22nd Parliament · 2nd Session
The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 3 p.m., and read prayers.
– I direct a question to the Minister representing the Minister for Labour and National Service. By way of preface, I would like to say that yesterday, in a question without notice, I sought certain information from’ the Minister on the unemployment position at Devonport. The Minister did not give me the information that I sought, but simply said that there were 695 persons unemployed in Tasmania at 30th September, 1957. I therefore repeat my question. Will the Minister inform me of the number of unemployed persons at Devonport on 31st March, 30th June, and 30th September, 1957? Will he, further, advise me of the number of unemployed persons in Devonport at the present time?
– I shall find out whether my colleague has that information. If he has, I shall ask him to convey it to the honorable senator.
– Will the Leader of the Government in the Senate inform me whether the Government has given any consideration recently to the calling of a convention of Commonwealth, State and local government authorities to attempt to arrive at a formula to overcome the problems of local government with respect to adequate revenue and loan funds for financing road works, water supplies and sewerage facilities - problems which have been accentuated by Australia’s ‘excellent immigration policy? If the Government has not considered the matter, will he suggest to the Prime Minister that consideration be given to calling such a conference, the need for which was, I believe, conceded by the right honorable gentleman in 1950?
– I am not aware whether or not recent consideration has been given to the question of the calling of a convention as indicated by the honorable senator, but I know that the subject-matter of his question has received - and, I think, it continually receives - the earnest consideration of the Commonwealth. I think it has been the subject of discussion at the (Premiers’ Conferences. However, I shall be happy to bring the honorable senator’s suggestion to the notice of the Prime Minister.
– I should like to ask the Leader of the Government the following questions: - Is it a fact that Communist propaganda is constantly issued against the free world? Should not this be countered by the free nations, of which Australia is one? Did the Minister note in the press recently that Russia was lending India many millions of pounds, that Britain, America and France had refused aid to India and India, consequently, was attracted to Russia? Has the Minister any information on this matter? If he has no information, will he try to secure verification, or otherwise, of the statement?
– I am not able to answer all those questions offhand, but I think it is notorious that there is very substantial Communist propaganda throughout the free world. In regard to the honorable senator’s second question, I think a certain amount of ideological warfare or enlightenment is being pursued by members of the free world. The extent to which they can penetrate all the countries behind the iron curtain is a matter, of course, substantially controlled by the controllers of the iron curtain countries. Apart from newspaper reports, I know nothing of the matter. Those reports have indicated that Russia has lent substantial amounts of money to countries yet outside the iron curtain. Whether approaches have been made by such countries to the United Kingdom and the United States of America, and whether such approaches have been repulsed or not, I am not aware. I do not know what source I could consult in order to get the information required by the honorable senator., but if I am able to get further information for him along the lines of his questions, I shall be only too happy to do so.
– Has the Minister for Customs and Excise noticed the recent fall in the world price of copper? Is the Tariff
Board examining ways and means of helping Australian producers? If it is making an examination of the industry, will the Minister see that the report is furnished without delay?
– I have noticed the continual downward trend in the price of copper on the world market. I understand that the Tariff Board has been inquiring into this particular aspect of copper. The matter of the Tariff Board report is one for my colleague, the Minister for Trade. I shall pass on the honorable senator’s request to him and ask him whether he can expedite the furnishing of the report.
– I direct a question to the Minister representing the Minister for Primary Industry. In its most recent report, that is, for the year ended 31st August last, the Fruit Industry Sugar Concession Committee referred to a likely decline in sales of canned deciduous tree fruits this year to New Zealand. The committee has referred to the fact that New Zealand levies a high protective duty on imports of Australian canned fruits, and has also pointed to the serious competition that is met from South African exports. Will the Minister inform the Senate whether the duty which is levied on imports of canned fruits from Australia is also levied on South African fruit? If the Minister is not in possession of the information, will he confer with his colleague?
– I have not the information that has been sought by Senator Pearson, but I shall be pleased to ask my colleague, the Minister for Primary Industry, to obtain it for the honorable senator.
– Will the Minister for National Development state what is the average period of time that elapses between the application by an ex-serviceman for a loan from the War Service Homes Division and the actual granting of the loan? Will the Minister undertake to take steps to reduce the period of waiting for those loans? I make that request because many exservicemen who contract to buy a home are given 60 to 90 days to settle. This involves a temporary loan, if they can secure accommodation, at very high interest rates and high weekly payments.
– No doubt the honorable senator knows that the appropriation for war service homes was increased this year by £5,000,000, from £30,000,000 to £35,000,000. The effect of that increase is already making itself felt in the administration of the War Service Homes Division, and it is being reflected also in the reduced time that the applicants have to wait for a loan. Those who have lodged applications for a home to be built by the War Service Homes Division, who have their land and have their requirements well defined in their own minds, will not have to wait. That is one of the first-fruits of the additional appropriation. The waiting time for those who are building homes themselves has also been reduced. I refer to those who are not looking to the War Service Homes Division to build for them. I hesitate to say how much improvement there has been in the waiting. time for those persons because we are in a period of flux. The additional money has been available for only a few months. I am giving preference, to some extent at least, to those who are building, and with regard to those people, as distinct from those who are buying homes, the waiting time has been eliminated, if the applicant is ready to proceed and if the work is being done by the division itself.
– I wish to direct a question to the Attorney-General regarding the Constitution Review Committee, of which he is the chairman. Will the Attorney-General inform the Senate what stage has been reached by the committee towards a completion of its work? Will he inform the Senate when the work might be completed? Is the Minister able, at this stage, to give honorable senators any idea of the subjects that have been considered by the committee and the nature of the consideration that has been given to them?
– I am afraid that the questions asked by the honorable senator, particularly the concluding queries, are too all-embracing for me to attempt to give him an immediate reply. 1 believe I can claim that considerable progress has been made by the committee. Much evidence has been heard and many witnesses, including many expert witnesses, have given us the benefit of their opinions and advice. The committee has just about reached the concluding stages of the hearing of evidence and is now in the deliberative stage of its proceedings. It would be quite fair to say that there is nothing that impinges on the Constitution which has not been considered by the committee. My colleagues and I “hope that we will be in a position early next year to bring down a report.
– I ask the Minister “for National Development whether it is a “fact that the Minister for External Affairs has stated that Australia is to finance under the Colombo plan the setting up of a medical school in Sumatra for the training of doctors, that it is to be supervised by ;the University of Melbourne and is to cost £200,000. Is the Minister aware that the University of Melbourne is in a parlous “financial position and that the Victorian Government finds it increasingly difficult to obtain from the federal Treasury either grants or loans to relieve that situation? Is he further aware that the University of Tasmania is without a medical school and that Tasmanian medical and veterinary science students find it extremely difficult to obtain tuition in mainland universities? Will the Minister give more generous consideration to Tasmania’s claims for funds when loan funds and State grants are next being allocated so that Tasmania may train its own scientists and students without the constant fear of lack of funds? Does the Minister remember the old adage that charity begins at home?
– I think the honorable senator could have stated his question shortly by affirming, “ I am opposed to the Colombo plan “. Well, the Government is not opposed to it.
– I direct to the Minister representing the Minister for Primary Industry a question relating to the Australian Apple and Pear Board. I ask him whether the Government has considered the appointment of a successor to the late Mr. J. B. Mills, who was a very experienced and valuable chairman of the board for a number of years. If the Government has considered such an appointment, when does it expect to make an announcement on the subject? I have in mind the fact that the next apple and pear export season is nigh at band.
– I shall bring the question to the notice of the Minister for Primary Industry and ask him, in view of the impending commencement of the apple season, to furnish an early reply.
– My question is directed to the Minister for Customs and Excise. Some three weeks ago I asked a question in relation to the importation of Japanese toy dolls and pointed out that the New South Wales fire chief had claimed that the dolls were highly inflammable and consequently were dangerous to children. Has the Minister concluded his inquiry into the matter?
– I am still having the matter investigated.
– Has the Leader of the Government in this place seen a press statement that Russia had promised Egypt financial support for the construction of the Aswan Dam but that now she refuses to honour that promise, with the result that Egypt has appealed to the World Bank, which was established by the free world, for financial assistance for the project? Is this not a warning to those who put their trust in totalitarian countries?
– I did see the report referred to by the honorable senator. I hope that people will take from it the lesson that he has emphasized and not put their trust in such countries.
– As the Government has provided in this year’s Budget an additional £5,000,000 for war service homes, will the Minister for National Development extend consideration to applicants for a second loan when family illness as a result of climatic conditions compels them to move to another locality? I instance the case of a person residing near the sea coast whose medical advisers have ordered him to remove from the seaboard. He is compelled to sell his home, or his interest in it, and the department has refused to grant him a second loan. Will the Minister give consideration to the granting of a second loan in such deserving circumstances?
Senaor SPOONER. - A second loan is approved only in the most exceptional circumstances. I review the conditions governing these loans from time to time, but I have refrained from making the conditions more favorable. I have little desire to do so, at least at this stage, because there is such a long list of people who have been waiting for some appreciable time, but have not yet had the benefit of obtaining a war service home for the first time. My view is that we should grant loans to those who have not yet had a loan before we make more favorable the conditions under which second loans can be granted.
– My question to the Minister representing the Treasurer refers to the moneys to be raised by the Australian Loan Council for the financial year 1957-58. Will the Commonwealth Government take from those loan raisings, as distinct from its own revenues, any money for Commonwealth capital works, other than the money to be made available for housing projects in the States?
– To the best of my recollection, Commonwealth capital works are being financed entirely from revenue, with the exception mentioned by the honorable senator.
– Has the Minister for National Development seen to-day’s issue of the “ Sydney Morning Herald “, which carries a very fine picture of Senator McKenna, our leader, surrounded by a report of the unanswerable criticism of the Government’s defence policy, or lack of policy, which he submitted to this chamber yesterday?
– Yes, I saw the picture of the Leader of the Opposition, and I looked at it with great interest.
asked the Minister representing the Minister for the Interior, upon notice -
In view of the statement recently made by Senator O’Byrne, the vice-chairman of the Parliamentary Standing Committee on Public Works, that the committee has at present no work committed toit, will the Minister give immediate consideration, to the desirability of instructing the committee to investigate the need for providing Adelaide with’ adequate Commonwealth buildings on one or more of the numerous sites the Commonwealth already has in that city?
– The Minister for the Interior has supplied the following answer: -
There is no proposal for work in Adelaide which would enable a reference to be made to the Parliamentary Standing Committee on Public Works. At present the Commonwealth is endeavouring to consolidate its holdings in that city which will provide the prerequisite for a Commonwealth Centre. The Government is aware of the need to make provision in Adelaide for Commonwealth offices and when site consolidation is achieved the Government will give consideration to having the Works Department do the preliminary planning required by section 15 of the Public Works Committee Act to enable proposed works to be referred to that committee.
asked the Minister for Civil Aviation, upon notice -
– The answers to the honorable senator’s questions are as follows: -
It is of interest to note that the proposed excise duty on aviation kerosene represents a duty of 25 per cent, on the tax-free price of 26d. a gallon. This is the rate of duty which applies to aviation petrol, which has a non-duty price of about 39d. a gallon. Because of the differences in capacity and rates of fuel consumption of typical piston and turbine powered aircraft, it is not valid to make direct comparisons of the cost or duty per gallon of fuel consumed by each type.
asked the Minister representing the Minister for the Interior, upon notice -
– The Minister for the Interior has supplied the following answers: -
– On 24th October, I asked a question without notice of the Minister representing the Minister for Territories regarding a report that ash from a volcanic disturbance on Manam Island, north-west of Madang in the Territory of New Guinea, had destroyed some native villages. I understand the Minister representing the Minister for Territories has a reply to that question.
– The Minister for Territories has supplied the following answer: -
Volcanic activity was reported on Manam Island on the night of 18th October, and some damage was done to native gardens and houses in the area. Arrangements have been made for the Government Vulcanologist to visit the area and to report on the renewed activity. Minor eruptions have occurred on Manam Island at irregular intervals, and since 1953 conditions there have been investigated on a number of occasions, the last being in January this year. In a report covering his investigations on that occasion the Government Vulcanologist stated that a number of factors suggested that unless there was a change in the nature of the volcanic activities no danger existed to the inhabitants of the island. The Administrator of Papua and New Guinea has developed plans for the quick evacuation of the island in the event of any major eruption in that area.
Senator SPOONER (New South Wales-
Minister for National Development). - by leave - I lay on the table of the Senate the following paper: -
Australian Atomic Energy Act - Fifth Annual Report of the Australian Atomic Energy Commission for the year 1956-57.
This latest report of the Australian Atomic Energy Commission is the most informative it has yet published. This has been made possible, in part, by the withdrawal of restrictions on the publication of a great deal of atomic energy information, by agreement with the United Kingdom, the United States of America and Canada.
The field of atomic energy activity in Australia is continually widening. In the earlier stages, the mining of uranium predominated, but now atomic energy is also becoming a matter of interest to commerce and industry. For the first time, we are free to give figures and details of the operations of Rum Jungle. Honorable senators will recall the circumstances under which Rum Jungle began. Under the pressure of defence needs, time was of the essence of the contract, and the undertaking was launched before the operational programme had been worked out in full detail.
Naturally, there were mainly initial difficuties in getting the plant and the mine running smoothly. No doubt there will be other difficulties in the future, but the figures in this report tell a most satisfactory story. In the first few months of the financial year 1957-58, the output of uranium oxide has been running some 10 per cent, higher than the target set in trie operating budget. The recovery of uranium oxide in the treatment plant has been as high as 90 per cent., which is as high as is normally obtained from this type of plant. Proven ore reserves are adequate to complete the contract for the supply of uranium oxide to the Combined Development Agency. Exploration work is being carried on energetically throughout the Hundred of Goyder in the effort to establish larger reserves. Mining companies are also sending in ore to Rum Jungle for treatment. This year, an approach was made to the Combined Development Agency with a view to negotiating an arrangement for the purchase of ore from mining companies in the South Alligator River area. Having regard to its other commitments, however, the agency was unable to agree to the Commonwealth’s proposal. Further negotiations are taking place for the disposal of the South Alligator production.
It is important that the development of our uranium resources should continue. Uranium mining is a valuable industry in itself, bringing capital into the country and helping to open remote areas, but in addition, an active mining industry should be maintained in order to provide Australian requirements of uranium for nuclear power in later years. Even if scientists succeed in working out an economical method of harnessing the thermonuclear or hydrogen fusion process, uranium will be needed in increasing quantities for many years to come.
– This is the statement of the Australian Atomic Energy Commission. The economic advantages of nuclear power are emerging clearly, as the result of British experience in the construction aud operation of nuclear plants. I believe that not many years will elapse before the first nuclear power plant will be seen in operation in Australia. That will present new opportunities for Australian industry, and raises the question of local fuel supplies. Australian power plants will begin by using uranium fuel elements manufactured overseas. For a time, these elements will probably be sent back to the suppliers for chemical processing after they have been withdrawn from the reactors, in order to recover the valuable fission products.
There is no technical reason why the fabrication of fuel elements and the chemical processing of spent fuel should not be performed in Australia. We should, in fact, aim to do this work here as soon as it is economically possible. We do not want a power industry to grow up which would become increasingly dependent upon supplies and services from overseas. Meanwhile, we are preparing for the advent of nuclear power by a programme of research which will help in evolving reactor systems particularly suited to Australian needs.
The majority of the commission’s scientific staff have now returned from the United Kingdom and resumed at Lucas Heights the work they began at the Harwell research establishment of the United Kingdom Atomic Energy Authority. Construction of the Atomic Energy Commission’s own research establishment, near Sydney, is progressing well. Early next year should see Australia’s first nuclear research reactor in operation. The choice of this research reactor has proved to be a sound one. Last November, the United Kingdom Atomic Energy Authority commissioned its first reactor of this type, and it has proved so valuable that a number of others are being built. It gives a neutron intensity 40 times as great as any previously available in the United Kingdom, and this enables tests to be carried out on components of nuclear power stations in weeks instead of years.
Although no nuclear power station is yet being built, we do not have to wait years for some of the benefits of atomic energy.
Radioactive isotopes have already begun to make their contribution to Australian industry and agriculture. The Isotopes Advisory Service, set up by the commission last year, has been very active, and has met with a gratifying response from industry.
There has been considerable activity in the international field. Since the close of the period dealt with in the report, the first General Conference of the International Atomic Energy Agency has taken place in Vienna. Australia has been chosen, as the nation most advanced in atomic energy in South-East Asia and Pacific, to sit on the Board of Governors. Australia has taken a leading part in the formation of the agency. The Australian delegation to the conference has urged that exchange of information and the extension of training should take precedence in the work of the agency. The benefits of atomic energy can be extended only by spreading the basic scientific knowledge, and by training more scientists and engineers in its application.
The agency could be useful to Australia as a means of selling uranium to other nations, subject to suitable safeguards. It could also be a help in securing materials which may be difficult to procure through normal commercial channels. In its wider aspects, the agency will help to spread knowledge and stimulate development, to the benefit of all parties. Our bilateral agreements with the United Kingdom and the United States for the civil uses of atomic energy are a valuable means of securing information and materials. The agency supplements them without in any way reducing their effectiveness. These two bilateral agreements are already in operation. A third is taking shape between Australia and Canada. This will facilitate a free exchange of information as between Australia and the three nations which have similar agreements among themselves.
When honorable senators peruse this report, I am sure they will agree with me that the Australian effort in the field of atomic energy is a creditable one, within the limits of the resources available. It is a great advantage to have close ties with such countries as the United Kingdom and the United States, where work goes forward on a scale not possible here. The size of our effort may look modest by com parison, but the quality of the work done is high, and provides an excellent basis for future progress.
.- I move-
That the paper be printed.
I take this course merely to afford myself an opportunity of addressing the Senate for a few minutes. I understand that this report relates to the period concluded on 30th June last. Is that right?
– Yes, 30th June, 1957.
– Whether it is already out of date, of course, will be a matter that the Government can decide. It is interesting to note that overseas developments are such that a very strong squeeze has now been put on uranium production. I should like to read what was said at the Atomic Industrial Forum last week, when, so to speak, a hydrogen bomb was dropped on the uranium industry. The American Atomic Energy Commission’s raw materials chief, Jesse Johnson, is reported to have said -
We have arrived at the point where it is no longer in the interest of the Government to expand production of uranium concentrate.
– Who said that?
– Mr. Jesse Johnson. I am quoting from the current issue of “Time”, dated 11th November, 1957. The report continues -
The decision meant that while the U.S. will honor its existing contracts to buy uranium concentrate from mills, it does not intend to sign any new contracts that would appreciably increase production.
In the report that the Minister has read, the whole emphasis is on an increase in production and an increase in demand. The report continues -
Thus, after ten years of an all-out program to expand uranium mining, AEC put on the squeeze; any big new uranium discoveries will probably not be able to find a market …. Yet uranium men contend that by putting the lid on concentrate output, the AEC will automatically stifle the hunt for ore. Johnson agreed that prospectors will need a fresh incentive to press the. search.
– Does that article say anything about the level of demand? We all know that there has been a tremendous increase in production, but the demand is still increasing.
– The article says, in effect, that although the United States of America has possibly ten years’ uranium ore supplies in sight, that is the only attitude that the Americans can take on it. The article goes on to state that many of the small-time uranium miners who do- not have contracts to sell to existing’ mills will fold up altogether. I think that has been anticipated for some time.
What I am interested in at this stage is that we have the report of the Australian Atomic Energy Commission for the year ended 30th June last. If the Minister has not the opportunity to reply, I bring this matter up, not in a desire to criticize, as the Minister knows, but to see whether we can look at this matter in the light of conditions to-day
There has been criticism of the defence planning. One of the criticisms has been that the Government is trailing badly, and it is important to ensure that the same mistake shall not be made in uranium production. We should not be trailing because public knowledge in other parts of the world is not being applied here to the development of our uranium.
There has been talk of the South Alligator River deposits. Just what will happen there, it is hard to know. Just how strong are the contracts that Rum Jungle enjoys, I do not know. It is quite certain they will be honoured, but the question is whether the Government is looking forward to the time when the contracts will expire, and deciding what the position will be then. The United States Government, and the Atomic Energy Commission will not at this stage enter into any further contracts. So, is production at Rum Jungle to be completely wiped off at the conclusion of the present contracts? lt seems, from this article, that that conclusion is to be drawn. With terrific developments in modern science, we do not know what initial power will be used after to-morrow.
– Is America the market for our production?
– The Atomic Energy Commission is the market.
– And the Combined Development Agency, which is British and American.
– Our stuff is shipped to the United States, not to the United Kingdom.
– I think that is correct.
– To all intents and purposes the Americans use our production.
– I do not know that that follows.
– I think the Minister will find that that is the position. It would be interesting if somebody could supply us with information on that point. There was an item in the Estimates that I felt should have been debated fully, but because of the restriction placed on time, a lot of matters were not even touched. I just mention this because I think it is right that the Senate should know about the developments overseas. When we hear a most optimistic report from the Australian Atomic Energy Commission, such as the one presented by the Minister, we should know whether the prospects in relation to uranium are not as bright as the commission would have us believe.
.- Mr. President-
– If you do not mind, Senator Laught, I think it might be appropriate for me to reply.
– Certainly, Sir.
– Senator Armstrong has opened up a fairly big question, and it is rather hard to reply, off the cuff, as it were, to the various points he mentioned. But I think I should do so because of the interest in and the importance of the matter.
I thought that the honorable senator’s interjection was aimed primarily at the accuracy of the statement concerning the development of other forms of nuclear power, but he did not develop the theme in the magazine article. So let us consider uranium and what Senator Armstrong said. The world was so short of uranium, that great efforts were made to obtain it. The Americans gave all sorts of rewards and all sorts of incentives. The result was that they got the answer at which they aimed in. the form of great production of uranium in the United States, and great prospective production, the result being that the American Atomic Energy Commission is not presently a buyer for uranium over and above the contracts which are current-
– That is a recent announcement?
– Yes, it is only a recent announcement. I should think it was made since this statement was prepared.
– That is the point I am making.
– The American Atomic Energy Commission is not at the present time a buyer. The price of uranium has fallen. The same situation does not apply in respect of the United Kingdom Atomic Energy Commission, which is still purchasing supplies. Its official price has fallen, but it is quite appreciably above the American official price. What we have to consider is the result to Australia. Can we forecast what this means to Australia? One needs to do more than a little crystal gazing in trying to forecast it.
The general opinion in the nuclear power industry, and in the uranium mining industry is that this is a passing phase. Despite the developments that might occur in thermo-nuclear or hydrogen fusion, there is a generally accepted belief - if I understand my professional advisors correctly - that the demand for uranium, the demand for thorium, will be maintained and will increase and that uranium may reach a situation analogous to that of base metals, the prices of which rise and fall according to demand. Despite that fact, it is difficult to see circumstances under which the sale of uranium will not always be controlled by the government of the country in which the uranium is mined. It will, I should think, always be a government-controlled transaction. Yet despite that, it is thought that the price will rise and fall with demand, and it is thought - whether rightly or wrongly only the future will show - that the price will rise in the future above the present level.
What is the effect of that upon Australia? We will have a demand’ for atomic power in Australia; we will use atomic power in Australia. When, and to what extent, are large questions. I think, if my recollection is correct, that this annual report of the commission canvasses that issue and gives some interesting views upon it. The time will come - leaving defence to one side - when we will have an Australian demand for uranium. Efficiency in the use of uranium will be developed tremendously in time to come, and the price of uranium will be a minor matter in comparison with the great savings that will be effected as a result of that development. I apologize to honorable senators for’ the fact that I have not the relevant figures available now. I did not know that I would be called upon to make a statement of this. sort. If I had, I would have prepared the material because I am sure that honorable senators would have been interested in the information.
The extent to which uranium has been used and the benefits that have been derived from it are small indeed in comparison with those that will flow from the use of uranium in decades to come. It will be of the greatest advantage to a nation, therefore, to have its own supplies of uranium. Whether the price will be ten, nine or seven dollars a pound will be an insignificant matter compared with the enormous value that will be derived from the production of heat from uranium as distinct from coal.
– Does the Minister mean that uranium production as a mining industry will not be of the greatest importance ultimately?
– No, the honorable senator has misunderstood me. It will be of the greatest importance to have uranium production as a section of the mining industry. The important point will be the possession of uranium rather than the cost of it.
– The economics of the mining industry will not be so important?
– No. The important factor will be the economics of the production of power from the metal that is derived from the oxide. Therefore, it is of the greatest importance that we have our own supplies of uranium so that, eventually, we can produce our own uranium metal and so produce our own fuel and power.
On the other side of the picture, it is tremendously important also that we should be independent in the use of our uranium - that we should not have to purchase our uranium on the basis that we have to send the spent uranium back to the country from which it was purchased for extraction of the defence potential from the metal.
– We spent more than £3,000,000 last year on atomic energy. Upon what exactly did we spend that money?
– If the honorable senator has correctly stated the amount of money that was spent - and I do not challenge his statement - I wish to explain to the Senate that the money expended last year was used principally upon the construction of the research reactor at Lucas Heights. I hope that honorable senators will inspect the research establishment in the notdistant future because it is a fascinatingly interesting project and one does not appreciate fully all that will come from it until a personal inspection has been made. I hope that I have answered the statements made by Senator Armstrong
– It is not possible to give an answer then.
– Well, at least I have put the other side of the case.
Debate (on motion by Senator Laught) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Motion (by Senator Henry) proposed -
That the bill be now read a first time.
.- Yesterday, on the motion for the first reading of the Income Tax and Social Services Contribution Bill, the Leader of the Opposition (Senator McKenna) took the opportunity to launch a discussion on the defences of Australia. I presume, therefore, that I am quite in order in raising another matter for discussion at the first-reading stage of this bill. Quite recently, the Senate had before it for discussion the Estimates of the Commonwealth Government for the current financial year. They amounted to more than £1,300,000,000. By some method of its own, the Government decided that the Senate could discuss adequately the multitudinous items of expenditure involved in approximately 35 hours. Therefore, it regulated the discussions concerning certain departments over defined periods so that, in 35 hours of discussion, honorable senators would be able to cover all the proposed expenditure.
– I rise to order. I take it that the honorable senator is criticizing a decision of the Senate in the use of the “ guillotine “. Standing Order 415 states -
No Senator shall reflect upon any Vote of the Senate, except for the purpose of moving that such Vote be rescinded.
I take the view that the honorable senator’s remarks reflect on a decision of the Senate, and, therefore, are out of order.
– Order! The point of order that has been raised by the Leader of the Government is upheld.
– I propose to deal with other matters. What I have said was only a prelude to my remarks. At this time, when we are approaching the end of this sessional period, we may expect the gag to be applied to our debates. I leave it to the people of Australia to determine whether we can conduct the proceedings of this Senate by moving in this way from one form of frustration to another.
– Can the honorable senator tell us who won the Melbourne Cup?
– Nobody can tell Senator Kendall anything because his mind is entirely closed. How are we to deal conscientiously with the business before the Senate if we are to be subjected to various forms of frustration? I had intended to say a good deal during the debate on the Estimates, but I was prevented from engaging in any wide discussion. I was interested to hear the debate yesterday on Australia’s defences. I am sure that honorable senators on the Opposition side concluded from the debate that the Government has no defence policy whatever. If the Government has a defence policy, it is not noticeable or can- not be deciphered. How is a defence policy formulated? It is formulated, not by the members of the Government, but by the service chiefs. They confer, they prepare their submissions to the Government and have consultations with the Treasury, and a policy is formulated. But it is not clear to honorable senators on this side of the chamber exactly what is the defence policy of the Commonwealth Government. It becomes apparent to all who have considered this problem that the service chiefs must be guided by what is occurring overseas and particularly by what the United Kingdom does.
In Australia, we have what is known as an inner Cabinet, which really formulates the Government’s policy. Then certain members of that Cabinet proceed to administer the policy. Although the Government may lay down a policy with respect to certain matters, Ministers, in their general administration, depart from that policy and incur huge expenditure in giving expression to their own whims. I propose to quote from the report of the Auditor-General for the year ended 30th June last to indicate to honorable senators exactly what has been done by Ministers in departing from Government decisions. The report reads -
In 1950, the Government-
Meaning, of course, the full Cabinet - approved the re-introduction of the Women’s Services in the Navy, Army and Air Force and decided that, apart from personnel serving in isolated areas, enlistment was to be on a “ living-out “ basis. This policy was re-affirmed in 1952.
Therefore, we have two decisions upon this matter by the Government - one in 1950 and another in 1952. In the circumstances, one would say that that was the firm policy of the Government in regard to that matter. The Auditor-General’s report continues -
Although the matter has been reconsidered by the Government, no variation of the policy decision has been made.
It becomes apparent, therefore, that this matter was brought forward for decision by the Government on no fewer than three occasions and that the Government decided that the enlistment of women in the Navy, Army and Air Force would be on a livingout basis. I think every one knows clearly what the term “ living-out “ means. It means that the female members of the forces must live at their own homes or where there is other suitable accommodation and that no hostel accommodation is to be provided for them.
Now comes the interesting part of the report -
However, with Ministerial approval and Treasury concurrence, substantial sums have been expended by the Departments of the Navy and the Army in the acquisition of accommodation for members of the Women’s Services. Two of the instances under notice are -
The Department of the Navy purchased “ Greenwich House “, Toorak, Melbourne, as accommodation for members of the W.R.A.N.S. at a price of £22,000 (plus £12,500 for conversion).
Late in 1956, the Department of the Army purchased, for £70,000, a property known as “ Nangunia “ in St. Kildaroad, Melbourne, to provide “ living-in “ accommodation for W.R.A.A.C. and R.A.A.N.C. members posted to units in the Melbourne area.
In a number of cases, barracks and other buildings have been altered and extended to provide living-in accommodation for members of the Women’s Services.
I just wonder how this Government could have a sound defence policy when it lays down a policy in regard to certain other matters and Ministers leave the Cabinet room and implement a completely different policy. Despite the fact that the Government decided that there would be no livingin accommodation for members of the Women’s Services, Ministers established living-in accommodation at a cost of £92,000. If Ministers can do that in regard to accommodation, what will they do in administering other departmental affairs? Of course, I am speaking now of departments associated with our defence structure.
It is interesting to note what the AuditorGeneral has to say about the maladministration of some of these departments. Referring to stores and store accounting in the Department of the Navy, he reports -
The standard of storekeeping and accounting, particularly in the maintenance of stocktaking programmes and the completion of results of stocktaking, continued to improve generally but the following features are still unsatisfactory.
Then he proceeds to quote certain unsatisfactory features. He referred to these cases of maladministration in previous reports, too. He says, in regard to New South Wales-
Internal audit reports and results of stocktaking indicate that storekeeping and accounting in certain ships and naval establishments are unsatis factory.
The word “ unsatisfactory “ cannot be misunderstood. We know what the AuditorGeneral means when he uses it. He continues -
As previously reported, the inexperience of the available staff is the main reason for the position.
The war ended in 1945, but the Department of the Navy in New South Wales is still unable to recruit competent staff to .do its storekeeping and bookkeeping. That is inexcusable when one considers that the Government expends £200,000,000 a year on Australia’s defence.
The Auditor-General further reports -
Reference was made in ‘the 1955-56 Report to thefts of victualling stores from -the Royal Australian Navy Air Station, Nowra. Proceedings instituted in civil courts resulted in the sentencing of eight naval ratings. Two other naval ratings and a civilian were awaiting trial when this Report was prepared.
Those offences would not have occurred if there had been strict administration at those centres. They have occurred because members of the Navy who are entrusted with the general administration of simple affairs are unable to carry out their ordinary duties in a competent manner.
In regard to Queensland, the AuditorGeneral said -
During the year, naval store accounting deteriorated due to frequent changes in staff ‘and, occasionally, to shortage of experienced stores staff. In some cases, records were incomplete and stocktaking and internal checks were in arrear. Remedial action is in course and substantial progress has been made.
I point out in regard to that part of the report that an examination was made by inspectors of the Audit Department and they discovered that naval store accounting had deteriorated. It had become worse since the previous inspection, and in some cases records were incomplete. How in the name of goodness could proper checks of the stock at the naval depots be made if the records were incomplete? That shows that there is a general disregard of ordinary bookkeeping principles by the Department of the Navy at the present time.
Then -the Auditor-General goes on to deal with Manus Island, about which we have heard a great deal in the Senate during the past seven or eight years. I can remember when some honorable senators opposite had very severe things to say about the Labour government and its treatment of Manus Island. I notice, however, that at .present they .are very silent upon .that subject, because experience has .shown that the policy followed by Labour after .the war was -correct. It was a policy laid down by the service .chiefs at that time. It was followed religiously by it-he Labour government and was found to be ‘Correct. No improvement of ‘the defences of Manus Island has been made by this Government. This ,is what the Auditor-General had to say -
There -was improvement in the accounting for and stowage of stores ‘mentioned in the previous report.
When this report was compiled, there was a serious lag in the -stocktaking of naval stores. Records of stores on loan were found to be unsatisfactory.
Again, the Auditor-General used the word “unsatisfactory”. It runs right through all he has to say about the Department of the Navy. He continued -
These matters have been taken up with the Department, which is taking remedial action.
He mentioned a serious lag in stocktaking. Anybody who has had experience of stocktaking knows that if there is a lag there is generally carelessness in the handling of the stores. Dealing with matters generally, the Auditor-General had this to say -
Errors in accounts of Naval armament and similar stores maintained by H.M.A. ships are too numerous.
The Commonwealth Government collects from the people of Australia something like £1,300,000,000 a year for its various requirements and allocates the sum of £200,000,000 for defence. How is that money being spent? It is all very well for Government senators to tell us about the Government’s defence policy and how it is strengthening the defences of Australia, but the Auditor-General’s inspectors find that money is being wasted. In many cases, that waste could have been avoided. Continuing, the Auditor-General said -
Current procedures do not provide for a check of store accounts at their source and errors often remain unadjusted until closed accounts are examined by Internal Audit in Navy Office. The institution of continuous ledger accounts, to be kept in ships and establishments by ratings trained in accounting duties, and to be subject to periodical examination by representatives from Navy Office, is receiving -departmental consideration.
Evidently the department, so far as these matters were concerned, was asleep. It was slumbering, just like the Minister for Customs and Excise (Senator Henty) is slumbering now.
– The honorable senator would put anybody to sleep.
– I know the Minister is not the slightest =bit concerned about how money is being wasted, and that is pretty well the attitude of all the members of the Cabinet. The cases I have dealt with are not isolated cases. This wastage of funds, carelessness in storekeeping and similar matters applies to other departments as well. When we turn to the Department of the Army, we find a similar state of affairs. In regard to stores and store accounting, the Auditor-General said -
Unsatisfactory accounting and ineffective control over Unit ‘Stores were mentioned in earlier reports.
That is quite true. It was the business of somebody in this Senate to bring those comments to light and to repeat them here. Continuing, the Auditor-General said -
Continued efforts by the Department have resulted in improvement, but, due mainly to the inexperience of staff and their inadequate training and frequent movement, a desirable standard of accounting efficiency has not yet been attained. However, it is apparent that a genuine effort is being made towards the attainment of that objective.
That is what the Auditor-General had to say about the stores and store accounting of the Department of the Army. The frequent movement and the inexperience of members of the Army entrusted with certain bookkeeping work brought about the state of affairs to which the Auditor-General referred. It was the fault of the administration, not of the individuals concerned. The Army should train men to do this accounting work and should not move trained men from their posts until other trained men are available to take their places. The alternative is to have an endless waste of money. I am taking this opportunity to tell the people of the Commonwealth how some of their money has been wasted by this Government. Then, dealing with New South Wales, the Auditor-General went on to say -
Accounting for and control over unit stores remain unsatisfactory and inspections of units by Army Audit Staff are in arrears.
First of all, the control over -unit stores remains unsatisfactory, and secondly, inspections of units by the Army Audit Staff are in arrears. The Army just does not know what the position .is. The report continued -
Stocktakings at certain units are overdue, and there were delays in adjusting discrepancies - some of which are large - disclosed by other stocktakings.
Results of sectional stocktakings conducted at 6 Engineer Stores Regiment during 19S4, showing surpluses and deficiencies totalling £25,318 and £18,027 respectively, were not presented for adjustment until almost three years later.
Could one get a more severe indictment of the administration of the Army than that? The Auditor-General went on -
As indicated by the following table, large discrepancies have been revealed at stocktakings in three National Service Battalions. In view of the short periods ‘between stocktakings, the position disclosed is unsatisfactory.
If this Government has a defence policy, it should implement that policy first of all by bringing efficiency to the ordinary administrative functions of the services. Continuing, the Auditor-General said -
An investigation into a theft of 6,758 blankets, valued at £15,205, from the Returned Stores Group, Moorebank, failed to locate the stores or to establish personal responsibility for their loss.
In that case, 6,758 blankets went west, but nobody knows who was responsible. The Army does not know where the blankets have gone. This is the mystery of the missing blankets. The Army is unable to locate the person responsible for this deficiency. I know that the Minister for Customs and Excise, who is at present in charge of the House, is eager for us to deal with a simple little bill which he has before him. He wants to extract more money from the people by way of higher excise duties and higher customs charges. I am dealing with losses due to maladministration. It is very important that we block up the holes through which money is pouring out.
– If the honorable senator were to read the bill, he would see that it provides for a reduction, not an increase. Of course, he would not know.
– The Minister would not know either unless somebody told him and gave him special instructions. The AuditorGeneral then deals with Victoria, which also is not free from blame. The unsatisfactory state of affairs that he mentions is widespread. It applies over the whole of the Commonwealth. The report reads -
The standard of unit stores accounting has continued to improve, particularly in National Service Training Battalions, where the position in the past has been unsatisfactory.
Some large discrepancies have been revealed by stocktakings which, in general, are up to date.
The departmental Register of Assets is being standardized, but as a record of Army property in Southern Command, is far from complete.
That is another indictment of the Army. These things occur year after year, for the services seem unable to establish a standard of efficiency and then maintain it. The departments of Navy, Army and Air are in duty bound to safeguard the financial interests of all the citizens of the Commonwealth. The people of Australia contribute the money from which these defence services are carried on. The average person does not mind the Government spending £200,000,000 or so ou defence each year, but he expects that there shall be thorough housekeeping in the expenditure of that money. Maladministration such as I have referred to is, of itself, a justification for setting up a royal commission to investigate losses.
I thought that at least Queensland would be free from blame in this matter but, in respect of that State, the Auditor-General has this to say -
Accounting for and control over stores at certain units continues to be unsatisfactory; internal checks are in arrear and have been performed inefficiently.
If I had said these things myself I should have been assailed by the Minister - in his brusque way - and been told that I did not know what I was talking about. Fortunately, I am merely repeating what the Auditor-General has said. However, the Government is quite unmoved when honorable senators point out the losses and inefficiency which characterize the conduct of the services. I read further -
Progress of stocktakings by unit personnel is satisfactory, but delays have occurred in processing results and adjusting discrepancies.
The unsatisfactory position previously reported in respect of the Jungle Training Centre, Canungra, still exists. A Command inspection, in June, 1956, disclosed administrative weaknesses, and a subsequent stocktaking revealed discrepancies which, when adjusted and combined with those referred to in my Report for 1955-56, totalled £838 surpluses and £7,306 deficiencies.
These shortcomings are not confined to the States that I have mentioned so far. South Australia must also be mentioned. The Auditor-General’s report has this to say about that State -
There is still need for improvement in accounting for unit stores, particularly at the larger units.
In respect of Western Australia, the Auditor-General says -
Although there has been a general improvement in unit stores accounting, some features remain unsatisfactory.
I could go on to tell honorable senators about the position in Papua and New Guinea, and about the delay in the revision of regulations governing financial matters, but in the short time left to me I propose to say something about the Australian Army component of the British Commonwealth Far East Strategic Reserve. In respect of this matter, the Auditor-General remarks -
Audit of the accounts of the Force disclosed that, in some instances, vouchers submitted in support of payments made by Australian paymasters in Malaya did not contain sufficient evidence to substantiate transactions.
Every one knows what is concealed in that statement. The imputation is clear, and I need not enlarge upon it.
The national service scheme has been in operation for quite a while, and I shall not comment upon its merits or demerits. However, I remind honorable senators that the secondary schools have also had a military training scheme. I was interested to see how well the boys took to that form of training, and how they gloried in the different forms of activity provided. They were given uniforms and dressed up like soldiers and airmen, and some of them undertook special courses of training and became under-officers. There is no doubt that they looked forward to the marchingout parade which was held each year for those who had completed their training. In other years a parade ground has been made available to them, and relatives and friends have been invited to see the lads march and show what they were made of. However, this year the Commonwealth Government has cut down on that form of expenditure and, consequently, a parade ground was not made available to these young men for their marching-out parade. That was one of the meanest acts of which this Government has been guilty. Is that the Government’s answer to a state of affairs in which thousands of pounds are being wasted through sheer maladministration in the services? How in the name of goodness can the Government ever establish a sound defence policy while it cannot even administer such simple matters as storekeeping and stocktaking in the various branches of the services?
The DEPUTY PRESIDENT (Senator the Hon. A. D. Reid). - I call the Minister for Customs and Excise.
– Mr. Deputy President
The DEPUTY PRESIDENT.- Order! I call the Minister for Customs and Excise.
– Mr. Deputy President, I was on my feet long before the Minister was. He will close the debate.
The DEPUTY PRESIDENT.- Order! I call the Minister for Customs and Excise.
– I listened with very great interest to Senator Benn’s quotations from the Auditor-General’s report. Indeed, I do not know what he would have done without it. What he has referred to can be seen just as readily in the Auditor-General’s reports of 1946, 1947, 1948 and 1949, when Labour was in office. The same comments are to be found there, with bells on! Indeed, a far worse state of affairs then obtained. I do not seek to excuse present shortcomings, but I remind honorable senators that when this Government came into office in 1949 I referred to three reports in which comments of exactly the same kind were made. Therefore, Senator Benn has directed attention to nothing new. In fact, the position has improved markedly, but since Senator Benn has been a member of the Public Accounts Committee-
– You were a member of the Public Works Committee. I hope you will remember what happened about the Townsville jetty.
– We did a good job with the Townsville jetty and the harbour board got out of it jolly well - and knows that it did. Since Senator Benn has been a member of the Public Accounts Committee he has relied entirely upon the reports of the Auditor-General for his material. I do not know what would happen if he had not those reports from which to read. I remind him that, if he wishes to bring quotations of the kind he has read before the Senate, there are available AuditorGeneral’s reports for much earlier years which also are well worth reading.
– The Minister is not implying that that is any justification for present deficiencies?
– I do not suggest that the Auditor-General is other than a great watchdog of the public finances. I am merely saying that the honorable senator is reading from the Auditor-General’s reports for the years that suit his case. He wonders why the Senate empties when he speaks. In the circumstances, I now move -
That the question be now put.
– Mr. Deputy President
The DEPUTY PRESIDENT. - Order! The question is -
That the question be now put.
– The “ Noes “ have it.
The DEPUTY PRESIDENT.- I think the “ Ayes “ have it.
The DEPUTY PRESIDENT.- I heard no dissentient voices. I make that quite clear. Ring the bells.
The Senate divided. (The President - Senator the Hon. Sir Alister McMullin.)
Majority . . . . 5
Question so resolved in the affirmative1.
Original question resolved in the affirmative.
Bill read a first time.
– I move -
That the bill be now read a second time.
The bill now before honorable senators provides that, on and from 23rd May, 1957, the rates of duty applying to goods coming under the intermediate tariff and general tariff provisions of many items in the schedule to the Customs Tariff 1933-1956 shall be reduced to 7i per cent, ad valorem.
Honorable senators will recall that the Government negotiated a trade agreement with the United Kingdom early this year. One of the main objectives of the negotiations with the United Kingdom which preceded the new agreement was to secure greater freedom to reduce preference margins in our tariff in order to reduce the cost of imports of producer goods from foreign sources. Under the terms of the agreement, the preference margins on a large range of items in the Australian Customs Tariff may be reduced to 7i per cent, ad valorem.
There are some 800 tariff items or parts of items in the schedule to this bill and all of the goods covered by them, with the exception of Item 449 (b), are already admissible free of duty under the British preferential tariff and are therefore non-protective items. Goods covered by these items are mainly capital goods, new materials and other aids to production and imports- from all sources in 1955-56 were valued at some £160,000,000 or 20 per cent, of our total imports, in that year.
The intermediate tariff rate on the great majority of the items concerned is 12± per cent, ad valorem although some intermediate tariff rates are slightly higher and a few lower than 12£ per cent, lt is proposed to reduce to 7i per cent, the intermediate tariff rates on all items except By-law Item 449 (b). In the case of Item 449 (b), the present British preferential tariff rate is 5 per cent, ad valorem and, in terms of the agreement, the intermediate tariff rate may be reduced from 17 i per cent, to 12i per cent., thus according a margin of 7i per cent.
The general tariff rate prior to 23rd May, 1957, on most of the items covered in the bill was the same as the intermediate tariff rate, and, in such instances, this bill reduces the general tariff rate to 7i per cent. also. Where the general tariff rate was higher than the intermediate tariff rate, it is pro, posed to reduce the general tariff rate, but to maintain the existing margin between the intermediate tariff and the general tariff.
By far the most important single item on which margins under the intermediate and general tariff rates of duty are being reduced is By-law Tariff Item 449 (a) (1). It is under this item that many of our imports of plant, raw materials and other aids to production are granted by-law admission. Goods cleared under the Item 449 (a) (1) at a rate of 12£ per cent, ad valorem during 1956 amounted to no less than £20,000,000. and honorable senators will readily see that on those figures alone a saving in cost to importers of £1,000,000 would have resulted had the rate of duty been 7i per cent, as now proposed. As honorable senators will appreciate, this is a highly important initial step which should result in real cost-saving to many Australian industries.
A “ Summary of Alterations “ has been circulated to honourable senators showing the new rates of duty as compared with those in force under the Customs Tariff 1933-1956.
I commend the bill to honorable senators.
Debate (on motion by Senator McKenna) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Motion (by Senator Henty) proposed -
That the bill be now read a firsttime.
.- I do not wish to delaythe Senate, but merely to take this opportunity of trying to get some information. When I sought this information previously at question time, I was wiped off, and during the debate on the Appropriation Bill I was prevented from obtaining it by the operation of the “ guillotine “. I was nearly wiped off on this occasion, but luckily I got in.
I want to bring to the notice of the Senate the effect that imports from Japan are having on Australian workers. ‘ I refer, in particular, to the workers in the textile mills, the canning factories and the timber mills, to say nothing of those in the toy factories and other factories which are being affected also. I am not concerned with whether or not these effects have flowed from the Japanese Trade Agreement, but I am concerned about the cheap goods, produced in other countries under conditions of sweated labour, which are being imported into this country. I take the same line now as the Minister for Customs and Excise (Senator Henty) took when he was a private member. No doubt many honorable senators will remember how Senator Henty protested against cheap timber coming in logs and big flitches from Borneo, Malaya, and other countries, because those imports, on which small duties were imposed, were breaking down conditions in Australia and putting Australian timber mills out of production. Senator Henty protested strongly and suggested increased duties as a remedy. Now that he is Minister for Customs and Excise, I throw that suggestion back to him. He should apply, against cheap goods coming from countries using sweated labour, the remedy that he then proposed.
When the Japanese Trade Agreement was under discussion, there was a full-dress debate on the textile industry. The Government’s excuse was that cheap textiles were being imported before the agreement was made. Similarly, it was said that canned fish was being imported previously. These goods are being produced under conditions of sweated labour at one-sixth of their cost under Australian conditions.
– In Japan?
– In Japan. The result isthat our industries are going out of production and our factories are closing. In the State of Tasmania, which the Minister represents, the mayor of Devonport called a conference between interested people and the State Government in an endeavour to overcome unemployment in the town. That is one of the towns from which the fishing fleets sail. A large number of the workers there are dependent for employment on the fishing industry and the fish-canning factories. Many other workers are dependent upon the timber industry. That town is right on the Minister’s own doorstep. I asked a series of questions about the quantity of fish held in Tasmanian fish-canning factories, but I was wiped off by the Minister. He knows that considerable quantities of canned fish for which markets cannot be found are held in those factories, and he knows that employees have been dismissed because the canning of fish cannot continue unless a market is available for the fish canned. Dismissals have occurred in other parts of Australia as well as in Tasmania.
The Government asks, “ Do you not want cheap goods for the workers? “ Of course we want cheap goods for the workers, as long as the quality is there, but even though the quality is there cheap goods are of no use to the workers if they have not the money to purchase the goods. We are encountering that position now, as we encountered it in the 1920’s and 1930’s. It would be better for us all to be able to buy some goods at a reasonable price, if they were manufactured here under decent conditions, than for only some of us to be able to buy goods very cheaply. Government supporters claim that goods are being imported from sweated-labour countries for the purpose of providing cheap goods for our workers, but those imports will put a huge number of workers here out of work and they will have no money to purchase the goods. That is what is happening in the fish-canning industry.
The Minister for Customs and Excise has the ball at his feet, and, if he so desires, he can move for the protection of our industries, particularly those industries within his own State. If the Tasmanian industries were protected, hundreds more workers would be in employment. The Minister for National Development (Senator Spooner) has given us particulars of the number of unemployed in each State and the total for Australia. He has said that about 50,000 workers are drawing unemployment benefit. To find the real number of unemployed, we can treble or quadruple that number. If 50,000 people are drawing unemployment benefit, at least 150,000 would be 75 per cent, or 80 per cent, unemployed. That has resulted from goods being imported from countries which use sweated labour.
The position would not be so bad if the goods were coming from countries which have been friendly towards us, such as India and Pakistan, but the bulk of the goods is coming from people who were the most brutal and barbaric enemies that this country has had. When 1 made that statement before, Government supporters interjected and said that I was biased. I have very good cause to be biased. Some of the young men who went away and fought those barbaric enemies have been pushed out of employment in order to keep in employment the workers of that other country. I claim that that is a very un-Australian act. That is what is happening to-day. We are pushing our workers into unemployment and on to the scrap heap in order to provide employment for the factory workers in Japan. Instead of having our fish-canning factories working at full pressure, we have pushed many of our men out of work in order to keep Japanese fish-canning factories working at full pressure. Nobody can deny that that is a positive fact. Instead of having our sawmills working at full pressure, we have pushed out some of our workers so that workers in cheap labour countries may be kept in full employment. The same conditions apply in our textile mills.
If that is the policy of the Government, let Government supporters stand up and say so. Let them say that they prefer full employment in Asiatic and other countries which fought us in the past, to full employment for young Australians who went away and fought to keep this country free.
If, having returned from the war, our young men are to be pushed into unemployment, so that their former enemies may be fully employed, the Government’s interpretation of democracy is very poor indeed. I suggest to the Minister for Customs and Excise that, in his all-powerful position, he has the ball at his feet. He can ask the Tariff Board to institute inquiries into commodities being imported.
– The honorable senator knows that the Minister for Trade has jurisdiction over the Tariff Board.
– If the Minister for Customs and Excise has not more influence with the Minister for Trade than has a member of the Opposition, his influence has waned considerably. I say that it is his duty as a member of the Cabinet, especially as the State that he represents is so adversely affected, to bring the matter before the Minister for Trade in an effort to have something done about it. I am sure that the Minister for Trade is a reasonable man. He has had considerable experience over many years. If Senator Henty and other Senate Ministers were to point out to the Minister for Trade the effect that this matter is having on Tasmania, I believe that he would take appropriate action. I know that the Minister for Trade is a great battler for primary industries.
– Hear, hear!
– I mean that, and I am sure that if this matter were presented to him in the proper way by the members of the Ministry in this chamber the Minister for Trade would concede a point here and there in order to keep Australian workers in full employment. He knows perfectly well that the men who to-day are being thrown out of employment in the manufacturing industries are those who will be called upon to defend this country if another conflict occurs. Therefore, I urge the Minister for Customs and Excise to take up this matter with his colleague, in the interests of Tasmania particularly, which he represents in this chamber, and see whether the position that exists to-day can be rectified.
Question resolved in the affirmative.
Bill read a first time.
– I move -
That the bill be now read a second time.
This bill embodies certain proposed amendments to the schedule to the Customs Tariff 1933-1956, which have been in operation since 23rd May, 1957. The amendments, in the main, are designed to accord increased tariff assistance to Australian industries engaged in the production of furnishing and upholstery fabrics; piece goods being substitutes for canvas and duck, composed wholly or principally of cotton; cotton denims, jeans and drills of types ordinarily used in the manufacture of men’s and boys’ outerwear; cotton twill sheeting for use in the manufacture of bed sheeting and pillow-cases; felt polishing bobs; industrial machine driving chains with pitches from 1.65 inches to 6 inches; taximeters; motor vehicle type voltage regulators; and medicinal tablets. The bill also provides for reduced duties on certain items, the more important of which are circular type hosiery for women and girls, purse frames and base metal buckles, clasps and slides.
Specific provision is also being made for electric motors, controls and needlelights for domestic type-sewing machines, but the new duties represent little variation from the rates payable immediately prior to 23rd May. Inclusion of sewing machine motors in the tariff, however, has necessitated some redrafting of the items relating to electric motors and, where this has occurred, there has, of course, been no change made in the rates of duty.
The tariff variations I have mentioned are based on the findings of the Tariff Board. The relevant Tariff Board reports have already been tabled in this chamber.
The bill also provides for the duty free admission from any country of goods which are imported for repair or alteration, and which are intended to be returned to the country of export. This new provision replaces the present concession in the tariff schedule which applies only to second-hand goods owned by persons resident in the Territory of Papua and New Guinea.
The Government has taken note of the growing capacity of Australian industry to cater for repair work and the need of some industries, such as those manufacturing refrigerators, when seeking export markets, to offer a factory guarantee service. This amendment facilitates the entry of goods into Australia for repair and return.
Specific provision is also made in this bill for the duty-free admission from all sources of limited quantities of advertising matter designed to advertise the sale or hire of goods by persons overseas. In addition, it is proposed to make a tariff provision whereby free admission may be accorded to samples of negligible value, regardless of the country from which they are imported.
The basis of these amendments stems from Australia’s accession to the provisions of an international convention to facilitate the importation of commercial samples and advertising matter. Whilst existing Australian customs law and practice are substantially in line with the provisions of the convention, the action now proposed will demonstrate our good faith to other contracting parties to the convention and, at the same time, will do away with the need, in most cases, to collect insignificant amounts of duty on small quantities of printed advertising matter forwarded through the post to individuals in Australia. I commend the bill to honorable senators.
Debate (on motion by Senator McKenna) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Motion (by Senator Henry) proposed -
That the bill be now read a first time.
– I shall take advantage of the opportunity provided by the motion for the first reading of a measure that the Senate may not amend - the open season, as it were - to ventilate certain aspects of the St. Mary’s ammunition filling factory, because sufficient time was not provided during the consideration of the Appropriation Bill 1957-58 to enable us to discuss this subject fully.
– I rise to order. Is it in order for Senator Ashley to speak to this matter in view of the fact that earlier to-day the Leader of the Opposition (Senator McKenna) gave notice of his intention to move for the appointment of a select committee to examine all aspects of the St. Mary’s project?
The DEPUTY PRESIDENT.- It is in order for Senator Ashley to deal with the St. Mary’s project, so long as he does not <refer to the appointment of a select com.mittee
– 1 wish to direct the attention of honorable senators to the waste that has occurred at St. Mary’s, and to the amount of money that has been thrown down the drain. When approval was given by the Menzies Government to undertake this project, it was estimated to cost in all £23,200,000. It is significant that the additional amount of £3,079,000 now needed to complete the project - which does not include £800,000 for work now deleted or deferred - closely approximates the total cost of £3,200,000 for the following items: - Architects’ fixed fee, £1,250,000; contingencies, £950,000; and an escalator figure of £1,000,000 to cover projected rises in the cost of labour and materials. Therefore, in effect, provision was made, on a £20,000,000 project, for the additional expenditure amounting to £3,200,000 for supervision, contingencies and building costs.
In the latter part of last year, when insufficient money was available to complete the project, an additional amount of £4,879,000 was provided, £1,800,000 being in respect of work originally included, but now deleted or deferred. It has been emphasized in the discussions that have taken place both in this chamber and in another place that the work that has been deleted or deferred was of an urgent nature. The additional finance required over the original estimate to finish the project was £4,879,000, which, when added to the £3,200,000, gives a grand total of £8,079,000 for the supervision of a contract that was estimated to cost £20,000,000. That is the financial aspect of the St. Mary’s project, as I see it. The recent discussions on this project have centred on whether the Government carried out the advice of its experts or decided on its own initiative to build a new ammunition filling factory. I have asked whether the Government decided to erect the filling factory on the advice of the experts, but that is not nearly so important as other aspects of this project. Is it a fact that the construction of the factory has been delayed considerably?
We have heard much in this Senate regarding the Government’s defence preparations, as a result of the critical exposure of the Government by the “ Sydney Morning Herald “. The Leader of the Opposition (Senator McKenna), the Deputy Leader of the Opposition (Senator Kennelly) and other honorable senators have criticized the Government, and very weak replies have been given by the Leader of the Government (Senator O’sullivan) and other Ministers. They had no adequate answers to the charges that have been made against the Government. In 1951, the Prime Minister (Mr. Menzies) said that Australia had only three years in which to prepare for war. He said that war could break out in two years or in one year. The right honorable gentleman said -
Certainly, nobody can say with any authority that we have a day more than three years. Let me be clear. I am not prophesying war. I merely point out that there is an imminent danger of one, and that against that imminent danger we must be prepared, and in time.
If the international situation had deteriorated to the extent that the Prime Minister claimed, or if he believed completely that war was imminent, obviously it was his bounden duty as the Leader of the Government responsible for the defence of the nation to take action immediately to acquire the old filling factory at St. Mary’s. However, on Mr. Menzies’s own admission, no action was taken until four years afterwards when, according to the Prime Minister, we should have been in the middle of another war.
Like every Australian and every person who now lives in this country, I am grateful that the Prime Minister’s prophecy did not materialize. If it had, we would have been caught in a state of unpreparedness as we were under the conservative Government that was led by Mr. Menzies when war broke out in 1939. If the prognostications of Mr. Menzies had been correct, this country would have had to participate in another war without access to the means of providing the armed forces with their munitions requirements.
The Prime Minister was insincere in stating that the Government was making the major decision on an economic problem when it decided to go ahead with the erection of the new buildings at St. Mary’s. Undoubtedly, the Government was discussing a project involving the expenditure of £23,000,000. Although Major-General Legge claimed that alternative accommodation could be found for occupiers of the original buildings at a cost of £10,000,000, the Government decided to proceed with the new project which, when completed, will cost nearly £30,000,000.
The Prime Minister has refused to table the documents that will disclose the terms of the lease of the St. Mary’s buildings. As a member of the Cabinet committee of the Labour Government that arranged the transfer of the buildings, 1 want to inform the Senate that the leases were drawn up to provide for vacation of the buildings by the tenants in the event of national need. Therefore, those who are leasing the buildings under arrangements made by the Labour Government are on the basis of permissive occupancy contingent on national requirements.
When the St. Mary’s project was approved by the Government, the total estimated cost was £23,200,000, which included the cost of engineering study, £1,250,000 fixed fee for the architects, the builders’ fee, a contingency item of £950,000, and escalation figures of £1,000,000 to cover the projected rises in material and labour costs over the following two years. Honorable senators will agree with me that while those figures may be standard for people favoured with a cost plus fixed fee arrangement - and I use the term arrangement deliberately because, in the first instance, for some considerable time the work was carried out under a letter of intent - the conditions are liberal and the financial provisions are lavish. They are not usually applied to a defence project.
Even the mounting inflation flowing from this Government’s maladministration cannot provide sufficient justification for the huge increase in the cost of the building. Nobody can deny that the provisions for architects, for builders and for all concerned were lavish indeed for a defence project. Indications are that no adequate scrutiny had been made of the contract in the first place, although the contrary has been claimed in the House of Representatives and undoubtedly statements to that effect will be repeated in this chamber.
During the war, despite the fact that there was a shortage of man-power and materials, architects within the Public Service were able to design and supervise all the munitions factories, ammunition filling factories and other buildings that were necessary for the successful conduct of the war. They designed buildings for our own armed forces and those of our allies with complete satisfaction. It is rather strange that now, when this country has the same capacity, the same number of architects and the same Department of Works, which would have gained valuable experience in the erection of buildings during the last war and would be in a better position than would a firm from America or elsewhere to supervise such works, recourse has been had to an outside firm of architects.
Another strange feature of the St. Mary’s project is that two different constructing authorities have been involved. The control authority in the first place was a Melbourne firm of quantity surveyors. As was the case in regard to architects, the Government could not find a suitable firm in New South Wales and had to go to Melbourne! I understand that the original firm of quantity surveyors resigned last year as a result of disputation over the erection of ten cottages. The fact that those ten cottages cost £85,000, or £8,500 each, was criticized in the press and elsewhere. One building authority has estimated that they should have cost no more than £4,000 each.
I rely upon the auditor’s statement when I say that, in relation to not only cottages but also other buildings, although a control authority was on the job, it was impossible to obtain the individual cost of any unit. That is rather strange. I suppose I would be right in assuming that, as the firm which replaced the original control authority was employed by the architects, Stephenson and Turner, on other works, the architects would act like judge and jury towards the contractor and would not be likely to find any fault with any of the work that had been done.
I do not propose to take up the time of the Senate any longer. I regard the debates of yesterday and to-day as being in the nature of a “ grievance day “. Advantage has been taken of the opportunity for what” has been, as it were, an open season, and I hope that the Minister concerned does not mind my having a shot, too. I am glad to have had the opportunity to ventilate my criticism of the St. Mary’s project.
Question resolved in the affirmative.
Bill read a first time.
– I move -
That the bill be now read a second time. This bill forms part of the 1957-58 Budget and gives effect to the Government’s decision to impose, as from 4th September, 1957, import duties of 6id. a gallon on aviation turbine kerosene and of ls. a gallon on automotive diesel fuel used in road vehicles. Similar amendments are being made to the excise tariff and will be the subject of a separate bill.
Prior to 4th September, both commodities when imported were subject only to primage duty of 10 per cent, ad valorem. The comparative statement now being circulated to honorable senators sets out in detail the changes which have been made.
As honorable senators are aware, petrol has been subject to revenue duty for many years past. Much government revenue has been spent on airport and air route facilities, so that to this day Australia has one of the best safety records in the world. With the advent of the turbo-prop and jet aeroplanes using kerosene as fuel, the Government noted that operators of such aircraft, by reason of the change-over from petrol to a fuel which was substantially tax-free, were contributing less towards the heavy costs associated with the upkeep of airports and navigational aids.
The imposition of duty of 6+d. a gallon on aviation kerosene restores the position to approximately that existing when all airline companies used petrol as fuel. The tax is expected to yield revenue in the vicinity of £400,000 per annum. A comparable position has existed in relation to road vehicles using diesel fuel in competition with similar vehicles using petrol.
As honorable senators may know, there has been increasing use of diesel-powered vehicles in Australia, and the Government has been concerned that operators of those vehicles have made little contribution towards the cost of building and maintaining roads. The estimated revenue from the duty of ls. a gallon on diesel fuel, including excise duty, is about £2,000,000 in this financial year and £3,000,000 in a full year.
Apart from these two revenue duties, the other amendments in the bill are consequential drafting changes of an administrative nature. The bill is commended to honorable senators.
Debate (on motion by Senator 0’Flaherty) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Paltridge) read a first time.
Senator PALTRIDGE (Western Australia Minister for Shipping and Transport and Minister for Civil Aviation) [5.241. - 1 move -
That the bill be now read a second time.
This bill provides for the raising of loan moneys amounting to £8,000,000 for expenditure upon war service land settlement in the year 1957-58. It is anticipated that these loan moneys will be made available to the States in the following amounts: -
Last financial year an amount of £8,018,000 was used in capital expenditure on acquisition, development and improvement of land for subdivision and allotment to eligible exservicemen and to provide finance to settlers for working expenses and purchase of stock and equipment. Since the war service land settlement scheme was introduced, the Commonwealth has provided almost £61,000,000 for capital expenditure.
Financial assistance to all States for noncapital expenditure such as living allowances, writing down the cost of holdings, rent and interest remissions, training allowances, &c, estimated at £2,000,000 for the current financial year, is met by the Commonwealth from Consolidated Revenue. Expenditure to 30th June last for these purposes amounted to nearly £8,000,000. The current Budget includes a proposal to raise the living allowance payable to all settlers during their assistance period by 7s. 6d. per week. The Commonwealth provides the whole of the capital moneys required for expenditure under the war service land settlement scheme in the States of South Australia, Western Australia and Tasmania. Victoria and New South Wales, which are “ principal “ States, have been assisted with special loans provided by the Commonwealth on the basis of £1 for each £2 provided by the State with a maximum loan of £2,000,000 a year for each State. The current financial year is the final one of the three-year agreement on this arrangement. In the past two years, neither State has availed itself of the full amount of the special loans available. In the State of Queensland there has been no war service land settlement activity for over three years. The newly elected Country-Liberal party Government there has announced that it is considering the resumption of this work but, so far, no concrete proposals have been received by the Commonwealth Government from the Government of Queensland.
It is estimated that, in the “ agent “ States, the actual expenditure on acquisition, development and credit facilities this financial year will be -
Honorable senators will notice that this estimated expenditure of £6,933,000 exceeds by £2,052,000 the amount proposed to be raised as loan money under this bill. The excess will be met by using repayments received from expenditure in previous years.
When the Loan (War Service Land Settlement) Bill 1956 was introduced last October, a resume was given of the war service land settlement scheme to that time and 1 do not propose to recapitulate that statement. Much of the work on the large developmental projects in the “ agent “ States is coming to fruition and allotments are being made at a steady rate. In Western Australia, development in the Gairdner River area and at Enneabba included, amongst other work, the sowing with cereals and pasture of 82,000 acres last autumn. On Kangaroo Island, off South Australia, approximately 120,000 acres have been sown with pasture and a further area of approximately 50,000 acres is in various phases of development from virgin scrub Development on King Island in Bass Strait, where over 140 farms will eventuate, is well advanced, work having commenced on the last area - Reekara Estate - to provide fat lamb units. Due to excessive rains in 1956, some setbacks were encountered at Montagu Swamp in Tasmania and on Flinders Island but determined efforts are being made to overcome these setbacks.
Although some difficulties in undertakings of such magnitude as those indicated are probably unavoidable, I think that in general it is fair to say that the war service land settlement scheme has been and is a boon to approximately 8,500 ex-servicemen now in occupation of farms, who had a desire for a life on the land and who were prepared to work efficiently on their farms to achieve success. In turn, the additional rural production thus obtained has been and will continue to be a national asset. I commend the bill to honorable senators.
Debate (on motion by Senator O’Byrne) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Paltridge) read a first time.
– 1 move -
That the bill be now read a second time.
The purpose of this bill is to authorize- the payment during the current financial year of special grants amounting to £19,500,000 to South Australia, Western Australia and Tasmania. The payment of these grantswas recommended by the Commonwealth Grants Commission in its twenty-fourth report which has now been tabled. A new feature of the bill this year is that it also authorizes the payment of advances to the claimant States in the early months of 1958-59, pending the enactment of the States Grants Bill 1958.
In its twenty-fourth report the grants commission has continued to base its recommendations upon the general principle of financial need. The commission has interpreted this principle to mean that, provided the efforts made by a claimant State to raise revenue and control expenditure are reasonable by comparison with the efforts made by the non-claimant States, its special grant should be sufficient to enable it to function at a standard not appreciably below that of the non-claimant States. In applying this principle the commission compares the budget results of the claimant States with those of the non-claimant States and takes particular account of differences in- levels of expenditure and in efforts to raise revenue.
The special grants recommended each year are divided into two parts. One part represents the commission’s estimate of the State’s financial needs for the current” financial year. This part is regarded by thecommission as an advance payment which will be the subject of a final adjustment two years later when the commission has examined the audited budget results of the States for that year. The other part of the grant represents a final adjustment of the special grant paid two years earlier. The grants recommended’ by the commission for payment this year are therefore- made up as follows: -
In total the special grants, recommended for payment in 1957-58, are £1,000,000 greater than those paid to the claimant States last year. Since it is estimated that the- tax reimbursements grants to the claimant States will rise by about £3,653,000 in 1957-58, the net effect of adopting the commission’s recommendations will be to increase the total revenue grants to the claimant States by about £4,653,000, compared with those made last year. Of this total increase, South Australia will receive £1,603,000, Western Australia £2,218,000 and Tasmania £832,000. The special grants recommended by the Commonwealth Grants Commission have been adopted each year by the Commonwealth Government of the day and the Government considers that the commission’s recommendations should be adopted again this year.
As I mentioned earlier, the bill this year contains a new clause. It authorizes the payment to the claimant States next year of advances pending the authorization by the Parliament of the special grants for that year. Hitherto these monthly advances, which are based on the special grants for the preceding year, have been made from the Treasurer’s Advance. They now represent a substantial amount and it seems desirable that in future they should be specifically authorized by the Parliament. A clause conferring this authority has, therefore, been included in the bill, which I commend to honorable senators.
Debate (on motion by Senator McKenna) adjourned.
Debate resumed from 31st October (vide page 1029), on motion by Senator Spooner -
That the- bill be now read a second time-.
– This bill amends the Western Australia Grant (Water Supply) Act 1948, which was brought down to subsidize the Western Australian Government, on a £l-for-£l basis, so that’ water might be conveyed to the- eastern gold-fields; and to certain other parts of the State. The work was not proceeded’ with- at the time” because the Western Australian Government had difficulty in obtaining man-power and materials. The bill was later amended to increase the grant by the Commonwealth Government to a basis of £2 for each £1 expended by the State. Therefore, the bill before us is the second brought down to amend the original act. It also increases the total amount of grant payable by the Commonwealth.
The original legislation was introduced primarily as a result of knowledge gained during the war years. From a defence point of view alone, the Commonwealth must take a prominent part in any move to populate the huge area covered by the scheme. Western Australia has a special case for assistance. The bill will be the means of providing water for the goldfields, for some of the agricultural areas, and for some of the southern towns. I Commend it to honorable senators and trust that it will do everything that is expected of it, not only in providing water, but also in enticing people to settle in these areas, for the ultimate benefit of the whole State. Now that the Commonwealth has seen fit to increase its financial assistance, I trust that the work will proceed speedily and we shall shortly have evidence that the money is being spent in the way envisaged.
– -I was very pleased indeed to hear Senator Kennelly say that the Opposition supported this measure. Water plays a vital part in the development of Western Australia. The rich coastal areas on the western side of the Darling Range have a rainfall which varies between 30 inches and 50 inches. In that area, of some 13,000,000 acres, most of Western Australia’s development in the last half-century has taken place. However, most of the State’s wheat belt lies on the eastern side of the Darling Range, and it is essential that the water which now flows down to the sea on the western side should be diverted for use on the eastern side, which has a rainfall varying between 10 inches and 20 inches. It is ideal for wheat and sheep, but if one sinks a well one finds that the water is brackish. As a consequence, the people living there obtain their water from the Darling Range reservoirs.
The Government of Western Australia approached the Commonwealth Government in 1946 with a view to obtaining a subsidy, on a £1 -for-£1 basis, for the development of water supply in these .areas, at a total cost of about £10,000,000. The State was to raise the wall of the Mundaring Weir, as well as that of the Wellington Weir and would then, on a 50^50 basis with the Commonwealth Government, go ahead with the job of providing water lines to the main towns in the wheat belt areas. In 1946, Narrogin, with a population of some 3,500, suffered such severe water restrictions that in the months before April the townspeople were allowed only 6 gallons per person each day. From April onward, they were allowed no water at all.
Sitting suspended from 5.45 to 8 p.m.
– I ask for leave to continue my remarks at a later hour.
Leave granted; debate adjourned.
Motion (by Senator Paltridge) - by leave - agreed to -
That leave be given to bring in a bill for an act relating to a proposed agreement between the Commonwealth, the Australian National Airlines Commission ‘and certain companies in connexion with airline services, and to amend the Civil Aviation Agreement Act 1952.
Bill presented, and read a first time.
Standing Orders suspended.
– I move -
That the bill be now read a second time.
The purpose of this bill is to approve an agreement supplementary to the Civil Aviation Agreement 1952. The aim of the 1952 act was to keep two major trunk route operators - Australian National Airways Proprietary Limited and Trans-Australia Airlines - in vigorous and fair competition and to ensure the efficient and economical operation of air services within Australia. To this end the agreement gave A.N .A. substantial assistance in the form of guaranteed loans for purchasing new equipment, reduced air route charges, shared mails equally, gave A.N.A. access to Government business and provided for the rationalization of air services and related matters. Notwithstanding these measures, it had become apparent early in 1957 that the financial position of the private airlines, and especially that of A.N. A., had deteriorated to the point where their continued existence was at stake.
The Government’s policy to meet this crisis was made known on a nondiscriminatory basis, not only to the A.N.A. board, but to all groups which were interested in the purchase of A.N.A. This policy in the case of trunk route operations - with which this legislation is principally concerned - is the same in concept as that embodied in the 1952 Civil Aviation Agreement, that of providing fair and equal conditions of competition for two major airlines. The Government indicated that the private airlines concerned would be given continued access to Government mail and business and assistance for re-equipment purposes, and that it was proposed to eliminate the wasteful effects of uneconomic competition on trunk routes by strengthening the rationalization provisions of the Civil Aviation Agreement. Under these conditions the Government believed - and still believes - that the trunk route operators will be able to make profits and yet provide at the same time the efficient type of service for which the Australian airlines are noted.
I would now like to review very briefly the protracted negotiations concerning the future of A.N.A. At first these negotiations centered around a series of proposals submitted by the A.N.A. board for the formation of a holding company. Initially, Mr. Haddy, chairman of A.N.A., suggested as a basis for negotiation a holding company, having an issued capital of £15,000,000 - T.A.A. receiving £7,000,000 in shares; A.N.A. shareholders receiving £6,500,000, half in shares and half cash; and other operators up to £2,000,000. It should be clearly understood that whereas T.A.A.’s assets have a net worth of at least £7,000,000, A.N.A.’s assets were encumbered to the extent of £3,600,000 and had a net worth of between £3,000,000 and £3,500,000, so that the relative shareholdings in the holding company proposed by Mr, Haddy bore no relation whatsoever to the net worth of the assets of the two undertakings. Subsequently the A.N.A. board submitted a revised proposal under which the holding company would have an issued capital of £12,000,000, of which A.N.A.’s holding would be £4,500,000 and T.A.A.’s £5,500,000, with the proviso that A.N.A.’s shareholders would withdraw properties and investments having a current value estimated at £2,000,000 and that tax in respect of such investments estimated at £500,000 would be remitted.
It has already been indicated in Parliament that these proposals were rejected and there were quite decisive reasons why this should be the case. The concept of a holding company was quite inconsistent with the Government’s philosophy of two major operators competing on trunk routes under equal conditions and would inevitably have led to a monopoly.
Quite apart from these fundamental objections, the financial basis of the proposals was in any case unacceptable because the level of capitalization proposed was too high to achieve anything like the A.N.A. target of 8 per cent, return on shareholders’ funds, and the respective shareholdings proposed by the A.N.A. board were heavily weighted in A.N.A.’s favour and involved the A.N.A. shareholders withdrawing some £2,000,000 worth of assets from the air transport industry.
Following rejection of the holding company the A.N.A. board indicated that its shareholders were unwilling to accept the measures which the Government had made known to the board, and subsequently announced in its policy review. It will be recalled that these measures included the subsidization of unprofitable DC3 services to rural areas and the granting of assistance for replacing the DC3 aircraft. The A.N.A. board then indicated that it would proceed to liquidate unless a satisfactory offer were made for the purchase of the shares in A.N.A. by any of the various groups which had made overtures for this purpose.
The position was complicated because A.N.A. had in the month of June defaulted in the repayment of the loans which the Commonwealth had guaranteed under the 1952 Civil Aviation Agreement. I will shortly give details of these loans when considering the clauses of the bill.
In order to maintain essential air services while A.N.A.’s shareholders completed their arrangements to either liquidate or sell their shares, the Government facilitated an extension of the time for paying the instalments due under the loans which it had guaranteed. Of the several groups which made overtures for the purchase of the shares only Ansett Transport Industries Limited was prepared to proceed on the basis of the Government’s declared policy of subsidizing unprofitable feeder services, a strengthening of the rationalization provisions of the agreement and, in appropriate circumstances, granting financial assistance in the form of guaranteed loans for the purpose of reequipment.
There were numerous reasons, of course, why a sale of the shares of A.N.A. was preferable to a complete liquidation of the company. The latter would have involved the disruption of essential air services, unemployment of many of A.N.A.’s skilled and loyal staff of some 3,500, and the extinction of a great airline which had pioneered air services in Australia and had over the years made a vital contribution to the development of air transport in this country. Following detailed negotiations between Ansett Transport Industries Limited and A.N .A., on which the Government’s stated policy had an important bearing, the A.N.A. board finally decided on behalf of its shareholders to sell all the issued shares to Ansett Transport Industries Limited for the sum of £3,300,000. The sale agreement was signed on 3rd October and the new Ansett-nominated board assumed control on that date.
I should like to emphasize that the new civil aviation agreement is fully supported by both Ansett Transport Industries Limited and the Australian National Airlines Commission, and suggest that this is perhaps the best indication that the Government’s policy as embodied in this agreement is in the best possible interests of both trunk route operators and of the air transport industry as a whole.
I turn now to the detailed provisions of the proposed legislation. Briefly, the purpose of the bill is threefold -
The first clause of the bill requiring comment is clause 4, which empowers the Australian National Airlines Commission to enter into the new agreement and to carry out its obligations and to avail itself of the rights conferred under the agreement. The commission was not a party to the 1952 agreement but is required by section 5 of the 1952 act to do everything which the agreement provides that the commission will do. Accordingly, while effectively bound, the commission was not a voluntary party to the 1952 agreement. On the other hand, the commission not only has no objection to the new agreement, but, on the contrary, has indicated its willingness to become a voluntary party provided Parliament empowers it to do so.
Clause 5 of the bill is necessary to obtain parliamentary approval to guarantee amounts payable under existing loans granted in pursuance of clause 3 of the 1952 Civil Aviation Agreement which, following default by A.N.A., are to be rearranged. Since 1952 the Commonwealth has guaranteed three loans to A.N.A. totalling £4,350,000 to purchase two DC6 and four DC6B aircraft.
The first loan from the Commonwealth Bank was a sum of £1,500,000, and as at 30th June, 1957, a balance of £600,000 plus interest for the preceding six months was outstanding. The second loan, also from the Commonwealth Bank, was a sum of £1,500,000, and as at 30th June, 1957, a balance of £1,019,000 plus interest for the preceding six months was outstanding. The third loan from the Australian Mutual Provident Society was a sum of £1,350,000, and as at 15th June, 1957, the full amount of the loan plus interest for the preceding six months was outstanding.
Originally the three loans were repayable over a period of five years with the principal to be reduced by ten equal instalments at six-monthly intervals. A.N.A. defaulted in the three instalments totalling £435,000, plus interest, due in June, 1957. During the negotiations for the sale of A.N.A. the
Commonwealth facilitated a period of grace to enable A.N.A. to determine its future. It will be appreciated that by purchasing all the shares in A.N.A., Ansett Transport Industries Ltd. automatically assumed the obligations as well as the benefits of A.N.A. under the Civil Aviation Agreement. Before concluding its purchase, Ansett Transport Industries Ltd. therefore entered into detailed negotiations with the Government to obtain a re-arrangement of the loans in default, to allow a reasonable period to discharge the outstanding obligations it thereby assumed. Briefly, Ansett Transport Industries Ltd. sought the following rearrangement of the loans: - It requested that the Australian Mutual Provident Society loan of £1,350,000 and the two Commonwealth Bank loans, of which balances of £600,000 and £1,019,000 are outstanding, together in each case with accrued interest, should be re-financed over a five-year period commencing on the date of execution of the agreement for the purchase of all the shares in A.N.A. Proprietary Limited, and that the first instalments in repayment of these loans as re-financed should be due and payable, together with current interest, six months after the date of execution of that agreement.
On Ansett agreeing to execute the new agreement in the schedule to the bill, which, as indicated, gives effect to the Government’s policy and, in particular, preserves the philosophy underlying the Civil Aviation Agreement 1952, it was considered proper and reasonable that the Commonwealth should facilitate the re-arrangement of the loans on this basis, particularly as the security for the loans substantially exceeds the balance still outstanding. Clause 5 of the bill seeks parliamentary authority to guarantee the loans as re-arranged.
The schedule to the bill sets forth the proposed supplementary agreement. The parties are the Commonwealth, the commission, A.N.A. Proprietary Limited, Ansett Transport Industries Limited and Ansett Airways Proprietary Limited. The recitals indicate the relation of this agreement to the 1952 agreement: that Ansett Transport Industries Limited has purchased all the shares in A.N.A. and controls Ansett Airways Proprietary Limited; that the parties desire to establish a rationalization committee to supplement the rationalization machinery under the old agreement and, in particular, to state the Commonwealth’s policy of two and only two trunk route operators, one being the commission, each capable of effective competition with the other.
Clause 1 of the agreement substantially extends the scope of the routes which are subject to rationalization. The 1952 agreement only relates to routes on which T.A.A. and A.N.A. were competing in 1952. It does not extend to routes developed thereafter or, of course, to routes on which T.A.A. competes only with Ansett Transport Industries Limited and its subsidiaries other than A.N.A. This clause extends rationalization to all competitive routes, namely, routes on which the commission and any one airline in which Ansett Transport Industries limited has a controlling interest - including A.N.A. - operate or propose to operate.
Clause 3 of the agreement establishes a rationalization committee comprising a coordinator nominated by the Minister for Civil Aviation and two additional members nominated by the commission and the company respectively. Clause 4 sets out in some detail the functions of the proposed committee. If the commission and the company are unable to agree on questions of routes, fares and freights, time-tables and other related questions, the matter in dispute may be referred to the committee and if, after further consideration, the airlines are still unable to agree the co-ordinator decides the matter. His decision is binding but either airline, if still dissatisfied, may appeal to the independent chairman, Sir John Latham, in which event the coordinator will furnish the reason for his decision in writing to the chairman. There are several reasons for this supplementary rationalization machinery. The present machinery is unsuitable for obtaining daytoday decisions on rationalization matters and, in some respects, unsuitable for broad policy decisions since this type of issue has to be considered in the light of overall air transport policy and no procedure existed for placing such policy considerations before the chairman.
It is believed that the supplementary machinery will cure both these defects while retaining, as I believe is essential, a completely impartial chairman to decide issues after all other avenues of agreement have been exhausted. The informal coordination committee can meet at very short notice on matters of detail which are in their cumulative effect of great importance but would not justify separate references to the chairman and, indeed, in practice would not be referred to him, but could simply snowball into uneconomic operations. I refer to such matters as the take-off time of a particular flight and the increase of frequencies or the introduction of an additional stopping place on a particular route. Where major policy issues are involved the chairman will now have the advantage of detailed reasons for the co-ordinator’s decision, which will no doubt survey national civil aviation policy considerations as well as the views of the partisan operators.
I would like to take this opportunity of placing on record recognition of the valuable services already rendered by Sir John as chairman and to express the appreciation of the Government, and indeed of all parties, for Sir John’s advice that he will continue to be available not only for the purposes of the 1952 agreement but also for the new agreement.
Clause 5 of the agreement requires Ansett Airways to cease operation of airline services and is necessary to achieve the Government’s policy of two and only two major trunk route operators, one being the commission. A period of twenty-five months is allowed for the complete merging of Ansett-A.N.A. operations since the terms of the sale of A.N.A. extend over a period of 24 months. It is believed, however, that complete integration should be achieved much sooner.
Under clause 6 of the agreement, Ansett Transport Industries Limited undertakes to ensure that airlines in which it has a controlling interest will not act inconsistently with the objects of the agreement.
Clause 7 of the agreement deals with past omissions by Australian National Airways Proprietary Limited. The object of this clause is to preserve the right of A.N.A. to obtain, in certain circumstances, further financial assistance. During the first ten years of the 1952 agreement, A.N.A. is entitled to further guaranteed loans provided such loans are necessary to achieve heavy equipment parity with the commission, and provided also that the balance outstanding at any time does not exceed £4,000,000. However, the Commonwealth is discharged from the obligation to facilitate any further loans if there has been a default on the part of A.N.A. This clause has the effect of removing any disqualification on Ansett Transport Industries Limited for eligibility for further loans which could have resulted from the default of the previous owners of A.N.A.
Finally, it will be noted that nothing in the agreement requires or permits operators to act inconsistently with the Air Navigation Act and Regulations - clause 8 - and that the period of agreement has the same duration as the Civil Aviation Agreement of 1952 and, therefore, will continue in force until October, 1957 - clause 9.
This legislation has, I think, the distinct advantage of being accepted quite voluntarily by all the airlines which are parties to it - T.A.A., A.N.A. and Ansett - as being not only in the their best interests but also in the best interests of the industry as a whole. In these circumstances the Government believes it should bring muchneeded stability to air transport and, in the long term, assist greatly in the promotion of a self-sufficient industry. I commend the bill to honorable senators for favorable consideration.
Debate (on motion by Senator McKenna) adjourned.
Motion (by Senator Paltridge) - by leave - agreed to -
That leave be given to bring in a bill for an act to amend the Air Navigation (Charges) Act 1952.
Bill presented, and read a first time.
Standing Orders suspended.
– I move -
That the bill be now read a second time.
The main purpose of this bill is to increase by 10 per cent, the charges payable for the use by aircraft of aerodromes, air route and airway facilities, meteorological services and search and rescue services provided by the Commonwealth. Air route charges were first introduced in 1947, and the present scale was introduced by the Air Navigation (Charges) Act 1952, which this bill amends. Under present conditions the 10 per cent, increase will yield an additional £50,000 in revenue, and increase total recovery to some £550,000 per annum. It is proposed that the increase in charges shall become effective from 1st January, 1958. The increase is a relatively modest one and, spread over the entire industry, will not have any severe effects. However, the legislation is important because it re-affirms the objective of achieving a more selfsupporting air transport industry. It is proposed to keep the scale of charges under periodical review with the object of progressively reducing the gap between the cost of providing facilities and the revenue obtained from the users.
The opportunity is taken to amend the schedules of the act to provide for a number of situations not contemplated when the 1952 legislation was enacted, and also to bring up to date the table of flights contained in the First Schedule to the act. Broadly, charges for airline operations are calculated by multiplying the unit rating of an aircraft, which is based on its all-up weight, by the factor specified in the act for the flight in question. The factor has been calculated having regard to the extent of facilities, including aerodromes, provided along the route of the flight.
Flights for which a factor is specified have been increased from 219 to 310 to cover all flights at present being operated by regular public transport services. In this connexion I should mention a significant change in the regulation-making power. Section 3 of the 1952 act authorized regulations amending the schedules to the act. In the light of five years’ experience, there is no longer any justification for vesting such wide powers in the executive. The power to amend the schedules by regulation is therefore repealed, but if a new route is developed the regulations may specify the factor applicable to a flight over that route. In view of the comprehensive coverage of 310 flights in the new table, this power to specify the factor for new flights is a very narrow one indeed.
I shall now mention briefly other minor amendments. Provisions are added in clauses 4 and 7 of the bill to permit a charge where a transport aircraft lands and takes off from the same aerodrome without an intermediate stopping place. Airline operators frequently conduct “ sightseeing “ flights over capital cities. Such flights will now be the subject of charges. The present act authorizes a refund of charges where this is considered “ just, having regard to the nature, locality or extent of the operations of the aircraft “. Typical cases for exemption in whole or in part would be aircraft operated for search and rescue operations or other humanitarian purposes or in remote areas where few if any facilities are provided by the Commonwealth. Clauses 9 and 10 of the bill authorize remission in advance as well as reimbursement of charges actually paid, and thus provide a more convenient procedure for reducing or waiving charges where the circumstances are appropriate. Finally, in the case of charter, aerial work and private operators who usually pay charges in advance on an annual basis, clause 11 ensures that the charge is not increased until the expiry of the current period for which a charge has already been paid. I commend the bill for your consideration.
Debate (on motion by Senator McKenna) adjourned.
Debate resumed from 12th November (vide page 1 145), on motion by Senator Spooner -
That the bill be now read a second time.
– In approaching this particular measure, I express appreciation of the fact that the Government has seen fit to circulate a memorandum prepared by the Commissioner of Taxation, explaining in great detail the provisions that are before the Senate. It is an excellent practice that has been adopted by the Commissioner for Taxation down the years. I take this opportunity to pay tribute to the commissioner for the great consideration he has shown to members of the Parliament in the matter, and I hope that his very good example will be followed by other departmental heads and by Ministers in this chamber. in respect of each measure that comes before the Senate, at the committee stage the responsible Minister is supplied with notes dealing in great detail with each clause of the bill, but they are for his use only in ihe great majority of cases. I believe a Minister might find that it would suit his purpose and facilitate an understanding of the measure if he were to follow the practice of making available to all honorable senators the notes that have been compiled by departmental officers, lt would be an advantage to all of us and the Minister might well find that it would be a convenience to him.
In considering estate duties, there comes to one’s mind the old saying, “ You can’t take it with you when you die “. It is equally true that, having regard to Commonwealth and State legislation, governments in Australia will take a fairly substantial slice of what you leave, if any. The Commonwealth slice is covered by the conditions of this bill and its allied measure which imposes the rates of duty. As a tax, an estate duty is purely a revenue-producing item. I cannot see that it serves any other purpose or is designed for any other purpose. Last year, estate duties yielded to the Commonwealth £12,700,000. In the current financial year, the yield is expected to be £14,200,000, which is a reasonably substantial increases. It is interesting to note that the rates that are applicable in estate duty range from 3 per cent, on estates up to £10,000, to £27 18s. per cent, in respect of estates of £500,000 or more. That runs to a very high level.
The purposes of this amending measure now before the Senate in relation to the Estate Duty Assessment Act are threefold. The first relates to the impact upon duty of gifts under a will or testamentary disposition to children. At present, there are certain exemptions from duty in respect of gifts that are made to children. There is a lower rate up to £10,000 for gifts to children and certain other dependants, including widows. As has been pointed Out by the Minister quite properly in his secondreading speech, the exemption and concession apply in respect only of children of the marriage of the testator. This measure will place other types of children - adopted children, step-children and ex-nuptial children - who are dependent on the estate of the testator, in no worse a position than the children of the marriage itself. That, I think, is a very appropriate and humane provision, and one to which the Opposition offers no objection.
The second main purpose of the amending bill is to exempt from estate duty testamentary dispositions in favour of certain new institutions. They include the National Trust in each State, the Australian Council for Education Research, public libraries which are to be included for the first time, and hospitals which are not conducted for the profit of individuals. I believe it very proper that bodies of that type, which are akin to bodies that are already exempted in the act, should be included in this measure. It is particularly appropriate that two of the new classes should be added, and I refer to public libraries and hospitals which are not conducted for the profit of individuals. Fortunately, hospitals of that sort are scattered throughout Australia. Many are conducted by denominational bodies and many by lay organizations, but all of them do magnificent work and make a splendid contribution to Australian hospital facilities. All of them render a standard of service that is very high. I am delighted to note that the Government has provided for exemption from estate duty of gifts that may be made to bodies of that type by testamentary disposition. The Opposition favours that provision which is the second main purpose of the bill.
Coming to the third and final point, I believe belated justice has been done by all governments in Australia to the situation where a testator dies and his estate passes to another person who, in turn, dies soon after. Under the provisions of the act, duty is levied on the full estate on both occasions. Of course, in those circumstances, an estate that can be twice mulct in estate duty in a short time would have terrific inroads made into its substance, and great injustice would be done. That has been the position.
In these days, when there is a great deal of travel by husbands and wives, when travel is speedy and accidents can happen easily, some provision should be made to grant relief from the impact of an imposition such as I have mentioned. Often an accident in which both partners to a marriage are involved will result in the death of both husband and wife within a short time of each other. Relief from the imposition of an estate duty twice in quick successon is highly desirable.
The Government has made an approach to that problem, and has dealt with the situation where the death of the successor takes place within five years of the original testamentary disposition. Relief is to be granted by falling rates of duty over the period of five years. It is provided that if death takes place in the first year after the first testamentory disposition, 50 per cent, of the tax that otherwise would be payable will be remitted in the second case. After the second year, the remission will be 40 per cent., and if death takes place in the third year, the remission will be 30 per cent. The remissions will be progressive until, in the fifth year, the rebate will amount to 10 per cent. A series of highly complicated and technical clauses have been incorporated in the bill to give effect to those provisions. The situation is necessarily technical and complex, and there is a complete explanation in the memorandum that the Commissioner of Taxation has circulated for any one who wishes to pursue the technicalities of the machinery clauses that are essential to effectuate the purpose of the Government.
The Opposition not only does not oppose the measure but supports it quite cordially. In our view, the three main purposes of the bill are proper and just; they grant relief^ We do not propose to interpose any difficulty in the passage of the: legislation.
– I rise to welcome and support this legislation. I commend to the Senate the speech of the Leader of the Opposition (Senator McKenna) in which was accurately put to honorable senators the salient features of this small but important bill. It is another instalment of the humane and understanding legislation that was foreshadowed in the recent Budget. Some of the ameliorations provided for in the Budget may not appear to be large in terms of money, but this bill contains quite a number of very important concessions in relation to estate duty.
As the Leader of the Opposition has pointed out, the property which passes to the adopted child, the stepchild, and the ex-nuptial child, will not be subject to a greater burden of duty than property which passes to a child of the marriage of a deceased person. It is necessary to point’ out to the Senate that, in the past, under the federal estate duty system, a widow, widower and children have paid duty of a lesser amount than have what may be called collaterals or strangers in blood. This bill includes a larger number of people under the principle governing the payment of lower estate duty.
Although the measure focuses attention on federal recognition of the status of the adopted child, I feel that there is still more scope in federal legislation to recognize the status of the adopted child. With the consent of the Senate, I shall develop that point in one or two directions just as a matter of interest.. I shall not anticipate legislation that is about to come before this chamber, but let me mention in passing that a recognition of the status of the adopted child is being introduced: in legislation covering the payment of gift duty and income tax. In State legislation, a determined effort is being made to recognize the adopted child. For example, the Adoption of Children Act of South Australia provides- -
The adopted child shall for all purposes civil and criminal and as. regards all legal and equitable liabilities benefits privileges- and consequences of the natural relation of parent and. child be deemed in law to be the child born in lawful wedlock of the adopting parent.
That is one important step forward which is not anticipated in the legislation that is emanating from the recent federal Budget. For the benefit of the Senate, I state in passing that section 94 of the Commonwealth Life Assurance Act, which relates to family insurance policies and which provides protection for children, could be extended to the adopted child.
I acclaim, nevertheless, with very great respect and appreciation this imaginative part of the legislation relating to adopted children. It is the aim nowadays to bring the adopted child right into the care of the adopting parents. As we well know, since the last war a number of refugee children whose parents have been lost have come to this country. I think particularly of the orphans who arrived recently from Hungary. 1 hope that many of those children have already been adopted or will be adopted. Consequently, it is only right that, when they succeed to benefits, as they are bound to in the course of time, from the estates of their adopting parents, they should not be placed in a disadvantageous position.
I compliment the Government also, as did the Leader of the Opposition, upon the imaginative conditions that are now to apply to bequests to hospitals. At one time, a hospital paid full estate duty and the balance of the estate attracted a higher rate of duty because that part of the estate which went to the hospital was included when the rate was assessed. The concession that is now to be made will also have the benefit of reducing the rate of duty on the balance of the estate. The same thing will apply to bequests to public libraries. I compliment the Treasurer (Sir Arthur Fadden) upon the interest he has shown in regard to national trusts, in particular the National Trust of South Australia, which is doing really excellent work.
I feel that the major part of the bill is that which relates to relief in the matter of quick successions. The Leader of the Opposition went into some detail on this matter. I compliment the Government upon this aspect of the legislation, too, because in effect it has followed the excellent legislation that has been in force in South Australia for some years. It was my privilege a year ago to submit to the Treasurer that the South Australian legistlation should be followed, and I am pleased to note that it has been followed as closely as possible.. In. South Australia, death duties are dealt with on the principle of succession duty, but in the federal sphere they are dealt with on the principle of. estate duty..
A genuine attempt has been made to preserve- the inheritance which virtually would be decimated in the case of. the deaths of, say,, a father and a mother being close together, when a large slice would, be taken from both estates for the payment of duty.
I feel that honorable: senators who have influence with State Treasurers could point the way to the need for’ improvements in State legislation. It is well known that, particularly in New South Wales, death duties are unusually severe on the State level, and I feel that this idea that has now been incorporated into Commonwealth legislation could with great advantage be applied to death duty legislation throughout the Commonwealth. While I am on that point, I pose this question: Has not the time arrived when there should be one collecting authority in Australia for death duties? Admittedly, the States have their method of assessment and the Commonwealth has its method, but, after all is said and done, only one person dies in each case and only one lot of assets is left. Even though it might be wise to preserve the rights of the States and the Commonwealth according to their own fiscal policies, surely there could be some way of rationalizing the collection. I commend that suggestion to the Prime Minister and the Premiers for discussion at some future Premiers conference.
I conclude by referring to the excellent notes prepared by the department. I refer particularly to page 7 of those notes where, after a learned discussion on the technical effects of the avoidance of quick successions, this paragraph appears -
In practice the estate duty return forms lodged by the administrators of deceased estates will be redesigned so- as to- enable applications to be made in the returns in appropriate cases for quick succession rebates.
I ask the Minister to present my compliments to the department and to request that these forms be redesigned: immediately and that the regulations- embodying the forms come before the Senate at an early date. In the past, the tendency has been for this Parliament to alter’ a law so as to give certain relief, but for the redesigning of the necessary forms not to be completed, sometimes for a year or so after the law has been altered. I commend to the Minister the necessity for redesigning these forms at a very early date.
.- 1 sincerely regret that, against the background of the present fiscal policies of the States and the Commonwealth, this bill dealing with estate duty has not excited more attention in the Senate. It is well known that the Labour party feels that the estates of deceased persons - the capitalists, as they call them - should be subjected to heavy death duties. I said, recently that estate duty is one of the early capital taxes that is still sought to be justified - mainly, I think, because the deceased possessor of the property is not in a position to hit back.
We have had a federal estate duty since the first world war. All of the States have imposed death duties. Most of the States in the last few years have increased the rates at which they impose death duties, in an endeavour, I assume, to keep pace with the ever-rising inflation with which they have to contend. Speaking in terms of finance, the revenue derived from estate duty is only a morsel. Last year, it represented a contribution to the Commonwealth Treasury of only £12,712,151 17s. 5d., out of a total taxation revenue of £1,095,000,000. The value of the duty must be considered also in the light of the fact that last year Commonwealth tax reimbursements to the States amounted to £244,000,000 and this year to £266,000,000. It is a farcical situation when the Commonwealth levies an estate duty, competing with the death duties imposed by the States.
The estate duty is a matter of vital concern to people who strive to obtain a means of independence for their families. I am not a tory, nor do I come from a wealthy family, but I respect and admire the struggle of some men to accumulate a few assets that will be a springboard for the independence of their children.
In 1915, for instance, when the income tax field was occupied by the States and the Commonwealth was faced with the problem of financing a great war, a separate Commonwealth estate duty was sensible and proper. It might have continued to be so until the beginning of the second world war, but after the Commonwealth arrogated to itself the whole of the income tax field, having already appropriated to itself, contrary to the spirit of the Constitution, the whole of the revenue derived from customs duties, excise duties and sales tax, Commonwealth estate duty became something farcical.
Honorable senators stand here and support a Government that maintains this form of taxation in competition with the States. We go to our party branches and hear representations from the members of our party for the remission of this tax, and very rarely do we hear those representations without sympathy and understanding. The time must come when we shall have to translate our sympathy into parliamentary action. I hope that what we say in these debates will be hearkened to and transmitted to other quarters. I make a very earnest plea for a re-orientation of our outlook on this tax.
I wonder whether the Government realizes the vexation to beneficiaries of a deceased person’s estate to which these taxes give rise. First of all, a State taxation commissioner probes every aspect of the estate. Then, since land valuers now have no occupation in the federal sphere other than to value estates for the purposes of estate duty and gift duty, they try to justify their existence by setting their valuation at a level slightly above that taken by the State taxation commissioner, but making the margin so small as to render objection to the valuation not really a worthwhile proposition. In effect, they create a margin of irritation. This double taxation is extremely irritating. From the point of view of public finance, it gets us nowhere. As I have said, the Commonwealth collects about £12,700,000 in estate duty and pays to the States £244,000,000 in tax reimbursements.
I am grateful to Senator Laught for his speech. It was a speech expressing his gratitude to the Government. I wish that my outlook on the matter was such that I could utter expressions of gratitude also, but I am completely adamant in my opposition to this tax. A farm that was worth £10,000 in 1940 is now worth at least £25,000, because of the inflation that has taken place. Despite the difference in value, it is still the same farm and yields the same livelihood to the widow of the owner, yet, by reason of the rise in value due to inflation, the rate at which estate duty is applied now is vastly higher than the rate that would have been applicable at the time when the rates were fixed. In other words, there has been no adjustment of the rate of duty on these estates since this inflationary spiral became evident. We do not hesitate to raise the salaries of important public officials so that they will accord with present living costs. It seems to me just as important to adjust the percentage of the actual value of an asset on which duty is payable, so that the liability will be akin to that borne in pre-war days, before inflation of this kind was experienced. Clearly, an estate which was previously worth £10,000, and is now worth £25,000 is taxed much more severely if the same rate of duty is applied to the greater figure. I speak subject to correction when I say that in the period to which I refer the rates have not been adjusted. I know that in the last two or three years the exemption figure has been raised from £2,000 to £5,000, but estates not in that category must suffer simply because the owner died during an inflationary period not envisaged when the rates were fixed.
Coming now to the specific terms of the bill, I acknowledge, with due appreciation, the fact that the lesser family rates are now to be applicable to the adopted child also. For the life of me, I do not know why the Commonwealth persists obstinately in refusing to place an adopted child on exactly the same basis as a natural child. All the State legislatures within whose province this matter falls have said in unqualified terms that, for the purpose of succession to property, and all other purposes, a child once adopted legally is in all respects to be regarded as one’s natural child. I cannot understand why, time and time again, we have to penetrate the obstinate barrier which exists in Canberra against applying that interpretation to all federal legislation.
I have already directed the attention of the Treasurer (Sir Arthur Fadden) to the case of an ex-nuptial child in Tasmania who was brought up in the household of his parents. At the age of 45, after the man concerned had earned the farm which he inherited, he was taxed at the same rate as if he were a stranger. I am extremely grateful to the Government for ensuring, in this bill, that there shall be no repetition of that kind of injustice.
Moving on to the other aspects of the bill, I cannot help wondering what relationship the author of the provisions as to quick succession bore to Scrooge. Here we have a situation in which property becomes subject to two imposts of federal duty by reason, first, of the death of the owner, called the “ predecessor “ and, secondly, of the death within a period of five years of the person to whom the property has devolved, called the “ successor “. We ought not to forget that such a property would have already borne State death duty twice, therefore the relief offered by this bill to the successor on the occasion of the second death is exceedingly paltry. If the death of the second deceased takes place within twelve months the successor is liable for 50 per cent, of the duty ordinarily payable on the lesser of the two estates.
We are so mindful of garnering death duty in these circumstances that even the notional property - the property that is not included in the testamentary estate - is drawn in for assessment. For instance, if, within three years of my death I make a gift of the domestic dwelling to my wife she pays death duty on it, despite the fact that it has been given to her in my lifetime. When she dies it comes in again for duty. If she dies within three years a rebate of 50 per cent, is paid; if within two years a rebate of 40 per cent; if within three years, a rebate of 30 per cent.; if within four years, a rebate of 20 per cent.; and if within five years, 10 per cent. - of the duty on the lesser of the two estates. That is an extremely mean contribution to a very unjust set of circumstances, and I hope none of us will be in the slightest degree satisfied with it. I hope that we shall all press for a greater measure of justice.
I acknowledge everything that has been said about the helpful nature of the memorandum, but I must say that pressure of work has not enabled me to understand it fully in the time available. I do not know for how long the Senate is to do its business in this way. I hope the Minister will correct me if I am wrong, but page five of the memorandum, referring to subsection (2.) indicates that the net duty payable in respect of an estate is the gross duty less any rebate which may be allowed on account of gift duty. I have the impression that here the nips have been put in with a little poison on the point. Those who framed the Gift Duty Assessment Act have showed at least some mercy. For instance, the gift duty on a property worth £10,000 would be £300. If I die within three years, and that property becomes subject to a State duty amounting to say, £700, one is permitted to deduct the gift duty from the death duty payable. But when it comes to deciding which of the lesser of the two death duties, that payable on the estate of the predecessor or that payable on the estate of the successor, is to be apportioned under this system of 50 per cent, spread over five years, care is taken to ensure that the legatee has not the advantage, in connexion with the estate of the predecessor, of the £700, which is really the property duty that has been paid - that is, the estate duty - plus the death duty. Under this bill, care is taken to exclude that benefit of the gift duty from this rebate within the five years. For that reason, I receive the amendment with only modified rapture.
– I do not think anybody could make a more thoughtful analysis of this measure at such short notice than Senator Wright. I agree especially with his submissions in connexion with the Commonwealth’s exacting estate duty. Dual taxation of this nature is unfair. Indeed, it can become increasingly unfair, and I suggest that either the State or the Commonwealth should abandon this field of taxation.
But I do join issue with the honorable senator on his criticism of the Labour party’s attitude to this question. In case he has forgotten, I remind him of what took place about three years ago. If he cares to peruse “ Hansard “ of that time, he will see that I, with the permission of the Labour party, suggested that the exemption should be increased from £2,000 to £5,000 because of the adverse effect of inflation. I. was very ably supported on that occasion by Senator Byrne from Queensland. Although the Government listened with sympathy to my submissions, some honorable senators opposite criticized the Labour party for having put forward the suggestion. I repeat now that although at first glance this measure seems an excellent move, it does not, in fact, do a great deal to relieve what is undoubtedly a most unjust situation. Even though, as a result of submissions put forward by the Labour party three years ago, the Government has increased the exemption to £5,000, that maximum is still not enough in face of the ever-rising spiral of inflation. Why, the modest home of the ordinary working man would be valued at £4,500 for estate duty purposes to-day! The working man could have struggled hard to get that home if he held only an average position during his lifetime. This leaves a balance of only £500, under the present exemption, for goods, chattels, personal effects and perhaps some small saving he has struggled to make for his family. The Labour party made its attitude to this taxation quite clear, but the Government has done nothing about rectifying the anomalies.
Senator Wright has said that he is not at all sure that anything has been done to cope with the present inflationary situation, and it cannot be denied that the effects of inflation make the present system of assessing this duty particularly harsh and unjust if the position is not continually reviewed not only by the Commonwealth, but also by the States. It is essential that urgent consideration be given to the effects of inflation on estates in these times.
It is also idle for the Government to believe that the Opposition cannot do other than accept the bill as it is submitted to us. We have a right to offer reasonable criticism, and the criticism I offer is that except for a few small garnishings, such as the recognition of adopted children and ex-nuptial’ children very little is being done to rectify an anomalous position. Although the Government has boasted about what it isdoing under this measure, it is in fact only removing an injustice from’ one section of Commonwealth legislation.
I repeat that even though the Government increased the exemption from £2,000’ to £5,000 about three years ago, at the instigation of the Labour party, that figure is too low under present circumstances. Without wishing to discuss the measure at any length, I emphasize that it operates most severely indeed on families who own only moderate homes. Furthermore, the small farmers, the men who work hard’ many hours daily, are suffering a tremendous disadvantage in that the values of their properties have been inflated to a far greater extent than the values of propertiesowned by any other section of the community. This means that when estate and probate duties are assessed concurrently on those properties the surviving members of families are left almost ruined, whereas, if justice were done, the dependants could be left with enough from the estate to enablethem to live in frugal circumstances.
Question resolved in the affirmative.
Bill read a second time.
Wish to refer specifically to clause 8, which treads -
The amendments made by sections four, five and six of this act apply in relation to assessments «n respect of the estates of persons who die on or after the date of commencement of this act.
I move the following amendment: -
Leave out the words, “ who die “, and insert, “ which are made “.
Honorable senators will appreciate, on reading the terms of the bill, that the liberalizing provisions which it incorporates are proposed to be extended to those cases of dual or quick succession where the incidents occur after the date on which this legislation is proclaimed. The effect of the amendment I have moved is to relate the application of those liberalizing provisions in relation to the assessment of duty, in the case of dual or quick succession, to those cases where people have died before the bill was introduced in the House of Representatives, but whose estates have not yet issued with assessments; in other words, those who died up to the point of the presentation of the legislation in another place, where the estates have not yet been lodged for assessment, or where the estates have, up to this point, been lodged for assessment but assessments have not yet actually issued, or, to use a term of art, which have not yet been made.
I move this amendment with some diffidence, but feeling, nevertheless, that it is warranted, because I happen to be trustee in an estate in which, unfortunately, circumstances such as these have occurred, and there are a number of children. Under those circumstances, it may be construed that I have, if not a personal interest, then at least a personal sympathy which is dictating the attitude that I am now taking.
– It would be just, in any case.
– That is quite true, but I think I should mention a further fact. I do not know, just on quick recollection, whether that estate has been lodged for the assessment of federal duty or, if it has been lodged, whether the duty assessment has been issued. To that extent I am ignorant; but I know it is an estate in which there has been a dual death, and in which estate duty will be payable, possibly in substantial amount, in relation to the second succession.
Having said that, I advert to the principle of this measure which liberalizes the taxation in respect of a heavy and veryunfair incidence. Everybody has acknowleged that very often this type of taxation bears with great gravity and great severity on the estates of innocent people. My recollection is that in England, during the first world war,, it was found necessary, becauses of the quick deaths of fathers and sons, to do something of this nature to try to relieve estates from becoming completely liquidated by the payment of duties to governments. I do not know to what extent that legislation went, but it was actually passed. This is a bill of the same kind and for the same purpose.
Quite candidly, I can see that tremendous difficulties are associated with the proposal that I put forward. One difficulty is that there may be estates in relation to which, by default or neglect, particulars have not yet been lodged for assessment. Another difficulty is that where an estate has been badly presented for assessment, and it has been necessary to issue a number of requisitions, an assessment has not been made. To that extent, it may be said that the proposed amendment would give a concession to those who least deserve it. No doubt there would be a number of cases of that character, but against those we must balance the tremendous number of estates that are now in the process of assessment and which otherwise would not benefit from the liberalizing provisions of the bill as it is before the committee.
In fairness to Senator Wright, may I say that I mentioned my proposal to him. I do not rely on his subsequent remarks, delivered a few moments ago, in which he rather severely criticized the very meagre nature of the concessions now offered, for support of the contention that I am putting forward. I am inclined to think that he does not favour my proposal, though he thinks that the concession overall is extremely meagre. Nevertheless, what he said is true in that regard. As this bill does purport to give some concessions and to liberalize to some extent the incidence of taxation, there is in logic no reason why it should not go that little stage further. A concession is to be granted. Is there any reason why it should not be a little wider in its application? I feel that many people would welcome the amendment which I propose. It is, in the circumstances, extremely realistic.
Let us consider the position which faces assessors in the federal Taxation Branch, who are assessing estates under the existing legislation. Every day that they approach the files they know that the executive government and this Parliament have set their faces against the very work which they are continuing to do. They know that if, by a mere accident, an estate had come in for consideration a month later, they would have been approaching its assessment on different principles. I do not think it is a good thing for public administrative officers to be assessing just the tail end of a series of cases on one principle, when the abandonment of that principle has received the approval of the executive government and the seal of the National Parliament. Fob those reasons, and without unduly labouring the point, I submit the amendment to honorable senators, while realizing the difficulties which it could present. I am convinced that those difficulties would be few in relation to the great additional concessions and the greater justice that would be done if my amendment were accepted. 1 appeal to honorable senators to give this matter their consideration and to try to get this amendment through, thus introducing into the bill a greater generosity of spirit than Senator Wright was able to find in it. Gradually, we might improve it further and ultimately eliminate this type of double succession assessment, thus bringing the legislation to a level where it would provide, in fact and law, a .worthwhile concession. I commend the amendment to honorable senators.
– Senator Byrne advised me a few minutes ago of his intention to propose the amendment. In the meantime, T have considered it and I have listened to his speech very carefully. I am prepared to support the amendment for these reasons: Irrespective of where the draftsman draws a line, there will always be marginal cases, and cases of hardship. In this instance, let us see where the line is drawn. We are dealing now solely with the benefits and the remissions of tax that are proposed when, in relation to one estate, there are two deaths in quick succession. On the line drawn by the draftsman, the benefits will apply only to the estates of people who die after the act begins to operate. The act is not scheduled to begin until after the royal assent is given. Upon a consideration of the exact terms, the Senate will see the classes of person who may lose the benefit.
This bill was introduced in another place, presumably, some weeks ago. I have not before me the exact date, but it was at some time in the past. The estate of any person who dies between the time this measure was first presented to the Parliament and the time it leaves the Senate, approved by this chamber, will not benefit by this clause. There is another gap, incidentally. If a person were to die between the time the legislation has passed completely through both Houses of this Parliament, but before the royal assent is given, his estate would miss the benefit by the narrowest margin of a period of days. I think it would be more desirable - and I hope that the Attorney-General (Senator O’sullivan) will be impressed by the argument - to reduce those marginal cases as much as possible. I would rather have expected that this clause might be deemed to operate at least from the date when the measure was presented to the Parliament.
The amendment proposed by Senator Byrne goes a little further than that. It proposes the extension of the concession to the estates of people who may have died some time prior to the presentation of this legislation to the Parliament. As he pointed out, the presentation of the returns in respect of their estates may have been delayed, for a good or a bad reason. The reason may have been connected with queries from the department. I point out that in marginal cases it is better to err on the side of generosity than on the side of narrowness or restriction.
I am in favour of the proposition that Senator Byrne has put to the committee. I think that the Minister will, on consideration, agree that it is a very neat and tidy drafting proposition to provide that only the estates of those persons who die after the law becomes fully operative, in some days’ time, will receive the benefit of this clause. That is very easy, and the provision can be handled administratively very conveniently.
But a more important consideration is the hardship and the upset that can occur in many marginal cases. One day can make a difference. The estate of a man who dies one day prior to the royal assent will be denied the benefit of the allowances and exemptions now proposed. The estate of a man who dies one day later will benefit. I think that some genuine effort ought to be made to meet the marginal case and to reduce the instances of hardship. I hope that the Minister will be impressed by the argument addressed to the committee by Senator Byrne and supported by me.
– It cannot be disputed that there is some merit in the amendment moved by Senator Byrne and supported by Senator McKenna, but the fact remains that in fiscal and many other matters it is always necessary for the Government to have a fixed starting time, whether on the side of imposing penalties or on the side of conferring benefits. Budgetary considerations must be taken into account. It cannot be disputed that the Government, by clause 6, proposes the conferring of quite a considerable benefit. It is not by any means ungenerous. It does not go the entire distance towards meeting particular cases of hardship, but I think it will be agreed that in broad principle it is a step in the right direction. No matter how sympathetically we on this side might feel towards the proposed amendment, at this stage the Government is not prepared to accept it.
– Despite the fact that the scope of benefit proposed by the amendment is only small, I disagree with the principle that underlies the amendment. When dealing with taxation legislation, I submit, we have to be entirely consistent with principle. Here, it would be against the principle to apply the benefit of this rebate simply because it may be. due to delay, which was otherwise penalized under the legislation, in filing the schedule for duty. You must have some criterion. The time that determines the applicability of the appropriate rate of duty is always the date of death. Therefore, when you are applying a benefit, I submit that the proper criterion to determine who should receive the benefit and who should not is the date upon which the testator dies; otherwise, a case may be discovered where the death occurred several years ago and assessment might not be made until next year. It would be completely unjust to discriminate in favour of that case as against persons who punctually and properly observe the law. It is painful to suggest that any one should not be given the benefit, but I submit that the proper principle requires that the amendment should be rejected. Whilst saying that, I recognize the high purpose that led Senator Byrne to move his amendment.
– I listened to the Minister and I appreciate the sympathy he extended to the amendment, but I regret that sympathy is not enough. The Minister, in expressing his sympathy, indicated, to my mind, that he was concerned more with the convenience of administration than with dealing with marginal cases of hardship. I have already indicated that I did not accept that attitude and that I thought some effort should be made to reduce the impact on marginal cases.
My own thought would be - I think I expressed it effectively when I spoke earlier - that the commencing date might well have operated from the date upon which this measure was introduced into another place, 23rd October. It is only a matter of some weeks between that date and the date upon which the royal assent will be given.
It is completely certain that everybody, prior to that date, had no thought of the possibility of these benefits. It is equally certain that nobody would have died deliberately so that his estate could get the prospective benefit promised under this particular legislation. So I say that the Government would lose nothing, in revenue, of any substance; the amendment would narrow the cases of hardship, because it would impact very harshly upon an individual who misses these benefits after the matter has been introduced into the Parliament and before it becomes legally effective in a completely formal way. I would have been happier from a technical point of view if the matter were left in respect of the estates of people who died as at the date the measure was introduced into the Parliament, namely, 23rd October. It still strikes a marginal date, but it does not leave the feeling that an estate has missed these benefits in respect of people prior to that date. They died at a time when these proposals were not mooted.
I said that Senator Byrne’s amendment goes further than my original thought, which was to make the cutting-off day the date that the measure was first introduced into the Parliament, and it does extend to a class of person in respect of whom the presentation of a return was delayed or whose assessment has been delayed owing to difficulties connected with the assessment. Again, I prefer to err on the side of generosity rather than otherwise. Accordingly, I continue to support the amendment that has been moved by Senator Byrne.
– I agree with Senator Wright in regard to the amendment; and with a little consideration I must say that I cannot agree with Senator Byrne’s proposition in respect of what he has termed these marginal cases. 1 feel that we should be actuated by one principle only. One factor has actuated my mind in this discussion, and it is this: In matters of tax remission or matters where this Parliament is imposing taxation, retrospectivity should be given by this Parliament only where there are some exceptional circumstances which demand retrospective application. I cannot find, in considering this amendment, any special circumstance to prompt us to depart from our well-established principle in regard to the application of retrospectivity.
I fully agree that there will be cases of hardship, but logically we could carry that argument a good deal further than Senator Byrne carried it. For instance, we could suggest that the date of commencement should go back not to the introduction of the measure into the Parliament, but perhaps right back to the date of the introduction of the Budget. It would be just as logical, I suggest, to give retrospective application to the measure as from that date.
– Or from the commencement of the financial year.
– Yes. There is no rule about the application of retrospectivity in this matter unless, I repeat, some exceptional circumstances warrant it. During the few years that I have been in this chamber, this Parliament has passed many acts relating to the imposition and remission of tax, and they have invariably applied from the time of the passage of the bill, or the Royal assent. I cannot see that there are any exceptional circumstances to prompt us to depart from that principle.
.- J think we must understand the arguments propounded by Senator Wright and Senator Vincent as being compelling arguments. There is one exceptional circumstance involved, in the general sense that the incidence of taxation of this nature and in these proportions is, in itself, unjust. Thai is probably the most exceptional circumstance that can apply in any set of circumstances where there is an element of injustice.
– Does the honorable senator suggest that taxation is unjust?
– It is never suggested that taxation is unjust. It has been suggested in this chamber that there is an element of injustice in double incidence. 1 do not submit that argument merely as a matter of sophistry. As to any principle being involved - I refer to exceptional circumstances - it is the principle of continuing the general injustice.
Senator Vincent has suggested that we might have advanced the commencement date earlier than is proposed in the amendment. That is true but it is no argument that because we want to advance the date by three years, we could have advanced it five years. We might think we are circumspect in advancing it such a little time, and we could have asked for much more. The general principle involved in the commencement date of a tax imposing charges of that nature is possibly faulty. Nevertheless very often one would disturb principles in the face of such a grave injustice as that which is ackowledged here.
I appreciate Senator Wright’s opinions and, in his absence, I would mention that while he himself criticized severely the rather meagre treatment that was being extended in this remission, I was not relying on that because I knew in advance that possibly he would not accept the proposal that I have put forward. However, I still commend the amendment to honorable senators with the submissions that were made in support of it by the Leader of the Opposition (Senator McKenna). I do not know that I will press the matter to a division. I would be happy to have a vote on the voices and I hope to get some support from the Government side.
Question put -
That the words proposed to be left out (Senator Byrne’s amendment) be left out.
The committee divided. (The Chairman - Senator the Hon. A. D. Reid.)
Majority . . . . 5
Question so resolved in the negative. Bill agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
Debate resumed from 12th November (vide page 1146), on motion by Senator Spooner -
That the bill be now read a second time.
– The purpose of the measure before the Senate is to allocate about £23,000,000 by way of special assistance to all the States of the Commonwealth. This grant is supplementary to the amount that is normally paid under the States Grants (Tax Reimbursement) Act. That act makes available an enormous amount of money to the six States of Australia. I thought it might be of interest, if I were to review very briefly the history of these grants.
I am sure it is quite common knowledge that, throughout the war period, uniform taxation was imposed by the Commonwealth with the concurrence of the States, and reimbursement grants were made to the States on condition that the States abstained from entering the fields of both income tax and entertainments tax. When World War II. was safely over and the future of Commonwealth and State relations had to be faced, conferences took place between representatives of the Commonwealth and the States at Canberra on quite a number of occasions. Finally, although the grants for all six States had totalled £34,000,000 annually throughout the war period, they were lifted, as a result of discussion, to a figure that was considered quite satisfactory - £40,000,000 in favour of all States - in 1946.
At that time, some resilience was given to the grants which had had an element of complete rigidity throughout all the war years. A formula was evolved taking as the base amount £40,000,000 each year, but providing that that amount should expand with the growth in population in the States. Provision was made also that the amount should increase in accordance with one-half of the increase in average wage of the population. Then again, the formula provided for the distribution of that particular amount. It was provided that in the first year of a ten-year period 90 per cent, of the payment should be in accordance with the formula which took as the base amount the sum of £40,000,000, and that the remaining 10 per cent, should be based on what was known as the adjusted population.
By and large, an element of flexibility was introduced into the income tax reimbursement for the first time since uniform tax was imposed in 1942. As a matter of fact, on that occasion all the States were so delighted with the new element that had been introduced into Commonwealth and State relations, into the formula, and into the whole basis of the reimbursement, that they entered into a gentleman’s agreement wilh the Commonwealth, not to raise the matter again and not to disturb the formula and the base for a period of seven years.
– Was that in 1946?
– Yes, in 1946. Although the Senate will realize that it is not possible to write a gentleman’s agreement into an act of parliament-
– It would not be a gentleman’s agreement if you did.
– That is right; but I point out to the Senate that, nevertheless, an attempt was made to record it. If honorable senators will hark back to the 1946 act and look at section 10, they will note that the intention was that there was to be no alteration of the formula as revised until 1953, that is, seven years later. The only circumstance in which it was expected, according to the section, that the matter would be raised again was if there was some very substantial change in Commonwealth and State powers and responsibilities which necessitated a recasting of the formula and a different approach to the whole matter.
But unfortunately, as in the ordinary affairs of life so in Commonwealth and State relations, things do not stand still. Despite the gentleman’s agreement and the effort that was made to write it into the legislation, the States were back in 1947 asking for an increase of the base amount to a figure that would yield them more than if the formula were adopted. The Commonwealth met them by giving them an additional grant of £5,000,000 for that year.
The Chifley Government was in office at the time and it was thought at the Commonwealth level that the matter had been reSOlVed; but in 1948 the States were back again, and what had been a temporary grant of £45,000,000 in 1947 became in 1948 a new base figure. Another important change was made which gave further elasticity and generosity to the formula. Not only was the sum of £45,000,000 made the base amount and was it to be varied in accordance with changed populations in the States, but also it was to be varied in accordance with the full amount of the increase of average wages year by year. A further concession was that, in taking the base period for determining the rise in average wages, the comparison was to be made with July, 1946, instead of with July, 1947. Again, when the legislation was renewed,’ the gentleman’s agreement about a seven year break in hostilities betwen the Commonwealth and the States was included.
I mention these facts to indicate to the Senate that Commonwealth and State financial relations do not stay on a fixed basis for any great length of time. The situation was that in 1946 the Commonwealth and all the States thought they had arrived at a formula and a base that disposed of the matter for at least seven years. We find that the grants did not stay put for very long; year by year there was a change. So far, I have taken the matter to 1948. In 1949, the formula carried the grant to £53,000,000, and in the following year to £62,000,000. I am speaking in round millions and am omitting the lesser figures. In that particular year, that is, in 1949-50, even the formula grant did not suffice for the needs of the States, and because of difficulties that were caused by the coal strike, an additional £8,000,000 was provided by the Commonwealth.
From 1949-50 to the present time, despite the fact that the formula has provided greatly increased grants, the Commonwealth has had to come to the aid of the States and supplement the formula amounts. It is interesting to note that the grant under the formula rose from £62,000,000 in 1949-50 to £70,000,000 in 1950-51, to £86,000,000 in 1951-52, to £108,000,000 in 1952-53, to £120,000,000 in 1953-54, to £130,000,000 in 1954-55, to £141,000,000 in 1955-56, to £154,000,000 in 1956-57, and this year it is to reach the extraordinary total of £166,000,000. I make the point that it must have been a very good formula and indeed have had a great degree of flexibility to be able to expand the grant from £45,000,000 to £166,000,000.
Another very interesting fact is that throughout the intervening years, despite the many recriminations that have flowed from the States towards the Commonwealth, no one has ever suggested an alteration of the formula. In completing the history of this matter, I want to record the fact that from 1949-50 onwards the formula amount, despite the great flexibility of the formula, has proved to be insufficient and that amounts varying from £8,000,000 to as high as £33,000,000 a year have been added. From that I think we can draw the conclusion that, in relation to Commonwealth and State financial relations, however far we may go in determining formulas and however farseeing and flexible those formulas may be, they can never be determined positively for any length of time. I am led to the conclusion that something like an ad hoc approach must be made to them all the time. Economic conditions do not stay put, and varying situations and difficulties arise in the States. So I am rather led to the thought that we must be prepared to deal with Commonwealth and State financial relations more or less on a year-to-year basis and try to get them onto a completely firm base. But I am afraid there is great difficulty in achieving that desideratum.
It has even been said that the mere fact that the Commonwealth collects all the income tax that is raised and makes such enormous payments to the States, and in effect provides the greater part of their finances, induces financial irresponsibility and instability in the States. I do not accept that view, because the only condition that attaches to the States’ receiving this year under the formula a sum of £166,000,000, and under this bill an additional grant of £23,800,000, is that they must stay out of the income tax field. That money, amounting this year to approximately £190,000,000, is paid to the States without any conditions as to where it is to be applied and the avenues into which it is to be directed.
I say that there is a proper and a high degree of financial responsibility in the States in relation to that money, because its allocation is a matter for determination by them alone. I do not accept the full strength of the argument that there is financial irresponsibility on the part of the States by reason of the fact that the bulk of their revenues is not collected by them. They are compelled to decide how they will allocate their money, and that is a decision that carries with it, in the view I am presenting to the Senate, financial responsibility. I think the uniform taxation system from which these grants flow is one of the greatest blessings and conveniences that this country has ever encountered. I doubt that anybody in Australia wants to see the system abolished.
One must remember that although the Commonwealth is held responsible for the economic stability and welfare of the country, it is deficient in powers for achieving, those ends. One of its greatest and most flexible instruments is, of course, income taxation. This Government has used that instrument very largely to condition the trends it has wished to develop and maintain. I for one, looking at the deficiency in the economic powers of the Commonwealth, would not be willing to see the Commonwealth vacate the income tax field, because income taxation is one of its great financial instruments. When I point out to the Senate that the Commonwealth’ Parliament has no control over interest rates - other than bank interest - hirepurchase transactions, capital issues, prices or restrictive trade practices, one can see that although held responsible for the state of the economy, the Commonwealth has its hands tied behind its back in some respects. Accordingly, I would not like to see the Commonwealth cut down its powers of taxation, which are co-extensive with those of the States.
The States and the Commonwealth have equal access, as a matter of power, to every field of taxation except one. The imposition of customs duties and excise duties is the only taxation field which isexclusive to the Commonwealth. In every other field the States have as much power as the Commonwealth. They can levy taxes in any of the fields, but, being practical, and knowing the rates of income tax. levied by the Commonwealth, they see that, it is not politically possible for them to enter the income tax field. If they did so. they would lose their reimbursement grants. In addition, the rates levied by the Commonwealth are so high that the States would not have elbow room if they entered that field. Although income taxation is one of the fields into which the States could, enter, as a matter of constitutional law, their entry would not be a practical proposition. Every other field, apart from customs and excise, is wide open to them.
The validity of uniform, income taxation was tested recently in the High Court. The judgment was given on 23rd August last, when the High Court upheld the validity of the tax reimbursement grants, but rejected the proposition, upheld during the war, that the Commonwealth could accord priority to its assessments of income tax. However, that does not affect the practical position of uniform taxation.
I now wish to refer to what the Treasurer (Sir Arthur Fadden) said recently in the House of Representatives when it was represented to him that the Commonwealth was taking unfair advantage of the States. It was put to. him that the Commonwealth used some of the revenue collected during the year to finance the whole of its capital works programme, amounting to over £1.00,000,000, and gave to the States the whole of the loan proceeds, those moneys being, subject to interest charges, which the States had to meet, together with amortization or sinking fund payments. It was argued that it would have been fair and reasonable for the Commonwealth to look at the amount of loan money available and then to say to the States, “We will share that with you “, and then, having looked at the amount of revenue required to finance both State and Commonwealth capital works, to say, “ We will also share that with you “.
That would have been what I regard as a federal approach, or an approach of partnership between the Commonwealth and the States. But the Commonwealth does not make that approach. It finances the whole of its own capital works from revenue and gives the whole of the loan proceeds to the States. Then it gives some of its revenue to the States, but treats the payments as loans. That money, collected from the taxpayers by the Commonwealth, is repayable by the States, with interest. The Treasurer, quite recently, said in another place that revenue moneys of the Commonwealth that had gone to the States in that way between 1951-52 and 1955-56 amounted to £588,000,000. That tremendous sum from the revenues of the Commonwealth was used to support the works programmes of the States. The Treasurer claimed that although the burden of paying interest on that sum fell on the States, the Commonwealth took that fact into consideration in making the supple mentary grants of the type we are considering in this bill. In other words, he said that in giving £23,800,000 to the States, we are having regard to the fact that the States have to pay interest on moneys which we have raised free of interest. The Senate will find that, by an extraordinary chance, the interest on £588,000;000- at 4 per cent, works out at almost the exact figure of the supplementary grant that the Senate is now considering. It works out at something like £23,500i000, and this bill proposes that £23,800,000 shall be paid to the States.
– The grant the Senate is considering applies only to certain States.
– It applies to all of the States. I have already explained that this is an income tax reimbursement grant. It is not a grant payable pursuant to a recommendation of the Commonwealth Grants Commission. A grant of that kind applies to only three States. This is a grant applicable to all the States. If the Commonwealth is merely compensating the States for the. interest it compels them to pay on Commonwealth revenue loaned to them, I would say there is no element of generosity in this extra grant. It appears, from an answer to a question given by the Prime Minister (Mr. Menzies) on 3rd October last, that the States find interest payments to be burdensome. The Prime Minister was asked -
The answer shows where the burden has fallen. The Prime Minister said that in 1949-50 the Commonwealth’s burden of interest was £57,421,000, and that in 1956-57 it was £60,980,000. There has been roughly a £4,000,000 increase in the Commonwealth’s annual liability for interest since the war ended. I invite the Senate to note the position so far as the States are concerned. Their interest payments in 1949-50 amounted to £27,733,000, and in 1956-57 to £68,009,000. In other words, the annual burden of interest on the States rose by £41,000,000, whilst the annual burden on the Commonwealth Government rose by less than £4,000,000. That is a terrific burden to impose upon State budgets. But that is not all of the burden, because the States are under an obligation, under the financial agreement, to pay at least 5s. per £100 off the principal sum each year. It is quite true that under the financial agreement the Commonwealth itself contributes an additional 5s. to that, but the States in toto are burdened with an additional £588,000,000 for capital funds, and are paying an additional £40,000,000 per annum interest, and have to find per annum 5s. per £100 of loan moneys raised. All this adds up to a terrific burden.
– Does the honorable senator suggest that the States should pay interest upon, but not repay, their borrowings?
– I do not suggest that at all. My proposition is this: The States and the Commonwealth each year need moneys for capital works. The loan funds available for this purpose are strictly limited, and are supplemented from Commonwealth revenue. The Commonwealth finances all its capital works out of revenue, and leaves the States to take advantage of the small sums available through loans. Commonwealth revenues filter through a trust fund and are loaned in return for interest. In reality, the Commonwealth is getting the fruits of its superior financial position. It has the best of both worlds.
A proper approach would be to say to the States, “ We shall, subject to the terms of the Financial Agreement, come in and take our proportion of the loan market, and we shall share with you such revenue moneys as are available “. The Treasurer (Sir Arthur Fadden) argues that he makes the States pay interest and then reimburses them. Of what use is that argument in a consideration of this bill? Why impose a burden and then take a step such as this in order to remove it? It all seems quite futile, because it puts up costs in the States, and imposes heavier charges upon their citizens. It negates the element of partnership between the Commonwealth and the States.
– How much money does the honorable senator think that the States would borrow at interest, if they could provide their capital works from revenue?
– The amount to beraised by way of loan is determined by the Australian Loan Council. I remind honorable senators that the executive body of the loan council is the Commonwealth Govern-, ment, which has already proved how great is the power that this places in its hands. Unfortunately the loan market has failed and is not yielding very much, but if my proposition were accepted I do not imagine that the amount raised on the loan market would be lessened because the States had received some money without a demand for interest. I do not accept any argument to the contrary. If it were true, as the Treasurer has said, that this £23,000,000 contained a contribution to the increased interest burden that is forced upon the States, why is not the exact extent of the contribution specified? If that were done it would settle much argument with the States over this matter. It is not specified: simply because it would reveal the character of this further grant that we are now considering. The whole sum would beneeded merely to meet the increased burden that the Commonwealth had put on the States in recent years. No one will convince me that this amount is paid as a result of any wish to be fair to the States.
We are told that the Commonwealth is being generous, but in fact it is not taking, into account many factors which affect State budgets. The fluctuation of the grant according to changes in the average wage does not take into account economic changes and situations, or fluctuations as between one State and another. Despite what the Treasurer has said, if this additional grant of £23,800,000 is to be devoted merely to offsetting the backlog of interest that has been forced on State budgets, it is in no way generous. How are the States ever to expand the level of present servicesextended to the people?
– They can do so only by a redistribution of the financial powers.
– That is one possible way, but under present conditions the States do look largely to the Commonwealth for aid. They cannot, from their own tax revenue, expand their services very greatly. They need Commonwealth aid. Whether the honorable senator is right or not, this grant contains no element of generosity. I acknowledge that the Commonwealth is making a contribution to State budgets in respect of interest, not on the amount of £588.000,000 to which I have been adverting, but under the financial agreement. Each year it assists the State budgets to the tune of £7,500,000 for interest on debts contracted prior to 1927, when that agreement came into being. By way of contribution to State sinking funds it pays another £5,000,000 annually - a total contribution of some £12,500,000.
One has only to look at the budget position of the States to see the difficulties which face them. No one will deny that the Commonwealth enjoys soaring revenues. How did the States fare last year? New South Wales had a very small surplus of £129,000. That great State barely balanced its budget. Victoria had a deficit of £4,300,000, Queensland a surplus of only £15,000, South Australia a deficit, Western Australia a deficit of £1,900,000, and Tasmania a deficit of £813,000. Therefore, at 30th June last, four out of the six States had deficits. They certainly have not enjoyed soaring revenues. The other two States have barely balanced their budgets.
If honorable senators read the report of the Commonwealth Grants Commission in respect of the three claimant States they will find that for 1955-56, the year of review, the States were assisted on the basis of deficit budgets. In other words, the commission says, “ We look at you from the point of view of the standards that have been attained by the mainland States of Queensland, New South Wales and Victoria. We rely upon your making some effort for yourselves. We are prepared to give you enough to let you raise your standards appreciably close to those of the other States “. Each year since 1941 the norm, or standard, of the other States has been a balanced budget, but in the year of review, which the Senate will no doubt be considering shortly, the standard to which the commission was prepared to raise the claimant States was a deficit standard.
– If you were in government, what would you do to give the States independence in finance?
– I do not know whether the honorable senator was in the chamber when I argued that the States were getting this grant, and the formula grant, of £166,000,000, upon the single conditionthat they did not enter the income tax field. I said that they had not only a high degree of independence, but also a high degree of financial responsibility, because they determined the allocation of the money. I make no secret of where I stand in the matter of the Commonwealth and State financial relations. There are certain spheres that notoriously belong to either State or Commonwealth, and they are expanding all the time. Our immigration policy has added to the. Commonwealth’s burdens considerably.. Their activities in connexion with housing, schools, health and hospitals have grown, enormously, particularly in recent years. The Commonwealth could give leadership.. The Commonwealth has a financial, superiority, and if it liked to operate on the basis of the agreement relating to the tuberculosis campaign, something concrete could be done. Under that agreement theCommonwealth, in conjunction with the States, not against their will, evolved a national plan to wipe out tuberculosis. TheCommonwealth agreed to find all the additional money required for the purpose, and a vast national end has been achieved. That campaign, which has been running, now since 1948, is a long way along the road to success in wiping out tuberculosis in this country. That is my ideal of how the Commonwealth and the States should operate. Let the Commonwealth supply the leadership and the money, let the Statesconcur and agree - I make that condition of their agreement - and then let them dothe work in the practical field.
– Are the States to have any say in the allotment of that money?
– If they follow thepattern of what was done in the tuberculosiscampaign, the answer is “ Yes “. TheCommonwealth merely set up the particular scheme. By that statement, I mean thetechnical scheme, the medical scheme for wiping out tuberculosis. The Commonwealth said to the States, “ If you are prepared to carry out that scheme, we will supply all the additional money that you. require for capital expenditure or running costs “. Under that scheme, it was a matter for the States to determine what capital expenditure they should incur, what types, of buildings they should erect, what types- of sanatoria they should establish and how they should operate their various institutions.
I have been diverted to that theme by Senator Wright’s question as to what 1 would propose. I think that I have given an excellent example of how the Commonwealth and the State could work in partnership, not only to their own satisfaction, but to the great national good. It is idle if one State makes an effort to eradicate tuberculosis and another State makes none. Under such conditions, no real attack is made upon the problem. There may be -scope for activity of that kind in relation to education, hospitals, and health generally, adn in many other fields. As I have said, I have been diverted to that by Senator Wright’s question as to what type of approach 1 favour in that matter. Well, that is it.
Repeating that there is no element of generosity in this grant, and repeating that the States have vast responsibilities, which are rapidly growing, and many of which site promoted by the Commonwealth’s immigration policy, I think the Commonwealth might well have been generous and given :to the States enough money to let them feel a little bit comfortable. The Commonwealth Grants Commission points out that -every one of them is pinched. The commission has set its own standard for the States as a deficit standard. It has set the -standard for State budgets as deficits. I -do not blame the Commonwealth Grants Commission for doing so: I just say it is tragic that it regards that as the standard in Australia to-day.
For that fact, this Government must accept some responsibility. The Government could well have erred on the side of generosity in providing more than a mere £23,800,000 under this bill to supplement the formula grants of £166,000,000 that the States get as a statutory right. That will barely enable them to keep afloat, and certainly will not enable them, in my view, to balance their budgets. I think it is bad for the federation that the States should be on such a tight shoestring, and I think the Commonwealth Government needs to be reprimanded for not being more generous to the States in this particular grant. Because it is a grant to the States in those circumstances, we shall not oppose it; but we do not think the Government has been generous, nor do we think it deserves any praise for making this grant available.
– Mr. President, I indicate at this stage that 1 propose to support the bill, and I ask for leave to continue my remarks later.
Leave granted; debate adjourned.
Debate resumed (vide page 1209).
– Prior to the suspension of the sitting I was informing the Senate of the difficulties that were being experienced in the towns east of the Darling Range prior to the establishment of the water supply scheme to which this bill relates. I indicated that severe water restrictions had to be imposed by local governing bodies. I mentioned that in 1946, up to the month of April, the 3,500 residents of the town of Narrogin were restricted to six gallons of water per head per day. The position then became so grave that after 30th April no water was supplied to the townspeople. They were left to manage as best they could. And that was the experience of only one town in the Great Southern and east of the Darling Range. All towns in that area had similar difficulties.
It is proposed under this bill to increase the Commonwealth’s contribution to that water supply scheme to £5,000,000 so that the total expenditure will be £10,000,000 divided equally between the Commonwealth and the State of Western Australia. The original agreement was entered into in 1948. Under it, the Commonwealth agreed to contribute £2,150,000 towards a modified water supply scheme which was to cost £4,300,000. With the limited amount of steel and labour available, it took the State Government seven years to spend that money. Each year from 1948, the Commonwealth Government included in its estimates the unspent balance of its contribution of £2,150,000.
As I have said, it took the State seven years to spend the whole of the Commonwealth’s contribution of £2,150,000. Because of the increase in the cost of the water supply scheme, the State Government approached the Commonwealth for more money, but, because of the slow rate of spending by the State Government, the Commonwealth Government decided to impose a time limit within which any further moneys were to be expended. In 1955, the Commonwealth Government decided to increase its contribution to £4,000,000 provided the money was spent within four years and stated that £462,500 was the maximum it would contribute in any one year. Since then, the State has made a further approach to the Commonwealth, which has agreed to increase its contribution to £5,000,000, thus making the total amount to be expended on the scheme £10,000,000, the State contributing the remaining £5,000,000. More labour and steel are available and we have agreed to let the Western Australian Government expend the money as fast as it can. We shall come to light with our 50 per cent, of the total cost, as money is expended from year to year. I hope that the Western Australian Government will do its utmost to expend the money as quickly as possible and get on with the job of providing water.
As I said earlier, it is vital to the development of farming areas that water be supplied as quickly as possible, and I am amazed that the scheme has taken so long to complete. I do not believe that since the scheme was started in 1948 the various governments of Western Australia have paid enough attention to getting on with the job. It is amazing that, although almost nine years have passed, they have not been able to spend £10,000,000, or about £1,000,000 a year, and that it will be another three or four years before the scheme is completed.
The report shows - and I quite believe it - that in those areas water will increase carrying capacity by at least a further 500,000 or 600,000 sheep. At an average wool clip of £2 a year, the extra income for the area will total £1,000,000 a year. Additional water will be available also for the gold-fields and all the towns along the line.
Let us look at what has been done in the production of gold since water was provided on the gold-fields in 1903. The expenditure then of a couple of million pounds kept in Kalgoorlie an average population of from 20,000 to 25,000, rising to 40,000 at one stage, and in Norseman 3,000 or 4,000. The population of all towns through which the water supply passed also increased. Travelling through towns where water is reticulated, one appreciates the difference that water makes. Towns with water have grass tennis courts, bowling greens, and swimming pools. The residents have beautiful gardens. In towns which have no reticulated water supply, people are living with insufficient water, unable to have gardens, grass tennis courts, or bowling greens. They are really living in dire circumstances. With the expenditure of this additional money, more and more people will be able to get their just deserts and enjoy the amenities that can be obtained by the reticulation of water.
In Western Australia, water is allimportant. The Commonwealth Government is spending about £18,000,000 a year on the Snowy Mountains hydro-electric scheme, which will provide additional water in large quantities to the States of Victoria and New South Wales for irrigation purposes. The payment of interest and sinking fund charges will be met by the provision of electricity, and additional income will go to those States and the people living in them. Once we leave the south-west corner of Western Australia, we are totally reliant for further development on the provision of water. We have at Ord River a research farm where much experimental work has been done to determine the kind of crops that can be grown there, and I hope that at some time in the future the Commonwealth will come to the aid of Western Australia in the furtherance of that project. We expect that within the next few years we shall be able to grow about 20,000 acres of rice each year at Liveringa. We appreciate the difference that the provision of additional water has made to the towns of Port Hedland and Broome.
The towns which will be supplied with water as a result of this grant have suffered from restrictions and have had great difficulty. In Perth, for instance, the consumption of water is about 60 gallons per head per day, while residents of Canberra use about 200 gallons per day. I have no doubt that the increased production . that will follow the provision of this additional water will pay the interest and sinking fund charges on the scheme. .1 certainly hope that, when this scheme is completed, the Government will take steps to make additional finance available for other water schemes in Western Australia.
I read with interest a recent announcement in the press to the effect that an American scientist had evolved a method of desalination of sea water. He said that he could reticulate desalinated sea water in such cities as New York at the same cost as that at which water is now being reticulated there. With the discovery of peaceful uses of atomic energy, I think that within a decade or so we shall be able to erect power stations on the coast and produce power from the hydrogen in sea water. The power could be so cheaply produced that it would be an economic proposition to pump desalinated sea water to our sparsely populated areas, which receive so little rainfall that the country can be used only for grazing and can carry possibly one sheep to 40 or 50 acres. I believe that in the notdistant future - possibly within the next decade or so. - it will be possible to reticulate water to these rich areas. The soil is as rich as in any part of Australia, particularly in the Murchison and Gascoyne areas. It is difficult to estimate by how much the carrying capacity will be increased when water can be pumped into these dry areas for irrigation purposes. Australia will be able to support a much larger population.
I have mentioned some of the bright things that we can look forward to in the future. We in Western Australia are thankful to the Commonwealth for making additional money available to enable this scheme to be completed. I sincerely hope that the State Government will do its utmost to ensure that the scheme will be completed at the earliest possible moment.
– Is much money being wasted on it?
– J should say that no money is being wasted or has ever been wasted on water supply schemes in Western Australia. If honorable senators could see at first hand the improvement that has taken place in the towns, particularly on the eastern side of the Darling Range, since the water was laid on, I think that they would agree readily to additional grants being made to Western Australia for water supply purposes.
The large-scale production of wheat in the areas of Western Australia that I have mentioned was undertaken between 1910 and 1920. Due to recurring droughts, and the depression of the ‘thirties, many farmers abandoned wheat-growing in favour of mixed farming. Unfortunately, they could not get sufficient water to enable their farms to carry their sheep. Most of the water that was found was too brackish for stock. It was then decided to undertake this comprehensive water scheme. Most of the farmers who have been able to obtain water from the scheme have increased the carrying capacity of their properties by at least 100 per cent. I firmly believe that the work to be carried out with the additional money now being made available will result in an increase of the sheep population of Western Australia by 600,000 or 700,000. During the last five or six years, the number of sheep in Western Australia has increased from 9,000,000 or 10,000,000 to almost 15,000,000.
Great progress has been made in the development of the dry areas since the comprehensive water supply scheme was commenced. I believe that, after this additional money has been expended on the water scheme, the sheep population of Western Australia will be increased within five or six years to 20,000,000. I make the proviso that we are granted freedom from drought. I commend the Government on making available this additional money. I hope that the State will take full advantage of it and that the scheme will be completed as soon as possible.
– In common with other honorable senators, I am glad that the Government has changed its policy in relation to the comprehensive water supply scheme in Western Australia. I assure the Senate, and particularly Senator Scott, that the Western Australian Government will continue to push ahead vigorously to complete the scheme.
But the history of this water supply scheme is not quite so bright as Senator Scott would have us believe. In 1948, when the Snowy Mountains hydro-electric scheme was under consideration, the Chifley
Government carried out a fairly wide survey in connexion with water supplies in Western Australia. When it was decided to undertake the present comprehensive water supply scheme in that State at an estimated cost of £4,000,000, the Commonwealth agreed to subsidize expenditure by Western Australia on a £l-for-£l basis, with an upper limit of £2,150,000. Work on the scheme proceeded vigorously. At a fairly early stage the subject was reexamined, and it is to the credit of the Chifley Government that it recommended the installation of larger pipes to permit of the extension envisaged by Senator Scott.
Upon the defeat of the Labour government in Western Australia the water supply plans were practically jettisoned. Shortages of man-power and materials were not the cause. The new government entered into an agreement in relation to the construction of the Kwinana oil refinery. Its finances were tied up in that developmental programme and nothing whatever was done towards completing the water supply scheme. Indeed, little more was done in the matter until Labour regained office in Western Australia.
Soon after the new government came to office, the Minister for Water Supplies, Mr. J . T. Tonkin, approached the Commonwealth Government to obtain a better agreement than a subsidy on a £l-for-£l basis. However, the Commonwealth was not receptive of his submissions. Of course, this has been denied. In another place, a member of the Government stated last May that no such submission was made. It was made.
If honorable senators need proof of my statement, they need only refer to “ Hansard “ of March last, which shows that I personally raised the matter in this chamber, but the Government would not agree to increase the amount of subsidy. At the time the Minister for Water Supplies in the Western Australian Government made his submission to the Commonwealth, work had been done on the scheme entitling the State to receive from the Commonwealth £380,000 in the financial year ended 30th June last. By the end of last April, the work done entitled the State to receive from the Commonwealth £462,500, which was the full amount that the Commonwealth had undertaken to make available to Western Australia in 1956-57. Mr. Tonkin stated at the time that the State would have to finance work on the scheme during May and June from its own resources; and he said it was expected that the full expenditure for the financial year would be £1,032,500, of which the State would have found £570,000.
The continuous pressure of the Western Australian Government, plus the fact that an association of Western Australian farmers had stated that unless the scheme were proceeded with they would take political action against the Commonwealth Government that they were supposed to support, quickly brought about a change in the policy of the Commonwealth Government.
– In what year was that?
– The Rural Water Commission of Western Australia met in March last, because of the disappointmnet of supporters of this Government with its attitude to the proposal that it increase the subsidy ceiling in relation to the scheme. As a result of continuous pressure by them on the Government and on Government supporters in this House something was done about it. That is not a Labour set-up by any means. Nevertheless, at this stage we find that the Western Australian Government has pushed on, and will continue to do so, with all vigor, and with commendable speed in view of the time that it has been able to operate in this field, with the completion of a comprehensive water scheme in Western Australia. Naturally the cost of the scheme has increased immeasurably as a result of inflation. The Commonwealth talks about generosity in this matter and tries to make it appear that the State has had very much more than it was originally offered. But the increased amount is no more than the increase of costs brought about during a period of inflation, largely due to this Government’s policy. When Commonwealth money was first made available the scheme could well have been carried out within the original estimate, of £4,300,000. The scheme was deferred, however, as a result of the policy of a non-Labour government in Western Australia, which embarked on other de.velopmental work such as that associated with the oil refinery at Kwinana. It lost sight of essential works including water conservation and reticulation. The merest study of the records of governments in Western Australia will show that on all occasions Labour governments have acted very vigorously to achieve something practical for the people in areas denuded of water. The Hawke Government was in office in 1955 when the limit of the Commonwealth’s contribution was raised from £2,150,000 to £4,000,000. That Government spent the money effectively, but then there was a hig of five years when the McLarty Government was in office, nothing was done.
– Why do you say that this Government has done nothing?
– 1 say that, because the Commonwealth put a ceiling of about £450,000 on the annual expenditure. The State could have spent half as much .as that again had further money been available on a £l-for-£l basis. But it found that by the end of March it had expended the Commonwealth’s grant plus an equivalent sum of its own. Nothing more was coming from the Commonwealth but the work was continued with State money, for which there was no £l-for-£l subsidy because of the ceiling fixed by the Commonwealth. At that stage the State Government was faced with a deficit of £1,500,000 for the year.
I think the Commonwealth’s attitude is wrong because this scheme is a necessity, not only to Western Australia, but also to the nation. Water conservation and reticulation are so vital to Australia that there should be no restrictive measures imposed by the Commonwealth Government.
– It has taken nine years up to date and the State has not spent all the money.
– It has not taken us nine years. The State Government has already expended more than the Commonwealth has given it on a £l-for-£l basis. The State Government has pushed ahead with the scheme and will continue to do so. When I raised earlier a matter in relation to the Kalgoorlie-Fremantle railway, the Government denied that the Western Australian Labour Government gave any priority to water and power. But what is the reply 1 get now? The Minister said that the Premier of Western Australia, the Honorable A. R. G. Hawke, had told this Government that whilst he was most anxious to have a uniform gauge system in Western Australia, if any priority at all was to be allotted in that State it was to be for water and power. In respect of both those services the Western Australian Labour Government has a record which is not bettered by that of any other government. For instance, there are the big power station at Bunbury and the water conservation undertakings at Mundaring and Stirling.
– All done with federal money.
– Not federal moneyAustralian taxpayers’ money! My friend sits over there talking about federal money, and he is a representative of Western Australia in this Senate. He always cries poor mouth here when it comes to defending his State. He talks of federal money. It is money to which Western Australia is thoroughly entitled, and if the honorable senator were doing his job in the Senate, he would see that Western Australia was getting that money, instead of crying down the development of his own State. We have seen Senator Vincent shedding crocodile tears in the Senate about development in the north of Western Australia. Is it Commonwealth money that he wants for that kind of development? He should not be such a hypocrite.
The bill will make possible the completion of portion of the comprehensive water scheme in Western Australia. 1 say that the Commonwealth Government should provide as much money as it can for the national task of improving water supplies, not only in Western Australia, but in all the arid areas in Australia. A scientific assessment by the engineers of all States shows that, whilst Australia is not yet suffering from a shortage of water for human consumption, the supply of really good drinkable water is so limited that it could become a serious problem if this nation developed to the extent that we expect it will develop. There is plenty of brackish water available, but nothing has been done in a really big way about conservation of water since the 1948 survey set in train by the Chifley Government, when the Snowy
Mountains scheme and this scheme in the south-west of Western Australia were all envisaged.
All that the Commonwealth has been asked to do is to make money available for the completion of this Western Australian scheme. The money is now available, but only for the completion of a modified scheme from which, admittedly, there will be great benefit, but which will by no means solve the problem of water supply in Western Australia. There is a great amount still to be done, and I think that it can only be done through a recognition by the Commonwealth of its national responsibility for development of this kind. There must be some better understanding than there has been so far between this Government and the States about federal responsibility for developmental work. The bill, of course, approves of something that has been submitted by the Opposition and supported by the agitation of the Government’s own supporters in Western Australia. The Government has been forced to change its attitude. But the scheme was not only submitted by members of the Opposition. The Rural Water Commission of Western Australia pressed the necessity of this whole thing on Government supporters. If ever political duress was used, it was used in this instance. Nevertheless, I say that this bill is a belated answer to the representations of the Honorable A. R. G. Hawke and the Western Australian Minister for Works, John Tonkin. They are pleased to get this much from the Commonwealth, but I repeat that the action is belated, and that the delay caused by putting a ceiling on essential national works has cost Western Australia a considerable amount of money.
– I think it might be advisable to put the true facts about this water scheme on record. Having been in the Western Australian Parliament and in the Western Australian Government during the time that these negotiations took place, I want to correct one or two statements that have been made. It was during the term of the Wise Government - that is, the government of Mr. F. J. S. Wise, it may be necessary to explain, because all Western Australian governments are wise, mentally - that Mr. Hawke, who was Minister for Works then, submitted a plan to the Commonwealth Government for this comprehensive water scheme. When the plan was submitted Mr. Chifley sent a committee headed by Mr. Loder of the Department of Works, over to Western Australia to investigate the scheme fully. In its investigations that committee went throughout the country districts and took evidence. It then submitted a report to the Commonwealth Government to the effect that the scheme should be reduced by half - in other words, that instead of being extended to serve the country areas it should serve only the towns.
The ACTING DEPUTY PRESIDENT (Senator Anderson). - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -
That the Senate do now adjourn.
Question put. The Senate divided. (The President - Senator the Hon. Sir Alister McMullin.)
Majority . . 7
Question so resolved in the negative.
– When the debate was interrupted, I was pointing out that, as a result of an investigation of the comprehensive water scheme by the Loder committee, the scheme was reduced by half. The agricultural section was omitted, and the scheme was confined to the towns. That proposal was agreed to, but, unfortunately, after the scheme was started, the reigning government went out of office and the McLarty-Watts Government was elected. The Minister for Works, Mr. Victor Doney took up the question of a modified scheme with the government and was given its sanction to proceed with the work. Work commenced shortly after World War II.
– During the development of the oil refinery.
– No, long before that. The work was started when steel was almost unobtainable. I was present at the laying of the first pipe near Collie, and I interviewed representatives of the Broken Hill Proprietary Company Limited with the Attorney-General in an attempt to get more steel. We could not get it from the company, but we received an offer of steel from Japan at £100 a ton. That offer covered only 1,000 tons.
We submitted the proposal to the Commonwealth Government in 1948 in order to ascertain whether the Commonwealth would assist in the purchase of this expensive steel. The Commonwealth Government refused and the scheme was delayed until steel became more plentiful after the accession of the present Hawke Government in Western Australia. That Government proceeded with the scheme. I would not want it to be thought that I am so politically biased that I could not give credit to a government of a political persuasion opposed to my own, and I have no hesitation in saying that the present Labour Government in Western Australia pushed on with the’ scheme as soon as it could get the steel. !I travelled between Williams and Narrogin and saw the men working there in pouring rain on a Sunday. I give credit to the Western Australian Government for the way the work was done. I was at Pingelly when the pipes were extended there last year. The line will go on to Katanning next June.
Senator Cooke has said that the scheme was held up because the State was not able to get more money from the Commonwealth. That is not correct. The present Western Australian Government applied for extra money about 1955-56, and the Commonwealth Government increased the grant as a result of that application. Shortly afterwards, the Western Australian Government asked the Commonwealth Government to increase the annual contribution because the State Government believed that it could find more than the maximum annual contribution agreed upon and it wanted that amount matched. When the State Government made that application, which I supported, the point was made that the State had not expended all the money that was available. When the money was expended, however, a further application for an increased contribution was made and was granted. This bill is the result of that application. I wanted to put those matters correctly. One of the reasons why the first application was refused was that the Commonwealth Government made available (he sum of £2,000,000 over and above the grants given to the States, and it was contended that some of that money might well be put into this scheme. The scheme is going ahead satisfactorily at present, and by making this extra money available it will be finished much sooner than it otherwise would have been.
I did not propose to take part in this debate, because during the Budget debate 1 congratulated and thanked the Government for making this money available, but during the course of that debate Senator Pearson made some remarks about Western Australia. He said it was about time that we provided our own water supply, instead of going to the Commonwealth Government. I should like to give a brief description of Western Australia so that honorable senators who do not know that State as well as I do will be better able to appreciate some of our difficulties. In the first place, Western Australia comprises an area of 900,000 square miles. South Australia has an area of 330,000 square miles, or one-third the area of Western Australia. Western Australia has 4,000 miles of coastline, compared with 1,400 miles .in South
Australia. The revenue of Western Australia is about £45,000,000, compared with £48,000,000 in South Australia. Western Australia must make its £45,000,000 go considerably further than South Australia’s £48,000,000. Apart from that, there are other disabilities from which Western Australia suffers, and 1 want to mention them because they show why so much money is being spent on water in Western Australia. “1 think Senator Hannaford said that he had been in the north-west of Western Australia and was not favorably impressed with the soil. I think he was quite right. Any man from the eastern States who goes to Western Australia will not be impressed with the soil in 50 per cent, of the State. It consists of patches of good soil and patches of sand - I call it sand, but it is generally referred to as light land. We have, I suppose, the worst supply of water in Australia. Speaking from memory, there is only one town I know of - and that town has now gone out of existence - which has a water supply of its own. That is the town of Wiluna. All the other towns in Western Australia have their water piped to them. Narrogin, which was mentioned by Senator Scott, and Katanning, which are down in the Great Southern, in a fairly good rainfall area, had reservoirs put down and they had to bitumenize the catchment area. Even then they were not able to catch sufficient water to supply the needs of those two towns. I remember that in Narrogin the people had to fill their baths every Sunday because the water was turned off until the following Sunday. Gardens and the like had to be neglected in the summer. It was most depressing. Practically every stream, with the exception of perhaps one or two in the extreme southwest, is brackish or salty, and totally unfit for providing drinking water.
– You should give it back to the blacks.
– We are doing much more with Western Australia than you people can do with your good land and your wafer supplies. I can take you to a farmer in Western Australia who puts 100,000 bass of wheat into the pool every year and who shears not less than 35,000 sheep. Another farmer 100 miles east of Perth sent his annual consignment of fat lambs to Perth the other day. Tt consisted of 47 trucks - 5,200 lambs - of which over 90 per cent, will go first class. Another farmer had 15 acres of potatoes last year, which yielded 42 tons to the acre. So you see, we do something with our land.
However, to get back to the question of water. We have done a great deal in trying to find water in Western Australia. Senator Scott pointed out that the Mundaring scheme was put down in 1903. Unfortunately, the brilliant engineer responsible for the scheme did not live to see the completion of his work. He was criticized so much by a newspaper that he took his own life. That scheme was commenced in 1903. If it had not been for that scheme for pumping water 340 miles to Kalgoorlie, we would not have Kalgoorlie now.
That is the first scheme we put in. Subsequently we had to provide a water supply to Perth. The result of that was the Canning dam, which holds 15,000,000,000 gallons of water. In addition to that, all these towns did not have a water supply, so we had to provide them with water. One dam is being put down in the Serpentine, which will hold ‘8,000,000,000 gallons. By 1960 the capacity of that dam will be increased to 40,000,000,000, at a cost of £9,000,000. To give supply to the Collie district the Wellington dam was put down, which holds 8.000,000,000 gallons. In addition to that, the Stirling irrigation dam holds 12,000,000,000 gallons; the Harvey weirs and the Samson Brook and Drake’s Brook scheme were carried out, and in the last two years we have put down the Bridgetown reservoir. Bridgetown is in a pood rainfall area, but one of our big troubles is to get holding ground. It is very difficult to get holding ground in Western Australia, probably on account of the sandy nature of a lot of the soil. At Trayning a £334.000 dam was put down, at Cranbrook a £38,000 dam, and a £234.000 dam was put down at Mount Barker.
Those are dams that have been recently put down. Throughout the country we have tanks, which hold about 1,000,000 gallons and which cost about £3,000. T could show honorable senators at least 20 of those. That indicates that we have done everything possible to provide more water. The present scheme, as Senator Scott pointed out, will increase the capacity of Mundaring dam to 15,000,000,000 gallons, and the Stirling dam to 40,000,000,000 gallons. The Stirling dam will hold more than the Mundaring and Canning dams put together. But that will not complete our work in this regard, because our next job will be to provide a water scheme to serve Geraldton. Geraldton is a large town and port about 370 miles from Perth. They tried everything to get a water supply at Geraldton. There is one dam there, but it is not capable of supplying all their requirements, and the only solution will be a pipeline from the Perth hills to Geraldton, a distance of 370 miles. So our position is vastly different from that of the eastern States, by reason of the fact that we have brackish water, varying from 600 or 700 grains of salt to the gallon down to less than 100 grains, which is suitable only for farm use. lt is difficult to get water to supply the various towns that have sprung up with the opening up of the country for agriculture. That is the main thing that is troubling Kalgoorlie’s water supply. The towns are draining so much water that it is becoming short in Kalgoorlie and they have had to put in this extra supply.
They are some of the difficulties confronting us in Western Australia. It is not that we are not doing our utmost. We are willing to bear the expense of providing water. But we have many difficulties to contend with, such as lack of water, lack of mountains, and lack of rivers of any size in the agricultural areas. These factors are compelling us to take our water from areas around the hills near the west coast. The drain on our limited water resources is becoming so great that it is a question of whether the catchment areas in the hills will be able to supply the whole of the State with water. That is a problem which will confront Western Australia and whether the requirements of Geraldton can be supplied if it becomes necessary to do so will have to be seriously considered.
They are just a few things I wanted to say to give some idea of the difficulties we have to contend with in Western Australia and the way in which we are endeavouring to overcome them. I support the bill and congratulate the Government on bringing it forward.
– This bill has been introduced for the purpose of raising the limit of Commonwealth payments to Western Australia for the water supply scheme that was commenced in 1948. On many occasions I have visited the areas that will be served by what is known as the Comprehensive Water Supply Scheme. It will be a great day for the people in those areas when the scheme is completed.
I endorse Senator Kennelly’s statement that the Opposition does not oppose the measure. As a matter of fact, we compliment the Government for having introduced it. In 1948, the Chifley Government agreed to make a £I-for-£I contribution towards the cost of the scheme, which was initiated by a State Labour government. Western Australia is a vast State and is regarded as being largely unpopulated and undeveloped. It covers one-third of the total area of Australia, and most of the population is in the southern part of the State. Water is necessary for the development of the agricultural areas and we believe that, if sufficient water is made available and these areas are developed, more British migrants can be absorbed there as well as in the northern portion of the State. If the level of the migrant intake is to be maintained, as we desire it to be, we must try to develop Western Australia to the fullest degree.
The State Labour Government is eager to see the Comprehensive Water Supply Scheme completed within a reasonable time from now, because at the present time the people who reside along the great southern line down to Katanning are relying on reservoirs and dams. I assure honorable senators that if there has not been a heavy fall of rain the dams become dry halfway through the summer months. It is then necessary for the Government to supply water by rail. That has been a very expensive undertaking every year. For that reason, the Government is eager to complete the project.
Obstacles that have been placed in the way of both the McLarty Government and the Hawke Government have made it impossible for them to have the scheme completed within a reasonable time. They have been starved financially, and there has been very little increase in the Commonwealth g”?.nt. In more than one year the Western Australian Government has spent more than has been provided by this Government. Shortage of money has been a problem. The Kwinana project absorbed a few million pounds of the annual Commonwealth grants to Western Australia. It was necessary to spend £2,000,000 on dredging Cockburn Sound alone to enable large tankers to come in. Expenditure on the Kwinana project made it very difficult for the Western Australian Government to expedite this water supply scheme.
A shortage of materials and, in the early stages, of man-power has created a problem. Materials are still more or less in short supply. I know that the firm which is supplying the pipes is on a kind of quota in regard to the supply of steel plates, which I presume come from the B.H.P. works in Newcastle. As a result, the project is repeatedly delayed until new shipments of steel plates arrive. That has been a big factor in the slowing down of the project. We know, too, that particularly from 1954 and 1955 Australia has been in the grip of inflation, with the result that the project, which was expected to cost about £4,000,000, will now cost in the vicinity of £10,000,000. I am pleased to note that the Treasurer (Sir Arthur Fadden) has recognized that fact and that the Commonwealth’s contribution has been increased from £4,000,000 to £5,000,000. That will make a big difference to the State Government, which hopes to be able to expedite this work. All the dams that will supply water through that area to Narrogin and down the southwest have been almost completed. However, completion of the pipeline itself is the main problem, and when that is done I am sure the people of the south-west will appreciate the provision of fresh water throughout the agricultural area. Although the State Government received only £462,500 from the Commonwealth, it spent £570,000.
Now that this Government has recognized the situation in Western Australia, I hope it will give favorable consideration to other matters concerning that State. If it does- so, Western Australia will be in a happier position than it is at the present time-. I hope this Government will make more finance available to Western Australia to enable that State to complete the public works programme it has in hand. It is a large State to develop, and the State Government is doing its best to develop the north-west by erecting jetties along the coast, but the cost is greater than the State Government can cope with. This project is most important to the people of that particular area. The Kalgoorlie water scheme, which will serve the country areas, will be a godsend to quite a lot of people there. 1 am very pleased to be able to support this amendment. The Government is doing the right thing in increasing the grant by £1,000,000.
– At this late hour I do not propose to speak at length, but I wish to make one or two observations about the measure before us. In the first place, I regret that Senator Cooke adopted the attitude he did in regard to the history of this project. He attempted to establish the rather absurd fact that the Hawke Government alone was responsible for carrying out this work. Like Senator Seward, I pay tribute to the work of the Hawke Government in regard to this measure. It has done all it can to expedite completion of the work, and I think that can be said truthfully about Mr. Hawke’s predecessor in office, Mr. McLarty. That fact has been placed on record- many times, so I do not need to elaborate the point.
This project has been delayed only through the grave lack of steel in its early stages. It is quite clear from the records that there has never been a shortage of funds. The Commonwealth originally made available a sum exceeding £2,000,000 and then, at the request of the Hawke Government in 1955, increased that amount to £4,000,000. That money was not spent until this financial year when the amount available was increased to £5,000,000. So, it is apparent that never at any time has this project been delayed because of shortage of funds. As a matter of fact, it was pointed out by the Treasurer (Sir Arthur Fadden) early this year, that at that time enough money was available in the vote to enable the Hawke Government to proceed with the job.
I shall now make one or two observations concerning the project itself. I think the’ measure has three important features. In the first place, it enables the Hawke Government to complete this work as soon as possible. I think all honorable senators agree that the work is somewhat overdue.
Everybody in Western Australia will welcome the fact that adequate money is now available. The second important feature of the measure before the chamber concerns the method of spending the money. There is no limit on the amount that the Commonwealth may pay to the State in any one year, so there is a degree of flexibility in regard to the expenditure of the funds which will tend to expedite completion of the work. The third important feature of the measure is that it will ensure that practically all the towns in the agricultural areas, and the agricultural areas themselves, will have adequate supplies of water. During the last 100 years those towns and districts have been short of water, and no one living in the well-watered eastern States can fully appreciate just what this project will mean to the residents of the areas. The bill recognizes three very important things: First, that the conservation of adequate supplies of water is absolutely vital to the development of Western Australia; secondly, that Western Australia is unable to meet the cost of providing adequate water conservation and the Commonwealth Government is prepared to accept a degree of responsibility in that respect; and thirdly, that the measure establishes that Commonwealth assistance will be granted to States, in particular Western Australia, only when proper planned projects are placed before the National Government. In the past, there has been a spate of criticism of the parsimonious attitude of Commonwealth governments to the State of Western Australia. That is a big subject, and I do not intend to open it up now. However, if my honorable friends opposite continue to encourage me, I shall speak for a little longer.
When the Western Australian Government has been prepared to put forward a practical scheme and to contribute to the cost of the scheme, the Commonwealth Government has never denied assistance, but when the State Government has put forward some half-baked scheme and has not been prepared to accept some responsibility itself, the Commonwealth Government has, quite properly, refused to grant assistance. As the only member of the Senate who lives in an outback area of Western Australia, I can perhaps claim to have a more personal interest in this measure than any other senator. I come from Kalgoorlie, which, curiously enough, although it is situated in a desert, has an adequate supply of water. That is due to the foresight of Sir John Forrest. He did not ask for federal aid for the gold-fields water scheme. He went ahead, borrowed the money and did the job. Although he was criticized in 1900, the venture became a world-famous project. It took only two years to bring the water from the coast to Kalgoorlie, at a cost of just over £1,000,000. That scheme was infinitely larger than the present comprehensive scheme, which is estimated to cost £10,000,000. It has been in progress for nine years, but has not yet been completed. We cannot compare the efforts of our fathers with our own efforts and come out on the credit side. When it was a case of getting a job done,. John Forrest did the job and did it quickly.
It is interesting- to note that although that scheme was instituted for the purpose of supplying water to the gold-fields of Western Australia, that is not the only role it is playing now. Although the scheme has enabled the gold-fields of Western Australia to produce some £400,000,000 of wealth, it has also supplied’ a very rich agricultural area with water. Because of the gold-fields water scheme the central areas of Western Australia are probably the most prosperous of all the agricultural areas of the State. The water scheme has been responsible for maintaining hundreds of thousands of sheep and has supplied water to many thousands of people who live along the route of the pipeline. We now have the spectacle of that water scheme supplying, not only the gold-fields of Kalgoorlie, but a large agricultural area as well.
The rate of development of Western Australia, not only in relation to minerals, but also in relation to primary products, is related directly to the amount of water consumed. The gold-fields scheme and the present comprehensive scheme both emphasize that fact. The rate of growth of the population of Western Australia, and even the size of the cities, are governed largely by the amount of water we can conserve. Western Australia is the dryest and largest State of the Commonwealth. We have not one permanent fresh water river in the State. We have no rivers similar to the Murray.
Water conservation is a hazardous and expensive project, but millions of acres of land could be brought into production if water could be supplied. I shall refer briefly to various projects that could, and I am sure will eventually be planned by the State Government, with assistance from the Commonwealth Government. There is the Ord River valley scheme, whereby an enormous quantity of water could be conserved. The Fitzroy River valley scheme would enable tropical agricultural industries to be developed in that area. In fact, they have been started already. The Gascoyne scheme would cater for sub-tropical agricultural projects. Then there is the Wiluna basin, in which large untapped supplies of water may be available for intensive agriculture.
These schemes will need money and they will involve planning. I do not think we can be critical of the Commonwealth Government for not taking the initiative in these matters. The responsibility lies squarely on the State Government to commence these projects and to show that it is prepared to accept responsibility for a portion of the cost. If it were to do that, I believe the Commonwealth Government would give sympathetic consideration to the granting of large sums of money for properly planned water conservation schemes in Western Australia.
I do not think it is of any use for the Western Australian Government to blindly request the Commonwealth Government to accept, not only the whole financial responsibility, but also the responsibility for the initiation of these projects. Those matters are the responsibility of the State. If the Western Australian Government were to recognize that that is so, I believe we would be much closer to solving the vital problem of providing adequate water for the State.
I commend this Government for the support it has given to this scheme. It has never refused to supply money to enable the scheme to be completed, and I think it should be given due credit. I am quite certain that the money made available under this bill will enable the comprehensive water scheme to be finished, to the great satisfaction, not only of the honorable senators who have listened to me to-night, but also of the people of Western Australia generally.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Senate adjourned at 11.50 p.m.
Cite as: Australia, Senate, Debates, 13 November 1957, viewed 22 October 2017, <http://historichansard.net/senate/1957/19571113_senate_22_s11/>.