22nd Parliament · 2nd Session
The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 3 p.m., and read prayers.
– I desire to inform the Senate that His Excellency Ngo Dinh Diem, President of the Republic of Viet Nam, is within the precincts of the Senate. With the concurrence of honorable senators, I propose to provide him with a seat on the floor of the chamber.
Honorable Senators. - Hear, hear!
His Excellency Ngo Dinh Diem thereupon entered the chamber, and was seated accordingly.
– Will the Minister for Repatriation inform the Senate whether finality has been reached on plans which have been revised many times over the past seven years for extensions to the repatriation hospital in Hobart? What was the original cost of the proposed extensions, and what is the estimated cost of the complete extensions that were most recently approved? Why has no start been made on the extension work about which the Minister said fifteen months ago, “ It has been given No. 1 priority, and I believe work will begin during the next twelve months “? Will priority be given to replacement of the present totally unsatisfactory chest ward by a structure which would contribute to successful treatment of tuberculosis sufferers? Can a start be made immediately with the proposed extensions with a view to absorbing skilled men who are seeking work in the building trades? If not, when can a start on this work be expected?
– In reply to the first part of the honorable senator’s question regarding alterations or extensions which have been made in the past twelve months, I can inform him that a ward has been provided for female members of the forces and for war widows. Full facilities are now available for them. I cannot give the honorable senator offhand the cost of the present building or the proposed alterations. Plans have been prepared for certain additions to the repatriation hospital at Hobart, but that work has not been started. When 1 met the executive of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia in Hobart last year, I said I hoped that the work would be started this year. That hope has not been realized. I shall make inquiries and inform the honorable senator on this matter as soon as possible.
– Will the Minister for National Development elaborate his reported press statements concerning the proposed investment of capital by British insurance companies in Australian housing co-operatives? Does he consider that the proposal will assist significantly in overcoming our present housing position?
– In a brief press statement that 1 made yesterday, I said that I had been negotiating for some time in an endeavour to get to Australia the know-how of the British permanent building society movement, together with some capital in support of that know-how. I might be successful, but not, I should like to make clear, to the extent that was implied in newspaper reports, which left me with the impression that I would be able to attract sufficient capital in that way to enable the housing shortage to be overcome within a relatively short period of from three to five years. All that I say is that, if I were successful in this connexion, I would make a good contribution towards finance for housing coming principally from savings, which would be worth while.
– Has the Minister for National Development yet received from the Queensland Government a report by the three American experts who were delegated to report upon the re-conditioning of the railway line connecting Mount Isa with Townsville?
– I, personally, have not yet seen any such report. My impression is that the visiting overseas delegation got to a certain stage in its investigations when the Queensland election intervened, and the delegation, I think, went quietly until the election was over.
– Will the Minister for Civil Aviation inform me whether his department has provided space for the parking of air travellers’ motor cars at the Adelaide airport? If it has done so, will steps be taken to prevent theft of the cars? Will they be placed under cover in order to protect them from the weather?
– I assume the honorable senator refers to space for the parking of motor cars belonging to people who emplane at the Adelaide air terminal to go to Melbourne and wish to have their cars available on their return. Is that assumption correct?
– Although I opened the new airport as recently as Friday last, I confess that I am not sure whether such accommodation has been provided. I will find out and let Senator 0’Flaherty know later.
– My question to the Minister for National Development is prompted by a recent application from the Premier of Western Australia for a licence to export a large quantity of iron ore. I would like to preface my question by saying that the application was refused, the Federal Treasurer stating that, at the present and planned rate of consumption, Australia had only about 40 years’ reserve of iron ore. 1 suggest that that is a most alarming and disturbing state of affairs. In the circumstances, will the Minister for National Development consider seeking CommonwealthState co-operation in regard, first, to an immediate and comprehensive survey of the nation’s reserves, secondly, to the ways and means whereby exploration for new ore bodies can be encouraged, and, thirdly, to consideration being given to the granting of rewards for the discovery of new ore bodies, as is already done in respect of the discovery of uranium?
– The refusal of the Western Australian application was made only after very deep consideration of all the facts. Australia’s iron ore reserves are comparatively limited. Iron ore is the basis of the steel industry, and the steel industry is the basis of manufacturing industry. This, in turn, is the foundation of our defence effort and the means by which we hope to improve our export position in the future. We are already importing from New Caledonia iron ore for our steel industry. Senator Vincent has made three very constructive proposals. He asks for an immediate and comprehensive survey. I am sure that has already been carried out. The matter is of such importance that, undoubtedly, I should only have to ring the department to be provided with a map of Australia’s reserves. Exploration is proceeding continuously. I think I am correct in saying that four aircraft are employed on this work. These make magnetometer and scintillometer surveys, which clearly indicate the whereabouts of deposits. I should have to give the matter of a reward considerable thought before agreeing to it, because the finding of a big iron ore deposit would, of itself, produce such a substantial financial reward that I do not think that any additional encouragements would be necessary.
– My question is addressed to the Minister representing the Prime Minister. I draw his attention to a recent report in a daily newspaper to the effect that a section of the Commonwealth Public Service is urging a reconstruction of the service, as well as an inquiry. As this call for an inquiry comes from the public servants themselves, it deserves the most serious consideration of the Government. There is, too, a strong feeling of apprehension throughout the country that the Public Service is growing in numbers and strength at a really alarming rate. This is a frequent subject for reference by the public generally. I ask, therefore: Will the Government set up a widely representative commission to inquire into, and report on, all phases of the Public Service, to find out whether it is possible to improve efficiency and service to the country, to examine the possibility of co-ordinating the activities of the various departments, to ensure that there will be no overlapping and to inquire whether it is possible to streamline the work entailed and reduce the numbers employed?
– I am not prepared offhand to give any undertaking with regard to the matters raised by the honorable senator, but I give him an assurance that I shall discuss the matter with the Prime Minister and shall let him know if anything emerges from the discussion.
– My question is directed to the Minister representing the Minister for Social Services. Is it not a fact that certain medicines are supplied free of charge to aged pensioners? Is it not also a fact that this benefit is discontinued when the pensioner’s income from other sources exceeds £2 per week? Why is this so? Is there any chance that this practice will be altered in the near future for the pensioner’s benefit?
– The answer to the first question is “ Yes “. The answer to the second question is “ Yes “. The other questions relate to a matter of government policy. The Government in its wisdom feels that as the permissible income for a. pensioner married couple is £15 a week, it is not unreasonable that a means test should be imposed on the free medicine service. 1 do not hold out any hope of the Government changing that policy.
– Has the
Minister for Shipping and Transport seen the report of Mr. Carver, the Commonwealth Statistician, that freight charges rose by 12 per cent. is*. 1956-57, during which year the value of goods carried to Australia decreased by 12 per cent.? Further, has he seen the report that after expenditure in Australian ports of £67,000,000 the net spending on freights in that year was £48,000,000, representing 6.2 per cent, of f.o.b. imports, compared with only 4.7 per cent, of f.o.b. imports three years ago? In view of this increasing burden on the Australian economy, will the Minister constitute a committee of the Senate to investigate thoroughly these always increasing charges?
– The honorable senator’s question relates to overseas freights, which fall, not within the administration of the Minister for Shipping and Transport, but within that of the Minister for Trade. In the circumstances, all I can do is to tell the honorable senator that I shall bring his question to the notice of the Minister for Trade.
– In view of the fact that an increased number of people are taking advantage of rail travel following the introduction of diesel-electric locomotives on the Trans-Australian railway, has the Minister for Shipping and Transport considered the need to provide additional services on that line? If the answer is in the affirmative, can he inform me when those services will commence?
– It has been the practice during the last two or three years to put on additional services at peak periods, such as Christmas and Easter. The Commissioner has under continual review the necessity to increase services on the TransAustralian railway, but the introduction of extra services is sometimes hampered by the fact that Western Australia and South Australia cannot supply matching trains. 1 can assure the honorable senator that the popularity of the diesel-electric Trans-Australian trains is recognized and that advantage is taken of every opportunity to increase the services in order to meet the trade.
– I ask the Minister representing the Treasurer whether it is a fact that the United Kingdom and Canadian Governments, whose financial year ends on or near 4th April, bring down their budgets in April or early in May, whereas the Australian budget is brought down two months after the close of the financial year. Has consideration been given to adopting the early budget custom in Australia? Does the Minister agree that, because of the economic effect of the budget, we, in Australia, should either close our financial year at the end of August or bring down the budget in the month of July?
– I think I can fairly say that the objective of all Australian Treasurers is to present the budget as early as is practicable. The end of the financial year in Australia is 30th June. I should have grave doubts about the wisdom of changing the end of the governmental financial year and putting it out of step with the end of the commercial financial period. I do not know why 4th April, 7th April, or whatever date it is, has been adopted in Great Britain, but I repeat that I should have very grave doubts about the practicability and the wisdom of selecting, for the end of the governmental financial year, a date other than that which is generally accepted by the commercial community as being suitable and which falls in between seasons for the primary industries and the retail trade.
– I ask the Minister tor National Development: Is it a fact that the Newstan Colliery, in northern New South Wales, is a most efficient colliery? is it one of the cheapest producers of coal, and does it bring to this Government a very good profit? If so, why has the Government determined to sell Newstan to private enterprise?
– Newstan is an efficiently controlled colliery, with a good staff, lt is a good colliery from every angle. The question is, rather: Why should the Government own the colliery when private enterprise is willing to invest in it? Further, how can we reasonably expect the Joint Coal Board to control and regulate the coal industry when it has a direct interest in the industry by owning collieries and producing coal in competition with other collieries?
– 1 direct a question to the Minister representing the Minister for Health. I preface my question by stating that about six months ago I asked whether the Senate could be given figures showing the amounts paid in by contributors to approved or registered friendly societies, and the amounts paid out to contributors by the societies. I received figures showing the amounts paid in, but I did not receive the figures for the amounts paid out in benefits. These approved societies are supposed to be mutual and nonprofitmaking societies. Is there any way of obtaining the figures showing the amounts, paid out to contributors in medical and hospital benefits payments? If so, will the Minister obtain these figures for the last financial year, together with the figures showing the amounts paid in by contributors?
– Offhand, I could not say exactly whether such figures are available. I think that the best course will be for the honorable senator to put the question on the notice-paper, when the appropriate Minister will furnish a reply.
– 1 direct a question to the Minister for National Development. Have the Governments of New South Wales and Victoria indicated to the Commonwealth the precise terms upon which they are prepared to take water and power from the Snowy Mountains scheme? If so, will the Minister inform the Senate of the terms so agreed upon? Has the Government of South Australia been informed of such terms?
– When the time is appropriate, I shall have very great pleasure in announcing to the Senate that an agreement has been reached and in stating the terms of that agreement. The time will be appropriate when, in truth, an agreement has been signed. Beyond saying that, 1 can do no more than assure the honorable senator, who comes from South Australia, that the interests of South Australia have not in any way been overlooked or by-passed, in these negotiations. There is nothing new in the proposed agreement. Negotiations have proceeded upon the basis of the original arrangements, which were made public in 1949. They have been known to everybody from 1949 onwards. Our great trouble has been to hammer out the details. No agreement has been signed yet.
– I direct a question to the Minister representing the Minister for Labour and National Service. If I have read the press reports correctly, the Government intends to bring to Australia in the near future about 60,000 European immigrants. Can the Minister now tell us what provision has been made to place these immigrants in employment? Can he also say what provision has been made to house these immigrants, and can he tell us the number of immigrants now unemployed and being held in migrant holding camps?
– I think the honorable senator has his facts a little tangled. To the best of my recollection, the figure of 60,000 mentioned by him represents the net increase that occurs in the work force each year as a result of not only immigration, but the natural increase in the Australian population. As was pointed out last week during the debate on unemployment, the task that confronts the Government and the Australian community is to see that our economy expands at a rate which will provide additional employment to the level indicated. I think we established conclusively during that debate that we have been able to do so up to this stage, and we hope to be able to continue to do it in the future.
– I ask the Leader of the Government in the Senate whether the Government has made any commitments with regard to the United States using the Woomera rocket range. If it has not, will he assure the Senate that Parliament will be given an opportunity to discuss any proposals of this kind before any commitment is made?
– I am not able to give the honorable senator a precise statement as to the facts at present, but I think it rather unreasonable of him to ask the Government to give an undertaking on the matter to which he has referred. That would be essentially a matter of Government policy on which the Government must be guided by its own wisdom and research into the matter concerned.
– I should like to address to the Minister for National Development a question supplementary to that asked by Senator Laught. When the details of the agreement relating to power and water from the Snowy Mountains scheme have been settled, will the Minister announce them to the Senate before the agreement is actually signed? I understood him to say that he would announce to the Senate the details of the proposed agreement, but I did not understand him to say that he would announce them before the agreement was signed.
– I have been endeavouring to bring these negotiations to finality for some six and a half years now, and I can only say in reply to the honorable senator that 1 am not going to commit myself to any arrangement which will in any way tend to defeat my objective of bringing them to a successful conclusion.
– Last week, 1 addressed a question to the Minister representing the Minister for Health, and in my opinion the answer given by him then was very unsatisfactory, f now preface a further question to him by saying that pensioners seeking hospitalization and pharmaceutical benefits are not subjected to a means test if they received their pensions prior to 1st November, 1955, whereas those pensioners who happened to receive their pensions on or after 1st November, 1955, are subjected to a means test. Will the Minister indicate when the Government intends to remove that anomaly and the severe injustice that is imposed on many thousands of pensioners?
– There is no injustice and no anomaly implied in the honorable senator’s question. The two pensions are entirely different. One is a war pension.
– I did not mention war pensions.
– Well, I did. The other pension is a social service pension, and it carries with it pensioner medical benefits. In 1955, when we lifted the artificial ceiling which, in 1948, had been placed on the permissible income of war pensioners in respect of eligibility for social service benefits, a married man and his wife were allowed to have an income of £15. Qualified totally and permanently incapacitated exservicemen and special rate pensioners were given social service benefits which lifted their income from £9 15s. for the exserviceman, and £1 15s. 6d. for his wife, or £11 10s. 6d. in all, to £15. In December, 1954, the total permissible income, plus pension, had been just over £11. The amending legislation provided that those who applied for additional benefits, including pensioner medical benefits, before 1st November, 1955 - just immediately after the bill was passed - would be accepted. Those who applied after that date who were receiving more than £11 12s. would not be accepted. Nobody has been penalized. Those were the conditions that were provided in the legislation, which was introduced in the budget session of 1955. The totally and permanently incapacitated pensioner who could conform with the means test was able to earn the full permissible income in addition to the pension, or £15 a week. He may do so now.
– I rise to make a personal explanation. My question referred to age and invalid pensioners generally. The reply that has been given by the Minister for Repatriation was concerned only with service pensions. I was referring only to age and invalid pensions prior to 1st November, 1955.
– I preface a question to the Minister for Civil Aviation by informing the Senate that yesterday I was booked on the Viscount service from Hobart to Melbourne. When we reached the airport, we were informed that two DC4 aircraft, instead of the Viscount, would convey the passengers to Melbourne. I did not mind very much, but many of the passengers were vehement in their condemnation of the change. They were angry because, having booked on the pressurized Viscount aircraft at this season when those aircraft are more popular, they were forced to travel on non-pressurized and slower aircraft. As Trans-Australia Airlines officers had known earlier that the change was necessary, the passengers considered that they should have been informed so that they could transfer their bookings. Does the Minister agree that when commercial airlines have established regular services with fast pressurized aircraft and have early knowledge of an enforced change to slower, non-pressurized aircraft, they should advise all passengers who have booked, when that is possible, so that the passengers will have an opportunity to change their bookings to another airline or another service?
– I have no knowledge of the occurrence to which the honorable senator has referred. I was under the impression that, when possible, the airlines did advise their passengers of a change of aircraft. I am surprised to learn that T.A.A. did not do so yesterday. There must have been some very special circumstances which made it necessary for T.A.A. not to advise its passengers. I will make inquiries into the specific case that the honorable senator has mentioned and will obtain any information that I can for him.
– Will the Minister representing the Minister for Defence inform the Senate whether the American service mission will have any authority to make United States equipment available for the Australian armed services? If not, is there any guarantee that American equipment is ahead of British equipment? Has an opportunity been taken to ascertain from the British Minister for Defence to what extent British equipment is available? When does the Government propose to place orders with the Australian aircraft industry for either American or British prototypes that will provide adequately for the Royal Australian Air Force?
– I am not trying to evade answering the honorable senator’s question, but I am sure that, on reflection, he will agree that that is not the type of subject-matter that can be debated or aired with advantage prior to any consultations or discussions taking place.
– Is the Leader of the Government in the Senate aware that there is a serious lag in the provision of adequate and suitable accommodation for the ever-growing numbers of school children attending public schools, technical and high schools and universities? In view of the growing number of unemployed throughout Australia, despite the views of the Minister to the contrary, will the Minister confer with his colleagues in the Cabinet with the object of making available to the States funds to replace outmoded schools, to modernize existing schools and to provide hundreds of additional modern buildings to cater for increased enrolments?
– The honorable senator knows that the question of education is primarily a matter for the States. I do appreciate that, according to press reports at all events, accommodation for children in public schools is very strained in practically every State of the Commonwealth. However, the Commonwealth would have no assurance or guarantee that if it made funds available the States would use them for that purpose. I remember reading a report of a fairly recent conference between Commonwealth and State Ministers when more than one of the Premiers made it perfectly clear that they resented any suggestion of intrusion by the Commonwealth into the field of State education. The onus is on the States to discharge adequately their responsibilities in regard to public education and to use properly the not ungenerous allowance that they get from Commonwealth taxpayers.
– 1 direct the following questions to the Minister for National Development: - (i) What is the total cost to date to (a) the Commonwealth, and (b) the State of Western Australia, of experiments undertaken at Ord River, in Western Australia? (ii) What is the actual cost to each government? (iii) ls the department satisfied that some crops could be grown commercially in the area? (iv) If it is, what are they? (v) If the answer to question (iii) is “ Yes “, is it the intention to encourage the growing of these crops commercially, and if so, when? (vi) What new experiments, if any, are proposed?
– The honorable senator has asked pretty comprehensive questions about the Ord River Research Station. Having been to that research station, and having a high opinion of the work that is being done there, I think it will be more satisfactory, both to the honorable senator and myself, if .1 ask him to place the question on the notice-paper, so that it can be answered comprehensively. It is a couple of years since I was there, but I regularly see the figures showing the respective costs borne by the Commonwealth and the State. 1 know that the station has done yeoman service by proving the practicability of growing sugar cane and rice, for instance, in the Ord River valley. The station has also carried out a lot of work in connexion with pasture improvement in the area, with very good results.
– My question is addressed to the Minister for Shipping and Transport, and is prompted by the alarm concerning the shipbuilding industry in Australia. Has any programme been determined by the Government in order to keep the Australian shipbuilding yards fully in operation? If there is a programme, is the Minister prepared to report to the Senate the details of it and say how long it is designed to keep the yards in full operation?
– I will be happy to let the honorable senator have a list of the orders currently in execution by Australian yards, showing the date to which each yard will be kept in employment in fulfilling the orders now held by it. The position is not such as to give cause for immediate alarm. Unfortunately, one or two of the smaller shipbuilding yards are in need of immediate orders. The Government is doing what it can in respect of those yards. I shall be pleased to furnish the honorable senator with a detailed answer to his question.
– I direct a question to the Minister for National Development. In view of the current shortage of. steel in Australia and the fact that steel is being imported, will the Minister inform the Senate whether the Government is permitting Australian steel to be shipped outside Australia and New Zealand for free sale in Asiatic and other countries?
– I should, perhaps, ask for the question to -be put on noticepaper. However, I shall take a risk and answer it, and if I find that I have been in error I shall correct myself to-morrow. The policy is that the export of steel is allowed traditionally to the Pacific islands and to parts of New Zealand. For this purpose, we regard the Pacific islands as a part of Australia. Beyond those Pacific areas, as a general rule the export is permitted only of those types of steel that are surplus to current requirements. That is, if we have a surplus of pig iron, steel ingots or a particular type of steel, they can be exported; otherwise, steel cannot be exported; subject to this explanation, that since the establishment of the Department of Trade, special arrangements have been made to encourage exports, which are the subject of particular arrangements with the department on each occasion.
– In order to assist the Minister, I shall ask him a further question. In view of the shortage of steel plates for shipbuilding in Australia, will the Minister inquire whether the shipment of steel plating has been permitted to Hong Kong for the purpose of shipbuilding there, thereby denuding Australia of that particular type of steel?
– Having taken a risk in answering the honorable senator’s previous question, I shall ask for this one to be placed on the notice-paper.
– Will the Minister for Shipping and Transport inform me how many government-owned ships are being used exclusively for purposes associated with the Broken Hill Proprietary Company Limited, and how many are on loan to the Japanese Government for the purpose of carrying scrap and nickel ores from New Caledonia to Japan?
– No Commonwealthowned ships are on loan to the Japanese Government. As to the number that are engaged in trade for the B.H.P., I cannot say offhand. I understand that a number of bulk carriers are so engaged. I shall make inquiries and let the honorable senator know the precise number of governmentowned ships engaged in such trade.
– 1 preface a question to the Minister for Civil Aviation by stating that an aircraft on which I was a passenger last Thursday was compelled to circle for half an hour before being able to land at Williamtown airport, because exercises were being carried out by the Royal Australian Air Force. I consider that preference should be given to aircraft which are routed to Williamtown aerodrome twice or four times a day, and I therefore ask the Minister to take such action as will ensure that civil aircraft procedure at Williamtown shall not be interrupted by Royal Australian Air Force training exercises.
– I will make inquiries and give the information to Senator Arnold later.
– The Minister for Customs and Excise is no doubt aware that recently a motor car which was imported into Western Australia by Mr. Ric New, of Perth, was seized as a prohibited import, sent to the Eastern States for use in the ministerial pool, and subsequently sold at public auction. Is it the Government’s policy to transfer such cars to the ministerial pool, or to offer them by public auction? If the latter, will he ensure that the so-called prohibited import is auctioned at the point of importation, thus avoiding unnecessary expense and giving the people of the State concerned an opportunity of buying it?
– For a number of years it has been Government policy to offer seized cars to the Department of the Interior or the Department of Supply for use, if suitable, in the Government transport pool. The car in question was offered to the Department of the Interior, which sent it to Sydney en route to Canberra. The Minister for the Interior, upon examining it, felt that it was not suitable for use in the transport pool, and it was then made available to my department for disposal.
– It was not a bad bomb!
– It is not worth while for anyone to attempt to bring in ordinary cars these days - only super-duper vehicles of this kind would be worth while. But these are not suitable for use in the pool, and in future such cars will be sold by public auction.
– I ask the Minister for Civil Aviation whether, in view of the great advantage in the field of air transport which Trans-Australia Airlines gains by the use of Vickers-Viscount aircraft, whose Rolls-Royce turbo-prop engines do not need major replacement before 1,500 hours’ operation, having regard to the added fares that would have to be charged the Australian travelling public, he will give an assurance that American Boeing transports, powered by American engines which need major overhaul and replacement after 150 or 200 hours’ operation, will not lead to their being brought into the field of civil aviation.
– I know of no proposal to purchase Boeings for use on our domestic airlines. If Senator O’Byrne is referring to the purchase of Boeings by Qantas Empire Airways Limited last year, the delivery date for which is, I think, 1959, I can do not better than tell him that it was made after an examination by the most competent experts in Australia of the relative merits of all types of aircraft. The Boeing was considered to be the most satisfactory then available.
asked the Minister representing the Minister for Trade, upon notice -
– The Minister for Trade has advised me as follows: -
The responsibility for deciding the various categories into which goods are placed for import licensing purposes rests with Cabinet. In reaching decisions, Ministers take into account the views of the Department of Trade which are referred to the Minister for Trade before submission to Cabinet. The department also discusses its recommendation with the Interdepartmental Import Committee before referring them to the Minister for Trade. The Inter-departmental Committee consists of senior officers of the Prime Minister’s Department, Department of the Treasury and Department of Trade. In making his recommendation to Cabinet, the Minister for Trade also takes into account advice tendered to him by the Consultative Committee on Import Policy, The committee includes representatives of such important groups as chambers of manufacturers, chambers of commerce, trade unions, primary industry and women’s organizations. Appropriate recognition is paid to the views of interested organizations and individuals who are at liberty at any time to make direct approaches to the Department of Trade regarding the licensing treatment applicable to specific commodities or groups of commodities, but these views are not necessarily followed.
asked the Minister representing the Minister for Trade, upon notice -
– The Minister for Trade has advised ‘me as follows: -
asked the Minister representing the Minister for Trade, upon, notice -
– The Minister for Trade has advised me as follows: -
– by leave. - During recent months the Government has made a comprehensive review of civil aviation policy, the results of which it would now be appropriate to report to the Senate. At the outset I would like to make it clear that the financial crisis of Australian National Airways Proprietary Limited, which has received so much publicity, was symptomatic of the condition of the entire air transport industry. Indeed most airlines, other than Trans-Australia Airlines, have been incurring deficits or operating under extremely marginal conditions and even T.A.A.’s profit was relatively small judged by normal commercial standards.
An exhaustive study of the economics of the air transport industry has established that the financial crisis has been largely due to two quite unrelated causes. The first cause has been the inability of airlines to make profitable returns on DC3 aircraft, which still comprise in numbers the main element of the Australian aircraft fleet. This has not only adversely affected the small operators of intrastate feeder services, but also has contributed substantially to the poor results achieved by trunk route operators. The second cause has been the uneconomic load factors achieved on certain trunk route operations due to overlapping and unnecessarily duplicated services. To eliminate the recurrent crises in the aviation industry and to establish a framework for long-term development, the Government considers it a matter of national importance to eliminate these causes of instability.
In the case of feeder services, the Government has decided to extend assistance by way of subsidy to the operators of essential air services in rural areas and also to help selected operators obtain suitable replacement aircraft for the DC3. The grant of this assistance will be conditional upon the operator agreeing to provide services to specified areas at frequencies approved by the Minister, having regard to public needs and convenience in the rural areas to be served. A further necessary condition will be that fares and freight rates are fixed at reasonable levels. The policy which we have adopted in the case of trunk route operations is basically the same in concept as that embodied in the 1952 Civil Aviation Agreement Act - that of providing fair and equal conditions of competition for two major operators. Since one of these operators is governmentowned, it is obviously necessary to give the private airline continued access to government mail and business and for it to be given assistance in the form of a government guarantee in respect of loans for re-equipment purposes.
It will also be necessary to eliminate the wasteful effects of uneconomic competition on trunk routes by strengthening the rationalization provisions of the Civil Aviation Agreement Act. Under these conditions the Government believes that the trunk route operators should be able to make reasonable profits and yet provide at the same time the highly efficient type of competitive service for which Australian airlines are noted. We believe that stability in the industry can be achieved under this pattern of development. This conclusion is supported by experience in the United States of America where the industry has been organized on a similar basis for many years. There twelve major airlines provide competitive services on trunk routes and thirteen subsidized operators provide DC3- type services in selected regional areas and are currently being considered for reequipment assistance. Certainly the powers of the Civil Aeronautics Board to regulate and control air services are greater than our own, but I believe we can quite fairly assume some more effective control as a contractual condition of our very extensive financial assistance to this industry.
It is interesting to record that during the last 30 years the Commonwealth has spent £40,000,000 on the capital development of the ground facilities system and provided, either directly or through guarantees, £17,500,000 in capital for aircraft purchases. In addition, it is currently subsidizing outback or “ developmental “ services to the extent of about £350,000 a year and proposes to increase this assistance through extended support of feeder type services. It is spending more than £7,000,000 annually on maintaining and operating the ground safety system, but its revenue return in air navigation charges and fuel tax is less than £2,000,000 per annum. It is not very rewarding in these circumstances to find a financial crisis developing in the industry every few years. We recognize the important part which civil aviation plays in the daily lives of most Australians and our financial support has provided ample proof of that recognition. But it is essential that we get a stable pattern for future development which holds some prospect of the industry finally emerging as a self-sufficient arm of our transport services. I believe that the plan the Government has devised, involving as it does extended financial assistance and a commensurate measure of Commonwealth control, will achieve these objectives. 1 should now like to return to the recent negotiations for the purchase of A.N.A. and inform the House that it was the policy I have outlined which determined the Government’s attitude to the many proposals made to it by the parties interested in this purchase. While we viewed with concern the possible liquidation of A.N.A., the pioneer airline which has contributed so much to the national economy and development, we could not accept its proposals for a holding company which, apart from other considerations, departed radically from our basic concept of maintaining competition on Australian civil aviation services. Further, we could not agree to providing financial assistance to any particular purchaser because, apart from giving that purchaser an advantage over others, this might well have compromised our long-term objective of promoting a self-sufficient industry. We were prepared to permit the major operators to contract to trunk route operation and to subsidize feeder operators for this purpose, but we could not escape the definite conclusion that even the trunk route system could not support more than two major airlines. The introduction of a third large operator would have increased heavy aircraft capacity beyond the reasonable needs of the traffic offering and so depressed load factors as to make heavy losses inevitable for all three operators. This situation may well have led, in the long run, to a government airline monopoly.
While the Government could not actively intervene in negotiations for the sale of A.N.A., it did make its broad policy patently clear to all the interested parties and indicated that the only type of assistance it would give to any possible successor to A.N.A. would be along the lines already provided in the Civil Aviation Agreement Act. That is still the position to-day and no concessions to trunk route operators are contemplated which fall outside the general principles of the act. If the Ansett Transport Industries group acquire the shareholding in A.N.A., as seems probable, they will automatically take over the financial obligations of that company to the Govern ment under the terms of the Civil Aviation Agreement Act. For that reason, if for no other, the Government will wish to see its basic policy requirements satisfied for the establishment of a stable and financially healthy industry.
The Government a!so gave consideration to the administrative arrangements under which the Australian National Airlines Commission conducts its business. It recognized the need for the commission, as a commercial enterprise, to have the greatest possible flexibility in its administration, and accordingly decided to give it more freedom in general staffing matters and also to apply to it, in respect of audit and various charges to be included in its expenditure, similar provisions to those which apply to other authorities of a similar nature. These measures will assist the commission in its role as one of the major competitors on the trunk routes. Appropriate legislation for this purpose will be introduced as soon as the present rather heavy legislative programme permits.
In the course of its general review, the Government made a special study of the liability of operators in respect of death or injury of passengers. This was necessary in any case, because the Warsaw Convention of 1929, which now regulates practically all international carriage by air, was recently amended quite substantially by a protocol adopted at The Hague in 1955. The protocol clarifies many provisions in the light of developments in commercial practices of air transport since 1929, but its main effect is to double the limit of liability of the carrier in respect of each passenger from £3,700 to £7,400. Australia has already signed the protocol, and amendments of the Carriage by Air Act 1935 will be introduced as soon as possible to give effect to the amended international rules. The convention does not apply to domestic carriage and at present all operators except T.A.A., which has a statutory limit of £2,000, contract out of liability even in the event of serious acts of negligence by their servants or agents. The practice is, however, to carry voluntarily insurance of £2,000 per passenger. It is now considered appropriate to extend the international rules to domestic aviation with certain necessary modifications, which are at present being discussed with the airlines concerned.
Broadly, it is proposed to make the domestic carriers, including T.A.A., strictly liable up to £7,500 a passenger, and to permit defences in only the most exceptional circumstances. Although this legislation cannot extend to purely intrastate nights, I am hopeful that the principles will prove attractive to State governments and that in due course uniform principles will apply to all domestic carriage.
The Government’s review of civil aviation policy was not, of course, restricted to airline operations. We considered also our very extensive responsibility for the provision and operation of ground facilities, especially airports. It would cost many millions of pounds to equip country airports to accommodate heavy aircraft like the Viscount. We are not prepared to undertake works of this magnitude but intend, as stated earlier, to assist the smaller airlines to keep the DC3 in operation until it can be replaced by suitable replacement aircraft. Aircraft like the Handley Page Herald or Fokker Friendship are capable of using DC3 type aerodromes, are pressurized, and operate at much higher speeds. They will be available for airline use in the next few years and have a capacity much better suited to feeder service operation than heavier types like the Viscount. The Government, therefore, re-affirms its policy of assisting in the development of country aerodromes only to the standard of DC3 or similar performance aircraft.
We recognize the very commendable efforts that have been made by local authorities in recent years to provide aerodromes in country areas, and where such aerodromes fulfil the previously declared conditions for Commonwealth acquisition we will progressively provide funds for this purpose. Some 50 aerodromes are involved, and altogether some £800,000 will need to be outlaid over a period of several years. We should prefer to see local authorities retain responsibility for the ownership and operation of these airports and are prepared to give assistance to those who choose to do this rather than proceed with acquisition by the Commonwealth. This would, of course, be in addition to the repayment to them of expenditure which they have already incurred in developing the airports.
In all cases Commonwealth maintenance grants to owners of licensed aerodromes used on regular air services will be increased to levels which bear a more realistic rela tion to present-day costs. In addition, any municipality able and willing to undertake the maintenance of an adjacent Commonwealthowned aerodrome will be encouraged to do so and reimbursed its agreed costs. In this way it is hoped that substantial savings in Commonwealth staffing would be achieved, and greater local responsibility and interest stimulated in the aerodromes. It is also intended to restrict the responsibility of the Commonwealth at its own airports to the provision of those facilities which have a common user function, and to make airlines and other agencies responsible for those facilities required for their exclusive use. No change is contemplated in the Commonwealth’s responsibility for the provision of essential safety services - radio, air traffic control, regulatory services, &c. These activities have resulted in an outstanding safety record being achieved by Australian airline services and are accepted as an appropriate field of Commonwealth endeavour.
I should now like to turn to the international field where the Government has continued its policy of maintaining and expanding the operation of air services to and from Australia. As evidence of the growth of Australia’s overseas air services, it is interesting to note that Qantas Empire Airways Limited has doubled its route mileage in the last five years to a total of 50,000 miles. Its services operate into 26 countries in five continents. The field of international air services is a most competitive one, and to ensure that Qantas Empire Airways Limited is able to maintain its present role as one of the major air carriers in the world the Government authorized the company last year to purchase seven Boeing jet aircraft, the first of which should come into service about the middle of 1959. These 550-miles-an-hour aircraft, supplemented by Super Constellations, will maintain the standard of Qantas services at the high level desired by the Government.
Apart from the strategic importance of rapid air communications linking this country with other parts of the world, the Government is very conscious of the importance of the international air services provided by its overseas airline in developing Australian trade with other countries.
In his Speech to both Houses of the Parliament at the opening of this session, His Excellency the Governor-General mentioned the Government’s intention to strengthen Australia’s air links with both the United Kingdom and the United States of America and stated that to this end endeavours would be made to establish an Australian air service through the North American continent. I am pleased to be able to report that early last month an agreement with the United States Government was signed in Washington which provides the necessary authority, as far as the United States is concerned, for the establishment of an Australian air service to the United Kingdom and Europe through the United States. In return, the United States has been granted approval for its airline to extend its services from Australia to Antarctica, South-East Asia and South Africa.
The importance to the security of Australia’s air communications of this alternative routing to Europe needs no emphasis when one reflects on the events in the Middle East in November last year which threatened to sever Australia’s air connexion with London along the Kangaroo route. The Government also attaches great importance to the dollar-earning potential of the route through North America, which will serve, not only San Francisco on the west coast of the United States, but also the great city of New York in the east. The Government is anxious for Qantas Empire Airways to commence its service to the United Kingdom through North America before the end of this year, but it is necessary first of all to obtain the approval of the United Kingdom Government for the necessary traffic rights at London on the North American routing. The United Kingdom Government has agreed to discuss this matter with ah Australian delegation which the Government will send to London immediately for this purpose. The Government is confident that the United Kingdom Government will have a ready understanding of the vital importance which we attach to the operation of Australian air services on this route and that the London discussions will result in the conclusion of arrangements of great mutual benefit >o both countries.
In the field of civil aviation, as in all other matters, Australia has always main tained very close relations with our sister member of the Commonwealth in the Pacific, New Zealand. In exchange for the right for Qantas to operate through New York, the Australian Government agreed to grant to a United States carrier the right to take on and discharge in Australia trans-Tasman traffic. As this was of particular significance to the New Zealand Government, steps were taken immediately to confer with the New Zealand authorities. Who raised no objection to the grant by Australia of trans-Tasman rights to an airline of the United States. It should be appreciated, of course, that before a foreign airline can exercise traffic rights between New Zealand and Australia it will be necessary for that airline to obtain the approval of the New Zealand Government.
Air services between Australia and New Zealand are at present operated by Tasman Empire Airways Limited, which is jointly owned by the Australian and New Zealand Governments. A conference at ministerial level has been arranged to discuss re-equipment plans for T.E.A.L. and to consider the possibility of closer association with Qantas so as to ensure adequate and economic utilization of existing and future T.E.A.L. equipment. The Australian Government realizes the importance for New Zealand’s defence policy to have longrange transport aircraft on the New Zealand register and to have maintenance facilities in New Zealand and a reserve of New Zealand operating crew. Full weight will be given to these considerations - which are also of indirect strategic importance to Australia - in the forthcoming intergovernmental discussions.
At present the focal point for Australia’s international air services is Sydney. From Sydney air services radiate across the Pacific to the United States and Canada, through South-East Asia and the Middle East to European points, including London, to South Africa and also to the Philippines and Japan. Apart from one service a week to the United Kingdom which operates through Perth, all Qantas services to the United Kingdom and to the Far East at present leave Australia through Darwin. The Government believes that it is in the interests of the Australian public for Australia’s international airline to serve more Australian cities and accordingly the Government has approved a plan under which
Perth will obtain improved connexions with Europe and Melbourne direct connexions with both Europe and North America. In addition to this, a call at Brisbane on Qantas’s services to London will be authorized. Detailed arrangements for these new services have still to be worked out, but it is hoped that improvements I have mentioned in overseas air connexions by Qantas from Melbourne, Perth and Brisbane will be in operation by January next year.
Another development in the international air transport field in which the Government has been taking a deep interest is the arrangement of air services in Malaya and Singapore which are in the process of important constitutional developments. Air services radiating from Singapore through Malaya to countries to the near north, to the Philippines and Hong Kong and to Indonesia, are provided by Malayan Airways, which is a company registered in Singapore. Coincident with the development of selfgovernment in Singapore and Malaya, new plans are being considered for the future operation of air services by Malayan Airways. Last year the Australian representatives in Singapore, Kuala Lumpur and London were asked to inform the governments to which they were accredited that the Australian Government was prepared to give its support, in principle, to any arrangements which would result in a strengthening of the traditional aviation interest which Qantas Empire Airways had held for many years in the Malay Peninsula. As a result of this, Qantas Empire Airways has associated itself with British Overseas Airways Corporation in negotiations with representatives of the Singapore, Malaya and Borneo Governments on the question of the future arrangements for Malayan Airways services. The precise details have not yet been completed, but it is proposed to authorize Qantas to make an investment in Malayan Airways equal to that to be made by the United Kingdom airline, B.O.A.C. The investment will not exceed £400,000 and will ensure that Qantas shares equally with its partner on the Kangaroo route in the development of air communications on behalf of these Commonwealth countries in such close and vital proximity to Australia.
Before concluding, I should also mention that the special problems associated with air transport in the Territory of PapuaNew Guinea have not been overlooked. A complete review of air services is being undertaken, and as soon as possible a policy will be announced which caters for the special needs of services within, as well as to and from, that area. 1 think it will be apparent to the Senate from this outline of civil aviation policy that the Government has fully recognized the unique importance of airline services to a country of such vast distances and remoteness from other centres of world population as Australia. I could, perhaps, have dealt at greater length on other aspects of our existing policy, for we are subsidizing flying training in the aero clubs; we are assisting financially that great humanitarian project, the Royal Flying Doctor Service; and we are making it possible, through our financial support, for people in the outback areas of Western Australia, the Northern Territory, Central Australia and Western Queensland to receive regular air services. All these things are being done because we appreciate the great potential of aviation in the future development of this country. Our philosophy is to see that each section of the aviation industry gets a fair and equal opportunity to play its part in this development, and the policy I. have outlined is directed primarily towards this end.
– by leave - I am sure that everybody will agree that the statement made by the Minister for Civil Aviation (Senator Paltridge) is most important, ft deals with the internal airlines of Australia and their operation, and also with the activities of Australians in the international airlines sphere. Further, it announces the future policy of the Government in relation to the vastly important matter of civil aviation. The Senate will have noted that the Minister neither tabled his statement nor proposed a motion. The Opposition is keen to discuss the subject-matter of the statement, but the procedure adopted by the Minister would seem to deny the opportunity of debate to the Opposition. The Leader of the Government in the Senate (Senator O’sullivan) was good enough to advise me in advance that the Minister would be making a statement of this nature, and one of my purposes in rising is to place on record the fact that he has given an undertaking to facilitate the provision of any opportunity that the Opposition may seek to discuss the very important subjectmatter of the statement. A question upon which 1 desire to reserve decision is whether the Opposition will seek that opportunity in the budget debate, particularly during the consideration of the Estimates for the three aspects of services referred’ to by the Minister, or whether it will seek an opportunity for a separate debate of the matter. However, an opportunity has been promised.
My second purpose in rising is to request the Minister to make available to honorable senators copies of the statement he has made. May I take it that that will be done?
– They should be on the way here now.
Debate resumed from 28th August (vide page 56), on motion by Senator Paltridge -
That the bill be now read a second time.
– This measure sounds exceedingly uninteresting from its title, but becomes very interesting on perusal. The broad purpose of the bill is to set up an Australian Wool Testing authority as a body corporate. There are to be seven members and it is noteworthy that three industry members are to be included among them. They are as follows: - A person nominated by the Australian Council of Wool Buyers, another nominated by the National Council of Wool Selling Brokers of Australia and a person nominated by the Wool Scourers, Carbonizers and Fellmongers Federation of Australia. Three other members of the Authority are to be what I may term Commonwealth nominees. The first is a. person nominated by the Australian Wool Bureau. That bureau, of course, is a statutory body of this Parliament. Its nominee may or may not be directly concerned with the wool industry. The next is a person nominated by the Commonwealth Scientific and Industrial Research Organization, and the third an officer of the Department of Primary Industry. So on the surface there would appear to be, at this stage, three assured and direct representatives of the industry, and three representing the Commonwealth. One other person is to be appointed. What his qualifications may be, and of whom he should be deemed to be representative, is not indicated in the bill, nor, I think, did the Minister for Shipping and Transport (Senator Paltridge) refer to it in his second-reading speech. I probably am right in assuming that this person will be one with special executive and administrative experience rather than one who will represent any particular section or interest. The chairman of the body is to be elected by the body itself, and the election is to take place once a year.
The functions of the authority are set out in clause 14 of the bill, and again we see the necessity that rests continually upon this Parliament to stay within the limits of its constitutional authority. The first function of the authority is to carry out tests of wool and wool products being, or intended to be, the subject of trade and commerce with other countries or among the States. There is a further provision that, as incidental to the efficient and economical performance of the foregoing functions, the authority is to carry out tests of wool and wool products other than wool and wool products referred to as being the subject of trade and commerce with other countries or among the States. I imagine that the matter has been presented in that form so that if the High Court of this country should hold that it is not possible for the Commonwealth to be concerned with the testing of wool other than In relation to our interstate and overseas trade in that commodity, then the second provision would be severable. I am not questioning at all the desirability of the testing authority’s having access to wool that is required for purely State purposes, or purposes within any individual State.
The next provision that interests me is clause 17, which provides that the authority shall conduct its affairs with a view to securing such revenue as is necessary to enable it to meet its financial obligations. I interpret that provision to mean that this authority is so to conduct its operations as to pay its way but not to make a profit. It is contemplated in a later clause that surplus funds may be disposed of by putting them on deposit with the Commonwealth Bank. One might be disposed to gather from that provision that the authority might be making profits and accumulating surpluses, but my understanding of what I read is that, by and large, the- authority is expected to be a nonprofitmaking organization, that it should balance its revenues and commitments annually, and that this is intended to be a service to the wool industry, particularly to the exporters of scoured and carbonized wool. 1 assume that that is the reason why the body is not to be subject to income tax, but is to be subject to all other taxes.
Under the authority there will be a director, and I should imagine that upon his quality and activity will very largely depend the success of this body. He will be the active executive officer making daily contact with the industry, supervising and primarily being responsible for all the tests. I confess I was surprised when I found that the service, providing for establishments initially at Melbourne and Sydney, was to be initiated with what 1 thought was the very small sum of £40,000, £10,000 being required for capital buildings at each of the two cities, and a further £10,000 for plant and equipment at each of them. I confess that my knowledge of the economics of the wool industry is far ahead of my knowledge of its practical operation and its various techniques. My first thought was that this seemed to be a most inadequate provision for the handling of Australia’s colossal wool clip. Then I realized that this testing would be in fact a testing, that the new authority would not be handling bales, that it would probably be handling portions of bales that were submitted to it.
– Samples only. I am glad to have confirmation of that thought because I can imagine that a £10,000 building would be wholly inadequate if the authority had to address its mind to the vast number of bales of scoured and carbonized wool that is exported from Australia. 1 think the testing authority is off on what 1 might term a very sound basis if it can be established with so very little capital outlay. That capital outlay is helped initially by a loan from the Commonwealth to the authority. It is not indicated whether interest will be charged, but the Treasurer is authorized to make the initial advance upon such terms and conditions as he determines, lt is provided that he may make further loans to the authority but that the authority shall not borrow otherwise “ except with his consent “, and if it does so borrow, it is authorized to issue debentures. I think that for my purposes that covers all I need say upon the actual contents of the bill.
I was very interested to hear the Minister say that this proposal was mooted during 1941 and 1942 by the Central Wool Committee. It is rather a commentary upon the slowness with which governments proceed that the matter should not be implemented till now, because, on the face of it, the testing authority will enable sales to be made more readily. It must help selling in that it will give great confidence to the buyers. The Minister indicates that it will also result in a higher yield to the woolgrowers and to the wool industry of this country to the tune, on his estimation, of approximately £1,000,000 a year. That is important, even if our exports of wool ran to close upon £500,000,000 in the last financial year. I am not suggesting that the whole of that wool was scoured or carbonized; in fact, it was not. Of a total of £485,000,000 worth, more than £400,000,000 worth was greasy wool.
Any action that will tend to make Australian scoured and carbonized wool more accessible to world markets is something that all of us should support, because if we can expand activities in Australia to scour and carbonize our own wool and export it in that condition, not only will we add to the employment possibilities in Australia, but we shall also make a substantia] difference to our balance of payments position. A high yield will result because we can expect the labour we spend on it to return us some profit. I take it that the reason why nothing was done in this direction sooner was because, in the first place, in 1941-42, the government of the day was primarily concerned with the survival of the nation which was then engaged in total war. I can well understand the outlook in the earlier post-war years of both governments that reigned then. Knowing the lucrative returns that were won for the wool industry, they would not find a matter of this kind of such vital significance.
However, I believe the matter goes far beyond the better financial returns that will be won by the wool industry. Tt is vastly important that the quality and nature of ov.r wool should be defined with complete precision. 1 think it is a tribute to the prestige of the Australian wool industry and, therefore, to the prestige of Australia, that there should be no doubt about the exact quality and content of our wool bales when they go abroad. Therefore, I put the matter of Australian prestige even higher than the return that might be expected to come to us from the use of this service.
No doubt, the service will be expanded to other places in Australia. At the moment, testing is to be restricted to the two classes of wool I have indicated - to scoured and carbonized wool - but it will later be extended to wool tops and some processing phases of the industry.
This body is to be set up as a statutory authority so that its. certificate as to the moisture content of wool will be acceptable to the International Wool Textile Organization. That is a body whose standards are valued throughout the world and the Minister has assured us that it is prepared to recognize an authority constituted as provided in this bill.
I was rather interested to find that the Minister rejected out of hand the idea that this service might be provided by a government department, and that both he and the Government, as well as the industry itself, were of the opinion that the industry should be represented on the testing body. Looking at the matter quite objectively, it would seem to me that a more acceptable certificate might come from a body which has no interest whatever in the industry. lt is to be a purely scientific test. I should have thought that a certificate of a government department would command more respect and would be more completely divorced from all suspicion of self-interest than would that of any other body. The Minister, however, rejected out of hand the idea that Australia should follow what was done in New Zealand where, apparently, a testing authority has been constituted by a government department.
When the Minister is replying, I should like him to say what is wrong with that principle. No such question as socialization is involved. It is a matter of setting up an authority which, first, has to do a purely scientific job in a most objective way. I am casting no aspersions on the body as it is to be constituted under this bill. All I say is that I would expect that a certificate from a government department would cai) for more respect abroad as having come from a body whose objectivity would not be threatened. What defects does the Minister see in the New Zealand system? He has said merely that the Government would not like to see the activity carried on by a government department, as is the case in New Zealand. As a pure matter of interest, 1 should like him to indicate what objections he has, and whether any defects have been noted in that system.
The wool industry is of vast importance. I know that every honorable senator realizes that, and I do not propose to develop that theme further than to pay due acknowledgment to the wool industry for the major part it plays in keeping the Australian economy and the standard of living at the high level that exists here now. We are all seized with the importance of that element in our economy.
This bill has led me to consider the complexities of the techniques in the wool industry. There are many highly complicated and technical processes, and many highly technical methods are used in bringing wool to the stage where it serves members of the public. After only a quick survey of the matter, I was amazed to find the extent of the repercussions of these activities. A report was prepared by the Tariff Board in 1956 on wool tops, woollen yarn, woollen piece goods, blankets and rugs. In the course of its report, the board referred in a most informative way to the processes of manufacture. I believe that this section of the report, which covers only a few paragraphs, would be of interest to the Senate. The board stated -
Raw wool is subjected to a large number of processes in the course of manufacture of woven or knitted piece goods. Each of them adds considerably to the cost of the finished article and each of them could affect by a significant amount relative costs of production between two countries.
There are two distinct products of wool manufacture, i.e., worsteds and woollens. In the manufacture of woven woollen fabrics the processes are sorting, scouring, carbonizing where necessary, blending, carding, spinning, weaving, dyeing and finishing. In the manufacture of woven worsted fabrics, there are the additional processes of combing, gilling and several drawing operations.
Wool sorting as done by the manufacturer is much more exacting than the classing carried out in the shearing shed. The wool is then scoured to remove the natural grease as well as dust. Scouring does not remove’ vegetable matter such as burrs and seeds and for that reason much wool, especially of the shorter types, must then be carbonized. In some circumstances the wool is dyed at this stage. Depending on the requirements of the manufacturer various types or qualities of wool are then proportionately blended together.
In preparing the wool fibres for woollen yarns less attention is paid to their parallel position than in the case of worsteds. As distinguished from worsted yarn, woollen yarn is a rough thread which meets the requirements of the type of fabric for which it is used.
Worsted yarns are spun from the long finer wool fibres. They are combed and gilled after carding so that they lie parallel to one another as they are formed into bands called slivers or tops. In the process of combing all short fibres below a certain length are extracted, the remaining fibres and all remaining foreign matter are removed. In order to reduce the sliver or top to a more suitable weight or thickness and to a more convenient form for spinning it is passed through a drawing process.
Spinning is the final process in the conversion of wool to yarn. The wool now receives its final reduction in weight and thickness and a sufficient amount of twist is permanently inserted to give the yarn the strength desired for the purpose for which it is intended. After spinning the yarn is sometimes further processed by doubling or folding into two or more ply to give extra strength. Weaving is of course the conversion of yarn into cloth.
For a simple matter like wool, that represents a great many processes - highly complicated ones. Probably most honorable senators know the extent to which science has been invoked, not only to increase the production of wool and to improve its quality, but also to improve every one of those processes. The C.S.I. R.O. has played a magnificent part in this country in all those purposes and I am delighted, since we are to have a representative body, to see that the Government has decided to include on the authority a representative of that organization.
The Opposition very cordially supports the measure, and I will be happy, in the course of the debate that I trust will follow, if some honorable senators who are really knowledgeable in relation to these processes, and in relation to this interesting question of the moisture content of wool, will give to the Senate the benefit of their experience. I certainly would appreciate it.
I was confused for a considerable period as to why the moisture content would be determined in Australia, and this thought occurred to me: Will not that vary according to climate, storage and other factors from the time it leaves here until it reaches the country of destination? I take it that after a certificate is given that sets the bone dry weight of wool, the moisture content is ignored from then on. I assume that it does vary in transit. I am now asking for information. I take it that the whole purpose of testing is to guarantee the dry wool content, and then the moisture content can be completely ignored by the buyer.
– That is one of the purposes of the testing.
– That is what I am seeking to confirm, and I am obliged to Senator Hannaford for confirming it. Unquestionably, testing will facilitate transactions. It will cut out, as the Minister indicated, all kinds of correspondence and claims for errors and making allowances for the moisture content of the wool. It must save no end of discussions and adjustments, and that in itself is worth money to the industry.
We support the bill, and we wish the authority success in its work. I shall be very interested to hear from those who have had practical experience of these processes, probably some interesting facts that may be added to what the Tariff Board said in its excellent report. I should like, with the permission of the Senate, to read one more paragraph from that report, because we take pride in every phase of the wool industry in this country, and there will be others, no doubt, who will read this speech and profit by this comment. Amongst its conclusions, at page 13, the board said this -
The range of samples submitted by manufacturers at the inquiry, together with the large variety of goods seen by the Board on its subsequent visits to a number of representative mills, convinces the Board that in variety and quality the Australian industry can meet all reasonable requirements of the nation in woollen yarns, piece goods and blankets, and that imports are necessary only to satisfy the whims of those people who desire something different, or who cherish the belief that an imported article is necessarily better than one made by their fellow countrymen. The Board congratulates the makers of piece goods particularly, on the very full range of qualities and designs available to the public, from the heaviest woollen overcoating to the finest worsted suiting and ladies’ dress goods.
It is very pleasing to have that commentary on the variety and quality of woollen fabrics and worsted made by our own operatives. I should like the industry to develop and expand, and the wool scouring and the carbonizing processes to be used far more extensively in Australia so that we may get a higher benefit from exports. With those comments, I shall be very happy to lift my voice in support of the measure.
– 1 rise to support the bill. As has been pointed out, its purpose is to establish a testing authority in connexion with the quality of scoured and the processed wool before it leaves Australia. In other words, I should say that the object of establishing the authority is to put on scoured and processed wool before it leaves Australia a trademark in regard to its moisture content. As the Leader of the Opposition (Senator McKenna) pointed out, there seems to have been a good deal of confusion about the matter in another place. The proposed authority will direct its attention only to scoured wool - not greasy wool - until it becomes firmly established and takes up other activities that were mentioned by the Minister for Shipping and Transport (Senator Paltridge) in his second-reading speech, such as testing for yield and for other purposes concerned with greasy wool. But the authority’s immediate attention will be confined to carbonized and scoured wool.
I shall not bore the Senate by repeating the reasons that were stated by the Minister for the establishment of the authority. Suffice it for me to say that I congratulate the Government on bringing forward this measure, and particularly on making available the money to establish the testing authority in the early stages.
One of the reasons - probably the principal reason - for this testing is to remove from the marketing of wool one of the numerous guesses that has taken place for years past. Buyers have come along and inspected the wool in the wool stores, and they have then guessed the yield and guessed the price that it may be worth, and so forth. By establishing the exact amount of moisture that is in the wool - I understand it is impossible for anybody definitely to determine other than by mechanical testing the moisture content of the wool - the element of guesswork in this connexion will be removed.
The Leader of the Opposition referred to the authority that is to be established to carry on this work. I, also, wish to refer to it, briefly. I notice that the Australian Council of Wool Buyers is to be represented on it. I think that is essential, because members of the council are concerned with the buying of the wool and, as can be well understood, they are interested in the testing. It is good to see that they will be represented on the testing authority, and thus able to see that the whole thing is carried out in the manner they desire.
The National Council of Wool Selling Brokers of Australia is to be represented on the body. I am afraid I cannot see any need for its representative to be there. I make it clear, when I make that statement, that I say nothing against the fine system of wool selling it has established in Australia. Of course, this body is concerned more with the selling of wool than with testing. The composition of the authority has received the endorsement of the growers, so 1 shall take no exception to the brokers being on it. Of course, I have vivid recollections of the action that was taken by the brokers during the war years. They opposed certain measures put forward by the woolgrowers. To anybody interested in this subject, I commend Eric Hutchin’s book, “Tangled Skeins”. The Wool Scourers, Carbonizers and Fellmongers Federation of Australia will be represented, because its members are the people who deal with the carbonizing of the wool, and naturally they want to know exactly the contents of it. The Australian Wool Bureau, which consists of six wool-growers, is a fully representative organization. I should have been pleased to see two members of the bureau on the authority. One could then support the other - and this is always advisable. I have verified the Minister’s assurance that the wool-growers have accepted the proposed representation, and therefore, I, too, accept it. It is, of course, as the Leader of the Opposition has pointed out, absolutely necessary that the Commonwealth Scientific and Industrial Research Organization should be represented. It is intimately connected with the work in question.
There is also to be a representative of the Department of Primary Industry, and one additional government representative. I should like to know who that representative is to be. Perhaps the Minister will give us that information in his reply. If he does not, there may be speculation that this is merely another case of finding a good job for some one. Such information would forestall criticism. The bill has been well received, and if that information is given those concerned will be very appreciative.
The Leader of the Opposition said that it might be advisable to set up a government board. Thank goodness that was not done! 1 know something about the wool-grower. I know what happens now when the wool goes to the store, the buyers test it, and the brokers issue their list of values. Any one who has heard the comments passed would be convinced that only a really independent authority could “do the job - and it would not be a government authority. We have some atrocious bread, and some pretty bad milk, in Canberra though the supply of these commodities is controlled by a government authority. If a government authority cannot do any better than that I would not like to see such an authority have anything to do with this very important field. The task would be very much better performed by a board comprising, to a great extent, those who are vitally interested in the industry.
It might be interesting to look at some of the figures because some confusion arose in the other chamber, where it was thought that the proposed body would be dealing with greasy wool. As the Leader of the Opposition pointed out, an enormous organization would be required to test 1,245,462,000 lb. of wool - Australia’s total wool production, according to the latest figures in my possession. The proposed body is to deal with scoured wool only. The production figures of scoured wool for the five years from 1952 to 1957 are as follows: -
One can see that the quantity produced has almost doubled in the last five years. Therefore it becomes more important every day that testing be. carried out.
In the same period exports of scoured wool have not increased to the same extent. In 1952-53 exports amounted to 66,544,000 lb., but to-day the figure is only 76,804,000 lb. That may be accounted for by the fact that more scoured wool is being used in Australia than was the case previously. Production of wool this year is expected to be 1,245,462,000 lb., valued at £235,000,000, but, as the Minister has pointed out, it is expected that only about 40 per cent. - or 54,000,000 lb. - will be treated in the early stages. I wanted to bring out that point because I am particularly anxious to ascertain the probable charge for the furnishing of certificates. Definite information on that matter would ease the minds of those concerned. There will be much speculation on what the certificate is to cost. Some bright person will doubtless state that it is to cost so much a pound or bale. If such news gets abroad it may deter people from making use of the service in its early stages.
We shall have 54,000,000 lb. of wool with which to repay over five years the advance from the Treasury of £40,000 to cover the initial outlay for the two testing centres. In the first year there will be only the testing establishment in Melbourne. Victoria, incidentally, produced about 18 per cent, of Australia’s wool clip. After six, nine or twelve months, another centre will be set up in Sydney. As New South Wales produces about 43 per cent, of Australia’s wool clip, a total of about 61 per cent, of Australia’s production will be under test. It will then be a matter of how long a time will elapse before the service is provided in the other States.
I sincerely hope that the third testing authority will be established in Western Australia. I do not suggest that for any parochial reason. I assume that samples from particular bales will be tested. If that happens Melbourne will be able to test for South Australia, and Sydney will be able to test for Queensland. Later, of course, it may be necessary to establish centres in other States. Neither Melbourne nor Sydney will be able satisfactorily to carry out the testing of Western Australian wool. The distances are so great that wool coming from Western Australia would accumulate moisture on the journey.
If 61 per cent, of the wool is to be treated at Sydney and Melbourne, and 40 per cent, is the figure to be aimed at, it then becomes a matter of calculation to see how much might be raised to repay establishment expenses amounting to £20,000, in three years and the remainder in another two years. I do not know whether a charge will be made on each pound or on each bale of wool tested, but if wheat is to be taken as an example the charge will be made on a small unit. A levy of a farthing a pound applied to a total of 54,000,000 lb. of wool would yield between £50,000 and £60,000 a year. However, all the scoured wool produced will not be treated for some time to come - perhaps a year or more. Certainly it will be some time before Western Australian wool is tested. I should like the Minister to give an estimate of the charge so that woolgrowers may know how much the service will cost.
I hope that, later, the further testing proposed will lift the standard of Australian wool even more. Buyers throughout the world will then know definitely, by consulting the testing figures, that Australian wool is of the highest order and should, therefore, bring the highest possible price. Wool is our major industry and the higher we can raise its standard the greater will be the reliance placed on it by buyers everywhere. I understand some other business is to come before the Senate, so I ask for leave to continue my remarks at a later stage.
Leave granted; debate adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Henty) read a first time.
– I move -
That the bill be now read a second time.
The Seat of Government Act which called for the establishment of Canberra as the Federal Capital looked forward to the development of the Federal Parliament surrounded by its administrative machinery. Necessarily it involved the provision of public buildings, extensive residential accommodation and the necessary services and amenities which would provide a national capital city. Through the processes of an international competition and the acceptance of a Canberra plan in the Commonwealth Gazette of November 19tn, 1925, a capital city began to take shape.
Understandably there has always been some concern with the rate of progress. There has been criticism of delays by successive Governments in building what was considered a worthy national capital. But it must be recalled that the development of Canberra has been delayed on occasions by wars and major depressions and economic difficulties of one sort or another. The urgency of national development in other forms has tended to take priority over that of the National Capital, but I believe the days have gone by when we can continue to divert our attention from the necessities of building a sound administration based on the availability in the National Capital of the central sections of all departmental administrations. While the development of the National Capital languished somewhat, the pressure for the provision of office accommodation, houses, works and services has not in any way diminished. The result has been the development of a waiting list for homes, an urgent need for additional office accommodation and the great impetus given recently when, as a part of the national defence programme, the Prime Minister (Mr. Menzies) announced the Government’s decision to transfer the policy-making core of the defence services from Melbourne to Canberra during 1959.
The new phase of national development, which will be necessary to give effect to this transfer of something like 1,100 public servants and their families, will call for a greatly expanded programme of works in the construction of homes, schools, services and so on. The Government has accepted the principle of a five-year programme to meet the present requirements in Canberra together with those generated by this defence move. The immediate consequence of such a proposal is to demand the closest possible examination of the machinery for planning, development and construction of the National Capital. Even the casual reader of the monumental report produced by the Senate committee of inquiry into the development of Canberra in 1955 will have been struck by the number of advisory and co-ordinating committees and other organizations which have, over the years, concerned themselves with the development of Canberra. But these agencies, having been discontinued for one reason or another, recent years have seen the work of planning and development of Canberra divided between the Department of the Interior and the Department of Works. Divided responsibility of this kind, which may be quite satisfactory in times of leisurely development, appears to be in need of review if the programme now before the Government is to be achieved. 1 doubt if I can do better than quote the report of the Senate committee on Canberra which examined this matter rather exhaustively and came to the conclusion, “ that the present form of administration is unsatisfactory for the task required of it. The blame for this does not lie with the officers of the various departments but with the type of organization “. The committee went on to suggest that the development of Canberra to permit the full transfer of administrative departments should be given over to a centralized authority and that the authority should be controlled by a single commissioner with power to take over those branches of the Department of the Interior and the Department of Works which deal solely with the planning, development and construction of Canberra.
The Government agrees with these general recommendations of the Senate committee. As a consequence we propose to establish a powerful and competent commission. It will be charged with the responsibility for planning, developing and constructing Canberra and the provisions for it are embodied in this bill, which I now present to the Senate for the establishment of the National Capital Development Commission. History reveals that the period of greatest development in Canberra occurred under the original Federal Capital Commission, established in 1925. Nevertheless, some changes are proposed in the general form of the commission, which will not have any administrative functions but will be developed purely to plan and construct the National Capital.
The commission will be constituted by a commissioner and shall be a body corporate. The commissioner will be assisted by two associate-commissioners appointed by the Governor-General. These associatecornmissioners will be required to give such advice and assistance to the commissioner as the commissioner requires, and shall perform such duties as the commissioner directs. The period of appointment shall not exceed seven years but, of course, commissioners will be eligible for re-appointment. The bill then covers the normal machinery for appointments, for termination of appointments, for the appointment of an acting-commissioner in the event of the office of commissioner becoming vacant and empowers the commission to delegate all of its powers except this power of delegation.
The report of the Senate committee stressed the need for unifying all of the activities involved in the development of the National Capital. For that reason the commission has been given the broadest possible powers in the statement of its functions which are “ to undertake and carry out the planning, development and construction of the city of Canberra as the National Capital of the Commonwealth with power to do all things necessary or convenient to be done in connection with or incidental to the performance of its functions and the exercise of its powers “. Although liberally endowed with the power to perform the task in front of it the commission is, nevertheless, required to inform the Minister of its decisions in respect to matters of policy. As previously indicated, the commission will not assume administrative functions of any kind. It will have transferred to it land for development and upon completion of its task it will hand the land and the completed work back to the relevant department for administration and maintenance.
Very little new administrative machinery will be required by the commission. The commission will have transferred to its control the functions and staff now existing within the departments of the Interior and Works which are engaged on those matters shortly to become the responsibility of the commission. It is also provided that the commission may arrange for the permanent head of any department of state of the Commonwealth to make available the services of officers or employees of the department. Should the services available to it be considered inadequate or unsuitable the commission has powers to appoint such officers or engage such employees as is considered necessary for the purpose of the act. In addition, provision is made for the availability to the commission on transfer or hire, of vehicles, machinery, plant or -other assets owned by the Commonwealth if those assets are required for the performance of functions allocated to the commission. The rights of public servants appointed or employed under the act are adequately safeguarded.
Although the Government has accepted, in principle, the commitment involved in a five-year programme, finance will be provided for the work of the commission by annual appropriation. The commission, will be required to expend its moneys only an accordance with estimates of expenditure already-approved and to keep proper accounts and records which will be subject to inspection and report by the AuditorGeneral. The delegation of responsibility and power of this kind to a commission must necessarily be covered by adequate safeguards.
There will be those who will question the authority of the commission to alter the gazetted town plan of Canberra. I am happy to re-assure the House that subsection (5.) of section 11 specifies that the commission shall not depart from or do anything inconsistent with the plan of layout of the city of Canberra except with the approval of both Houses of Parliament. Also, machinery is provided for the resolution of any difference of opinion between the Minister and the commission on matters of policy so that final authority is not taken out of the hands of the Government. Finally, the provision of funds by annual appropriation and the obligation of the commission to present an annual report and financial statement to each House of Parliament offers ample opportunity for the Senate to keep under close scrutiny the performance of the commission.
I should like now to turn to another important aspect of the present bill. The growth of Canberra physically and the fact that the National Capital is becoming increasingly the focus of national sentiment make it essential that the commission shall have available to it the most expert advice available on matters of planning and development. The bill, therefore, provides for the establishment of a National Capital Planning Committee of nine members under the chairmanship of the commissioner. In order to promote the widest possible professional interest in the development of the National Capital, the Minister for the
Interior has sought the co-operation of the three major national professional organizations, which has been given readily. The Royal Australian Institute of Architects, the Institution of Engineers of Australia, and the Town Planning Institute of Australia have each agreed to submit a panel of nominations from which two will be selected for appointment to the National Capital Planning Committee. Two additional appointments to complete the committee will be made of persons with special knowledge and experience in artistic or cultural matters. This proposal needs no explanation and will, I feel, be generally applauded.
In this way, I believe the professional bodies will be encouraged directly to take a positive interest in and play an important role in a task which requires of the participants great skill, technical training and wide experience. Some degree of rotation of membership of the National Capital Planning Committee is provided for by making the period of appointment three years, although retiring members will be eligible for re-appointment.
The appointment of the new planning committee will abolish the present National Capital Planning and Development Committee which, for the past twenty years, has functioned as an advisory body to the Minister under ordinance of the Australian Capital Territory.
In his second-reading speech in another place, the Minister for the Interior has paid fulsome tribute to the splendid work rendered by the present National Capital Planning and Development Committee. I have little to add to his expressions of appreciation except to say that the Senate will support an expression of appreciation of public spirited citizens who have given so much of their time to the development of the National Capital.
Finally, the bill provides a regulationmaking power, since in a comprehensive programme of this type it is not possible to cover by legislation every detail which will need to be dealt with by the commission. I venture to suggest there will be general approval of the proposals contained in the bill and the general aim of giving greater speed and better direction to the development of the National Capital.
One or two points of criticism may readily spring to mind. The first is that involved in making financial provision by way of annual appropriation. The fact of the matter, is, however, that the development of Canberra is only one of the great developmental responsibilities which rest upon the Commonwealth Government. If the principle of long-term appropriation were accepted as far as the development of Canberra is concerned, the same principle must necessarily be extended to such activities as national development, the Snowy Mountains Hydro-electric Authority and the activities of the Department of Supply. It follows, I think, that long-term financial appropriation for each of these bodies would rob the Government of that intimate control of the financial affairs of the Commonwealth without which sound government could not progress.
Since the commission will have a considerable amount of financial control of its affairs within the overall annual appropriation, I would not expect difficulties to arise. With a commission of the type proposed devoting its full time and attention to the development of a suitable programme and the carrying out. of that programme, its estimates must be expected to be much more accurate than has been possible heretofore, and annual appropriation must be considered completely satisfactory.
A second point which has given rise to some concern is the fact that there should be no provision on the proposed National Capital Planning. Committee for local representation. In this matter, I should like to point out that the committee to be elected is not a broadly representative committee to convey to the Government points of view on matters of policy. It is, in fact, an expert committee set up to deal with the highly technical points of planning, architecture, engineering and general development. Contrary to some suggestions, I also believe it is right and proper that the commissioner should be the chairman of this advisory committee since planning, development and construction are the real functions of a commission. It would be incongruous if the commissioner were to be separated from that department which is being established to advise him on those matters for which he is to be responsible.
Under the bill which I now present to the Senate, I have every confidence that the development of the National Capital will move forward under the competent direction of a commission having considerable power, having adequate finance, and having available to it the most competent advice.
I should like to pay a tribute to the Senate Select Committee on Canberra which did such a great deal of work in high-lighting and bringing to the notice of the Government many of the matters for which provision is made in the bill. Much credit is due to the members of that committee for the fact that the measure is now before this House. I commend the bill to the Senate.
Debate (on motion by Senator O’Flaherty) adjourned.
Debate resumed (vide page 93).
– If I understood the Leader of the Opposition (Senator McKenna) correctly, he asked why the testing could not be done outside Australia. Obviously, that would be impossible, because the wool is sold on the basis of a moisture content of 16 per cent. at Bradford. In order to determine exactly its moisture content when it left Australia, it is necessary for the testing to be done in this country. I have much pleasure in supporting the bill.
.- Although the Opposition does not object to the bill, there are certain features of it which I think one is entitled to criticize. As the Minister for Shipping and Transport (Senator Paltridge) said, in the main the bill provides for the establishment of an authority to test the moisture content of scoured and carbonized wool, and sets out the names of the organizations that shall be represented on the authority. However, I am intrigued by the provision relating to a member whose nomination has been irregular. The bill provides that such a person shall remain a member of the authority without the authority’s decisions being affected. I should like to know what the Minister regards as being an irregular nomination.
Clause 6 (1 . ) sets out the bodies which shall be represented on the authority.
Clause 6 (5.) provides -
The appointment of a member is not invalidated and shall not be called in question by reason of a defect’ or irregularity in or in connexion with his nomination.
I do not suppose any one would object if there were a mere clerical error, but I should like to know what the word “ irregularity “ is intended to mean. We have heard quite a lot in this chamber and in other places about irregularities in the election of persons to various positions, but what is meant by the use of the word in this bill?
It is true, as the Minister has said, that the bill is the outcome of a rather lengthy examination of the position. Senator McKenna said, 1 think, that it was first mooted in about 1941. One must admit at this stage that it has had very long consideration. 1 take the same stand as Senator McKenna took. I am surprised at Senator Seward’s remarks. I cannot see anything wrong with the authority being run by the government of the day. A similar authority is being conducted by the Government in New Zealand and as the Minister said, this Government went to the trouble of getting a New Zealand departmental representative here to give advice. It is admitted that the authority will be a non-profitmaking organization. I submit that a certificate bearing the stamp of the Australian Government would carry more weight than one bearing the stamp of an authority administered, in the main, by persons vitally interested in the industry.
The bill provides also that a member may, with the approval of the Minister, appoint a person to be his deputy. Should not the organization which the member represents have some say in such an appointment? A member might not be able to attend a meeting because of short notice. Should not the appropriate organization be asked to appoint a deputy? The bill does not require that the member shall appoint as his deputy another member of the organization which he represents. It may be said that that is inferred, and that he would do so, but the bill states only that a member who is appointed to this authority may, with the approval of the Minister, appoint another person to act for him. Has he to obtain the Minister’s approval to the making of such an appointment, or must the person whom he proposes to appoint as his deputy have the Minister’s approval? Two constructions are open to us. A member may not be able to attend a meeting and may desire another person to be there in his stead. Does clause 7 (1.) mean that he must seek the
Minister’s permission to appoint a deputy, or that he must seek not only that permission, but also the Minister’s approval of the person nominated? lt would be far better if the organizations represented on this authority, rather than the members, appointed deputies. The bill should provide that an organization shall appoint one person, and another to be his deputy in case he is unable to attend.
As previous speakers have said, the measure took a long time to come to fruition. No one could have much opposition to it, but there is one aspect that intrigues me. This is the wealthiest industry in the nation. In 1950-51, the wool clip was valued at £655,000,000, in 1951-52 at £337,000,000, and in 1956-57 at £503,000,000. The Minister said that this industry did not want the Government to run it and he added, “ and the Government wholly concurs in that decision “. I am reminded of a speech on another matter that the Minister made this afternoon. The Government did not wholly concur when Trans-Australia Airlines put Australian National Airways Proprietary Limited out of the running. Instead, it bent over backwards to find a way to save the private company, although Government supporters talk constantly of their belief in fair competition. I do not mind the wool industry wanting to run this authority, but one would think that the industry would have been able to find the £40,000 required. To my mind, it is rather mean for such a large industry to adopt this attitude. The Minister said that at the outset the authority will be concerned only with the moisture content of scoured and carbonized wool. The scheme will bring another £1,000,000 a year to those persons connected with the industry. It has been said that the sellers will be saved a tremendous amount of trouble, and difficulty will be avoided in the purchasing countries when a comparison is made of landed and invoiced weights. The return to the growers will be greater when wool sold proves, upon arrival at its destination, to have a lower moisture content than is permitted under international standards.
Sitting suspended from 5.45 to 8 p.m.
– At this juncture, I ask for leave to continue my remarks at a later hour.
Leave granted; debate adjourned.
– I lay on the table the following papers: -
Estimates of Receipts and Expenditure, and Estimates of Expenditure for Additions, New Works and other Services involving Capital Expenditure, for the year ending 30th June, 1958;
The Budget 1957-58 - Papers presented by the Right Hon. Sir Arthur Fadden in connexion with the Budget of 1957-58; and
National Income and Expenditure 1956-57, and move -
That the papers be printed.
To-night, the Treasurer (Sir Arthur Fadden) is delivering in another place his budget speech for 1957-58. I should like to refer briefly to some of the main features of the budget. The first is the economic prospect. During the past year, our economy has gained greatly in stability and strength. Twelve months ago, despite signs that inflationary pressures were easing, costs and prices were still rising fairly strongly. Our international reserves had, by then, ceased to fall, but we were maintaining external balance only by the use of drastic import restrictions and there seemed little early prospect of relieving the position. To-day, it can be said that inflationary pressures have been reduced, and the movement of costs and prices has slowed down. We have added more than £200,000,000 to our overseas reserves and import controls have already been relaxed to a considerable extent.
We have reached a state of substantial balance, both internal and external, at a high level of trade and industrial activity. The problem, now as always, is to preserve such a state of balance and at the same time keep up an adequate, though not excessive, rate of growth in terms of population, industrial capacity, living standards and defensive strength. The supply of resources will increase and so will the demand for resources - the vital thing is to keep the two in step.
With further resources entering production, and with the gains in productivity that are undoubtedly taking place, especially in some industries, we have reason to expect an appreciable rise in local output. Moreover, through the easing of import restric tions, there will be some addition this year to imported supplies of both finished goods and equipment and materials for industry.
On the side of demand, consumption expenditure appears to be rising at a fair rate and there will also be some increase in public expenditure this year, both on works and on current services.
We cannot, of course, foretell precisely what the magnitude of these trends in supply and demand will be. The balance of payments is likely to be particularly influential and, at this stage, prospects seem promising. We are certain of another large wool clip this year and, if wool prices hold, our export income will again be high. This could obviously have an important impact, directly on incomes and monetary conditions and indirectly on attitudes towards investment and consumer spending. On the other hand, it would make possible a further relaxation of import controls although the effect of this, in terms of larger imports, would be felt only after an interval of some months.
On a broad view, the outlook is very favourable to enterprise. Industrial activity is, as I have said, relatively high. The trend of costs and prices has been much steadier, a fact which should of itself be encouraging to enterprise. Population is increasing at a fairly rapid rate. Our balance of payments and overseas reserves are in a sounder condition and, so far as we can see, external prospects are good. The share market has been rising for a considerable time past and is at present very strong. With so many favorable portents I cannot see why there should be any hesitancy about the future. So far as government policy is concerned, I believe the best assurance that business can have is that policy will be directed primarily towards preserving stability, a stability which has been gained not without some cost but which has certainly not so far proved incompatible with sound progress.
The budget does not cover the whole range of policy. Banking policy is important, too, and so is trade policy; Perhaps most significant of all is the attitude of the business world and the community at large. Yet the budget occupies a central position and its range of. influence is wide. It was chiefly to budgetary measures that we turned when, eighteen months ago, the economy had become unbalanced and wo had to lay a restraining hand on the excessive rate of business and community spending. The question of prime interest in budgetary policy this year is whether we should modify to any extent the measures then adopted and, if so, how far. Before T go on to discuss that problem, however, it is necessary first to explain what the budget outlook is.
I come now to estimates of revenue for 1957-8. On the basis of existing legislation, revenue from taxation in 1957-8 is estimated to be nearly £107,000,000 greater than revenue last year. Collections from all forms of taxation are expected to increase but the greater part of the total increase is attributable to income tax on individuals. With higher wool incomes and a general increase in professional and business earnings last year, and increased employment and wage earnings this year, income tax collections from individuals are estimated to increase by £71,300,000. Company income is estimated to have been a little higher in 1956-7 than in 1955-6 and income tax collections from this source are expected to be £6,400,000 greater than last year.
Customs revenue is estimated to be £5,400,000 greater this year, mainly because recent relaxations in import restrictions will allow a larger flow of imports. Excise collections are estimated to increase by £11,600,000 and revenue from sales tax by £6,700,000. Sales of most goods subject to these taxes are expected to increase. With rising wages and salary payments, the yield of pay-roll tax is estimated to increase by £3,800,000.
Miscellaneous revenue is estimated ut £34,600,000. This figure includes a transfer of £2,000,000 from sundry trust account balances. Last year, transfers totalling £69,800,000 from trust accounts increased this item to £106,500,000.
Post Office revenue is expected to increase by £6,300,000, and revenue from broadcasting and television services by £1,250,000.
At existing rates of taxation and other charges, total revenue from all sources in 1957-58 is estimated to be £1,347,000,000. If the transfers from trust accounts in 1956-57 are excluded, this represents an increase on last year’s revenue of almost £113,000,000
Last financial year, the Government provided £190,000,000 for defence. The actual expenditure for the year was £188,497,000. A vote of £190,000,000 is again being provided in the current financial year to meet the requirements of the defence programme. This amount includes a substantial element to meet commitments incurred in previous years as well as current expenditure.
The Government proposes to increase war and service pensions and certain reestablishment benefits. The special rate war pension for cases of total and permanent incapacity will be increased by £1 5s. a week, making the pension £11 a week. The 100 per cent, general rate war pension will be increased by 7s. 6d. a week with proportionate increases for pensioners in receipt of partial pensions; and the service pension will be increased by 7s. 6d. to £4 7s. 6d. a week.
The war widows’ pension will also be increased by 7s. 6d. to £4 17s. 6d. a week. In addition, the domestic allowance payable to certain war widows, mainly those with children, will be increased by 5s. 6d. to £2 a week.
The new rates of pensions and allowances will be paid from the first pay-day after the necessary legislation has been passed.
It is also proposed to increase by 7s. 6d. a week the living allowances payable to settlers under the War Service Land Settlement Scheme and trainees undergoing fulltime vocational training under the Commonwealth Reconstruction Training Scheme, the Korea and Malaya Training Scheme and the Disabled Members’ and Widows’ Training Scheme. Altogether, these proposals are estimated to cost £4,100,000 in a full year and £2,737,000 in 1957-58. Total expenditure on war and repatriation services in 1957-58 is estimated at £129,067,000, or £3,371,000 more than in 1956-57.
On the basis of existing legislation, expenditure from the National Welfare Fund in 1957-58 would rise by just over £10,000,000. In addition, certain increases in existing rates of benefit are proposed.
Age and invalid pensions will be increased by 7s. 6d. a week to a new maximum of £4 7s. 6d. a week. The same increase will be granted in widows’ pensions, raising the pension for widows with one or more children to £4 12s. 6d. a week and for other widows to £3 15s. a week.
Unemployment and sickness benefits rates will be increased by I5s. a week for a single adult, 22s. 6d. for a man and wife and 27s. 6d. for a man with a wife and one or more children. The new weekly rates of benefit will be £3 5s. for a single adult person, £5 12s. 6d. for a married person and £6 2s. 6d. for a married person with one or more children. It is also proposed to raise from £1 to £2 the weekly income which is allowed from other sources without reduction of these rates of benefit.
Allowances payable to single and married sufferers from tuberculosis will be increased by 7s. 6d. and 15s. a week respectively to £6 10s. and £10 7s. 6d. a week.
The increases proposed in pensions and other benefits will become payable on the first pay-day after the amending legislation is passed.
The Government also proposes to increase the assistance given by the Commonwealth to hospital patients to meet their accounts for hospital treatment. At present, the Commonwealth pays a general hospital benefit of 8s. a day and, where a patient is a member of a hospital insurance organization, an additional benefit of 4s. a day. Legislation will be introduced providing for the payment of additional benefit of 12s. a day, in lieu of 4s. a day, where a hospital patient is entitled to receive hospital insurance benefit of 16s. a day or more. The amounts of certain benefits payable under the medical benefits scheme will also be revised.
The increases in the rates of benefits which I have just mentioned are expected to cost £15,980,000 for a full year and £9,531,000 this year. Taking this latter figure into account, and making provision for the normal growth in the numbers of social service beneficiaries, the total outlay from the National Welfare Fund in 1957-58 is expected to reach £243,572,000, which is £19,649,000 more than actual expenditure last year.
The Government proposes to double the contributions it is at present making towards the capital costs incurred by religious, charitable and other approved organizations in building homes for the aged. Instead of contributing £1, the Commonwealth will contribute £2 for each £1 found by an organization towards the cost of housing projects. Further, the Government will raise from £1,500,000 to £3,000,000 the maximum contribution it is prepared to make for homes for the aged in any single year. Provision has been made for an increase of £1,049,000 in expenditure under this heading in this financial year.
The living allowances payable to holders of Commonwealth Scholarships will be increased by 10s. to £3 15s. a week for a scholar living at home, and by £1 2s. 6d. to £5 15s. a week for a scholar living away from home. The increases will take effect from 1st January, 1958, and are estimated to cost £50,000 in this financial year.
Total payments to the States in the present year are estimated at £266,739,000, or £22,662,000 more than last year. The tax reimbursement grant payable to the States in 1957-58, under the formula embodied in existing legislation, is estimated at £166,200,000. As already announced, however, the Commonwealth has agreed to provide a special financial assistance grant sufficient to bring the total tax reimbursement payments to £190,000,000, or almost £16,000,000 more than last year. Following the recommendation by the Commonwealth Grants Commission, an amount of £19,500,000, or £1,000,000 more than last year, has been included in the Estimates for special grants to South Australia, Western Australia and Tasmania.
Payments under the Commonwealth Aid Roads legislation are expected to reach £34,000,000 this year, or £1,782,000 more than in 1956-57. The existing Commonwealth Aid Roads legislation is due to expire on 30th June, 1959, and the Government proposes to review the whole question of Commonwealth assistance for roads before that date. In the meantime, however, the Government has decided that some further assistance should be provided for roads.
The Government has been impressed by the fact that operators of diesel-powered road vehicles, as compared with operators of petrol-driven vehicles, are not making a reasonable contribution to the cost of building and maintaining the roads they use. The Government has decided, therefore, to impose customs and excise duties equivalent to ls. a gallon on automotive diesel oil consumed by road users. This is expected to yield about £2,000,000 in this financial year, and £3,000,000 in a full year. Although the proceeds of this tax will yield only about £2,000,000 in 1957-58, the Government has decided that £3,000,000 should be made available as special assistance for roads in both 1957-58 and 1958-59. This special assistance should be regarded as an interim measure which will be reviewed, together with the Commonwealth Aid Roads legislation, before that legislation expires at the end of the next financial year.
The arrangements under which the Commonwealth is assisting the State of Western Australia to finance the cost of the comprehensive water supply scheme have been reviewed, and it has been decided that assistance on a larger scale should be granted. Under the proposed new arrangements, the Commonwealth’s contributions in 1957-58 are estimated at £572,000 or £109,500 higher than last year.
The Government has, in the context of its general review of Australian transport policy, considered the question of assisting in the provision of a 4-ft. 8i-in. gauge rail link between Melbourne and Wodonga to enable the unbroken flow of the large quantities of goods passing between Sydney and Melbourne. The Commonwealth is already meeting half the estimated cost of the preliminary surveying for this work, and it has now been decided, in principle, to provide some financial assistance for the carrying out of the work itself. Discussions on the nature and amount of the assistance to be provided will take place shortly between the Commonwealth and State governments concerned.
Ordinary expenditure by business undertakings - post office, railways and broadcasting and television - is estimated at £110,336,000, or £8,193,000 more than last year. Practically the whole of this increase will be covered by increased revenue from these undertakings. The main increase relates to post office expenditure, which is estimated to rise by £6,888,000, chiefly because of wage increases and additional staff required to handle extra business. Expenditure in 1957-58 on ordinary services in the territories is estimated at £19,340,000, which is £2,830,000 greater than the actual expenditure of £16,510,000 in 1956-57. The increase reflects the expansion taking place in governmental activity in the Northern Territory and in the Territory of Papua and New Guinea. The provision for capital works and services is £122,403,000, or £14,601,000 more than expenditure last year.
The amount to be provided this year for war service homes is being increased by £5,000,000 to £35,000,000. This additional allocation should result in a reduction in the number of outstanding applications and in the period that applicants have to wait for loans.
The territories are to receive £3,280,000 more than last year’s expenditure of £8,027,000. The vote for the Australian Capital Territory has been increased by £2,867,000 to make possible an acceleration of the building programme in anticipation of the transfer to Canberra of the personnel of the Defence departments. The vote for the Northern Territory also has been increased by £563,000 to a total of £3,361,000, to provide for expansion of building and engineering services, developmental roads and further health facilities.
Funds for the capital works programme of the Postmaster-General’s Department are being increased by £3,659,000 to a total of £34,380,000. Of the increase, £2,548,000 will be applied to installing new telephone connexions and to improving trunk line and telegraph services. Additional expenditure on sites and buildings accounts for the remainder of the increase.
Payments in connexion with Christmas Island, a source of phosphate in the Indian Ocean, are estimated at £1,770,000, or £1,435,000 more than in 1956-57. The larger allocation is for payments connected with the proposed transfer of sovereignty of the island to Australia. In this, and in the expenditure aimed at raising phosphate production, Australia and New Zealand are sharing equally.
To meet increased expenditure on plant and equipment and other expenses, the amount provided for the Snowy Mountains hydro-electric scheme is being increased from £18,000,000 in 1956-57 to £18,350,000 in this financial year.
Departmental expenditure for 1957-58 is estimated at £61,313,000, an increase of £5,352,000 over last year. About half of this increase is due to increased expenditure on the research and technical services provided by departments and authorities such as Civil Aviation, the Bureau of Mineral Resources, the Atomic Energy Commission and the Commonwealth Scientific and Industrial Research Organization. Estimates of administrative expenditure also reflect increased wages, salaries and other costs. The Government has decided to make a full review of the functions of all Commonwealth departments and has established a committee of cabinet for the purpose. This committee will examine the functions performed by each department from the stand-point of cost and of public need, and will report its conclusions to Cabinet.
Expenditure on bounties and subsidies is estimated at £15,150,000, or £136,000 more than last year. The main item is the dairy products bounty, which will remain unchanged at £13,500,000. lt has been decided to seek an amendment of the Gold.mining Industry Assistance Act to increase from £2 to £2 15s. per ounce the maximum irate of subsidy payable to large producers. Small producers - those whose output is not more than 500 ounces per annum - will be entitled to claim subsidy at a new fixed rate of £2 per ounce. At the same time, the maximum allowance for development expenditure in arriving at cost of production for gold subsidy purposes will be raised from £3 10s. to £5 5s. per ounce. The increase will operate from 1st July last, and the annual cost is estimated at £100,000.
In 1956-57, the Government aimed at a level of net immigration equivalent to 1 ;per cent, of population per year. The target (figure for gross permanent immigration in 1956-57 was set at 115,000. The actual intake, however, was some 6,000 in excess of this, because the number of unassisted immigrants was greater than we had expected.
For this financial year, the planned intake as again 115,000, which is expected to result tin a level of net immigration somewhat less Khan the ratio of 1 per cent, of population. However, with an increase in the proportion of British immigrants in the programme and higher passage costs, expenditure on immigration is estimated to rise by £1,450,000.
The amount provided for international development and relief in 1957-58 is £5,850,000, compared with actual expenditure in 1956-57 of £5,668,000.
In order to accelerate the search for oil rin Australia, the Government has decided to offer to meet portion of the cost of deep -stratigraphic drilling. This assistance will be limited to not more than half the cost of each hole drilled at sites approved by the Government. These sites will be in areas not previously investigated at depth. The annual limit on the Government’s contribution will be £500,000. A sum of £300,000 for this purpose has been included in this year’s Estimates.
The Government has also decided to provide some relief to those Commonwealth superannuation pensioners whose pension entitlements commenced a number of years ago. Increases will be made on a sliding scale of 5s. per unit to those who retired prior to 14th May, 1942, reducing to 3s. 6d. per unit for those who retired on 5th April, 1947, or thereafter, with a pension entitlement which had not been increased by salary adjustments.
The various items of expenditure that I have outlined are expected to total £1,202,337,000, which is £79,505,000 more than the comparable total for 1956-57. Of this increase, £19,649,000 is for increased expenditure from the National Welfare Fund, £6,619,000 for increased expenditure on war and service pensions, £22,662,000 for additional payments to the States, £14,601,000 for capital works and £8,193,000 for business undertakings.
There are certain other major commitments which also must be considered. An estimated amount of £8,000,000 will be needed to finance advances to the States for capital expenditure on war service land settlement, whilst a very large but as yet unknown amount will also be required to assist the borrowing programme of £200,000,000 for State works and housing approved at the meeting of the Australian Loan Council in May, 1957.
For the time being, the Commonwealth has agreed to make monthly advances to the States at an annual rate of £200,000,000. The position will be reviewed in January, 1958, by which time the Commonwealth will be in a better position to decide on the amount of special assistance which it may provide.
I should mention, however, that apart from any direct assistance it may provide for the States’ works and housing programmes, the Commonwealth has also offered to arrange, to the maximum possible extent, for the refinancing of maturing loans that may not be fully converted.
Besides the £150,000,000 of 3i per cent, securities of which conversion has already been sought, further loans totalling some £265,000,000 will fall due during the remainder of the financial year. Of this amount approximately £110,000,000 is held by the Commonwealth Trust Fund, but the remainder presents a formidable redemption problem. Even though the response to the recent conversion offer has been encouraging, the amount of cash required this year to pay off non-convertors may well exceed by a substantial amount the current receipts of the National Debt Sinking Fund. There is also a loan of approximately £20,000,000 sterling which falls due in London in April, 1958. A further small amount will also be required to finance redemption of war savings certificates and savings certificates.
I think that I should make special reference here to the growing magnitude of the problem of maturing debt. During the next few years an immense amount of debt falls due, much of it the result of war-time borrowings by the Commonwealth. The amount is continually being increased by new borrowings or conversions. The Government has given close thought to this problem over a long period and for this reason established the Loan Consolidation and Investment Reserve by legislation three years ago. The resources available in the reserve have already proved useful in assisting to meet maturing loans and to reduce the total of outstanding debt. We have progressively added to the resources of the reserve and they now stand at a considerable figure. Measured against the potential magnitude of the problem, however, they are not large, and it is the aim of the Government to add further to them as and when opportunity occurs.
These then, in broad outline, are the main elements in our budget problem for 1957-58. On the one hand, we have to provide for increased expenditure on account of the Commonwealth itself, including increases in social service and war and repatriation benefits. As in recent years, also, we have to make provision for a potentially very large amount of assistance to State loan programmes. Moreover, we have pressing hard upon us an immense and fastgrowing problem of debt maturities and it is no more than common prudence to build up resources as far as we can in advance of liabilities which, in a less favorable situation, may fall in upon us. On the other hand, revenue prospects for the year are relatively buoyant, although, as I have mentioned, we owe a considerable part of this to the good fortune of a high wool market last financial year. Above and apart from these financial aspects of the position there is the broad question of what direction policy ought to take in the light of the economic possibilities I discussed earlier.
Probably the soundest encouragement the Government could give at this juncture to the business world and the community in general would be the assurance that, in the matter of the budget as well as elsewhere, its policy would aim to preserve, above everything else, the high degree of stability we have achieved. We are in a position to give some taxation relief and we propose to give it. But we do not feel called upon to start undoing, step for step, the measureswe undertook eighteen months ago for the very purpose of correcting an unbalanced situation and bringing about the kind of well-adjusted situation we now enjoy.. Neither do we judge it necessary or desirable to give a wholesale boost to activity and expenditure. Within the total amount of tax reduction we are able to make wefind it possible to give some relief to certain classes of taxpayers whose claims for relief have a high degree of priority - inparticular, the family man and the person setting up a home - and we can also makea very useful contribution towards the problem of strengthening Australian industry to meet keener overseas competition. In? particular, we have given attention to depreciation allowances as a means to encourageand facilitate re-equipment of industry. Beyond that we will be able to correct a> number of anomalies in the present taxation* system which, however, will not entail any large cost to revenue. We believe that, in» their own fields, these will all be timely and effective measures.
The taxation proposals the Government has decided to make are as follows: - It isproposed to increase by £13 the concessional allowances for maintenance of” dependants. This increase will apply to thewhole field of dependants’ allowances. By way of example, the allowance for a spouse will be increased from £130 to £143. The* increased deductions will be allowed in> assessments based on income of the current year 1957-58. In the case of salary and wage earners, the increased allowances will be reflected in reduced tax instalmentsexpected to be operative on or about 1st-
November next. The concession will be extended to those taxpayers who maintain parents-in-law.
It is further proposed that, for income tax purposes, adopted children and other children towards whom a taxpayer has all the legal obligations of parenthood will be treated in the same manner as the taxpayer’s own children. Similar action will be taken for gift duty and estate duty purposes. The revenue costs of these expanded concessions for income tax purposes is estimated at £8,425,000 in a full year and about £7,700,000 in 1957-58.
The exemption limits of the present age allowance coincide with the total of the present annual rate of pension and maximum permissible income for Commonwealth age pension purposes. In consequence of the proposed increase of 7s. 6d. per week in the age pension, the exemption limits for the age allowance will be correspondingly raised by £20 to £410 in the case of single persons and by £39 to £819 in the case of married couples. The increased allowances will begin to apply in the current income year 1957-58 at a cost to revenue of £450,000 in a full year and £250,000 this year.
It is proposed to widen the scope of the income tax concessions for gifts to include certain cultural and industrial research organizations. These are the National Trust in each of the States of New South Wales, Victoria and South Australia, public libraries and art galleries, the Sydney Opera House Appeal Fund, the Sidney Myer Music Bowl and the Australian Industrial Design Council. Amounts of £1 and upwards donated to these organizations on and from 1st July, 1957, will be allowable deductions. The revenue cost is estimated at £157,000 in a full year, but there will be little or no cost in this financial year.
It is proposed to reduce rates of company taxation by 6d. in the £1. The reduced rates, which will apply to incomes of the 1956-57 year, will be, for public companies, 6s. 6d. in the £1 on the first £5,000 of taxable income and 7s. 6d. in the £1 on the balance of taxable income. The comparable rates for private companies will be 4s. 6d. and 6s. 6d. A rate of 5s. 6d. will apply to the whole of the income of friendly, society dispensaries. The revenue cost of these reductions will be £14,500,000 in a full year and £13,000,000 in 1957-58.
I turn to depreciation. This important feature of our taxation system was examined in 1955 by the Commonwealth Committee on Rates of Depreciation, under the chairmanship of my colleague the honorable member for Petrie (Mr. Hulme). Certain of the recommendations of the committee were adopted last year and it is now proposed to give effect to some others. The main proposal is an increase of 50 per cent, in the depreciation rates applied in what is known as the diminishing value method.
A further recommendation of the committee which it is proposed to adopt relates to the taxation of depreciation balancing adjustments. These measures will commence to apply to the income year 1957-58. The cost to revenue is estimated at £26,400,000 in a full year and £2,000,000 in 1957-58.
The Government has had representations from investors concerning the method of taxing dividends paid to shareholders residing outside Australia. Opinion generally is that a with-holding tax at a flat percentage would be far preferable to the present system of taxing the dividends by way of assessment at ordinary rates. The Government has considered the representations and believes that overseas investment in Australia would be encouraged, and administration would be simplified, by the adoption of this method of collection, and is examining proposals for the introduction of such a system in Australia. Any system that may be adopted will not operate before 1st July, 1958. Accordingly, there will be no cost to revenue this year.
Certain exemptions and reductions in the sales tax rates are proposed. Of major importance to householders is the reduction in the rate from 10 per cent, to 8i per cent, on purchases of household furniture and equipment such as domestic refrigerators, washing machines and vacuum cleaners. The rate of sales tax on handbags, baskets, travelling bags and other travel goods is to be reduced from 25 per cent, to the general rate of I2i per cent. There is a considerable number of other proposals relating to sales tax which will be explained when necessary resolutions and bills are introduced. The new exemptions and rate reductions will commence to apply to wholesale transactions from the commencement of business to-morrow. The revenue cost will be about £4,000,000 in a full year, and £3,000,000 this year.
The exemption from pay-roll tax is to be raised from £6,240 to £10,400. Only those employers who pay salaries and wages in excess of £200 weekly will be liable for the tax in future. One of the effects of the increase in the exemption will be a reduction from about 39,000 to 23,000 in the number of pay-roll taxpayers. The higher exemption will operate in respect of salaries and wages payable on and from 1st September, 1957. The revenue cost is estimated at £2,750,000 in a full year and £2,000,000 in 1957-58. lt is proposed that a measure of relief be granted where the value of property becomes liable for estate duty on two or more occasions within a period of five years. For this purpose, the value of the estate subjected to duty on the first and the second succession and the amount of duty involved in each assessment will be ascertained. The relief proposed will be based on the lower of the two duties. If the second succession occurs within one year after the first, 50 per cent, of the duty will be rebated. The rebate will be reduced progressively according to the period of time intervening between the two successions. It is also proposed to extend the exemptions from duty to property passing to certain bodies. The estate duty concessions will apply from the date of assent to the amending legislation, and are estimated to cost revenue £168,000 in a full year and £50,000 in 1957-58.
The estimated cost to revenue of the taxation concessions I have outlined may be summarized as follows: -
I have already mentioned that the Government proposes to impose a tax of ls. a gallon on automotive diesel oil consumed by road users. This tax is expected to yield about £2,000,000 in this financial year and £3,000,000 in a full year.
During recent years, airlines have been making increased use of aviation kerosene which, up to the present, has been substantially tax free. In the meantime, there has been customs duty of lOd. a gallon on imported aviation petrol and excise of 84-d. a gallon on locally produced aviation petrol. It is only fair that commercial operators using aviation kerosene should make a reasonable contribution to the heavy costs of providing airport and air route facilities, and the Government has therefore decided that duties equivalent to 6£d. a gallon should be imposed on that type of fuel. The yield to revenue is estimated to be £290,000 this financial year and £400,000 in a full year. In addition, legislation will be introduced later in the session to increase the present scale of air navigation charges by 10 per cent.
The effect of the various revenue proposals that I have just outlined is to reduce the estimated receipts of the Consolidated Revenue Fund from £1,347,410,000 to £1,321,700,000. It is intended to appropriate an amount of £119,363,000 to the Loan Consolidation and Investment Reserve, which will assist in meeting the various commitments to which I have already referred. Taking this appropriation into account, estimated revenue and expenditure of the Consolidated Revenue Fund will be in balance.
The budget for this year reflects strongly the fact that our economy is growing at a fairly rapid rate. We have had to provide for larger services in both Commonwealth and State fields to meet the needs for an expanding population and industry. We are, however, able to finance these requirements and at the same time to give some additional assistance to older people and others in need, and also to provide a useful measure of tax relief. In part, our ability to do this is due, as I have pointed out, to fortunate circumstances on the continuance of which we cannot rely. But it is also due in part to the improved balance of the economy, and any hope of further progress in those directions depends upon preservation of that balance.
Debate (on motion by Senator McKenna) adjourned.
Debate resumed (vide page 97).
– I shall attempt to pick up the threads of the speech that I was making when the sitting was suspended for dinner. Although I said that the wool industry ought to have borne the £40,000 for the establishment of two wool testing centres, I am not unmindful of the fact that it has helped itself in other ways. It has imposed a levy of 4s. a bale on shorn wool, which is paid into the Wool Use Promotion Fund for publicity at home and abroad. It is also true that the industry pays 2s. a bale into the Wool Research Fund, but this payment is subsidized by the Commonwealth on the basis of £2 to £1, which means that the Commonwealth pays 4s. for every 2s. paid by the industry. We may regard these two instances of contributions by the industry as long-term investments. The industry wants to do this testing itself, whereas in our sister dominion, New Zealand, the authority bears the stamp of the government. I should have thought it would be far better for the industry to find the money itself in this instance, the initial expenditure being only £40,000.
There are clauses in the bill to permit the authority to borrow money. It is true that money may be borrowed only under conditions laid down by the Commonwealth Treasurer. There is nothing in the bill to provide that this £40,000 will be subject to interest, but admittedly its repayment is provided for. An examination of the industry emphasizes the point I have made. Last year, when Australia sold wool overseas to the value of £503,600,000, the total exports of the nation were worth only £994,000,000. The wool industry, therefore, accounted for 51 per cent, of our total exports in that year. Shortly we shall be discussing a bill relating to an industry which I might describe as being really on its uppers, but that industry is prepared to contribute its own money. I doubt whether I should be in order in saying any more on that score, but that shows the difference between the influential wool industry and other industries. The wool industry is wealthy - at least once every three years it helps our friends on *he other side of the chamber greatly with a commodity which is very useful at those times - but, for some reason which has not yet been explained, this wealthy industry is to receive a hand-out. If the scheme is so certain of success, as I believe it is, and as the Minister has said that the industry will benefit from it by another £1,000,000 a year, one “would think that the persons engaged in the industry would find this money themselves.
I am privileged to pay a great compliment to the officers of the Commonwealth Scientific and Industrial Research Organization for their work in connexion with this industry. I am glad that an officer of that organization will be a member of the authority, because the industry owes to it a tremendous debt of gratitude, even if only for its work on the destruction of rabbits by myxomatosis. I am informed that six rabbits eat as much as does one sheep. In years gone by in some Victorian country districts one could see a moving mass of rabbits. . The tremendous effect of the effort by officers of the C.S.I.R.O. is apparent to-day.
– Do not forget Dr. Jean Macnamara.
– I shall leave the work of Dr. Jean Macnamara to my colleague from Victoria. Seemingly she knows much more about the lady than 1 do. I do not mind the honorable senator singing the lady’s praises, if she deserves it. The increase in the number of sheep in recent years is rather interesting. In 1954 we had 126,900,000 sheep in Australia. In 1954 and 1955 myxamotosis played a great part in ridding the country of the rabbit scourge. The following year the number of sheep had increased by 4,000,000, and the following year by 9,000,000. At’ 3 1st March, 1957, the number of sheep in Australia was estimated by the Department of Primary Industry to be 150,900,000.
– A very dangerous level, too.
– It may be. I agree with honorable senators opposite when they say that this is not an industry of which people with money can make a success unless they have also a lot of knowledge and are prepared to work. I hope that woolgrowers are not taking the risk of excessive over-stocking.
– You do not think they are?
– I hope they are not, but, on these figures, they could be doing so. We must remember that many people, particularly in Victoria, abandoned the production of soft wheat because of the vagaries of the overseas market, and turned to wool production. We have been fortunate, not only in having bumper seasons, but also in receiving good prices, as one may judge from the speech delivered by the Minister for National Development (Senator Spooner) in relation to the budget.
No one could oppose the bill. As I said at the outset, I do not oppose it, but I say that if I were a leader of the industry, wealthy as it is, I would not come cap in hand to any government for the loan of £40,000 - £20,000 to establish a testing authority in Melbourne and Sydney and £20,000 for running expenses. I hope that the authority will do all that is expected of it, because in the present state of the world’s economy we must produce the goods that people want. We are not entitled to_sit back on our haunches and say, “ We grow well over two-thirds of the world’s wool “. I am speaking from memory, and I hope that if I have given a wrong fraction I shall be corrected. We must do something to enhance the value of our product. This system will tend to increase the value of scoured and carbonized wool. I have never been able to understand why so much of our wool has been exported in the grease. I should say that, in the main, the industry is not over-skilled in the extraction of grease from the wool, but when one realizes that Australia received £426,000,000 last year for wool in the grease one cannot help feeling that we may have to look to this phase of the industry in the future if we are to keep people in employment.
Without wishing to enter into a debate on unemployment, I must point out that provision is being made to bring 115,000 immigrants here in 1957-58 and that we must provide for the absorption of a further 60,000 or 70,000 into industry. We are entitled to use every avenue in our own country to give people useful and gainful employment. We should increase the export of scoured wool in preference to allowing such a huge amount of wool to be sold in the grease. I know it will be said by some that if we do not sell our wool in the grease, we will not enjoy the good prices we now receive. It may be that certain by-products from greasy wool mean a great deal to other countries. I feel that we should extract those by-products so that we may obtain full benefit from our own industry.
I hope that the bill will be the success that the Minister expects it to be. I hope, too, that he will be able to answer not only the question raised by me but also one which the Leader of the Opposition (Senator McKenna) has asked me to put to him. The Leader of the Opposition has asked me to refer to the following statement by the Minister: -
By enabling a more precise assessment and invoicing of the moisture content of scoured and carbonized wool to be made, it will put processors and exporters in a position to bid with greater confidence for wool in the greasy form in the auction room. This factor will, of course, operate in favour of tha wool-grower.
I hope that the Minister will see fit to give Senator McKenna an explanation of that statement.
– I rise to support the measure. I am pleased to note that the Opposition is also supporting it. Senator Kennelly suggested that the wool industry could have provided out of its own resources the £40,000 for the establishment of two wooltesting centres. I point out to him that it is almost impossible to see how that can be done. When these wool-testing houses are established, they will affect all sections of the Australian community. They will affect the wool scourers, carbonizers, fellmongers, and sellers; in fact, they will affect every one who has anything to do with wool. I should say that as wool is the main source of our national income it could be said that every one in the community will be affected. That being so, it is only right that the Government should find the money required for the establishment of these wool-testing houses.
It is important that I point out that the whole basis of the establishment of these wool-testing houses is the recommendation of an investigating committee which was set up in 1955. In its report, that committee recommended that the wool-testing authority should comprise seven members, as follows: - A representative of the Australian Council of Wool Buyers, a representative of the National Council of Wool Selling Brokers of Australia, a representative of the Wool Scourers, Carbonizers and Fellmongers Federation of Australia, a person nominated by the Australian Wool Bureau, a person nominated by the Commonwealth Scientific and Industrial Research Organization, an officer from the Department of Primary Industry, and one other person. It will be seen that on this authority will be representatives of all sections interested in the wool industry, including the C.S.I.R.O. I mention, in passing, that Senator Kennelly has paid great tribute to the organization for its efforts in combating the rabbit pest in Australia. The wool-testing authority of seven persons is to be charged with the responsibility of setting up wool-testing houses with a view to getting the most out of the Australian wool clip.
Under the present system of selling scoured wool, it is difficult for the scourers to assess the amount of moisture in wool when it is put up for sale. I presume that the normal process is for the wool-scouring and carbonizing companies to buy greasy wool for scouring and carbonizing purposes. Having scoured and carbonized the wool, they then offer it for sale to mills in Europe, the United Kingdom and other parts of the world. Usually, the wool is bought on a bone-dry basis, the scourer or carbonizer and the purchaser coming to an agreement as to what allowance shall be made for moisture in the wool. Under the standards set by the International Wool Textile Organization, the permissible moisture content in the United Kingdom is 16 per cent., and in Europe 17 per cent. It will be appreciated, therefore, that, having prepared his wool for market, the scourer must then work out the price he will require for his wool, knowing that he must allow for 16 per cent, moisture in the wool when it is delivered. Once the wool is scoured, it may have a moisture content of 6 or 7 per cent. When the wool is being transported overseas for delivery, it will regain an extra 8 per cent, or 9 per cent., and in some cases more. As a result, it is very difficult for the wool scourer to ascertain the price he should ask when he takes into account the amount of moisture in the wool.
I believe that frequently there are squabbles between the purchaser at the other end and the wool scourer after the wool has arrived. In some cases, the difference in the estimated moisture content after the wool has arrived at its destination is as much as 3 per cent, or 4 per cent, more than was contemplated, and the wool scourer, who has guaranteed the wool to have a certain moisture content, has to pay out money to achieve the correct balance. Usually, the moisture content is under-assessed and the wool purchaser receives the advantage of 3 per cent, or 4 per cent.
The idea behind the establishment of the wool-testing houses in Australia is to ensure that, when the scourer has wool for sale, he will be able to take a sample to the testing house where it will be weighed. He will be able to get a certificate from the testing house stating specifically the amount of moisture in the wool. That certificate will be recognized throughout the world. It will be possible to fix the price for the wool on the spot. In many cases, this procedure will save between 3 per cent, and 4 per cent, of the gross value of the wool.
The resulting increase in income from carbonizing wools throughout Australia will be about £1,000,000 once the testing houses are established. It is estimated that when they are first put into operation, only 40 per cent, of the wool that is scoured will be sent through those channels, but that quantity will grow steadily until practically the whole of the wool scoured within Australia will be tested by the wool-testing authorities.
I believe that the quantity of wool scoured and carbonized for export in the last financial year totalled 90,700,000 lb. which, on a f.o.b. basis, was worth £38,100,000. The average price of the scoured wool was approximately 100d. per lb. Australian scoured and carbonized wool regained in weight an average of about 13 per cent. That is what we have lost - the difference between the 13 per cent, and the 16 per cent, allowed in the Bradford standard or 17 per cent, in the European stand.
The amount of wool we are scouring in Australia and exporting is very small when we consider that export income for Australian scoured wool is only £38,100,000, compared with our national income from wool exceeding £500,000,000. I believe that the establishment of testing houses in Australia will encourage the operation of more scouring establishments in Australia, so that we will be able to sell tops and other types of goods overseas. I believe that Australia should take the maximum advantage of the opportunity to convert our raw wool as nearly as possible into the finished article because we have more than 30,000 persons engaged in the woollen industry in Australia. The establishment of scouring houses and woollen mills could mean a considerable increase in our export income. We will be able to get closer to the finished article until one day we will manufacture into woollen goods in Australia the whole of our wool production. These testing houses will enable us to go a long way towards achieving that objective.
It is interesting to note the increase in the number of sheep in Australia. From memory, I believe that the sheep population has risen - under this Government, of course - to astronomical figures. Undoubtedly, the introduction by this Government of a special depreciation allowance for fencing and equipment on farms has played an important part in the increase of the sheep population. Although myxomatosis was known to be effective against rabbits in 1940, it was not released until this Government authorized that action in 1953. Since then, the number of sheep has risen rapidly. This Government had the courage to release myxomatosis. The Labour Government, which preceded it, could have released myxomatosis, but it was frightened to do so. Some of the rabbit trappers must have been playing down the Labour party’s alley.
– What about the rabbits?
– Since the rabbits have been knocked out by myxomatosis, the sheep population has risen to 156,000,000. That was the total at the end of the last financial year, and it is estimated that the total will rise to 162,000,000 next year. For the information of my Labour friends opposite, I remind them that that will be 50 per cent, more than the sheep population was in 1949, when the Labour Government was in office.
I give these figures because it is interesting to note that an honorable member in another place said that he was supporting this measure but he criticized the Government for its credit policy in relation to wool-growing. Why did he say that when the number of sheep has risen from 108,000,000 in 1949 to 156,000,000? If honorable senators opposite prefer, I shall give the figures for the period that Labour was in office. In 1942, the sheep population of Australia numbered 105,000,000. I think that I should congratulate the Labour government because, by 1949, the number had increased by 3,000,000.
As I said before, the establishment of the proposed wool-testing authority will assist greatly, not only the actual producers of wool, but all persons who are connected with the Australian wool industry. I believe that the wool industry will continue’ to develop and that, ultimately, the establishment of the wool-testing authority will result in more work for our people, more business for wool-scouring houses and increased income for Australia from the export of wool. I support the measure.
.- I have no intention of opposing the bill, which is a simple but very important measure. To-night, for the first time in my life, I have heard the Australian Labour party blamed for the rabbit population of Australia. Certainly we have been blamed for many things since the party was formed about 60 or 70 years ago, but it is novel to hear the blame for the rabbit population attributed to the Australian Labour party.
Senator Scott was very informative when speaking about the moisture content of wool. It is a pity that he did not conclude his speech at that point. He has some knowledge of wool, even though at times it is pulled over his eyes. Although the wool industry has been closely connected with the development of Australia, it is noteworthy that not until now has this Government introduced a measure to assist the industry. It is truly remarkable that some one associated with the party to which Senator Scott belongs has not previously thought about introducing such a measure.
One concludes from reading the bill that it is the result of many conferences between persons interested in wool production in Australia. We know that the wool industry has organizations functioning in connexion with sheep production, the breeding of sheep, the conservation of soils and fodder and the marketing of wool, which is handled by the Australian Wool Bureau. We have been told that this measure is based on experience, and in the light of experiments that have been carried out in New Zealand, despite the fact that we pride ourselves on and, indeed, we boast about our knowledge of the wool industry. We hold ourselves up as the greatest producers of wool in the world. Evidently, the question of the moisture content of wool is one of the things that has been missed before. It was indeed remarkable for us to be told, almost in the same breath as reference was made to our pre-eminence in the wool industry, that the introduction of the proposed system, under which, certificates showing the moisture content of wool will be issued, will increase wool-growers’ incomes by about £1,000,000 per annum.
– That is only in relation to scoured wool.
– Surely Senator Mattner does not think for a moment that I am suggesting that an authority should be set up to test the moisture content of greasy wool. There would be nothing to be gained by so doing because greasy wool contains not only moisture but a proportion of foreign matter. As I have said, the proposed certificates will be of great advantage to the growers, who will be enabled to estimate more closely the poundage for which they will be paid. The grower will be informed of the moisture content of his wool. When he receives the result of further tests overseas, he will be able to calculate the added moisture content. We know that the certificates - which will be issued first in Melbourne - will not count for anything as far as the woollen mills and the manufacturers are concerned.
Senator Scott gave us some information about scoured wool. The quantity of wool scoured has diminished over the years. Statistics show that the quantity fluctuates during any given period. I am wondering now just how much fellmongers’ wool was associated with the quantity mentioned by Senator Scott, because the scouring of wool in Queensland has diminished considerably. Many years ago, wool which had been washed and scoured attracted a good price. As Senator Scott mentioned, the woolgrowers will derive a benefit of about £1,000,000 a year from the activities of the proposed authority. Divided amongst the wool-growers concerned, of course, that amount will not represent very much to them individually. But, as Senator Scott said, it will probably lead to something more later on.
– Probably £4,000,000.
– No doubt others have wondered, as I am wondering, what is the total amount of money that the woolgrowers have been deprived of in the past because of the absence of a wool-testing authority. The certificate to be issued by the competent, independent authority will show the moisture content of the wool, which will stand for all purposes; it will be the hallmark of honesty regarding the moisture content. It will have nothing whatever to do with the quality of the wool, but will relate only to the moisture content for the purpose of buying and selling. The organizations concerned with the production of sheep and wool in the Commonwealth are interested in this legislation. Indeed, the Government would not have brought it down without first ensuring that the organizations whose representatives are to comprise the new authority approved of it completely. I look at the matter this way: If the people in the industry are wholly satisfied with the bill, it is not fitting for me to raise any objection to it.
This legislation is very belated and sets in motion machinery to put an end to something that has denied millions of pounds to the wool-growers. I do not intend to quibble about the machinery clauses or the proposed financial arrangements. A new authority of this nature must be financed. The bill provides for the fixing of charges appropriate to the services given and sufficient to meet costs, which will include interest payments on loans. Past losses cannot be made up, but at least in the future there need be no conjecture as to what wool-growers should obtain for their wool - it will be possible to produce a certificate showing the moisture content. Naturally, no wool-buyer will pay for excess moisture in wool, and the establishment of the proposed authority will put an end to the present uncertainty.
Before concluding I should like to commend the splendid work that the Commonwealth Scientific and Industrial Research
Organization has done for the wool industry. Government supporters speak disparagingly of the “ bureaucrats “ of the Public Service, whom they describe as living on the proceeds of taxation and not rendering adequate service to the community. The C.S.I.R.O. is a branch of the Public Service which has put millions of pounds into the pockets of the woolgrowers. In one year alone, its introduction of myxomatosis to the rabbit population increased the value of the wool cheque by £32,000,000. That is a huge sum and represents a great achievement. When any honorable senator on this side of the chamber notices that the C.S.I.R.O. is to be represented on the authority he cannot help feeling that the new body will be worthwhile, and will do its work in a scientific and satisfactory manner.
– The measure before us is well overdue, and marks a most important phase in the history of the Australian economy, which is basically founded on our sheep and wool industries. I feel that this is the beginning of the organization of the wool industry on sound, efficient, business lines. I also believe that the proposed wool-testing authority will offer an alternative to the old philosophy of “ She’ll do - she’s near enough “. That state of affairs has continued for 50 years, and people who have bought our wool and taken it overseas have been able to pay the freight by capitalizing on the increased moisture content which has occurred on the journey.
As has already been stated, wool may absorb up to 20 per cent, additional moisture. Our. wool leaves the drier, goes into bales in our relatively dry climate, and then absorbs a great deal of moisture as it passes through the tropics on its way to the other side of the world. Overseas woolbuyers have been very fortunate in being able to work to such a broad margin. The establishment of the proposed authority will put an end to this great lurk - and it has been a lurk - of the woolbuying profession. Buyers of scoured, dry wool have been able to count on moisture accumulation of 15 per cent, or 20 per cent, before they resell on the United Kingdom and Continental markets.
I have only praise for the Government in having had the capacity to organize the wool-growers along those lines. Senator
Benn made the very important observation that the wool-growers had been deprived of an incalculable amount over the years. The Minister has estimated that the likely saving will be £1,000,000, but on the figures that Senator Scott gave us it will be nearer £4,000,000 - yet over the years the woolgrowers have never been in such a frame of mind as to agree to the establishment of a central authority which could set a standard and say, “ This is our bond as Australian people. The world accepts our figures of the dry weight when the wool leaves this country “. The fact that the Government and the wool-growers are of one mind in introducing this legislation marks a great advance in our technique of selling this basic and vital Australian commodity to the world.
In passing, I would like to mention that the Government claims unto itself many things. It claims to have control of the seasons, and to benefit especially from the generosity of the Almighty. Senator Scott has claimed that, because there has been a Liberal-Australian Country party government in office, sheep numbers have increased since 1939 from 100,000,000 to 156,000,000. It must be wonderful to be in the state of mind in which one can keep a smile on one’s face while claiming these things. The pendulum has swung in uV Government’s favour. I can say without fear of contradiction that if it had had to contend with the normal swing of the pendulum, as have other governments over the last 50 years, a very different budget would have been produced to-night. The fact is that since the war the sheep population has increased from over 100,000,000 to 156,000,000 - due, of course, to a succession of good seasons.
– Only to that?
– And to the advent of myxomatosis. That has virtually eliminated the rabbit population, which was not only fouling a tremendous amount of feed, but also was eating acres of grass which normally would have gone into the production of wool. Then the development of the technique of pasture improvement has been of tremendous advantage. Pasture improvement has added much to the carrying capacity of various properties. Senator Gorton, Senator Maher and many other honorable senators on the Government side have gained a great deal from it. Their gains may be due to their own efforts to a certain extent, but 90 per cent, is attributable to assistance from Government enterprises such as the Commonwealth Scientific and Industrial Research Organization, which have generously made the results of their experiments available for the advancement of the wool industry.
There is, deep down, a desire by the woolgrowers, encouraged by members on the Government side, to socialize their losses. When something does not pay, they want, through the Australian Country party, to pass it on to the Government, but they want to capitalize their gains. If there are gains, their cry is, “ Our Government did that “, but in the case of losses they say, “ Let the Government carry them “. That is the philosophy that has grown up amongst the wool-growers through the years.
In the marketing field, where there are profits to be made, they go to the slickest people amongst the woolbrokers. We are dealing with this field at the moment. The woolbrokers, both overseas and in Australia, have been reaping a rich harvest from the wool-growers through the years. I am hopeful that the setting up of this authority, even though it will be a private enterprise authority - the Minister made great play of the fact that this will not be a Government show but will be comprised of private men - -will improve the situation. I do not care who comprises the authority so long as it introduces some degree of organization to an industry which has been conducted in so slip-shod and haphazard a way over the years. It is a good thing to see the woolgrowers beginning to acknowledge that the organization of the production and distribution of their product will be to their benefit. The Australian Labour party has been putting that idea forward for years. We say that there cannot be a sound and developing economy and a sound community unless the means of production and distribution are organized. This measure is a means of bringing about that organization and distribution on sound lines in the wool industry.
– There is no need to socialize it.
– The honorable senator’s party is doing that.
– How are we socializing this industry?
– The Government is teaching the wool-growers the lesson that, by establishing this wool-testing authority, they will close the door to those people who, through the years, have been getting from 10 per cent, to 20 per cent, of the proceeds of the industry.
– Who is getting from 10 per cent, to 20 per cent.?
– In future the woolgrowers will get most of the proceeds, as they are justly entitled to do, whereas now the parasites, who are battening on the woolgrowers - the overseas brokers, intermediaries and middlemen - are getting a big share. The Government claims that the growers will get another £1,000,000 a year as the result of the establishment of this authority. From whom will they take that money? It will be taken from the parasites. In the same way as C.S.I.R.O. has eliminated by myxomatosis-
– Who are the parasites?
– The rabbits comprised one lot and some of the international woolbrokers .comprise another. I wish to develop this argument because I think it relates to a very important phase in the development of the wool industry. I happen to have been very closely associated with this industry; I have still got burrs in my fingers from handling wool. Many other phases of the wool industry need the sort of organization that this authority will bring about. Just consider the comments that were made by the Minister about carbonizing and about vegetable matter in the wool. Why should we export Mallee dust, Thargomindah dust, St. George dust and other dust, vegetable matter, sticks and that kind of stuff at high freight rates? It is most unprofitable and uneconomic to send up to 40 per cent, or 50 per cent, of rubbish overseas at high freight rates. Why should not we pick out of the wool the grease, vegetable matter and other foreign matter, instead of paying high freights to send it overseas? It would make a tremendous difference to our economy if we could organize the wool industry along those lines.
Let us go back to another phase of the industry, where the wool-growers have a lot to learn. I refer to the observations that could be made by this wool-testing authority in regard to such things as Bathurst burr and Noogoora burr. Noogoora burr is the greatest curse of this country. As soon as a woolbuyer sees Noogoora burr in wool, he sheers away and says that the wool is no good. It is not easy to carbonize. He does not know what is in it and it is very difficult to assess its value. This authority could send reports back to districts from which it has received wool containing Noogoora burr and ask the local authorities there to send out their inspectors to find the people who are not dealing with the burr. Noogoora burr is developing in a number of areas. Many graziers are not bothering much about it. Instead of going round their properties on horseback, they go out on a tractor or in a car and do not see the pockets of Noogoora burr that are developing. This authority will see from the samples it obtains that Noogoora burr is spreading and will be able to send reports back to the districts concerned. That will be a tremendously important development in the wool industry.
Going back a further step, let us have a look at the primitive way in which wool is handled at the source. Many people handle their sheep in dusty yards, without proper advice on the way in which their wool should be presented. When the sheep come into the shed, they receive the most primitive treatment. The shearers are working on piece rates and the rest of the staff, the rouseabouts, wool-rollers and piece-workers, are working for wages. The staff want to get rid of the wool from the table and the shearers’ idea is to get the wool off the sheep’s backs as quickly as they can. That is bad from the grazier’s point of view. He has spent all the year looking after his flock and has taken all the risks of flood, fire, disease, drought and pests, such as worms, blowflies and dingoes. He brings the sheep carefully up to the shed and then hands them over to this terrific rush.
– Does he?
– He definitely does. The contractors are the biggest offenders. Their idea is to shove the sheep through the shed as quickly as possible. What happens then? In the first place, the sheep are knocked about. Then there is the waste as a result of second cuts. The fleece comes from all directions on to the table so fast that the hands cannot handle it properly. The fellows skirting it, the piece-pickers and the classers do not handle it properly and it all goes into the bale. All those things lead to waste. The proper classing and handling of wool in. city depots for presentation to overseas and domestic buyers is important. I hopethat one of the functions of the proposed’ wool testing authority will be to suggest tothe industry that wool is not being handled efficiently and in the best manner to give the very best presentation to overseas buyers.
– What would the honorable senator do with the shearers?
– The shearers are being encouraged to shear too fast. Most of those whom I have seen recently should have been shearing 80 or 90 a day but were shearing as many as 150 or 170. Something ought to be done to prevent this great waste. The number of second cute that are being made to-day is deplorable.
– We do not allow second cuts.
– The wool-grower cannot do anything to stop it unless he employs his own labour and supervises it. A contractor will do nothing about supervising the shearers. The point I am trying to make is that the industry should be organized all along the line in order to get the best from it.
– That is not a good advertisement for Tasmanian shearers.
– We in Tasmania are better off than are graziers in other parts of Australia, because the flocks are smaller, the contact between the employer and the employee is closer, and they are not in such a blustering hurry to make big dough. We take things quietly in Tasmania, we cannot be bustled.
– You are too wrinkly over there.
– We have some df the best wool cutting rams over there. They have wrinkles all round the neck and chin, and they produce the finest wool in the world. That brings me to another point. The bill provides that there shall be established a wool testing authority to control and administer a wool testing service. The testing of wool is the first stage towards setting a standard for clean, s.oured, bone-dry wool in Australia so that people will be able to buy it on that basis. It will mean that, if the moisture content is 171 per cent, when the wool arrives on the continent, allowance will have to be made for that percentage. If it gains a moisture content of 15 per cent, or 20 per cent, on the journey to somewhere else, the buyer, having received a certificate from the wool testing authority, will know exactly where he stands. That is done if we sell a pound of butter or a side of beef, and it is exactly what the Government is now seeking to do in relation to wool.
I hope that the establishment of this authority is only the start of an improvement in the industry. I note that the authority is to include a nominee of the Australian Council of Woolbuyers. I used to be overawed by woolbuyers, because I could never understand the technique of wool-buying. I think that the present method of selling wool is the craziest possible. On the day before a sale, the buyer goes around with a little case, as it is called, and has a look at the wool. Then he receives a telegram from his principals overseas telling him that something that they thought existed the day before does not exist to-day. How the industry has been able to stand up to the stupidity - and I say that reservedly - of our auction system beats me. However, it seems to work.
– Would the honorable senator prefer the appraisement system?
– With appraisements, a person knew where he stood; but he does not know where he stands with the present silly system. I think that, if it were put to the vote, the wool-growers would be prepared to return to the appraisement system.
– Try it!
– Just let them wait for another two or three months till there is a Ti per cent, drop, and then a few more little drops, in the return. This dream cannot go on forever. In this last year, Queensland, New South Wales, Victoria and Tasmania have not had very much rain. The drop of lambs in Queensland has declined from approximately 60 per cent, to about 30 per cent. The effect of all these things will eventually be felt, and the economy of the industry will need to be revised. Moreover, costs have risen. Rates and rents have increased greatly. I know one man who is paying for those two items as much as his whole income was before the last war.
The members of this authority can play an important part in stabilizing the industry. They can act as advisers and send back along the line messages to various sections of the industry to the effect that they need to smarten up their presentation here, to reclass their wool over there, to scour it somewhere else, or to get their local council men to prevent the spread of such things as noxious weeds. I am pleased indeed that the Government has been able to get the wool-growers in the mood to accept the proposal to establish this authority. I feel certain that if the Labour party had tried to do it, the wool-growers would have been prejudiced by propaganda against accepting the idea. The establishment of such an authority is essential in placing the industry on a solid foundation.
I should like to touch upon many other matters, particularly the need for this wooltesting authority to investigate the existence of lice in wool. A lot of people overlook the fact that, through carelessness or lack of knowledge, their sheep have lice. They think that, because the sheep are rubbing against a post, they are trying to get rid of grass seed, whereas in fact they are suffering from lice. The Commonwealth Scientific and Industrial Research Organization has developed aldrin and dieldrin for the prevention and reduction of the incidence of blowfly strike. Over the years, losses from blowfly strike have been as high as 10 per cent. Those honorable senators who have had experience of the ravages of the blowfly will realize what a wonderful boon aldrin and dieldrin have been to the wool-grower and to the unfortunate sheep themselves. I believe that the proposed authority should issue reports giving an idea of the percentage of lousy wool that is coming through. A lot of woolgrowers do not know that their sheep are lousy.
– There are some funny sheep men in Tasmania.
– We would shear the honorable senator quick and lively over there. We would probably export him to
South Africa. But to be serious, I think that the proposed authority has a very important function to perform and from this small but important beginning great things can come. We may see a revitalization and re-organization of the basis on which wool, our basic commodity, is presented to buyers throughout the world. I believe that as a result of this measure we shall not only increase vastly the amount of wool scoured in this country, but also decrease the amount of grease and rubbish exported overseas. Other countries have plenty of grease and rubbish of their own; they do not want ours. Why should we pay high freight rates to the Peninsular and Oriental Steam Navigation Company and other members of the shipping combine to transport rubbish overseas? What we have to sell is the clean, scoured, basic fibre. We should present it in better form’, in the best length and the best quality. Wool should be scoured efficiently where the centres of population are located, or we should decentralize the industry and scour the wool in the back country. Why should we stop at scouring? Why should we export wool for other countries to send back to us in processed form?
In this measure we have a basis from which the wool industry may enter a new era. For a change, I commend the Government for having introduced a very constructive and progressive measure, and I wish it success. Our national economy, the wool-growers, and the people generally will benefit from the introduction of this legislation.
– in reply - This is one of those all too rare occasions when there is to be no substantial argument on a bill. Naturally, the Government feels a good deal of satisfaction at the fact that a measure introduced into the Senate has gained the support of both sides, and that a similar reception was experienced in another place. My purpose in rising to close the debate, therefore, is merely to reply to a number of queries which were raised by the Leader of the Opposition (Senator McKenna), the Deputy Leader (Senator Kennelly), and other speakers. I assure the Senate that in view of the atmosphere which now pervades this place, I shall be completely unprovocative.
asked why the Government was not proposing that this service be conducted by a government department, as it is in New Zealand. Three or four reasons immediately suggest themselves. The first is that the policy of the Government is to encourage industry participation in matters which are basically the concern of an industry. Secondly, this is an enterprise which should be conducted along commercial lines, and the authority should be relieved of the type of control which is exercised over a government department, and should enjoy that degree of flexibility which allows it to operate as a commercial organization. Thirdly, the active participation of all sections of the industry will make the authority more readily acceptable to the wool industry as a whole and create an atmosphere of complete confidence. Fourthly, and possibly most convincingly, the industry itself requested this specific form of authority.
asked for the qualifications of the government nominee to the committee. No final decision has yet been made, but quite obviously the man selected will have marked administrative ability, and preferably a background of practical knowledge of the wool industry. Senator McKenna also queried whether the advance of £40,000 was sufficient to get this authority under way. The answer is that it is considered to be sufficient, a close examination having been made by the investigating committee. In the initial stages there will be no large capital expenditures. Premises for the authority in Sydney and Melbourne will be leased. There will be no need for money to purchase expensive property, and the equipment required will not be extensive until the authority moves to fields outside scoured and carbonized wool.
asked whether I could give any indication of the charges to be imposed. I am afraid that I cannot do that. Specific charges cannot be struck until the authority has got under way and has definite knowledge of its costs. The honorable senator may be assured that whatever charges are levied will be sufficient only to cover costs, and no more.
Senator Kennelly raised a query on clause 7 (1.), which regulates the appointment of deputies as required. Before approving the appointment of a deputy under the clause, the Minister will naturally satisfy himself beyond all doubt that the proposed deputy is a bona fide and true representative of the organization which nominated the original member. Senator Kennelly referred also to clause 6 (5.), which provides that the exercise of a power or the performance of a function by the authority is not invalidated by reason only of there being a defect or irregularity in connection with the nomination of a member.
The purpose of the clause is twofold. In the first place, it prevents the validity of an act of the authority being challenged in the courts on the ground that a person who voted when the authority resolved to do the act was not in fact a member of the authority because he had not been properly nominated as a member. Secondly, it does away with the onerous and lengthy task of investigating the nomination of a person for appointment to the authority in order to ensure that the body making the nomination had complied with all its own rules when making the nomination. The effect of the clause, therefore, is that a dispute as to the due nomination of a member must be determined by the persons who comprise the actual body on whose nomination the member was appointed. If those persons decide that the person was not properly nominated, they can request the Minister to terminate the appointment and the Minister is required, under clause 11 (2.), to terminate the appointment on receipt of such a request. So, in point of fact, this provision transfers back to the organization concerned the responsibility for appointing its own member. It is the common practice to include such a provision as this in acts that set up a statutory body consisting of members appointed by the Governor-General or similar person on the nomination of other persons or bodies.
The other point which Senator Kennelly mentioned at some length was the fact that the Government was supporting the establishment of this authority by a loan of ?40,000. I suggest, with respect, that a person listening casually to Senator Kennelly’s remarks might have been led to assume that this was not a loan, but a straight-out grant. In point of fact, it is nothing but a loan to the authority. That money will be lent on terms to be decided by the Treasurer. Those terms will include the payment of interest and repayment of the loan.
It is obvious that the reason for making the money available by this means is the fact that the organizations represented on the authority have not in their own right sufficient resources for the purpose, and even if they had the resources, it would be very difficult to decide what proportion of the required amount should be subscribed by each organization represented on the authority. Under those circumstances, it was considered that a loan - I repeat loan - made available at interest by the Government would be the best means of resolving the difficulty.
Senator Kennelly also asked, on behalf of the Leader of the Opposition, that I say something in explanation of a passage in my second-reading speech, which reads -
By enabling a more precise assessment and invoicing of the moisture content of scoured and carbonized wool to be made, it will put processors and exporters in a position to bid with greater confidence for wool in the greasy form in the auction room. This factor will, of course, operate in favour of the wool-grower.
I did not think that passage would require any further explanation. In point of fact, all it says is that by reducing the doubt as to moisture content, a more confident atmosphere is established, and as a result there will be more confident bidding by purchasers and the wool-growers will benefit thereby. I thank the Senate for the reception it has given the bill.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Senate adjourned at 10.25 p.m.
Cite as: Australia, Senate, Debates, 3 September 1957, viewed 22 October 2017, <http://historichansard.net/senate/1957/19570903_senate_22_s11/>.