjourned.

page 516

SOCIAL SERVICES BILL 1956

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator SPOONER:
New South WalesMinister for National Development · LP

– I move -

That the bill be now read a second time.

The chief purpose of the bill is to amend the Social Services Act to give effect to the Government’s decision, announced by the right honorable the Treasurer (Sir Arthur Fadden) in his budget speech, to pay higher pensions to widows and invalids who have two or more children under sixteen years of age, and to ensure that a widow who loses her class A pension when between the ages of 45 and 50 years will not have to wait until she reaches the age of 50 to qualify for a class B pension.

The principles and implications of the Government’s financial policy have been dealt with very adequately by the Treasurer. He clearly outlined the basic problems and emphasized that, in an economy dominated by strong pressures on its resources, it is a clear obligation of the central Government, as it is of all public authorities, to keep demands upon resources under the firmest control. In such circumstances, the Government is pleased to record that it has been able not only to maintain the value of the pension above what it was in 1949, but also to liberalize the means test substantially and to expand social services to an unprecedented extent.

The Government has brought down seven budgets. In five of them, general increases in pensions were made. The aggregate of these increases is £1 17s. 6d. a week. This represents an advance of 88.2 per cent, on the pension of 42s. 6d. a week paid when Labour left office.

In 1954, which was the only year, prior to this, in which the Government made no general increase in pensions, substantial liberalizations were made to the means test. In that year the permissible income was raised from £2 to £3 10s. a week. There had been a rise of 10s. in the previous year, so the full rise in the permissible income has been from 30s. a week to £3 10s. a week, or from £3 to £7 a week for a married couple. This represents an increase of 133 per cent, since December, 1949. In the same period the Government has also raised the property limit by 133 per cent., that is from £750 to. £1,750 for a single person and £3,500 for a married couple. It has doubled the property exemption - which is the amount that does not affect the pension - and it is now £200 for a single person and £400 for a married couple.

The Government has also entirely disregarded income derived from property for the purposes of pension assessments; it has abolished the means test for blind persons; it has abolished the means test which was* imposed on the parents of claimants for invalid pensions, and it has abolished the special ceilings which limited the amounts that could be paid to ex-servicemen by way of civil pension in addition to a war pension. Certain interests under wills have been excluded from the property means test and the exemption of the surrender values of life insurance policies has been raised from £200 to £750. The Government has also made a concession to pensioners who own a motor car by disregarding its value in the pension assessment.

One of the most important advances was the introduction of discretionary power which enables the Director-General of Social Services to disregard the value of property in special circumstances. The discretionary power has been exercised freely in cases where pensioners are unable to obtain possession of their homes and also where, through ill health or other circumstances, they have had to vacate their homes for long periods. This concession has been a great boon to many elderly people. Increases and concessions of a similar kind have also been made in respect ot widows’ pensions. In addition, the Government has made improvements in other social service benefits. Child endowment has been introduced for the first child in every family. The rates of unemployment and sickness benefits have been doubled. Rehabilitation benefits have been increased, and the field of eligibility for treatment and training has been extended to include additional categories of disabled persons.

One of the noteworthy improvements in social services initiated by the Government and one very highly appreciated was the introduction of the pensioner medical service, under which qualified pensioners are provided with free medical and pharmaceutical benefits. Concurrently with the provision of free medical and pharmaceutical benefits, the Government has tackled the other great problem of providing living accommodation for the aged. Honorable senators are aware that, under the Aged Persons Homes Act passed in November, 1954, the Government provides churches and other eligible organizations with financial assistance on a £l-for-£l basis towards the erection, purchase or extension of approved homes for aged persons. In these homes they will live under conditions approaching as near as possible normal domestic life and, in the case of married couples, with proper regard to the companionship of husband and wife. Up to 7th September of this year, 140 grants have been made, representing a total of £1,623,395. These grants provide additional accommodation for 2,759 elderly people.

I pause, Mr. President, to emphasize that the provision of homes and free medical and pharmaceutical benefits breaks new ground in social services in Australia. They make a very great contribution indeed towards the welfare of social service beneficiaries. Large sums of money have been provided under each heading. It is money well spent, and it should not be left out of the reckoning when comparisons are being made of the benefits provided under our social services legislation. The many improvements I have mentioned have added large sums to our annual expenditure on social services. In 1949-50, which was Labour’s last budget year, the total expenditure on Commonwealth health and social service benefits reached £92,800,000 and represented 4.06 per cent, of the national income. Last year it was £215,263,000, or 4.99 per cent, of the national income. This year the total expenditure on health and social services, including homes for aged persons, will be £227,320,000. Adding £65,280,000 for repatriation pensions and benefits, the total for health, social services and repatriation is £292,600,000 or 26.1 per cent, of the estimated budget expenditure for 1956-57.

There are two points which call foi special emphasis before I. make detailed reference to the provisions of the bill. First, the fact that the Government has increased pensions in every budget but one’ does not commit this or any other government to a regular annual increase in the pension rate. Secondly, the fact that the Government in last year’s budget brought the pension up to a figure well beyond its 1949 purchasing value should, in the judgment of fair-minded and responsible people, be a sound reason why a general increase for all pensioners should not be demanded this year. I am compelled to make some reference to the matter of the comparative value of the pension because of the persistent claims by honorable senators opposite that pensioners are worse off to-day than they were under a Labour administration.

It is common knowledge that the best yard-stick we have for measuring changes in prices, which reflect the cost of living, is the C series retail price index. For many years it was used as the basis for adjusting wages to meet changes in living costs. More particularly, I would remind honorable senators, it was adopted by the Parliament in 1940 as the measure for similar adjustments in the maximum rate of age and invalid pensions, and it so remained until the relevant provisions were removed by the Labour government in 1944. I am aware that the C series index relates to the pattern of expenditure of wage-earner households, and it would be better if we could devise and use an index based on the expenditure of pensioners. However, until that is done, we must use the C series as the most suitable index for the purpose.

The latest C series retail price index number issued for the June quarter, 1956, is 2528. The corresponding index number for the September quarter, 1949, which was the last issued before Labour left office, was 1428. By simply taking the ratio 2528 to 1428 and applying it to the pension of £2 2s. 6d. paid when Labour was last in office, we get the result £3 15s. 3d. Thus, on the C series index, the amount of pension now required to give the same purchasing value as £2 2s. 6d. had in 1949 is £3 15,s. 3d. The present pension rate of £4 a week is 4s. 9d. greater than the equivalent of that paid in 1949. In addition to this improvement, the pensioner now has the benefit of the free medical and pharmaceutical service, the home facilities provided under the Aged Persons Homes Act and various benefits as the result of the easing of the means test.

I have already indicated that the bill raises the maximum rate of widows’ pensions in cases where the widow has two or more children. As honorable senators know, a widow with one or more children under sixteen years of age, known as a class A widow, at present may receive a pension of £4 5s. a week. Ever since these pensions were introduced in 1942, there has been no distinction between the rate payable to a widow with one child and that payable to a widow with several children. The Government feels that this should be corrected and, to that end, the bill raises the maximum rate of the class A pension by 10s. a week for each additional child under sixteen after the first. This will apply irrespective of the size of the family. For example, where there are three children under sixteen, the maximum pension will rise from £4 5s. to £5 5s. a week; where there are five children, it will become £6 5s. a week, and so on, increasing by 10s. for each additional child under sixteen. The means test will apply to the new maximum rate of pension in these cases. So far as the property means test is concerned, a widow may have assets up to £1,750, in addition to her home, furniture and personal effects without affecting eligibility for the pension.

With regard to income, the act at present allows the widow to have earnings or other income up to £3 10s. a week plus 10s. a week for each dependent child under sixteen years. This will not be affected by the additional pension of 10s. which will be paid for each child after the first. Consequently, a widow with three children will be permitted to have income of £5 a week in addition to a pension of £5 5s., a total of £10 5s. a week. Similarly, a widow with five children will be permitted to have income of £6 a week in addition to a pension of £6 5s., a total of £12 5s. a week.

To those who may say that a widow with children under sixteen years of age would have difficulty in earning outside, income, I point out that some of them have various kinds of property which yield them income. This kind of income is disregarded when applying the means test. Others are entitled to superannuation payments under various schemes to which their husbands were contributors. Others, despite their family obligations, accept some part-time employment. So, on the average, the easing of the means test is no less a real benefit to the widow than to other social service beneficiaries. With the concurrence of honorable senators I shall have incorporated in “ Hansard “ the following table which gives the overall weekly totals which may be received: -

And to the possible total should be added any income which the widow receives from property investment.

The bill also raises the maximum rate of an invalid pension by 10s. a week for each additional child under sixteen after the first.

The first child is already provided for by a child’s allowance of lis. 6d. a week which is generally paid to the mother.

At present, in a family where the husband is an invalid the amounts payable are, subject to the means test, a pension of £4, a wife’s allowance of 35s., and a child’s allowance of 1 ls. 6d., a total of £6 6s. 6d. a week. These rates apply irrespective of the size of the family. The amendment made by the bill will add 10s. to the husband’s pension for each additional child under sixteen after the first. In many cases this will mean quite a substantial addition to the pension. For example, where there are three children under sixteen the maximum pension will become £5 instead of £4 a week, making a total of £7 6s. 6d. a week inclusive of the wife’s allowance and the allowance for the first child. Adding child endowment of 25s., the total Commonwealth payments in that case will be £8 lis. 6d. a week. Where there are five children, the pension will rise to £6 a week, making the total pension and allowances £8 6s. 6d. a week, plus child endowment of £2 5s., a total of £10 lis. 6d. a week.

These increases for children will be paid on the basis of children under sixteen who are in the custody, care and control of the invalid pensioner. This will be a great boon to large families. For example, where there are seven children under sixteen the pension will rise to £7 a week. Adding the wife’s allowance of 35s. and the allowance of lis. 6d. for the first child, the total pension and allowances will be £9 6s. 6d. a week. Child endowment of £3 5s. will bring the total Commonwealth payments to £12 lis. 6d. a week in that case. The means test will apply to the new maximum rate of pension, but the additional pension of 10s. for each child after the first will not affect the additional permissible income of the same amount already allowed in respect of each dependent child under sixteen years.

With the concurrence of honorable senators I shall have incorporated in “ Hansard “ the following table illustrating the overall weekly totals which may be received: -

Senator Kennelly:

– How many come into the category in which £24 lis. 6d. is paid?

Senator SPOONER:

– It is not a case of how many come into that category; the facts are that that is the provision made in the legislation for those who do come within it. If Senator Kennelly does not like it, perhaps he will move an amendment seeking to give them not £24 1 ls. 6d. but some lesser amount.

The increased pension rates will be paid also to widowers who are invalids and have the care of children under sixteen years. There will also be cases of spinsters, receiving invalid pensions, on whom has fallen the responsibility of the custody and care of children of deceased relatives. In these cases too, the increased pension rates will be paid. The higher rates of pensions for children under sixteen will be paid also to age pensioners who are permanently incapacitated for work. There will be no need, therefore, for a permanently incapacitated age pensioner who has children under sixteen years to transfer to the invalid pension in order to obtain the increase.

I turn now to explain the position of the blind. As honorable senators know, this Government has made it possible for blind persons to receive pensions of £4 a week entirely free of the means test. Where a blind pensioner has one or more children under sixteen the allowance of lis. 6d. for the first child is also paid. This will continue. But I should make it clear that the normal means test will apply in the assessment of the additional pension for children after the first. In no case will a blind person with children under sixteen receive less than £4 lis. 6d. a week, irrespective of his income and property. But when it comes to determining the amount of additional pension in respect of children after the first, there will be no distinction between the blind and other invalids.

A further important concession is made by the bill to class A widows. As honorable senators know, these are widows who have one or more children under sixteen years of age. At present, the class A pension ceases when the widow’s youngest, or only, child reaches sixteen, unless she is over 50 years of age and eligible for a class B pension at a lower rate. There is an exception where the child is undergoing full-time education at a school or university, is dependent on the widow and is not in employment. In such circumstances, the class A pension may be continued until the child reaches eighteen years of age. Where the youngest child does not continue with full-time education, the class A pension ceases and the widow has to wait until she is 50 years of age to qualify for a class B pension.

The Government has decided that a concession should be made to a widow in such circumstances where she is between 45 and 50 years of age. The proposed amendment will enable her, subject to the appropriate means test, to transfer directly from the class A pension to the class B pension without any break in continuity of payment, except that the class B rate of pension will apply.

The bill also provides for a higher portion of the maternity allowance to be paid to an expectant mother by way of prenatal payment. At present, the amount of £5 may be paid on account of the allowance within four weeks prior to the expected date of birth. This will be increased to £10, which will enable the mother to apply a greater portion of the allowance, if she so desires, towards the purchase of the layette before entering hospital.

The bill further provides for certain allowances payable to ex-servicemen to be excluded from income for the purposes of the means test. These are a decoration allowance, a recreation transport allowance, and an allowance paid for running a gift car.

The increased rates of widows’ pensions and invalid pensions will benefit about 10,500 widows and 6,000 invalids. They will become payable on the first fortnightly pension pay day after the bill receives the royal assent. So far as is possible, the increases will be paid on that day to all pensioners who are entitled to receive them.

Where, for any reason, this is not practicable, the increase will be made retrospective from the appropriate pay day.

The estimated cost of the increases and concessions made by the bill is £750,000 for a full year. The cost for 1956-57 will be £550,000.

The cost of our social and health benefits and services for 1956-57 is expected to exceed £227,000,000, or 20.3 per cent, of the total estimated budget expenditure of the Commonwealth. Thus, close enough to 4s. Id. in each £1 of Commonwealth expenditure goes in the provision of social services. It is, therefore, imperative in the interests of both social services beneficiaries and the taxpayers that that money should be spent wisely and well.

The Government claims that this ii> being done; that the level of payments to individual pensioners has a greater effective purchasing power than when the Government was elected in 1949; that the provision of free medical and pharmaceutical services and the contributions towards homes for the aged are a boon and benefit to pensioners which they appreciate; thai the constant amelioration of the means test has substantially increased the number ot those eligible; and that there should be universal support for the Government’s action this year in concentrating its proposals upon improving the financial circumstances of widows and invalids with dependent children.

And, of course, the tasks of the Government in social services will not end with this bill. Our policy now, as in the past, is one of progressive development. It is a policy that has already yielded the most positive results and given us a greatly improved system of social services. We will continue with this policy. I commend the bill to the Senate.

Debate (on motion by Senator Kennelly) adjourned.

page 520

POST AND TELEGRAPH RATES BILL 1956

Second Reading

Debate resumed from 25th September (vide page 446), on motion by Senator Cooper -

That the bill be now read a second time.

Senator KENNELLY:
Victoria

.- The brief that was given to the Minister for Repatriation (Senator Cooper) when he introduced this bill in the Senate was rather remarkable, lt stated, at the outset, that the bill dealt with an amendment to an act that was first passed in 1902, and was amended last in 1951. The purpose of the bill is to adjust postal and telegraphic charges from 1st October. The Minister said that the bill was necessary because of the higher costs that have to be met by the Postal Department. We should ask ourselves: What has brought about these higher costs? Having read through the Minister’s brief, it seems to me that this Government, having adopted the principle that controls over costs should be abolished, finds itself in the position of having to increase the charges for certain services that are performed by the Postal Department. The Government does not say, of course, how much the costs will be in a full financial year or for the remainder of this financial year. All it tells us, in effect, is that these added charges will return an additional £7,250,000 in revenue.

I attempted to obtain information for the last financial year, but I regret to say - and I suppose other honorable senators have had a similar experience - that I was unable to obtain a report of the PostmasterGeneral’s Department for that year. However, a dissection by the Public Accounts Committee of one of the past reports of the department is very interesting. It shows that, in relation to letters and lettercards, the rate for which will be increased from 3id. to 4d. for the first ounce, the department showed a profit of £3,000,000. Why the Government now wishes to increase the rate for those articles is beyond my comprehension. On the department’s own figures, that section of its activities surely is as profitable as any one in this chamber would like it to be. If it were an outside concern, Government supporters would be as concerned as would be Opposition members at the profit being made; yet we find that in relation to those two articles it is proposed to increase the rate by id. As I have indicated, the latest available figures that I could obtain show that the profit in relation to that section of the department’s activities was £3,000,000.

Senator Wright:

– On letter-cards?

Senator KENNELLY:

– It is certainly causing a reduction of the people’s money - to the tune of £2,400,000. This secondreading speech is the most illuminating brief ever handed to any Minister. The Minister said, further -

With the exception of a1d. increase in public telephone fees in 1955 Postal Department tariffs have not risen for over five years.

That is quite true. The Minister went on -

During that period, however, there have been substantial increases in costs, due to factors entirely outside the control of the department.

That is quite right, but those factors are not outside the control of the Government. On the contrary, they are well within its control. This Government was not in favour of prices control. Its attitude was that the prices would right themselves. That has certainly happened, but the only people who are benefiting are the wealthy press barons who are getting a rake-off from this bill.

Now I come to the reason why the Government says that postal charges have to go up, and why it wants to collect an extra £7,250,000 through this legislation. In his second-reading speech, the Minister also said -

Cost of living adjustments alone since July, 1951, when the present rates for Postal Department services were fixed, added almost £12,000,000 annually to the wages bill. Marginal adjustments in 1954 and 1955 and the recent basic wage increase added a further £6,000,000 a year. These levels of expenditure were increased still more by consequent higher costs of materials which the Department uses in enormous quantities.

Let us dissect and examine that. The facts are, as every one knows, that the report of the Postmaster-General’s Department last year disclosed a loss of £150,000. That means that the department has swallowed up £12,000,000 and the best part of the remaining £6,000,000. I have attempted to make some deduction. There are 77,000 employees in the Postal Department. I am allowing an increase of 10s. each but, no doubt - I am not blaming them - the tall poppies received a lot more. However, as reference is made here to the increased base rate, I estimate that if 77,000 employees receive an increase of 10s. a week the annual amount will be approximately £2,000,000. To that I add the £150,000 which the department lost last year. All I ask honorable senators to dois to wipe out the £2,400,000 that the Government is so kindly giving, in the main, to the press barons of this nation. I shall tell honorable senators possibly the funniest story that I have ever heard. I made inquiries as to this £2,400,000 in relation to newspapers and journals and I was informed from an official source that it mainly related to the postage of trade union journals. Have honorable senators ever heard anything more stupid? That is the information my secretary obtained. Of course, I certainly had a great laugh, because at least I claim to have some knowledge of the unions which publish journals. The department is merely trying to whitewash the situation by talking about £12,000,000 being added to the wages bill since 1951, in addition to the £6,000,000 because of the recent basic wage increase. The most the cost could be is £2,150,000.

The Postal Department has always claimed that it employs business-like methods. I remind honorable senators that during the last 43 years the department has made a profit of £63,000,000 of which £36,000,000 was made during the years from 1941 to 1949. We so frequently hear that Labour could not run anything; but those are the official facts. I never dreamt that a statement would be put into a Minister’s hands of such a nature that had he had time to study it he would have seen that it consisted of half truths. I accuse the department that submitted this brief to the Minister with supplying him with half truths. The statement will not stand close scrutiny. Further, the Minister said -

Stores, freights, motor vehicles, canvas and many other items needed to operate the largest business in Australia all rose in price over the period.

Of course, every , one knows that the prices of motor cars rose because of the excess sales tax imposed last March and every one knows of the 3d. a gallon that was imposed on petrol, whether the Government pays that tax or not.

Senator Vincent:

– The Government does not pay sales tax.

Senator KENNELLY:

– I know it does not; but, at least, it pays its portion of increased costs, other than sales tax, in relation to stores and freights. There is an amusing feature in regard to freights. Notwithstanding all that has been said about costs and about this loss of £150,000, the Government, in order to make itself ail right with private enterprise, is graciously giving £215,000 a year to Australian National Airways as its proportion for carrying mail. ls the Government ever going to be politically honest? 1 never dreamt that a Government could be so bare-faced as to do the things which a not very close perusal of this famous brief discloses.

The brief then goes on to say that the business of the Postal Department has grown by 34 per cent, in the last four years and that the number of employees in the department has increased by only 10 per cent, during the same period. Those are about the only figures in this statement I am not doubting. Again 1 say without equivocation that the statement at best is a collection of half truths. What has the Government done for the postal workers? Although they have made this magnificent profit for the Government over the last 43 years and have given of their skill, particularly in letter carrying, sorting and other sections, they are among the lowest paid workers. I regret, like every one else did, the recent trouble; but the Government must realize that it can drive people just that little step too far. The Government folded its arms and said. “ We believe in arbitration “. Yes, but what about the Castieau award? lt believed in arbitration then, but when the finding went against it, what did it do? Is used all the force possible to break down the award. Therefore, it is not of much use for honorable senators opposite to applaud arbitration, because at all times when the waterside workers, the coal-miners and others who have been in the vanguard of progress as far as the mass of the workers is concerned have not been prepared to accept decisions of the Arbitration Court, supporters of the Government have implied that the workers should do as they are told.

The Minister complained in his secondreading speech that electricity and gas charges throughout the Commonwealth as a whole had increased, on an average, by nearly 40 per cent. Why have those charges risen? In 1948, the Government parties said that if the States paid attention to prices, there would be no abnormal increases. We all know what has happened since.

By this bill, the Government is increasing charges imposed by the PostmasterGeneral’s Department in order that that department may increase its revenue by £7,250,000. In view of the fact that, according to the Minister’s figures, the department incurred a loss of £150,000 last year, one would have expected the Minister to state a more convincing case for the proposed increases. I was amused to hear the Minister say -

Even after the proposed increases in the rates have been effected, nearly all postal, telephone and telegraph services will be cheaper in real terms than they were in 1939. For instance, the Commonwealth weekly basic wage to-day would pay for 738 letters at the proposed rate of 4d. compared with 474 in 1939.

Although those figures are most interesting, they will not convince the people that the proposed charges are justified. Indeed, I shall be astounded if, after the charges have been increased, the loss incurred by the Postal Department in this financial year is not greater than it was last year.

According to the schedule setting out the effect of the proposed revision of postal charges, there will be increases under about nine headings in connexion with telephone services. For instance, yearly rentals for subscribers’ services in State capital cities and Newcastle will be increased by £1. I suppose I should be pleased that telephone subscribers in the thriving city of Geelong, in Victoria, will not be called upon to pay an increased yearly rental. It is proposed to charge a service connexion fee of £10. I point out to the Minister, with the greatest respect, that the Victorian police recently discovered that about 40 or 50 telephones were installed in certain premises for use in connexion with sporting events that are held mainly on Saturdays. I have no hesitation in saying that the imposition of the proposed service connexion fee would be justified in such a case, but it is unreasonable to impose this charge on people who have been waiting for telephones for many years. Of course, I realize that there has been a tremendous increase in the number of applications for telephones, and that it is not possible for the Postal Department to supply all the telephones needed merely by waving a wand. However, having regard to the fantastic profit that was made by the telephone branch of the PostmasterGeneral’s Department last year, the proposal to charge a £10 service connexion fee is fantastic.

The Government intends to increase the fee for local telephone calls in country areas from 2±d. to 3d. I cannot understand why the Cabinet gave its blessing to this proposal. As long as the Australian Country party holds the balance of power in Victoria, 1 am sure that the Victorian Government will not increase any charges in country areas. When one realizes that that party also exerts a tremendous influence in the Commonwealth Government, it is difficult to understand why this increase is being made.

Australia is one nation. It is perfectly clear to me that if one class of government, business enterprise is to be provided through: official sources with capital moneys on particular conditions, every other one of equal importance to the community should have its capital on the same conditions. If the Postal Department is to be forgiven capital charges because the money is taken directly from the Australian taxpayers, then State electricity supply, State railway, State water supply and like undertakings should enjoy the same access to the taxation pool and the same rights. Personally, I do not think that any of these business or semi-business undertakings should get their capital free of the ordinary charges of business undertakings simply because they are owned by the State in one of its various manifestations. The compelling argument against the lavish distribution of free money is that those who receive it tend to regard it as cheap money. It is never valued, and the itch to wastefulness can then become disastrous.

There are two deep-seated faults in the present status and functions of the Postal Department that need immediate correction. The first of these lies in the fact that we are trying to run a business undertaking, on what should be a business basis, under Public Service rules. The Postal Department is treated as part of the Public Service. Its employees work under the direction of the Public Service Board. They are promoted and classified under the cumbersome red-tape rules of the Public Service Act, all of which were designed for other purposes, and few, if any, of which are appropriate to the control of the staff of a business undertaking. The Postal Department should be taken outside the ambit of the Public Service Act, just as instrumentalities such as Qantas Empire Airways Limited are outside it. and placed under the control of a board or commission of competent businessmen with a charter to conduct the department as a business.

In the second place, the Postal Department should be limited in its functions to those of a business department, by the excision of purely administrative duties, particularly that relating to the control of radio, with which it was charged when broadcasting was in its infancy. Functions such as these have never been rationalized as they should have been. The Government’s proposal to increase the listener’s licence-fee for radio services gives alarming point to what I have said in this chamber about the Government’s current policy on television. Even though the listeners’ licence-fee is to be increased, the Treasury will still have to find about £600,000 for the national broadcasting services, and I may suggest that our losses on television will be considerably more than our losses on the sound broadcasting services.

There are many other comments that I should like to have made regarding this bill, but 1 see that I have exceeded my allotted time. I agree with one comment made by Senator Kennelly. I agree that persons who applied for telephone installations at least three months before the introduction of this legislation should not be obliged to pay the £10 installation fee when their telephones are finally installed.

I support this bill, Mr. Deputy President. Unfortunate though it may be that it has become necessary to impose these charges, I agree that it is the only way in which we can balance the accounts of our Postal Department, other than by imposing wage cuts on the employees of the department, and that is a course that I do not favour.

Senator COOKE:
Western Australia

– We have heard some remarkable statements from honorable senators on the Government side in support of this bill, which . will give further impetus to the inflation that is so apparent in our economy. The confused thinking and speaking of’ Senator Mattner is in keeping with the policy of the Government, which, on the one hand, appeals to private enterprise to reduce charges and thus stem inflation, while, on the other hand, it increases its own charges for postal services, which have become so expensive that many persons hesitate to use the postal facilities. It is true, as Senator Mattner and previous speakers have said, that the Postal Department has been run - and was run under a Labour administration - to show a profit, lt did show a profit to the nation, and there were many reasons for that happy result. The main reason was that the Labour government ran the department as an essential service to the people, and on business lines. The department has, however, suffered, considerably because of the policy of the present Government, which is reluctant to pay just wages to its employees.

Another phase of activity in which the department has suffered under the present Government is the purchasing of equipment. When Labour was in office, the government had a controlling interest in Amalgamated Wireless (Australasia) Limited, and a great deal of equipment for the Postal Department was purchased through that company at the lowest possible price. We were not held to ransom by what this Government calls private enterprise, or, in other words, by companies that charge prices far in excess of what they should be, and of what they were when our Postal Department equipment was supplied by Amalgamated Wireless (Australasia) Limited.

The Government has adopted a wrong policy in increasing postal charges. Some years ago, during the time of office of the Labour government, most up-to-date equipment was ordered for the purpose of sending telegrams. That equipment was ultimately installed, and it had a capacity to handle far more telegrams than were then being lodged. The people made full use of that facility, at the charges then being made. As soon as this Government realized that the department and its operators could handle this great volume of traffic, and even more, it raised charges for telegrams and lettergrams, with adverse financial results to the department. With the present excessive charges, it will be found that this service, which is essential to commerce and to our citizens, will be used less and less, although the overhead charges on this expensive and highly technical equipment will continue at its present high level. The people, and business houses generally, however, will not be able to use these services because they have become too expensive.

Every section of costing in the economy will be adversely affected. A rise in postal, telegraph and telephone charges will affect every section of business and commerce. Most private firms will make other arrangements for the delivery of their letters. Juniors are employed in many firms now to deliver literature and mail. Firms would not bother to employ them for that purpose if postal charges were more reasonable. The Government has shown bad judgment in revising these charges. There is a big delay in installing postal and telephone services because equipment and technicians have not been available. Under this legislation, additional charges will be levied on the persons who want those services.

Everybody will be hit by the new rates, but they will bear hardest on those who live outside the metropolitan areas. This Government has claimed that it believes in decentralization, yet it proposes to reduce charges for trunk line calls over short distances, in some cases, while long-distance calls will be dearer. How can that be reconciled with the continual pleas of the Government to people to settle in the country areas? If the Government wants decentralization of population, it is going the wrong way about achieving its objective. Supporters of the Government have claimed that they want to see development of the north-west of Western Australia. These new post and telegraph charges will not assist development; they will retard it.

The Government has claimed, as usual, that the new charges are necessary because of increases of wages. The truth is that there has been dissatisfaction among postal employees for a long time because their basic wage has been frozen. They have not received the cost of living increases that have been paid to other sections of the community.

If the Government wants to run the Postal Department as a business concern, and along the lines of private enterprise, why does it give concessions to airlines which are in direct competition with the government airline? If the Government is sincere in its proclaimed desire to fight inflation, it should provide essential services at the lowest possible cost. This bill shows that it is not sincere. It is penalizing the business community, and the people of Australia generally, by a policy which directly contradicts its plea to private business concerns to reduce charges and help to lower costs of production.

When he introduced the bill in this chamber, the Minister for Repatriation tried to prove that the charges were not excessive by estimating how many letters a man on the basic wage could post now, and how many he could have posted when the basic wage was lower. There is no sound basis for the comparison.. So far as I know, the man on the basic wage postsvery few letters, but the basic wage earner will pay, in the long run, for every increase in the charges for telegrams, telephone calls and letters that is imposed under this legislation. All these costs will be passed on to wage-earners and consumers.

The Opposition has asked for official figures to show that an increase of Postal Department charges has been made necessary by higher costs. We have not been able to get detailed figures. We have been told, broadly, that the position now is the same as that which existed in 1951. The Senate is entitled to know from the Minister in charge of the bill where the Postal Department is suffering financial losses.

Senator Hendrickson:

– There are no losses in the department.

Senator COOKE:

– The Government claims that the Postal Department is losing money, but it will not give honorable senators detailed figures. When the Government brings down legislation which is grossly inflationary, and foists severe increases of charges for essential services on to the people, it should produce figures to justify the measures it is taking. The Minister should place before the Senate a statement showing the losses and the turnover of the Department for various periods. We should be told where the Government expects to gain revenue, and how it expects to meet losses. While the Government continues to introduce inflationary legislation, it must expect private enterprise to ignore its requests to fight inflation by reducing charges.

This bill operates harshly on people in country areas. I do not think consideration has been given to them at all. Trunk line charges in outlying areas have been increased, and a charge for the connexion of telephones is now to be made. The bill will give further impetus to the inflation of which the Government is at present complaining and which is afflicting the whole of industry. The measure is a bad one and has been badly presented. It is incumbent upon the Minister to-night to give a better explanation than we have had of these increased* charges and this impetus to inflation that we are asked to pass.

Senator’ SEWARD (Western Australia) “10:51]. - I’ could not understand the speech of Senator Cooke. He wanted to know figures of turnover and. so on. While I, with Senator Kennelly, deplore the fact that the latest report of the Postmaster-General available to us is about a year old - it. goes only to 1955, and we should have a report to 1956 - apparently Senator Cooke has not seen it. The report deals with the handling of the various branches of the department over the two years that it covers. I should like to suggest that the department consider covering, more than two years in the tables contained in these reports. If I remember rightly, when we discussed this matter in 1951, it was agreed that the period covered by the report should be more than two years. I think the period should be three or four- years, which would give a better idea of the work of the department than does this report’ which is confined to two years.

I listened to a most extraordinary speech to-night from Senator Kennelly. He started by quoting figures from the report of the Public Accounts Committee. Then, in the middle of doing that, he jumped to the Postmaster-General’s report and quoted figures for the returns of the telegraph branch. Heaven only knows where he got other figures that he used. I certainly had no hope of following him. If he had kept to the report of the Public Accounts Committee, the report of the Postmaster-General or some other report that has been tabled in this chamber, I might have been able to follow him, but he was impossible to follow.

When speaking in the debate on the Estimates and Budget Papers recently, I said that there was one part of the budget that I did not like. That was the part with which we have to deal in this bill. Because I may be a little critical of it, I want to say at the outset that I regret having to be critical because I was pleased that the present PostmasterGeneral (Mr. Davidson) was appointed to his position. I sincerely hope that he holds that position for many years and that he will have success in the big task before him. I deplore the fact that he has taken over a department that is in the position of this one. It is not his fault, and it is not the fault of his predecessor.

It is one of the results of the method of conducting departmental business over a period of years. I take it that he is now endeavouring to put the affairs of the department on a sound footing and to make it, at alf events, come somewhere near to paying.

I want to pay a tribute also to the Director of Telegraphs and the Superintendent of Telephones in Western Australia. Whenever I have gone to them with requests, they have met me sympathetically. Unfortunately, they have not been able to give me what1 I wanted, because it was beyond their power to do so.

Senator Hendrickson:

– Does the honorable senator, say why?

Senator SEWARD:

– Of course I do!. They did not have the material, or the money, or they could not get technical assistance. As far as it lay in their power to do anything, they were only too pleased, to assist. In the course of his speech, the Minister pointed out that additional revenue was required to offset the inescapably higher costs incurred in the Postal Department in the provision, operation and maintenance of its services. He said that the higher costs were unavoidable. I should like to inform the Postmaster-General, through the Minister representing him here, that if he has a close scrutiny of the costs in- his department, he may find some ways of reducing’ them without affecting the services to the public or the convenience of the staff.

I was at the opening of a post office recently. I will not say where it was. It was in a town with a population of, I’ suppose, 300 people. In my opinion, great’ extravagance had been shown in the construction of that building. A similar building is being erected in another town in Western Australia which has a populationof about 150 people. The postal hall in the post office to which I have referred was quite a good one; it was up to date and will serve for many years. There was a reasonable number of private boxes. Having seen them, we then came to the telephonists’ room. It was a very convenient room with a switchboard large enough to meet future requirements. The next room was a very nice little room with a table, easy chair and cushion. We were told that it was the telephonist’s morning and afternoon tea room. I venture to say that the Director-General has his cup of tea brought to him at his desk. I think that most people have their cup of tea there. I do not know how the telephonist could leave her switchboard to sit down in that room for a cup of tea.

Senator Hendrickson:

– What is wrong with that?

Senator SEWARD:

– It is all right, but the honorable senator does not have a special room for his tea; it is brought to his table. The next room was a luncheon room with a stainless steel sink, cooking arrangements, table and chairs and everything necessary for the use of the employees. I remind the Senate that this was in a country town where, I venture to say, every one would go home for lunch. We then went on to the stationery room, which was a necessity. Then we came to a bicycle room and another room where the employees could hang their wet coats. Fancy that, in a small town of 200 or 300 people! In a second town the only members of the staff would be the postmaster, the lad who attended to the counter and the girl on the telephone exchange. They all go home to lunch.

If these buildings were examined, a considerable saving could be made. In some cases they are too elaborate for the towns that they serve. I know perfectly well, of course, how a government architect reacts when he is given a free hand. One received a medal for the design of the Canberra swimming pool, and another in Perth won a medal for a school that he designed. Government architects should be controlled slightly so that their designs for these buildings will be reasonable.

I had another illustration of what I thought was a shocking waste of money. In a country town that I visited was a post office built of rough granite blocks. It has been there for about 25 years. The country has plenty of red dust. I am sure no one will believe me when I say that this building has been painted white. The whole building of granite blocks has been painted white, and I venture to say that in eighteen months’ time it will be as red as it ever was - probably as red as the curtains in this chamber. Our income tax laws should be revised to prevent such stupid things as the painting of stone buildings. It is done only to avoid the payment of income tax. I suggest that the department examine these matters. It could economize on these buildings, and it would find that some of this inescapable expenditure is not as inescapable as it has suggested.

I turn now to the bill, and I find that we are in rather an extraordinary position. This is an extraordinary way of doing business in this Parliament and I just cannot get to the root of it. The bill we are discussing to-night deals with postal, telegraph, television and telephone charges. Yet there is nothing in the bill relating to telephone charges. If I wanted to move an amendment to delete or alter the telephone charges, the whole bill could be thrown out without having the slightest effect on telephone charges. They will be brought in by regulation or by an act of the executive. It is extraordinary that one set of charges should be dealt with in this bill but that telephone charges should not be included. However, that is the position and I want to direct my attention to-night to the telephone section of the department. To go out and support the increased telephone charges is rather difficult. Last year, the telephone branch made a profit of £2,904,538, and in the previous year, £3,221,100. The postal branch incurred a loss of £2,253,668 last year, and in the previous year £1,849,361, whilst the telegraph branch incurred a loss of £800,036 last year, and £1,218,796 in the previous year.

Debate interrupted.

page 532

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 negative.

page 532

POST AND TELEGRAPH RATES BILL 1956

Debate resumed.

Senator SEWARD:

– It would seem, therefore, that an effort is being made to make the telephone branch pay for the other two branches. The Government may be able to explain that away, but nevertheless it is the position. 1 note that over past years the telephone - branch has made an accumulated profit of £35,400,000. The accumulated profit of the postal branch is £33,300,000, whilst the accumulated loss of the telegraph branch is £5,300,000. As I have indicated, it seems therefore that the telephone subscribers are being asked to carry the loss that is being incurred by the other two branches. I know that this Government has installed many more telephones than has any previous government, but. we must recognize the fact that the population of Australia has increased. The result has been a greater accumulation of applications for telephones. At the present time 67,000 applications for telephones including 17,869 applications in country areas, are outstanding because of the shortage, of equipment, lt might be that import restrictions are preventing the Postal Department from obtaining equipment; but in view of the fact that the telephone branch’ is making such a large profit, I should think it would be apparent to the Government that it should do everything possible to obtain more equipment, even if that meant reducing the money that is being made available to other branches. To do that .should be good business, because apparently the installation of more telephones would lead to the making of more profit. I am pleased, however, to note that this year an extra £2,000,000 is to be made available to the department to purchase the necessary materials for the telephone branch.

I have stated in this chamber on “previous occasions that the population of our country districts is declining, and in my opinion it will continue to decline while those districts are denied the benefits of scientific invention. 1 was rather interested to note in to-day’s press a report from the International Bank for Reconstruction and Development to the effect that the per capita production in the industrialized nations is more than ten times greater than that of the nonindustrialized nations. It behoves us therefore to give attention to the installation of telephones in country districts. I think it was Senator Kennelly who referred to the proposed charge of £10 for the installation of a telephone. I do not complain about the imposition of such a charge in’ the city, because 1 think the city dweller is getting his telephone installed very cheaply. In country districts, persons who want a telephone must commence by erecting five, ten or fifteen miles of wire. I have met many persons who have spent £400 or £500 on the erection of telephone wires to join up with the departmental line. All that city applicants must do is to submit an application and then - not immediately, of course, but within a couple of weeks or a month or two - a telephone is installed. Country people have to wait for four, five or six years for a telephone, despite the fact that they have spent £400 or £500 on the erection of lines to their properties.

To a person living in the city a telephone is a convenience, whereas to the country dweller it is an absolute necessity. It affects his cost of production in many ways. In the case of sickness, a country dweller can telephone a doctor or district nurse and obtain advice or, if necessary, ask that person to call. Without a telephone, it is necessary to take a long journey in a car or truck over a corrugated road, and that is not very pleasant for a sick person. When bush fires occur, it is absolutely necessary to have a telephone. If a person in the country has not a telephone, before long he or his wife decides that life under such conditions is not worth while and they leave the farm and go to the city where they are able to obtain the amenities of life.

In country districts it is necessary not only to erect a line for several miles, but also to get somebody to take charge of the exchange. It is necessary for that person to be on duty for the stipulated hours. At this stage, I wish to direct attention to a small matter that the department ought to rectify. A person who operates an exchange in the country is not able to have his name printed in the directory unless he pays for it. That person does the necessary work and is on duty from 8 a.m. until 6 p.m. or 8 p.m. with a break of an hour for lunch. He does that work for a comparatively small return. I think that the practice of the department in not including his name in the directory unless he pays for it is mean. Perhaps others have had an experience similar to mine when I have wanted to telephone a certain person in a particular place. One knows that that person may be contacted on the telephone, but one is obliged to go through the various channels and subexchanges in an endeavour to locate him.

The Department could easily print that person’s name in the directory, and to do so would be a convenience to him and everybody else. I repeat that in country districts telephones are an absolute necessity. 1 note that certain concessions will be made in relation to trunk line calls. Incidentally, the charges for local calls will affect the country man more than the city man. The table distributed by the PostmasterGeneral shows that in the metropolitan area, the present basic wage will permit the making of 226 more local calls at the increased charge than did the basic wage in 1939. In rural areas the increase is 36 calls. It will be noted that the benefit in the rural areas will not be as great as in city areas.

Senator Sheehan:

– Those figures do not relate to an increase. They represent the cost of the calls as related to the basic wage.

Senator SEWARD:

– It is a fact that the city man will obtain greater benefit than will the country man. There is a concession in respect of calls made in the immediate vicinity of city areas, but that will not affect the country man. Of course, the proposed increases in respect of longdistance calls will not affect the people of the northern part of Western Australia because there is no telephone service beyond Carnarvon, which is approximately 700 miles from Perth. The increase of other postal charges, however, will affect them considerably.

When I was speaking to a similar measure in 1951, I made some comparisons to show how the proposed increases would affect the residents of country districts, and I intend to use the same services to-night for purposes of comparison. The particulars are as follows: -

The nomination fee refers to the charge for nominating a particular person which is often necessary, especially in country areas. Those are very high charges. I think that the proposed increases will penalize country people heavily. My object in bringing this matter to the notice of the PostmasterGeneral is to appeal to him to have another look at the schedule before the regulations begin to operate. As I have said, if the rates were referred to in the bill we might be able to amend them or send them back for revision, but as the bill stands, we could throw it out completely without the rates being affected.

Trunk line calls are expensive for country people because the radius of local calls is not very great. Usually, it extends between the residence of the caller and the nearest town. The majority of calls made by the country man are trunk line calls to the surrounding district or to the nearest city in connexion with break-downs in machinery, and that kind of thing. The cost of trunk line calls for the country man is, therefore, heavy. I suggest that the cost of local calls in the country should be kept to the minimum. After all, it is very convenient for the housewife on a remote property to be able to call her neighbours on the telephone and have a conversation with them when her husband is out working on the property and she is alone. For people in the country, the increased charges will be serious.

To give honorable senators an idea of the conditions experienced by country people, I propose to read some correspondence that I have received during the last few weeks. One letter comes from returned soldiers in the Lakes district and -reads as follows: -

The members pf the above branch . . . have instructed me to write and enlist your support and help in obtaining for the district an improved telephone service. At present the service is deplorable and delays amounting to several hours are quite frequent before it is possible to get a call through, especially when the line is extra busy, and this is most times. There is only a single line to Newdegate which has to serve the whole district from ‘Hopetoun to Holt Rock, so you can easily see how congestion and delays occur.” In May, 1955, the Postmaster-General’s Department recognized the need for better facilities in these areas and had approved of an additional trunk line between Newdegate, Lake King and Mi Madden, and that existing single wire lines were to be converted to wholly metallic (2-wire) circuits.

That line was erected by the settlers themselves in 1934, or about that time. They erected the line for 30 miles. They dug the holes, carted the poles, erected them and put on the cross bearers, and the department then put on the wires. I had occasion to go out there recently after there had been heavy rain. I wanted to find out the best road to take, so I tried to ring the exchange but could not get through. I got through to Newdgate and gave the Newdegate exchange my message; the exchange passed it on and then transmitted the reply to me. That kind of thing is not fair to the people in the area. They have to pay the full telephone charges, but must put up with service of that kind. In another area, the settlers erected a line 30 years ago. It was a single line, but there are now nine sub-exchanges connected to it. Honorable senators can imagine how difficult it is to make a call to that district. It is almost impossible to hear because of all the cross-talk that goes on.

Senator Hendrickson:

– What is the honorable senator’s remedy?

Senator SEWARD:

– 1 say that it is necessary for the Government to make available a larger sum of money for the telephone branch, so that it will be able to provide the necessary materials and install automatic exchanges where they are necessary. Incidentally, I notice that automatic exchanges are being installed in city areas. Whilst they are convenient in such places, I point out that, in the cities, it is relatively easy to obtain the services of telephonists, but in the country districts that is not so. Therefore, I maintain that the country districts should have first call on the automatic exchanges that are available. Most of us know that often people who have operated an exchange in a private house for 20 years or 25 years decide that they can no longer do so, and it is then most difficult to get someone else to take over the task. Unless it is possible to install automatic exchanges in such cases, the telephone service for the district is lost.

I appeal to the Government to provide more money for this department, even at the expense of some other department. Telephones are absolutely essential in country districts. Scores of applications have been held up simply because the materials have not been available. I hope something will be done because I should not like to move for the rejection of the regulations when they come forward. Some of the proposed charges may be warranted. I believe, however, that they are not warranted in the instances to which I have referred, and for that reason I urge the Government to reduce some of the imposts.

Senator HENDRICKSON:
Victoria

– I have listened with great interest to Senator Seward’s speech. I can appreciate all the difficulties that he mentioned, but I was astounded to hear him complain because the post office buildings being erected in country areas contain amenities for the staff. If it were possible for him to come with me to Victoria he would be able to see the appalling lack of amenities ‘a that State. He would see postmen, who are asked to deliver mail in all kinds of weather, coming in from the morning run, wet through, with no place in which to dry their clothes and no place in which to eat. I also was astonished to hear him say that he did not think that telephonists employed on switchboards should have a morning cup of tea.

Senator Seward:

– I did not say that.

Senator HENDRICKSON:

– 1 suggest that if a telephonist is sufficiently fortunate to have a cup of tea provided for her-

Senator Seward:

– Mr. President,. I wish tq make a personal explanation. Senator Hendrickson stated that I said that the telephonist should not have a cup of tea.

The PRESIDENT:

– Order! Senator Seward may make his personal explanation when Senator Hendrickson has finished speaking.

Senator HENDRICKSON:

– I am sorry if I have misquoted the honorable senator, i did not intend to do so. 1 point out for his benefit that provision would be made to relieve the girl on the switchboard while she had a cup of tea; and surely she is entitled to a chair to sit on!

Postal charges are increasing, it is true, but the staff cannot be blamed for that. The amenities that ar.e provided for staff members are totally inadequate. For instance, the line staff are obliged to eat their lunch in all kinds of weather, sitting at the side of the road, or in vacant allotments. If Senator Seward were to see how those men work he might appreciate the difficulties of the work in the Postal Department. I suggest that the increased charges now proposed will not solve any of the problems with which the department is confronted. Senator Mattner suggested that the Postal Department should be given preferential treatment compared with private enterprise. If the Postal Department had the same right as a State electricity commission or any semi-government instrumentality to go on the loan market, honorable senators would be amazed at the response, because people recognize the value of the services given by the Postal Department and would willingly contribute. No government department serves the public more efficiently.

Senator Seward complained about the cost of providing party lines or single lines such as were erected by ex-servicemen about 30 years ago after World War I. I well recall them, but Senator Seward failed to tell the Senate what revenue the department .would receive from such lines if they were erected by the Postmaster-General’s Department. To install a line over a distance of 30 miles to provide a service to one subscriber would cost £2,000 or £3,000, and the rental received for that service would be about £5 10s. a year. His calls might be two or three a week. Is that what Senator Seward and Senator Mattner regard as a sound business proposition? It is obvious that the Postal Department would have no hope of paying its way if such a policy were followed. Why should there be any concern about the installation cost provided the people of Australia have a service available to them? The telephone is one of the best utilities provided for the public.

Thi blame for the lack of telephone serv. _s does not rest on the PostmasterGeneral or the administrative officers of the Postal Department. I agree with Senator Seward that there are no better officers anywhere in the Commonwealth service. The cause of the present deficiency dates back to the depression years, when the government of the day paid the revenue from the Postal Department - which ran into million* of pounds - into Consolidated Revenue, instead of applying it to the improvement and extension of the Postal Department services. The result was that post offices, equipment and telephone lines were allowed to deteriorate and become unusable. Engineers and officers of the Postal Department, who realized that telephone and postal services would increase enormously, prepared plans and estimates to meet such a situation, but these were pigeonholed and have never seen the light of day. Recently, I was in a provincial town and saw estimates which I prepared in 1938 in respect of services that were then considered essential. Nothing was done, and in that town departmental officials are still waiting for money to implement the plans then drawn up.

The Government and the public do not realize that postal services are as important as the Snowy Mountains hydro-electric scheme. Who expects the Snowy Mountains project to pay dividends to-day? Although that is not posible at this stage, it will pay handsomely in the future. Who could expect the Postal Department to provide telephone services to people in remote areas, such as Senator Seward mentioned, unles the department planned for years ahead? If it had done so during the depression period, those people would now have the benefit of adequate telephone services. If the Postal Department were allowed to raise funds on the loan market, and pay interest on the loans obtained, tor the provision of post offices and telephone services, the increased revenue would soon offset the capital outlay and the department would show a profit.

Only this week, in Melbourne, 1 read in the press an insinuation of graft in the Postal Department because in some areas persons have been able to have telephones installed. The suggestion in the article proved conclusively that the writer had no knowledge of the ramifications of the department. When provision is made in any area for telephone services, probably a thousand-pair cable is laid. There may be only 500 or 600 subscribers, and for the time being, the remaining pairs are idle. Then, as new applications from that area are received, telephones are connected to the lines already laid, lt is wrong for the press to insinuate that the new subscribers recently connected obtained a service because they were able to pay for preferential treatment. In some areas of Victoria, if a starting-price bookmaker were willing to pay £1,000 to have a telephone installed in his premises he could not get it because the department would not have the lines, or the room in the telephone exchange, to provide it. This Government has taken away from the postal services revenue that could have been used to provide telephones for people in the out-back parts of the country, the people about whom Senator Seward spoke with such feeling to-night. 1 shall say no more about this measure, but when the Estimates dealing with the Postal Department are under consideration I shall have something more to say about postal services. If the Senate agrees to this bill to-night it will not solve any problem in the Postal Department. As Senator Mattner, Senator Seward and Senator Cooke said, the result will be to increase the costs of production throughout Australia, because the extra charges proposed will be added to the cost of living. I totally oppose the extra charges, and I hope that the motion for the second reading of the bill will not be agreed to.

Senator COOPER:
Minister for Repatriation · Queensland · CP

– in reply - This measure has been the subject of criticism, and that is to be expected when any measure which proposes an increase in charges is brought down. However, the speeches of honorable senators on both sides of the chamber did not reveal any specific ground for criticism. Senator Kennelly criticized the method of presenting the accounts in the Postal Department, and asked why certain figures were not made available. From time immemorial the whole of the revenue of the Postal Department has been paid to the Treasury, which subsequently makes available money required for new Postal Department works. Governments have always tried to make the costs and the revenue of the Postal Department balance, and that is the object of this bill, lt is estimated that extra costs amounting to £21,000,000 a year have been involved in supplying post and telegraph services, and it is expected that when this legislation comes into force £5,000,000 extra in revenue will be gathered during the remainder of this financial year, and in a full year, £7,000,000. The entire sum of £21,000,000 has had to be expended by the Postal Department. The department, over the years, has done everything possible to reduce costs, and its efforts have met with quite considerable success. During the last five years the number of trunk line calls handled yearly by each operator has risen from 7,500 to 9,300. The output of the maintenance staff per man hour has risen by 15 per cent. During the last four years an increase in business of 34 per cent, has been handled by a staff which has been increased by only 10 per cent. This has been achieved by a mechanization of the various processes and by increased efficiency throughout the department. This has made it possible to absorb what I believe I am quite right in calling the inescapable increase in costs during the last twelve or eighteen months.

Senator Seward mentioned country telephone calls and the handsome profit shown by the telephone branch. He asked why increased charges should be imposed to bring in extra revenue to the telephone branch when it is already earning substantial revenue. The telephone branch needs quite a large amount of expensive capital equipment. As all honorable senators know, it is one branch of the Postal Department which is under continual criticism from the community in regard to the installation of telephones. The department is doing all that it possibly can do to increase the rate of installation, and to this end it has to purchase and install expensive equipment. It is thought only fair that the telephone branch should bear some proportion, although only a small proportion, of that extra cost. There is no doubt that over the years country districts have been supplied with automatic exchanges in far greater numbers than have cities. About 100 automatic exchanges a year are being installed in the country. The country is getting quite a fair share of the department’s improved equipment. I point out to Senator Seward that the cost of trunk line calls for distances of between five and ten miles, which in a small country town is a fair radius, has not risen in 20 years. It was 3d. twenty years ago and it is still 3d. The basic wage would have covered the cost of 316 of these calls in 1939, whereas to-day it would cover the cost of 948. The rentals payable by telephone subscribers in Sydney and Melbourne have risen from £5 10s. to £13 5s., in other State capital cities from £5 7s. 6d. to £12 10s., and in districts served by small rural exchanges from £3 to only £4 7s. 6d. The basic wage in 1939 would have paid rental for 68 weeks. To-day, it will pay rental for 146 weeks.

The claims of country areas to special consideration have not been overlooked. For trunk line calls within a radius of 30 miles, the’ charge has been reduced from ls. Id. to ls. between 9 a.m. and 6 p.m., and from lOd. to 9d. between 6 p.m. and 9 a.m. Senator Cooke spoke about the Kimberleys in Western Australia. Trunk line calls for distances of over 900 miles are to attract a flat rate of 20s. from 9 a.m. to 6 p.m., and 15s. from 6 p.m. to 9 a.m. Those are the rates to be paid for long distance calls by persons who are developing the back country in Western Australia and in other States, including my own State of Queensland. They will receive very considerable benefit from this bill. 1 come now to the matter of the charge of £10 for telephone installations. If we install electric light, gas, water, Or sewerage, we pay for it. Over the years it has become customary for telephones to be installed free of charge. An amount of £10 is a small charge for the initial cost of installing a telephone. In respect of applications for services which have been accepted by the department and for which the rental has been paid, no charge will be made for installation. Where applications have been received but rental has not been paid, applicants will have to pay the installation fee of £10.

There may be some other matters on which honorable senators want some information. Perhaps I shall be able to deal with those matters in the committee stage.

Question put -

That the bill be now read a second time.

The Senate divided. (The President - Senator the Hon. A. M. McMullin.)

AYES: 29

NOES: 22

Majority 7

AYES

NOES

Question so resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 and 2 agreed to.

Thursday, 27 September 1956

Senator COOPER:
Minister for Repatriation · Queensland · CP

– 1 can only say, as I said before, that the information desired by Senator Kennelly will be obtained and supplied to him when the Estimates are before the chamber. Needless to say, I do not always carry particulars of this kind with me, and the department does not yet have the required information. The information sought is the kind that is normally furnished during consideration of the Estimates. If the honorable senator will compose himself in patience until then, I shall obtain the information for him, and I will be here to be shot at.

Senator KENNELLY:
Victoria

– I accept the assurance of the Minister for Repatriation (Senator Cooper) that, if I ask similar questions when the Estimates are under consideration, I shall be supplied with the relevant information. Therefore, the Minister has fourteen days, or more, in which to obtain particulars. I certainly hope that I shall be given more information on this subject during the debate on the Estimates than I have been able to obtain during the consideration of the measure now before the chamber.

Senator AYLETT:
Tasmania

– In view of the remarks of the Minister for Repatriation (Senator Cooper), would it not be only fair and reasonable to defer further consideration of the clause until the information that has been sought by Senator Kennelly is available? Never before, since I have been a member of this chamber, have I heard a Minister say, during consideration of a bill, that information sought by the Opposition could not be supplied until a subsequent debate a fortnight or three weeks later. The Minister has been a member of this chamber longer than I have, and I doubt very much whether he can recall any previous instance of such a pronouncement being made. As matters stand, the information that is needed by honorable senators to enable them to form a sound judgment on the clause, and to decide whether or not the measure should be passed, will not be forthcoming for several weeks after the measure has, in fact, been passed, because the Government has the numbers, and it will be passed. No more brutal exhibition of force could be imagined. We are being treated to a demonstration of the kind of thing that happens elsewhere, because certain nations are more powerful than others.

Senator Kendall:

– We all remember what happened in 1951 when Labour had a majority in this chamber.

Senator AYLETT:

– Nobody should try to deny to me the right to state the position fairly. I come now to another aspect of the matter. Although the Government intends that the increased charges shall be operative from next Monday, I doubt very much whether millions of people in this country are aware of the position. A Scotsman to whom I spoke recently probably knew about the proposed increases, because he said to me: “ I will trick them. I intend to buy a couple of pounds’ worth of 3id. postage stamps before the price goes up to 4d.”. Doubtless, many people who are not aware that the increased postal rates will apply from next Monday, will afterwards post letters bearing only 3 id. postage stamps. I should like the Minister to inform me whether there will be a period of grace. Will he assure me that, for a reasonable period after next Monday, the recipients of letters bearing only 3£d. postage stamps will not have to pay a surcharge? How does the Minister propose to acquaint the people of Australia, during the few days between now and next Monday, with the fact that higher postage rates will apply from that day?

Senator ASHLEY:
New South Wales

– I should like the Minister for Repatriation (Senator Cooper) to inform me whether the non-attendance of officers of the Postmaster-General’s Department capable of supplying to him the information that has been sought, is attributable to the Government’s economy drive. It is apparent that this bill will be bludgeoned through the Senate.

Senator Hendrickson:

– That is true.

Senator ASHLEY:

– In effect, the measure imposes additional taxation of about £7,500,000 a year on the people of

Australia, but no information has been given to us in justification of the increased charges. Why is it that this is the only occasion for as long ago as I can remember that informed officers of the Postal Department have not been present to supply to the Minister information respecting any branch of the department, so that he may answer fully questions asked by honorable senators? 1 appeal to the Leader of the Government in this chamber (Senator O’sullivan) to adjourn further consideration of this measure until to-morrow, so that the Minister can supply honorable senators with the information that they seek.

Senator COOPER:
Minister for Repatriation · Queensland · CP

– I assure Senator Aylett that any person who unwittingly affixes postage stamps at the present rates to letters that are posted next Monday will not be victimized. I remind honorable senators that wide publicity has been given to the fact that increased postal rates will apply from the 1st October. The matter was first mentioned in the budget speech of the Treasurer (Sir Arthur Fadden), and wide publicity was given to the matter when this measure was before the House of Representatives, lt is futile for Senator Aylett to assert that many people do not know that postage rates will rise from next Monday.

Senator COOKE:
During the second-reading debate on this measure, the Minister for Repatriation (Senator Cooper · Western Australia [12.9 a.m.].

stated that the proposed increase of postal charges was in conformity with the Government’s policy to place the Postmaster-General’s Department on a business footing. When I asked for certain figures to be furnished, Senator Seward said that they were readily available. I remind the Minister that, according to figures in the possession of the Opposition, mail matter has been carried profitably by the Postal Department On the other hand, the Minister has stated that the department has incurred considerable loss on this part of its activities. Is the Minister prepared to allow the department to be so run that certain mail matter will continue to be carried at concession rates while an increased burden is to be imposed on the vast majority of people, who are already paying postage at rates that are profitable to the department? The Minister has asked honorable senators to pass a measure which, in effect, imposes additional taxation of about £7,500,000 on the Australian people. Surely, he is in possession of a statement showing the running costs and trading results of the department.

Senator CRITCHLEY:
South Australia

– In common decency to the Opposition the Minister for Repatriation (Senator Cooper) should reply to the many requests for information made by Opposition senators, and in particular to the request just made by Senator Cooke. After all, the very purpose of this bill is to increase postal charges, and the Government should be in a position to tell the Opposition and the public without hesitation its purpose in raising these charges, lt is entirely wrong for the Minister to answer a request for information, made by the Opposition for the sole purpose of showing the country whether the Government was acting bona fide in increasing these charges, by telling Opposition senators to wait fourteen days until the Estimates came before the Senate.

Earlier this evening Senator Kennelly cited some figures. Surely no honorable senator will dispute Senator Kennelly’s opinion that accurate information had been forwarded to him! Shortly afterwards Senator Mattner also cited some figures, which were totally different from those given by Senator Kennelly. It is very obvious where Senator Maimer’s figures came from. Senator Kennelly asked for information in order to ascertain which figures were right and which were wrong, and other honorable senators also have tried to elicit this information, but no answer has been received. The Minister did not even bother to rise in his place to answer Senator Cooke’s request for information. Earlier he told Senator Kennelly that he would endeavour to give him the required information in a fortnight’s time. I have never witnessed such a disgraceful exhibition as we have seen here this evening, and I am sure Government senators also have never witnessed such a disgraceful exhibition. I emphatically protest against the Minister’s treatment of the Opposition.

Senator COOPER:
Minister for Repatriation · Queensland · CP

– Senator Critchley rose a little too quickly for me to reply to Senator Cooke’s request for information. Senator Critchley and other Opposition senators have mentioned the information that Senator Kennelly sought. I told him, and other honorable senators, that the Postmaster-General’s Department is run as a whole, and that the activities of the various branches are not considered separately. I explained to Senator Seward that although the telephone branch had made a profit the Government proposed to increase telephone charges.

Senator Ashley:

– Come clean!

Senator COOPER:

– I ask the honorable senator to give me a chance. He will have an opportunity to address the Senate later. 1 told Senator Seward that it was proposed to increase telephone charges although the telephone branch shows a profit. We must look at the overall picture. Individual branches of the department are not singled out for special treatment. Senator Cooke asked for exact figures in relation to the carriage of letter cards.

Senator Cooke:

– The Minister must have some figures.

Senator COOPER:

– I have told the Senate that I am unable to supply that information this evening. The department is taken as a whole in the consideration of profits, and revenue is paid into Consolidated Revenue, as has been done since the Commonwealth took over postal services.

Senator Hendrickson:

– That is so, but the Minister says that the department does not pay.

Senator COOPER:

– 1 did not say that.

I said we were to increase telephone charges although the telephone branch had made a profit.

Senator CRITCHLEY:
South Australia

– The Minister for Repatriation (Senator Cooper) has had about a dozen opportunities to answer the requests for information made by Opposition senators, but he is making heavy weather of it. Indeed, he is making no progress at all. Why does he not do the decent thing - tell .the Opposition that he has not the information and cannot get it immediately, and postpone the further consideration of the -bill until to-morrow? The Opposition would be satisfied if he took that course. The Senate is being asked to approve *he increased charges without the benefit of any information. The Minister did not contradict the figures cited by Senator Kennelly at the second-reading stage, but he allowed Senator Mattner to cite a fresh set of figures which came from a’ source unavailable to Senator Kennelly. The Government stands condemned for that action.

Senator AYLETT:
Tasmania

– Perhaps it will be a little easier for the Minister for Repatriation (Senator Cooper) to give some information that I want. Will he inform me how much additional revenue is expected to be obtained annually from the increased charges mentioned in this clause? 1 take it that the Minister will not resort to direct action - to which the Government is so much opposed - by going on strike and refusing to give the Opposition information. If he would give me the information for which I have asked it might make it easier for him to give the Senate the more general information sought.

Senator COOPER:
Minister for Repatriation · Queensland · CP

– I have given about half a do ‘.en times the information for which Senator Aylett asks. The increased charges to which he refers are expected to bring in approximately £5,000,000 for the remainder of the current financial year and approximately £7,000,000 or £7,250.000 in a full year.

Senator Aylett:

– Five million pounds from the increased charges mentioned in this clause alone?

Senator COOPER:

– That is the additional revenue expected to be obtained during the remainder of this financial year under the proposals in the bill and regulations. Offhand I cannot give the honorable senator separate figures for the various activities of the Postmaster-General’s Department.

Senator HENDRICKSON:
Victoria

– The Minister for Repatriation (Senator Cooper) has made an explanation, but he still does not understand what the Opposition wants. The latest figures available show that the Postmaster-General’s Department made a profit in 1955-56. This measure will permit an increase of charges which is estimated to bring in £5,500.000 in the remainder of the current financial year. Does the Minister want the Senate to understand that in fact the department made a loss of that magnitude in 1955-56, and that the Government proposes to make it good by increasing charges? What is the revenue expected to be obtained from the increased charges to be used for if the department again makes a profit of similar magnitude to that indicated by the figures cited by Senator Kennelly? We want to know where this revenue will go. Is this measure just a snide way of obtaining a further £5,500,000 to put into Consolidated Revenue?

Senator AYLETT:
Tasmania

– I ask calmly and coolly whether the Government’s failure to give the Opposition the information sought indicates that it does not have it.

Senator Hannaford:

– The honorable senator would not know anything about it.

Senator AYLETT:

– The honorable senator would not know what I am talking about. Is the Government merely making a blind stab and saying, “ We are down so much. We will bring in an additional £7,000,000. We cannot say how much our revenue will increase if we raise the charge for . first-class and second-class mail matter by a half-penny an ounce. We have no more idea than the man in the moon has of how much additional revenue that would give us “? That is exactly what the Minister for Repatriation (Senator Cooper) appears to be trying to tell us this evening. Could honorable senators imagine any private enterprise, much less a government, conducting an undertaking in such a fashion? Can the Government claim that it is in any way efficient if it conducts a business undertaking by such methods? This is the most crude and haphazard way of conducting an undertaking, either government or private, that 1 have ever heard of. It astounds me. I never thought for one moment that the Government’s administration had deteriorated so much that it could not even estimate how much more revenue it could obtain annually by increasing the postal charge on first-class mail matter by a half-penny an ounce. It is absurd to think that the Government cannot give us that information. I say it can and should give it to us.

I do not intend to belittle the staff of the Postmaster-General’s Department by saying that its methods are so haphazard that it could not supply this information, the staff has been too eflicient tor many years for me to say that. The Minister’s attitude to-night indicates that he is not interested in giving honorable senators the information that they have asked for. If he has not the information available now, he could postpone this matter until he has it, but it seems to honorable senators on this side of the chamber that, having the numbers, he is merely forcing this matter through the committee.

Senator COOPER (Queensland - Minis now give the honorable senator the figures that he has asked for regarding letters. The sum amounts to £1,200,000 for the remaining nine months of the present financial year, and £1,600,000 for a full financial year.

Clause agreed to.

Clauses 4 to 6 agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

Senate adjourned at 12.24 a.m. (Thursday).

Cite as: Australia, Senate, Debates, 26 September 1956, viewed 22 October 2017, <http://historichansard.net/senate/1956/19560926_senate_22_s9/>.

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Senate26 September 1956

QUESTION

BASIC WAGE

Senator HENDRICKSON:VICTORIA

Senator O’SULLIVAN:Attorney-General · QUEENSLAND · LP

QUESTION

DISARMAMENT

Senator GORTON:VICTORIA

The PRESIDENT:

QUESTION

ATTORNEY-GENERAL’S. DEPARTMENT

Senator MARRIOTT:TASMANIA · LP

Senator O’SULLIVAN:LP

SUEZ CANAL

Senator O’BYRNE:TASMANIA

Senator O’sullivan:

The PRESIDENT:

Senator O’BYRNE:

Senator O’SULLIVAN:LP

QUESTION

SOCIAL SERVICES

Senator REID:NEW SOUTH WALES

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

QUESTION

SHIPBUILDING

Senator KENNELLY:VICTORIA

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

QUESTION

SNOWY MOUNTAINS SCHEME

Senator SCOTT:WESTERN AUSTRALIA

Senator SPOONER:LP

QUESTION

EXPORT PAYMENTS INSURANCE CORPORATION

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

Senator SPOONER:LP

QUESTION

ROADS

Senator GORTON:

Senator PALTRIDGE:LP

QUESTION

SHIPPING FREIGHTS

Senator HENDRICKSON:

Senator PALTRIDGE:LP

QUESTION

TAXATION BOARD OF REVIEW

Senator VINCENT:WESTERN AUSTRALIA

Senator SPOONER:LP

QUESTION

GOVERNMENT LOANS AND FINANCE

Senator COOKE:WESTERN AUSTRALIA

Senator SPOONER:LP

Senator Cooke:

Senator SPOONER:

QUESTION

AUSTRALIAN AIR PILOTS

Senator ASHLEY:NEW SOUTH WALES

Senator PALTRIDGE:LP

QUESTION

QUESTIONS

Senator HENDRICKSON:

Senator SPOONER:LP

QUESTION

WHEAT

Senator HENDRICKSON:

Senator SPOONER:LP

QUESTION

FISHING

Senator WILLESEE:through Senator Critchley

Senator O’SULLIVAN:LP

QUESTION

BANKING

Senator MAHER:QUEENSLAND

Senator SPOONER:LP

Senator WRIGHT:TASMANIA

Senator SPOONER:

QUESTION

HANSEN’S DISEASE

Senator TANGNEY:through Senator Critchley

Senator COOPER:Minister for Repatriation · QUEENSLAND · CP

QUESTION

Senate
26 September 1956

Senator HENDRICKSON:
VICTORIA

Senator O’SULLIVAN:
Attorney-General · QUEENSLAND · LP

Senator GORTON:
VICTORIA

Senator MARRIOTT:
TASMANIA · LP

Senator O’SULLIVAN:
LP

Senator O’BYRNE:
TASMANIA

Senator O’SULLIVAN:
LP

Senator REID:
NEW SOUTH WALES

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

Senator KENNELLY:
VICTORIA

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

Senator SCOTT:
WESTERN AUSTRALIA

Senator SPOONER:
LP

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

Senator SPOONER:
LP

Senator PALTRIDGE:
LP

Senator PALTRIDGE:
LP

Senator VINCENT:
WESTERN AUSTRALIA

Senator SPOONER:
LP

Senator COOKE:
WESTERN AUSTRALIA

Senator SPOONER:
LP

Senator ASHLEY:
NEW SOUTH WALES

Senator PALTRIDGE:
LP

Senator SPOONER:
LP

Senator SPOONER:
LP

Senator WILLESEE:
through Senator Critchley

Senator O’SULLIVAN:
LP

Senator MAHER:
QUEENSLAND

Senator SPOONER:
LP

Senator WRIGHT:
TASMANIA

Senator TANGNEY:
through Senator Critchley

Senator COOPER:
Minister for Repatriation · QUEENSLAND · CP

Senator PALTRIDGE:
LP

Senator LAUGHT:
SOUTH AUSTRALIA

Senator SPOONER:
LP

Senator LAUGHT:
South Australia

Senator ARMSTRONG:
New South Wales

Senator SPOONER:
New South WalesMinister for National Development · LP

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

Senator ARNOLD:
New South Wales

Senator WRIGHT:
Tasmania

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

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

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

Senator SEWARD:
WESTERN AUSTRALIA

Senator McKENNA:
Leader of the Opposition · Tasmania

Senator McMANUS:
Victoria