22nd Parliament · 2nd Session
The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 3 p.m., and- read prayers.
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– My question is addressed to the Attorney-General, and I point out, by way of preface, that the following report which emanated from London appeared in to-day’s press: -
Ealing studios need 30 Australian boys who can “’ behave like savages “. The youngsters, who must bc able to look and act depraved, are needed for a new kind of horror film to be shot in and around Australia next year. … It is based on the novel “ Lord of the Flies “ by . . . William Golding . . . described by critics as “ a bloodcurdling masterpiece “.
Has the Attorney-General seen that report? If the report is correct, will the Minister investigate the possibility of preventing impressionable Australian youths from being employed in the unsavoury and blood-curdling manner indicated?
– I have not read the article to which the honorable senator has referred. I doubt very much whether we can do anything to prevent the employment of Australian youths in the production of the film because, after all, Australia is still a fairly free country. However, we will have full control over the exhibition of the picture before Australian audiences. I have sufficient faith in the film censor to believe that he will live up to the best traditions of his office in this regard.
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– Will the Minister representing the Minister for Labour and National Service inform the Senate how many persons are unemployed in Devonport and surrounding municipalities?
– Several questions have been asked about the unemployment position at Devonport. I thought there was a question on the notice-paper about it, but I find that there is none. I have obtained some information about the position, but I am informed that it is impossible to give the exact figures for Devonport. The figures that are available refer to a district which is covered by the Devonport employment office and includes the local government areas of Devonport, Kentish, Ulverstone and Latrobe. In that district at 1st November, 45 males and five females were receiving the unemployment benefit and 155 males and 73 females were registered for employment. All those figures are slightly lower than the relevant figures a month ago. At the same date, there were unfilled vacancies for 31 males and 21 females.
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– I preface a question to the Minister representing the Minister in charge of the Commonwealth Scientific and Industrial Research Organization by stating that at present 1,000 scientists are attending an international conference in Thailand to discuss some of the latest advances of modern science. The 1,000 scientists include 600 Thais and 400 foreigners, among whom are 100 from the United States of America and 28 from Japan. At the conference, Thailand’s Air Marshal Vesjant Rangsarit. who presided, said -
Pious words are not sufficient to stay the approach of wholesale devastation, of worldwide slaughter and of the prospect of a complete collapse of the comfortable house science has so elaborately built.
Will the Minister inform the Senate whether any arrangements have been made for Australian scientists to attend that conference? How many of our scientists are at the conference? What is the attitude of the Government towards the importance of having Australian scientists attend international conferences of this kind which are of such great importance at this time?
– I do not know whether Australia was invited to send representatives to the conference to which the honorable senator has referred. Accordingly, I cannot say whether any Australian scientists went to the conference, but I shall obtain the information for the honorable senator.
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– I ask the Leader of the Government in this place the following questions: - Is he aware that the national commissioner of the Australian Red Cross Society, Mr. A. G. Brown, who has just returned from the nineteenth international conference of the Red Cross at New Delhi, has stated that 84 governments have supported a Red Cross ban on nuclear weapon attacks against civilian populations? Has the Minister any information to give to the Senate on this very important development? If he has not, will he obtain as soon as possible a copy of the new set of draft rules that are soon to be submitted to the Swiss Government and to all nations subscribing to the Geneva Convention, in view of the fact that they may become either pari of a new Geneva convention or an additional set of rules for the conduct of war?
– I have no personal knowledge of the matter that has been raised by the honorable senator, but I shall be very pleased to take it up with my colleague, the Minister for Defence, who would know about it, and ask him to furnish me with whatever information is available.
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– Has the Minister representing the Minister for External Affairs seen a statement in the Melbourne “ Herald “, of Tuesday, 19th November, by Denis Warner, a prolific and informed writer on Asian affairs, to the effect that the Dutch will be forced out of western New Guinea within ten years either by Asian pressure or because of internal pressure, and that there are many Dutchmen in Indonesia to-day who curse the day that Holland decided to hang on to western New Guinea? In view of the fact that Australia recognizes the inevitability of the whole of New Guinea ultimately achieving independence, will the Minister give to the Senate the reasons why Australian toplevel statements which unnecessarily inflame Our 80,000,000 neighbours are made or why we identify ourselves so readily and closely with a reactionary form of Dutch colonialism that cannot possibly endure? Finally, does not the Minister agree that, in order to make our northern defences secure, our policy towards Indonesia should rest on stronger foundations than can be provided by our alliance with the Dutch, who have not even been invited to join the South-East Asia Treaty Organization?
– I did read the article written by Denis Warner, a journalist for whom I have a very high regard. Just how right or how close to the mark he was on this particular occasion, I am not in a position to judge. In regard to the making of inflammatory statements, I think that, if the honorable senator reviewed the sentiments that have been expressed and the statements that have been made, he would find that neither the Government nor any of its supporters has made inflammatory statements. On the other hand, quite false and groundless reports have emanated from elsewhere. In the circumstances, the attitude of the Minister for External Affairs has been most reasonable and quiet.
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– Will the Minister representing the Minister for Primary Industry obtain for the Senate information in reply to the following questions: - What is the total amount advanced by the Federal Government for the purchase and/or acquisition and preparation of closer settlement holdings for ex-servicemen for each of the financial years ended 30th June, 1950, to 30th June, 1957, inclusive? What is the total amount that has been written off by the Government each year on those holdings - in other words, the difference between the cost of purchase and preparation and the productive value of the holdings as sold to the ex-servicemen?
– Yes, 1 shall obtain the information.
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– Has the Leader of the Government in the Senate seen the leading article in to-day’s. “ Age “, dealing with the proposed visit to Australia of the Prime Minister of Japan, in which it is suggested that we should bury the hatchet, for the purpose of establishing good relations and trade with our ex-enemies? If the Minister has seen the article, does he agree with it?
– Not having had the privilege or the opportunity of reading the article, I cannot say at this stage whether I agree with it or not. I do hope, however, that old enmities will not be perpetuated.
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asked the Minister representing the Postmaster-General, upon notice -
– The PostmasterGeneral has supplied the following answers: -
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asked the Minister for National Development, upon notice -
– The answers to the honorable senator’s questions are as follows: -
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asked the Minister representing the Postmaster-General, upon notice -
– The PostmasterGeneral has informed me that he has read the comment referred to. Opinions on any art form are, of course, likely to vary substantially and honorable senators may be interested to know that the general tone of overseas comment on Australian stamps is most favorable, that Australian stamps have featured in a number of international awards in recent years, and that their popularity with collectors is increasing.
The artists and the engravers who prepare Australian stamps are highly qualified persons who excel in their special fields. Designs are obtained from private artists as required and this practice will be continued. In fact, the Stamp Advisory Committee has under consideration at present various designs which have been commissioned from Australian artists.
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– On 29th October, Senator Buttfield asked the following question: -
Has the Minister representing the Minister for Territories seen a leading article in to-day’s “ Sydney Morning Herald “, which suggests that the reason that hospital treatment for native patients in some areas of the Territory of Papua and New Guinea is not available, is that the Government is economizing on medical services in the Territory? Is there an adequate number of trained medical and nursing staff available at present for existing hospitals? How many fully trained doctors and nurses are already working in these hospitals, and are they being drawn from Australian sources? How many native hospitals are there, and what is their bed capacity? How many semi-trained native personnel are there, and are they satisfactory? Finally, are natives being trained in universities or hospitals in Australia to be medical practitioners or nurses?
The Minister for Territories has supplied the following answer: -
Expenditure on hospital buildings rose from £93,940, in the two years 1948-50, to £1,034,745 in the two years 1955-57. The staff is not yet adequate to serve the health needs of the whole population, but every year health measures are being extended.
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Debate resumed from 14th November (vide page 1253), on motion by Senator Spooner -
That the bill be now read a second time.
– This bill clearly expresses the Government’s policy in regard to Commonwealth housing. Its purpose is to authorize the issue of treasury-bills, or to borrow moneys not exceeding, in the whole, £33,160,000. After reading that, it must be quite clear to all honorable senators that the Government’s policy has two outstanding features. First, the Government has made no serious endeavour to deal with the housing problem in the Commonwealth, and secondly, it is obvious that the Government will do as little as it possibly can to alleviate the present housing shortage.
I submit, at the outset, that it is the responsibility of this Government to face up to the present housing problem in the Commonwealth, and I base my submission on three grounds. Believe me, the Government will have to change its attitude and its actions considerably if it is to alleviate in any way the existing housing shortage which has developed into a grave social evil! I shall now indicate the three grounds on which I base my case.
First, it will be recalled that during the war period, the Labour government formulated a housing scheme which allowed for close co-operation between the Commonwealth and the State governments. That scheme was functioning satisfactorily in the circumstances and, up to a certain point, homes were being provided for the people who required them.
The second ground is that the Commonwealth Government has sponsored an immigration scheme. It was the Labour government, of course, which founded the scheme and set it on its successful way. This Government took up the work where Labour left off, and has carried on the scheme ever since. That is another matter that I shall link with my reference to the present housing problem.
The third ground is that during the war certain financial changes were effected in the Commonwealth. The principal change was the introduction of the uniform taxation scheme, which is still in operation. Those are the three points that I shall use to support my argument in connexion with the housing shortage as I see it.
Dealing with the first point, I think it is common knowledge that throughout the war period no civilian home construction was undertaken. It was not possible to construct even one home, for the simple reason that the Government had first call on all the man-power in the Commonwealth, and also had a prior call on all the resources of the Commonwealth. If there is any homeless person listening to me now, he will be fully aware of the fact that during the war period it was impossible to have a simple home constructed.
Following the war period, there was a high marriage rate. Ex-servicemen who had been away for a number of years got married on their return and became homeseekers. Further, immediately following the war, there was in operation in almost every State a system of control over the construction of buildings. It was not possible >to erect a building, whether a dwelling or industrial premises, without a permit. All building materials were closely conserved for the industrial expansion that was taking place at that time. That system operated for the very good reason that the problem of unemployment was facing the Government at that time. It was the desire of the Labour government to place in employment all the servicemen who were being demobilized, and, therefore, it was necessary to establish factories and other industrial premises.
I come to the second reason why the Government must closely associate itself with the housing problem. It is the growth of our population due to immigration. The Treasurer (Sir Arthur Fadden), in his recent Budget speech, said that the Government had aimed at bringing 115,000 immigrants to Australia during the last financial year and, in fact, had succeeded in bringing 6,000 more than that number. During that year, immigrants totalled 121,000. It is interesting to note that between 1948 and 1957 Australia’s population, through immigration alone, increased by 1,700,000 persons. Not all of the immigrants require homes, but a proportion of them do, and later on I shall give the approximate number requiring homes.
The third reason why the Government must take full responsibility for the housing problem in Australia is the financial changes which were made for the benefit of the nation during the war period. Uniform taxation was introduced - certainly by a Labour government - for the purpose of carrying on the war successfully. As a result of that measure, the Commonwealth Government is the major government in Australia. It is also the major financial authority. Every one who follows the workings of the Loan Council knows that the Commonwealth Government is, in fact, the Loan Council. The States come with their various schemes, saying, “We would like to do certain developmental work. We want so many millions of pounds for roads, so much for irrigation, and so much for other projects “, but it is the Commonwealth Government which finally decides just how much money will be made available to the States from loan funds.
So on those three grounds - the taking charge by the Commonwealth Government of the whole of the affairs of Australia during the war, the immigration scheme, and the Commonwealth Government’s standing in the field of Australian finance at the present time - it is the prime responsibility of the Commonwealth Government to deal effectively with the housing problem, but, as I said in my opening remarks, this Government has, in effect, put tumours in its eyes so that it cannot see the housing problem that now exists.
I turn to the small sum that is to be made available this financial year to the Queensland Government for housing. I find it very difficult indeed to believe for a moment that the Queensland Government said that £3,160,000 was sufficient for housing in Queensland this year. I believe that no Queensland representative on the Loan Council would have been so irresponsible as to say that £3,160,000 was sufficient for housing in Queensland this year. I shall show quite clearly that that small sum is totally inadequate for Queensland’s needs. Let us consider the present cost of a house. I think everybody knows that the cost of building houses has increased tremendously over the past few years. In 1948, when Labour was in office in Canberra, the average cost of a house was £1,333; to-day, the average cost is £3,016. Why, even during the last twelve months the average cost of building a dwelling has increased by £157. The figures I am citing have been furnished by the Queensland Statistician. As everybody knows, due to this Government’s ineptitude in dealing with inflation, costs generally throughout Australia, including the cost of housing, have increased by 6 per cent, during the last twelve months. Based on an average cost per house of £3,000, the amount of £3,160,000 provided for housing in Queensland this year will enable the construction of only 1,053 dwellings. 1 have before me . document that was issued by the Minister for National Development (Senator Spooner) in February last, in which he stated that there was a housing shortage. The document contains certain figures. At that time, the Minister stated that there was a shortage of 9,500 houses in Queensland. Yet, in the current financial year, only £3,160,000 is to be made available to that State for housing purposes. The figures furnished by the Minister at that time were correct, but what I have said about the position in Queensland to-day is equally true in relation to the other States.
If the Government considers that sufficient finance is being provided to Queensland for housing this year, then logically it must also consider the amounts to be provided to the other States are adequate. Based on the figures supplied by the Minister in February, a very ‘ generous estimate of the present shortage of houses in Queensland would be 8,447 dwellings. In truth, I believe that the current shortage in Queensland is nearer 20,000 homes. Only the people who are homeless and are searching for homes really know how acute is the housing shortage, not only in Queensland but throughout Australia.
After the war, certain action was taken by various States in order to relieve the housing situation. Some of the States, including Queensland, imported prefabricated houses from European countries. Queensland, because of its adventure in the field of importing prefabricated houses, now finds itself in a very sorry mess indeed. Although I do not blame anybody in particular for the present situation, I think that the Minister who was in charge of housing in Queensland at that time should have taken more precautions than he did to ensure that the imported timber houses were free of pests.
– He imported some French borers.
– The proper name of the pest is European borer. These borers are now more troublesome than the prickly pear, sparrows, rabbits, Argentine ants and members of the Liberal party. The Queensland Government is now faced with the necessity to provide £145,000 for pest eradication. The occupiers of the homes infested by European borers will have to vacate them so that the fumigators can carry out their work properly. According to information that has been supplied to me, about 1,400 homes in Queensland are infested by European borers. Imagine the confusion and inconvenience that are being caused to the occupants of the infested houses, quite apart from the expense that is devolving on the Queensland Government Government.
There is another evil associated with this matter. It is not known to what extent the borers have migrated. After a year or two, it may be found that the pest has spread to other suburbs of Brisbane.
I shall revert now to my theme concerning the housing shortage. Nine months ago, the Minister stated that there was a shortage of 60,000 houses in New South Wales, 32,000 in Victoria, 9,500 in Queensland, 7,500 in South Australia, 4,000 in Western Australia, 2,000 in Tasmania, and 350 in the Northern Territory - a total shortage of 115,350 homes. In order to meet the grave situation disclosed by those figures, one would have expected an increased rate of provision of homes since February, but instead of increasing, the rate has diminished. In 1954-55, I find, 82,000 dwellings were constructed in Australia. In the following year, only 78,000 were constructed - 4,000 fewer. In 1956-57, I find, 68,000 dwellings were constructed - 10,000 fewer than in the previous year. Although immigrants are continuing to come to this country, the rate of construction of houses has diminished. Last year, when the shortage of houses was estimated at 115,350, 121,000 immigrants were brought to Australia. Apparently, the number of immigrants who required homes was not taken into account when the shortage of houses was estimated to be 115,350. I should say that at least one-fifth of the immigrants who come to Australia need homes. On that basis, 24,000 homes should have been provided for the immigrants who arrived in Australia last year. Again, prospective marriages were not taken into account when the shortage of houses was estimated at 115,350. If the estimated number of marriages during the last financial year was 72,000, it would be reasonable to assume that at least 36,000 homes would be needed by the married couples.
– Surely the honorable senator does not really believe what he is saying.
– The Minister will have an opportunity to deny what I am saying, but 1 do not think that he will dispute my figures, because I have been generous in this regard. First of all, 121,000 immigrants came to Australia in the last financial year, and I say that one-fifth of the immigrants entering Australia require homes.
– Does the honorable senator believe that any government department would be so utterly stupid as to make an estimate of housing requirements without making provision for immigration and marriages?
– I shall come to that point later. I am glad the Minister for National Development mentioned it. The estimated local shortage of housing is placed at 48,000 homes. How conservative that figure is! lt makes me blush as I state it. The Government believes that only 48,000 Australians are seeking homes and that that figure brings the total housing shortage to 115,350.
The Government has not diminished the housing shortage by any construction programme that it has sponsored. 1 want to make that fact clear. If there was a shortage of 1 15,350 homes in February last, that is a continuing shortage. The Government has not lessened it in any way and the shortage has continued into this financial year. The problem has not been abated by the provision of one home. As a matter of fact, the shortage has grown worse since last February. 1 have examined the amount that the Government proposes to raise by way of loans through the sale of treasury-bills to provide the States with funds to deal with the housing problem. A shortage of 115,350 homes is to be matched with the provision of £33, 1 60,000. What a miserable effort this Commonwealth Government is making to deal with the housing problem. What a puny effort! The total that is required immediately for housing is more in the neighbourhood of £300,000,000.
– Where would the honorable senator get the work force if that amount of money was available?
– Senator Maher has asked where we would get the work force. We have heard about that obstacle before. We could draw from the ranks of the unemployed. I can tell the honorable senator where we can get unemployed carpenters, bricklayers and building trade operatives at the present time. The Government could have done that. I remind Senator Maher of the huge volume of commercial building that has been proceeding in Australia in the past twelve months. To December last, £234,000,000 was spent on commercial buildings, and I know that this Government has manipulated its policy in such a way that as small a sum as possible will go to the States for housing programmes so that the sponsors of commercial building will have a free run and free use of the labour force and material that are available. As a result, big insurance company buildings are being erected in the States. All sorts of industries of a tertiary nature will be using these commercial buildings. Many are being constructed for office accommodation.
– If those buildings were not constructed there would be more unemployed.
– That is an economic problem with which I do not think Senator Buttfield could cope. I honestly believe that it is too much for her mentality. The purport of the proposed agreement is to cultivate building societies so that they can receive some of this money from the State governments and then lend it to those who want to build homes. That is the whole objective of this Government. It will do anything so long as it can get away from its own responsibilities. The people of Australia expect a Commonwealth government to do the things that a Commonwealth government should do. One of them is to look at the housing problem and to ascertain what it requires.
I know that the Government will say that there is a constitutional doubt in this matter, and that the Commonwealth Government has not the right to act under the Constitution. The Government claims that it is not one of its obligations to deal with housing, but that it merely lends money to the States for that purpose. Therefore, it has tried to encourage the formation of building societies in all the States so that they can receive from the State governments the money which is raised by way of loans and lend it to prospective home builders at high rates of interest.
This Government will receive something like 4 per cent, on the money that it makes available to the States. If this Government is to charge the States 4 per cent., obviously the States will have to increase the rate of interest on the money they make available to the building societies and to State housing authorities. The home borrower who obtains £2,500 to construct a home will pay something like £5,000 over 25 to 30 years to clear his home of debt. The rate of interest to-day is about 5 per cent, to 5i per cent.
What is the prospect for a home buyer? The banks will not lend him any money, no matter what security or collateral he has. A buyer cannot raise £1,000 or even £500 to construct a home. Very few building societies function in Queensland and those which operate do so on a very limited scale. They have not nourished over the years, although I remember that one building society in Queensland 20 or 30 years ago charged 8 per cent, on every £1 that was borrowed from it. No homes are being built for rental now because it is said that they are not a good investment. A little private building is going on among wealthy members of the community throughout the year. Some members of the community are doing very well under this Government and are moving into larger houses, but the situation is absolutely hopeless for the ordinary wage-earner. It is not possible for him to acquire a home under present conditions.
I turn now to the measure under which the Government will sell its treasury-bills and advance loan money to the States. An examination of the bill shows that savings schemes could be introduced. A savings scheme was introduced during World War II., and the Commonwealth Government paid high rates of interest to the small man who was able to save a few pounds. Why cannot the Government use a little imagination and extend that principle to encourage savings for homes now? It could do so under the same bill that it is using now to raise money through treasurybills. It could make a home savings scheme operate so that the Government could pay a high rate of interest - up to 15 per cent, or 20 per cent. - on money saved for a home.
Housing for the people could be classified’ as a defence scheme and could be linked with the defence of Australia, but under this Government it becomes merely a matter for Liberal party orthodoxy. It is futile for the people of Australia to look to this Government for any assistance in relation to housing. This Government believes in. the rooming house where people can be kept together, where the children will have to associate with strangers every week, where there is no privacy, where the seed beds of child delinquency are established, and from which there is a steady flow to the police courts and the divorce courts. They are the conditions that this Government believes in. It believes in the cultivation of communism by maintaining bad housing. (Government supporters interjecting) -
– When honorable sena tors opposite are told the truth about themselves, they do not like it. Some of the wealthy members of this chamber have never had to look for a dwelling. They have never lived in a rented home and have not associated with people who live in rented homes. They are not prepared to go into the poorer areas of the cities in which they live to see how other people live. The worst landlord in Australia is the Commonwealth Government. If honorable senators opposite were to go to the Northern Territory, they would see at Darwin the spectacle of slumdom. In no other part of the world are housing conditions worse than they are at Darwin.
– How long is it since the honorable senator was there? They have a jolly good housing settlement up there.
– The honorable senator should have a look at it.
– I have.
– My friend the good senator can afford to laugh; she has never known a poor day in her life.
– How do you know?
– The wealth that she has acquired has been left to her;, she has inherited it.
– You are talking absolute nonsense. You should get your facts right.
– She can afford to laugh when the spectacle of the present housing situation is brought before the Parliament. This Government has fallen down on a national obligation. lt is obliged to house the people of the Commonwealth, but it is not doing anything in that direction.
– I find great difficulty in joining issue with Senator Benn, because most of what he said was completely outside the scope of this bill. In the final stages of his speech, we listened to a travesty on borers and communism. He eventually reached the stage where he was prepared to reflect upon another senator. So I think we can completely ignore everything that he said.
The purpose of this bill is to authorize the provision of £33,160,000 for financial assistance to the States for housing. That money is to be advanced in accordance with the conditions set out in the Housing Agreement Act 1956, which incorporated a new agreement between the Commonwealth and the States. The sum that it is now proposed to raise is £1,000,000 more than was allocated under the 1956 legislation. Eighty per cent, of the sum of £33,160,000 is to be used by the States for their own housing programmes, and 20 per cent, is to be allocated to the building society movement, through the agency of the States, for the erection and purchase of homes.
It is quite wrong to suggest, as did Senator Benn, that the sum that is being provided by the Commonwealth for housing is limited to £33,160,000. The fact that Senator Benn did not know that the bill provides for an additional sum of more than £1,000,000 for service personnel is an indication of what little he knows about the situation. That supplementary sum will bring to approximately £35,000,000 the sum that is to be provided by the Commonwealth for war service homes. If Senator Benn wants to know the full strength of the story, let me tell him that we must also add the sum that is being provided for housing by the Commonwealth Bank, which last year was approximately £1,600,000. Assuming the Commonwealth Bank’s contribution for this financial year is the same as it was last year, if we add all those figures, we get a total sum of more than £70,000,000. It is fair comment on Senator Benn’s knowledge of the bill to point out again that he was not aware that the bill provided for the expenditure of moneys in addition to the sum of £33,160,000.
I did not rise for the purpose of referring to the allocation of 80 per cent, to the States, but perhaps I might be excused for referring to that aspect of the matter as it affects New South Wales. Following the debate on this measure in another place, there were some exchanges in the press between the Minister for the Army (Mr. Cramer) and the New South Wales Minister for Housing, and I understand some personalities were indulged in. I do not think that kind of thing does any good for the legislation now before us or for the parliamentary institution; but, leaving that aspect of the matter aside, I do not think any one can deny the burden of what was said by the Minister for the Army. He said that the landlord and tenant legislation in New South Wales operated against the availability of more homes for letting purposes. If we read the real estate columns in the press each week or discuss the problem with any one who has any knowledge of it, we will learn that the New South Wales landlord and tenant legislation makes people reluctant to let their houses. The action of the Western Australian Government in easing the landlord and tenant regulations of that State has indicated the means whereby more houses are likely to be made available for letting.
The New South Wales Housing Commission, which is a statutory authority, operates on the basis of an economic rent, and any one who builds a new house can do likewise, but houses that were built before 1942 - they constitute the bulk of houses in New South Wales - can be let only for a rent that is based on 1939 values. It is not economic to let homes on that basis. Another bad feature of the situation in that State is that the owner’s right of repossession is so limited that it is unwise for him to “ chance his arm “ by letting his house. The situation is particularly difficult for aged couples who own huge houses that are obviously too big for them to maintain. So I repeat that what the Minister for the Army had to say had great point.
– But it does not affect the new house.
– No, it does not apply to new homes; but, although the housing commission can charge an economic rent based on present-day values, the ordinary landlord is denied the right to charge an economic rent if his house was built before 1942.
I want to pass from that to the allocation of funds to State home-building accounts for home ownership purposes. 1 propose to quote from a statement that was made on 30th September by the Minister for National Development (Senator Spooner), who is in charge of this bill, which indicates quite clearly the measure of success that we are beginning to achieve in the allocation of funds for home ownership. He said -
Results of the first year of operation of the Home Builders Fund under the 1956 Housing Agreement are now available, and the progress made to date indicates that the scheme will be outstandingly successful.
Since the Agreement became operative last year, 166 new co-operative building societies have been formed throughout Australia to participate in the allocations of the Home Builders Fund. In 1956-57 this allocation totalled £6,430,000. For this financial year it is £6,632,000. It has been estimated that at least another £2,000,000 has been attracted to these societies as deposits, &c, by members.
Totals of new societies by States are: - New South Wales 69, Victoria 81, Queensland 13 and Western Australia three. In addition, four existing permanent building societies in Western Australia and four in South Australia participated in the allocation.
Dwellings commenced from Home Builders Fund moneys totalled 3,100.
For Senator Benn’s benefit I shall read the next paragraph of the Minister’s statement -
The progress made in Queensland is particularly significant because there were no societies available in that State to participate when the 1956 Agreement became operative.
I want to direct particular attention to one very significant sentence in that statement. The Minister said -
It is estimated that at least another £2,000,000 has been attracted to these societies as deposits, &c, by members.
That, of course, means that when, under this agreement, the Government makes £6,600,000 available for homes, a total of at least £8.000,000 becomes available for that purpose. The reason is that the building societies advance up to 80 per cent, of the cost of a home. Sometimes the member has an equity greater than 20 per cent., but generally there is an 80 per cent, advance, with an equity of 20 per cent, provided by the member.
Some interesting deductions can be made. A sum of money paid to a State government for the Home Builders Fund will provide 20 per cent, more homes than would a similar sum paid to a State government for use in its ordinary housing activities. That is quite a logical conclusion. I can assure honorable senators that the overhead expenses of State housing commissions are great, but for the purposes of this argument I will assume that they are minute. If £6,600,000 were made available to a State housing commission and if £3,000 were the cost of a home unit, 2,200 homes could be built with that money. If the £6,600,000 were given to the co-operative building society movement - there would be no overhead expense involved then, because this is a co-operative movement and costs are charged to management - the whole of the £6,600,000 would be available for housing loans and, in effect, would immediately become £8,000,000. That sum would build 2,666 homes, or 466 more homes than would be the case if it were used by a government agency. In the future, 30 per cent, of the money made available under the agreement will go to the Home Builders Fund, instead of 20 per cent, as at present. So we see that the Government has been very wise and that more homes will be built than would otherwise be the case.
Money lent to the States for home ownership through the Home Builders Fund will, in effect, be paid into a revolving fund. The money is lent on the basis of a 53-year loan. The loan has to be amortized over a period of 53 years. The rate of interest payable on it is 1 per cent, below the bank rate. It is lent in turn to the building societies, which can charge a rate of interest only £ per cent, above the rate at which they obtain the money. That brings the interest rate to 4i per cent., plus management costs. If management costs are added, it means that borrowers are charged approximately 5i per cent, interest. Building societies advance money for periods varying from 22 to 30 years. For that reason, money made available under this scheme on a 53-year basis can be used at least twice. So we see that the fund can be regarded as a revolving fund.
I suggest to the Government that the perfect thing to do would be to assure the building societies of a certain sum of money each year, so that they could plan their future activities. The building society movement asks that finance shall be provided in a regular and orderly way. As the Government is being paid interest on the money lent to the societies, it could amortize the loans over a period of 106 years, instead of 53 years. Amortization over the longer period would not involve much extra expense. On a loan of £6,600,000 over a period of 53 years, the annual interest payable is £264,000 and the annual amortization payment is £37,000. The answer to the request by the building society movement would be to build up a fund so that the societies could plan ahead in an orderly way. If the Government were to make payments to the fund which were repayable in 106 years instead of 53 years, it would not be very long before the building society movement had enough money available for its purposes, and there would be no need for supplementary advances by the Government.
The other point I wish to make is that it is foolish to think that the housing problem can be solved by government finance alone. One honorable senator has suggested that the Government should advance £300,000,000 for housing. That would be completely disastrous for the building industry.
– And for the whole of our economy.
– Yes. Whilst it is true there is a very fine line between the availability of materials and labour and the availability of finance, our economy demands that we shall get as near to balance as is possible. When those things are out of balance, the economy is affected. I assume that Senator Benn believes that £300,000,000 could be made available by the Government with a stroke of the pen. 1 do not think that such a large sum should be provided, but I believe that the private sector of the economy must be prepared to play its part in advancing money for home ownership. There are institutions in the field of private enterprise which depend basically upon housing. The success or failure of insurance companies, big manufacturing firms and retail trading companies depends upon the success or failure of the housing programme. If such companies want to invest large sums of money in more attractive fields such as hire purchase, that is all right from my point of view, provided they realize that if they want the economic climate which will suit them they must play their part in providing a certain amount of money for housing - money which, traditionally in this country is made available at low rates of interest. The Minister, in making that submission in more recent times - possibly in more effective language than I am using now - was quite correct. Obviously, it will not be long before we are in a very difficult situation with regard to housing if we rely entirely upon the Government for its provision, lt should never be forgotten that 75 per cent, of the work force of this country is employed by private enterprise. All the big organizations in the community must recognize that housing is not only the Government’s responsibility, but theirs also.
Let me conclude by saying that the impact of this agreement, and the provision of more fiance for home ownership, is already having a substantial effect upon the housing position in Australia. No one suggests that we are through the woods yet, or that the problem has been solved, but the Government, by introducing the 1956 legislation, and making finance available for home ownership, is certainly playing its part, and is producing results that are readily apparent. I have been interested to read a statement by the Minister on this very issue as recently as the 17th of this month. I think that it can be repeated with point because it crystallizes what I am saying. The Minister said -
The increase in the rate of commencements revealed by the Commonwealth Statistician’s preliminary figures for new houses and flats for the September quarter shows that the increase in the level of house building activity is continuing.
Commencements in the September quarter totalled 18,981, which is equivalent to an annual rate of approximately 76,000. This rate represents a 10.4 per cent, increase on the number of commencements for 1956. It compares with the numbers built in earlier years as follows: - 1954-55, 82,110; 1955-56, 78,504; 1956-57, 68,437.
The increased activity is reflected also in the rise in the number of houses and flats under construction. There were 66,668 houses and Hats under construction at the end of September, 1957, compared with 61,932 under construction at 31st December, 1956. The September figure is the highest for two years.
Although the Statistician’s figures do not reveal the progress made in the various States, statistics on the number of building permits, &c, issued in New South Wales indicate that that State is contributing significantly to the overall increase in activity.
For the September quarter there was a total of 8,064 permits, &c, issued for the construction of dwellings, compared with 7,570 for the June quarter, and 7,220 for the March quarter.
While the housing position must continue to cause the Government the greatest concern, it should never be forgotten that we embarked upon a vigorous immigration programme, which involved the taking of calculated risks. We have accepted those risks because we regard increased population as fundamental to our very existence. Nevertheless, the Government has gone some distance in its task of easing the situation. lt is no good having all the finance in the world if you have not also the materials and man-power that you need. Equally, there must be a balance in regard to the provision of finance also. The building trade is the most sensitive of all the trades. It is a kind of barometer. At present there is not available a surplus of man-power and materials such as would warrant the Government giving a tremendous impetus to the building trade of the order of £300,000,000 as suggested by Senator Benn. If the Government’s financial assistance is matched by that from the private sector of the community, it will not be long before we shall be round the corner so far as housing is concerned. lt is certainly true that, as a consequence of this legislation, more and more Australians will own their homes. Home ownership is one of the most important factors in Australian life. The home owner is the salt of the earth. He gladly accepts responsibilities extending, perhaps, over a period of 30 years. His home is his castle. He takes pride in it, and this all helps to make him a better and happier citizen. I commend the Government upon bringing down this legislation and assure it that, for my part, the bill will have a speedy passage.
Senator O’BYRNE (Tasmania) [4.23). - Senator Anderson has gone to considerablepains to attempt to justify the Government’s failure to estimate the true housing needs, of the Australian people. As the Minister said in his second-reading speech, the bill authorizes the raising of loan moneys to a total of £33,160,000, for the purpose of providing financial assistance to the States for housing. Senator Anderson referred to the Landlord and Tenant Act of New South Wales and tried to get out from under because, in the final analysis, the States can build only as many houses as the money given them by the Commonwealth will allow them to build.
The Government has not a consistent policy on housing. The Treasurer has one approach to it. Senator Spooner has another, and the Minister for the Army, who claims to know a great deal about the subject, has yet another. There is considerable confusion among Ministers as to what policy the Government should adopt. We are most interested in how the Government’s policy will affect the ordinary man or woman who is without a decent home. My colleagues and I believe that the housing problem has been used as a pawn in the economic game. The private trading banks have mercilessly exploited the situation. They have so completely shirked their responsibilities that on the 11th of this month Senator Spooner felt moved to slate them in public. Let me repeat what he said at a conference of the Federation of Co-operative Housing Societies of Victoria, which was held in Warburton. He said -
In May the Central Bank had suggested that the trading banks should moderately increase the volume of housing loans.
Since then trading bank lending for housing has. improved - although not quite as much as I would have liked.
I am disappointed that life assurance companies, have not come back into providing money for the building of new homes as actively as before.
I think their future contributions could bemore substantial.
If we examine the present position, we find that the number of home-seekers has been increased over the past twelve months by marriages and immigration. The allocation of an additional £1,010,000 for which provision is made in the legislation before us cannot possibly cope with the increased demand. During his second-reading speech, the Minister for National Development said -
The provision of £33,160,000 in 1957-58, for which approval is now being sought, represents an increase of £1,010,000 over the amount advanced to the States in 1956-57.
I have before me statistics showing the demand for housing created by the arrival of immigrants to this country. In 1947-48, there were 29,364 immigrants and in 1948-49, the number was 101,148. This figure increased to 161,348 in 1949-50. For the year 1950-51, the number dropped to 132,976 but in 1951-52 jumped again to 102,880. It dropped again to 86,376 in 1956-57, and we expect this year that there will be 98,840 immigrants. But the Government is making no provision in this legislation to meet the growing housing needs of the Australians and immigrants.
The Minister also stated in his secondreading speech that of the amount for which approval is sought £11,000,000 is to be allocated to New South Wales, £10,000,000 to Victoria, £3,160,000 to Queensland, £4,000,000 to South Australia, £3,000,000 to Western Australia, and £2,000,000 to Tasmania. That allocation is made on a basis which has no relation whatever to the numbers of applicants for homes. It has been suggested that the cost of overtaking the present housing lag would be approximately £300,000,000. I suggest that attempts should be made immediately to find this money somewhere, because the basis of a sound domestic economy and a sound and developing democratic society is the provision of decent homes for the people and the maintenance of the building industry in a stimulated and healthy condition.
I have drawn attention on previous occasions to the importance of the building industry to our economy. I have pointed out that the building of homes creates a demand throughout the whole range of endeavour. This demand starts with the timber industry which is in such a bad state everywhere in Australia at the moment. That industry could be given a tremendous stimulus if proper steps were taken to speed up home building, but this legislation provides only an extra £1,000,000 - a paltry sum - for the 118,000 homes needed throughout Australia. I repeat that only £1,000,000 extra is to be provided under this bill for overtaking the housing lag. Under those cir cumstances, it will be appreciated that the timber industry finds nothing at all in this legislation to lift it out of its difficulties. One expects the Government and its financial advisers to be able to prime the economic pump sufficiently to start a new cycle in home building because of the beneficial effects it would have to so many of our industries.
I should like to see many of our sawmills restart work in the coming summer, especially in Tasmania, where timber of good quality is produced. Unfortunately, the timber industry in that State is experiencing a depression. Honorable senators on the Government side have scoffed at the suggestion that there are building workers seeking employment. I assure those honorable senators that throughout Australia to-day marry building workers are seeking employment and are prepared to take any job at all, even casual work. In a country such as this, we should be able to look to a more substantial allocation than a paltry £1,000,000 to alleviate the housing position.
It has been stated that the number of homes needed to overtake the lag is 60,000 in New South Wales, 32,000 in Victoria, 9,500 in Queensland, 7,500 in South Australia, 4,000 in Western Australia, 2,000 in Tasmania, 350 in the Northern Territory and 3,500 in the Australian Capital Territory. Those figures completely contradict Senator Anderson’s suggestion that the States are not doing the right thing in connexion with the housing shortage. I ask him directly what the Commonwealth Government is doing in its own field - in the field where the responsibility is fairly and squarely in its own lap. What is it doing about the housing shortage in Canberra? The great lag that exists here is a challenge to the Commonwealth Government. Proportionately, the Commonwealth Government is as far behind as are the States, or perhaps further behind, in meeting its responsibilities.
The same position exists in the Northern Territory. It is a very grave reflection on this Government that people who are prepared to suffer the climatic conditions, to endure the isolation from the large centres of population which enjoy so many modern amenities, and bear the burden of the high cost of living due to heavy freight charges and so on, should be without homes. In addition to all these disabilities, the people who go to the Northern Territory are faced with an acute housing shortage because the Commowealth Government has neglected to face up to its responsibilities. The fact that there is a shortage of housing there is a grave reflection upon this Government.
It is all very well for honorable senators on the Government side to seek a way out from under when confronted with justifiable criticism from this side of the Senate, but we do not intend to allow this measure to pass through the Senate without bringing home not only to the Minister but also to the people of Australia, the realization of the fact that the great promises made by his Government in 1949 have not yet been honoured. They were promises that were very important, and they were vote-winners in the election campaign. The Prime Minister (Mr. Menzies) said -
We give this firm promise to young couples. The Liberal party, when returned to office, will regard as its paramount and most vital responsibility the speeding-up of the housing programme. We will not allow any other public works, other than those of the most extreme urgency, to be given priority over home-building. . . .
Yet every day we read in the correspondence columns of the press heart-rending appeals for assistance in obtaining homes. We see advertisements inserted by people wanting Accommodation. Young people are prepared to take any sort of accommodation, because they want to start a new life together with the sense of independence that is so important to married people. The Government’s policy gives no encouragement whatever to these people. Not only is the Government failing to honour its election promises, but it is causing serious frustration to people who were led to expect much better treatment.
During the last twelve months, contradictory speeches have been made by the Minister for National Development, who is in charge of this phase of the relations between the Commonwealth and the States. He realized that the number of houses built annually had fallen to such an alarming level that something had to be done and, belatedly, he made an appeal to some of the private financial institutions. The Minister knows what business people are like. He knows that they show no sympathy for the personal, intimate, domestic problems that exist in the hearts and minds of people needing homes. Economics and finance have no soul. Lending institutions are after profits and dividends, and for the Minister to ask them to direct their attention to home building is like pouring water on a duck’s back. He should have sufficient experience in finance to know that that is the case.
Any money that is available for investment to-day by private concerns is directed to channels where high interest rates apply. People seeking homes are quite unable to compete. In the Senate previously I have pointed out how ridiculous it is that although people can buy refrigerators, washing machines, carpet sweepers, radiograms, television sets and other electrical appliances on hire purchase, paying little or no deposit, they find it almost impossible to get money to finance the building of homes into which to put these wonderful things. I assure the Senate that I have nothing against hire purchase in principle, inasmuch as it enables people to obtain new appliances and improve their standard of living. I believe that if a change were made in the structure of the Commonwealth Bank, it should be a change to provide facilities for persons to buy these appliances at an interest rate of 34- per cent. People are being encouraged to accept offers to buy household goods on hire purchase. It is made easy for them to buy goods which would improve their standard of living, but they cannot borrow money from any of the financial organizations to buy or build a home in which to use those goods.
The whole of the economy is out of balance, and it is the responsibility of the Commonwealth Government to ensure that a state of balance is restored and maintained. It is a fact that private lending institutions are not in the slightest degree interested in lending money at a rate of interest which would permit people to borrow money for homes. We have seen evidence of this in the treatment of exservicemen waiting for war service homes. Many young fellows became sick and tired of waiting for loans from the Government during the long period when there was a shortage of funds for war service homes, so they went to private institutions and even to the Commonwealth Bank. Many private institutions lent money at interest rates of 6 per cent, and 7 per cent., which the ex-servicemen accepted in the hope and belief that the Commonwealth Government would take over the mortgages when more funds became available for war service homes. But in 1951 the Commonwealth introduced regulations whereby the War Service Homes Division was prevented from discharging existing mortgages, and many of these ex-servicemen are finding that the liability for the interest and redemption payments which they undertook to make is now a millstone round their necks. That matter should be examined with a view to providing assistance for them.
I stress the fact that it is useless to appeal to private lending institutions to assist in overtaking the terrific housing lag which now exists. There are 118,000 family units - not individual persons - in Australia in need of houses. They cannot expect any sympathy or consideration from private lending institutions, which direct their money into more remunerative channels. The problem is even more urgent than it was previously. Figures are quoted and sometimes misquoted. We are asked how much money Labour provided for housing in 1948 or 1949. Comparisons on that basis are always unsound, because since then our population has grown by 25 per cent, to 30 per cent., and the value of money has declined, according to my financial adviser, by one-half.
– By 78 per cent.
– lt has certainly declined considerably. To-day the need is for a more generous approach to this problem on the government level. The legislation we are now considering does not face up to the great demand. The Minister said that £6,000,000, which is 20 per cent, of the amount provided, will be allocated to building societies and other building institutions for the erection and purchase of homes for private ownership, but although some building societies are taking advantage of this provision, building societies in Tasmania, which have their own set-up, are not getting the full advantage of the amount available.
– They do not want any.
– That is true. They said that they would rather finance their own building commitments. Fortunately, in Tasmania, we have a savings bank which has continued along the traditional lines of savings banks before the money hawks, the big monopolistic private trading banks, came into the market, and were able to act as civic instrumentalities. People came along and deposited their money in the savings bank rather than in private safes, socks or cigar-boxes. They knew that their money was as safe as a church when deposited in the savings bank. The fact that they received interest of only 2i per cent, on amounts up to £250 and li per cent, for sums in excess of £250 was of little consequence to them, because they knew that they could withdraw their money if they required it.
The Launceston Bank for Savings has kept up that great tradition and, in consequence, it is now able to finance at a fairly reasonable, but limited, level some of the building societies that are operating in the northern part of Tasmania. I should like to pay a tribute to that bank which has retained the last remnants of the principle of honesty in banking and is still fulfilling the true purpose of a savings bank. To-day, most of the banks are engaged, in the guise of competition, in chasing what is called success. It has been described as the rich goddess.
The private trading banks have accumulated money that has been deposited with (hem at low rates of interest and have channelled it into fields from which the return is high; they consider it unprofitable to lend money for housing. As I have mentioned before, although the private trading banks are prepared, through their hire-purchase adjuncts, to lend money for the purchase of household goods, they are unwilling to lend money to provide a house in which to put the goods. Thus, additional responsibility devolves on the Federal Government to provide for housing more money than this bill will make available, which is only a little more than £1,000,000 greater than the amount provided last year.
To-day, many people are having a battle to make ends meet. I refer particularly to people with large families, and young married couples. When men who are working for the basic wage, or a small margin above that wage - I know that it has been pegged for a long time - see their more affluent neighbours acquiring new labour-saving devices in their homes, they naturally cannot see why they should deprive either themselves or their families of similar benefits. From time to time, the C series index varies according to the cost of potatoes, but it is very seldom that the housewives find when they visit the corner shops that prices have decreased; they are usually higher than formerly. Continually rising prices make it increasingly difficult for these people to maintain a decent standard of living, and it is becoming harder for them to acquire homes. If we are to have a contented society, an improving and advancing democratic society, it is necessary for a new approach to this subject to be adopted. As the existing institutions are making inadequate attempts to assist people who are living in sub-standard houses, newly married couples, and immigrants to obtain adequate housing I consider that the Commonwealth Government should accept responsibility in the matter. We on this side of the chamber consider that an insufficient amount of money is being provided by this measure to meet the needs of the people who require housing. We sincerely hope that the Federal Government will adopt a more liberal attitude to this matter next year. The Minister has stated -
The Commonwealth’s own contribution to housing has been maintained over recent years at the highest practicable level. In 1957-58 it is expected to provide some £77,000,000 for housing, which is an all-time record for any Commonwealth Government.
Apparently, the Minister himself believes that that should be the target for the Government. The need for housing is growing, and the allocation this year is less than one-half of the target set for next year.
– To that amount must be added the provision for war service homes and home construction in Canberra.
– As has been stated by previous speakers, an expenditure of at least £77,000,000 each year is necessary to overcome the present lag. But by the time that lag has been overcome, our population will have increased by immigration and by natural increase, and there will still be a shortage of houses. Therefore, instead of being able to acclaim with a fanfare of trumpets that this is a worthy bill, I say that it provides only half enough money to satisfy housing demands. I hope that the Government will make further allocations to the States in order to enable them to speed up their housing programmes. In addition to increasing the provision for the building of war service homes, I hope that the Government will make available money to enable ex-servicemen to discharge their mortgages on existing homes, so that they may enjoy living conditions comparable with those of more fortunate members of the community. Ten years ago, a moderately sized house could be built for about £1,200, compared with an average price of £3,000 to-day.
All the matters I have mentioned are crying out for attention. Year after year, the Government produces figures which show that it has an insufficient understanding of the basic human needs of the community. I hope that the Government will take notice of the points I have raised, and that it will do everything possible to relieve the housing shortage.
– This bill makes provision for housing loans to the States totalling £33,160,000. I think that is a reasonably generous provision. We all know that adequate housing is the basis of family life. Therefore, it is absolutely essential, in a democratic society, for steps to be taken to enable family men to obtain homes. We do not ask the State or Commonwealth governments to act as benefactors in providing a home free. All we want is an opportunity for the family man to provide a home for himself and his wife and family. Housing forms the basis of our family life.
The Government has been reasonably generous in providing this amount of money for housing when we consider that it has also provided £35,000,000 for war service homes. I want to make the point that the State governments are not fulfilling their responsibilities in connexion with housing. The Commonwealth is providing the money. What are the States doing with it? I believe that they are wasting quite a large amount of this money through top-heavy administration.
This housing scheme has been in operation for about ten years. During that time, thousands of houses have been built. If a private builder constructed ten homes for rental or for sale, the transactions would provide him with enough finance to build another house. What are the States doing?
Tasmania, for example, has several thousands of what are known as Agricultural Bank homes. The rentals are reasonably high in many cases. The money that is being returned from the sale or rental of those houses should be used progressively to build more houses without the extra subsidy that is provided each year by the Commonwealth Government, but results show that the Tasmanian Government is relying upon the Commonwealth Government for the finance that is provided each year for new houses. The housing scheme should now be almost self-supporting with the returns that are coming in from homes that have already been built in the various States, but that is not the position, mainly because administrative costs are very high in the State housing departments.
I believe that the Government could overcome the housing shortage within a very few years through co-operative housing societies. This Government has already realized the value of those organizations. Co-operative housing societies exist for the benefit of persons who are building homes and if more money were provided for them, we could catch up with the lag in home building in a very few years. It is an established fact that the money which is provided for co-operative housing societies will build two homes for every one that is built under State housing schemes. I urge the Minister for National Development to increase the amount that is to be allotted to the various States for co-operative housing from 20 per cent., which will be provided after next June, to 50 per cent, or even more of the total allocation.
I know that State housing schemes must provide a certain number of homes for pensioners and those who have very little money. That should be the job of the State housing departments, but there are hundreds of thousands of persons who have sufficient money to build a home if they can get the additional finance they require. They are working through co-operative societies. In Tasmania at present we are sponsoring co-operative housing societies, and we expect the first of these organizations to begin operations within the next week. We have no co-operative housing act such as exists in Victoria and New South Wales, but we are working through the Co-operative Industries
Act 1928. The societies that are being formed will do much to relieve the housing shortage in Tasmania. We are starting with £50,000 for which we have applied and, under our scheme, we will be able to build 32 homes with that money. The same results could be achieved through society after society in Tasmania or in any other State. If we can build 32 homes for £50,000, as we expect to do through the housing society we have just formed, honorable senators can be assured that the lag in housing in Australia could be overcome in a very short time through co-operative housing societies.
Most people to-day have a sense of responsibility. They have been in a reasonably good economic situation and have saved some money for the time when they get married or want to build a home. They might want to borrow £1,500. They cannot get it from the banks, but they could get it from the co-operative societies if sufficient money were made available.
If the Government were to allot to co-operative housing societies a much greater proportion of the available moneys, the lag in home building would soon be overcome. When these societies are going concerns, as they are in Victoria, they can raise finance from other sources. For example, those who hope to form societies in Tasmania have been given a promise by insurance companies that, when the societies are going concerns, they will be lent up to £100,000 on the same terms as money is lent by the Commonwealth Government. To provide for the erection of houses through building societies is to provide for home-ownership. That is allimportant, because the houses are built on individual lines, and the occupiers have an equity in them and cherish them. With the aid of co-operative societies, we can provide a firmer foundation for family life.
The administrative costs of the Victorian co-operative schemes are very low. That is why it is possible to build homes so much more cheaply. In Victoria, the Federated Clerks Union, which began the system of housing co-operatives, has lent in the vicinity of £4,000,000 to individual home-owners. I understand that all the administrative work is carried out by two full-time secretaries with the aid of four girls. The union, I repeat, has lent about £4,000,000 to eighteen different cooperative societies. We in Tasmania hope to do the same.
I implore the Minister to recognize the fact that the establishment of co-operative societies is the answer to the housing problem. By providing money for co-operative societies, we avoid, to a certain degree, the extravagance and mistakes that are associated with State housing schemes. All the money that is lent to the societies goes into the provision of houses and is not used for the payment of administrative costs or some other State function.
The Government has been reasonably generous in the provision it has made under this bill. If the money were properly applied, it would be sufficient; but once again I urge the Minister to ensure that a greater proportion of the available funds goes to the housing societies. Moreover, I hope that the agreement with the Tasmanian Government will not be continued after 30th June next, for the simple reason that in that State sufficient societies will have been formed to take 30 per cent, of the available housing funds and to use them in a way that I believe will overcome the housing shortage in Tasmania and which, if applied throughout Australia, would have the same effect throughout the Commonwealth.
Motion (by Senator Spooner) put -
That the question be now put.
The Senate divided. (The President - Senator the Hon. Sir Alister McMullin.)
AYES: 27
NOES: 23
Majority . . 4
AYES
NOES
Question so resolved in the affirmative.
– I now put the question, “That the bill be now read a second time “. All those in favour say, “ Aye “; to the contrary, “No”. (Government supporters having called, “ Aye “, and some Opposition senators having called, “ No “)–
– I think the “ Ayes “ have it.
Opposition Senators. - No!
– The Senate will divide. Ring the bells! (The bells having begun to ring)–
– Mr. President, I ask you to call the division off.
– I will not do that. I heard many calls of “ No “. (The bells continuing to ring)-
– I ask that the division be called off. I make that request pursuant to Standing Order 1 65, which provides that at any time before the tellers are appointed a call for a division may be withdrawn by leave of the Senate. Accordingly, as the tellers have not yet been appointed, I ask for leave of the Senate to call off the division.
– No. The Opposition has called for the division; let it proceed. (Leave not granted.) (Opposition senators having crossed the floor of the Senate)–
– I rise to a point of order. Standing Order 170 reads -
Every Senator shall vote in accordance with his voice, and his vote shall be so recorded.
More than one voice called, “ No “. I insist, Mr. President, that those honorable senators who called, “ No “, shall vote in accordance with their voices.
– Order! I ask all those honorable senators who called, “ No “, when the question was stated from the Chair to return to their places. (Opposition senators having failed to return to their places)–
– In the circumstances, 1 shall call off the division.
Original question resolved in the affirmative.
Bill read a second time.
In committee:
The bill.
Clause 3 provides -
The Treasurer may, from time to time, in accordance with the provisions of the Commonwealth Inscribed Stock Act 1911-1946. or in accordance with the provisions of any Act authorizing the issue of Treasury Bills, borrow moneys not exceeding in the whole Thirty-three million one hundred and sixty thousand pounds.
I should like the Minister to tell me the exact provisions of the Commonwealth Inscribed Stock Act 1911-1946 under which the Treasurer will obtain this sum of £33,160,000. I am asking this question because the act contains three or four provisions relating to the raising of funds. I should like to know under what provision it is proposed to raise this sum. The clause indicates that another act may be involved. I refer to the words - . . any Act authorizing the issue of Treasury Bills.
I am aware of the existence of the Treasury Bills Act. I ask the Minister in his reply to indicate to me whether it is proposed to use both of these acts or only one of them. Is it the intention of the Government to issue treasury-bills to obtain this sum of £33,160,000?
Senator SPOONER (New South Wales-
Minister for National Development) [5.23]. - I am not in a position to say what will be done during the forthcoming year. I do not think the Treasurer is called upon to commit himself twelve months in advance. His needs, the circumstances and the policy may change as the year proceeds. I remind the Senate that what has happened in past years has been that moneys raised on loans as a result of prospectuses issued to the public have been appropriated for housing and re-lending to the States. As far as I am aware, that procedure will be adopted again this year. I think that is a reasonable answer to the honorable senator’s question. I do not think the Treasurer can be reasonably expected to depart from what might be his normal statutory rights and normal prudent course of procedure.
Bill agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
page 1379
Debate resumed from 13th November (vide page 1207), on motion by Senator Paltridge -
That the bill be now read a second time.
The bill provides for the raising of loan moneys amounting to £8,000,000 for war service land settlement purposes. At the outset, let me say that the Government has adopted the policy laid down by the Chifley Government at the end of the 1939-45 war and, on that sound foundation, has built up a scheme for the settlement of exservicemen that can only be described as unequalled in the world. I have had the experience of meeting ex-servicemen on their farms in various parts of Australia, and I have seen the great developmental work that they have been able to carry out as a result of the policy initiated by Labour in 1945 and continued by this Government since 1949.
To compare the present scheme with that which operated after the first world war is to compare chalk with cheese. After the first world war ex-servicemen came home to a land which they believed was to be made fit for heroes to live in. They found that the money sharks had got hold of the land that was to be made available for soldier settlement. The way in which those areas were subdivided suggests that the ruling factor was to settle men regardless of their welfare, and then forget about them. As a result, many thousands of exservicemen were bitterly disappointed. They became frustrated and eventually gave up their farms, because it was economically and physically impossible for them to remain on them.
The present war service land settlement scheme offers a distinct contrast. However, I hasten to assure the Government that it possesses features which are open to criticism. Many ex-servicemen with experience on the land were anxious to return to it but were not prepared to undertake the formality of applying for it during the period of their rehabilitation. When they did do so they found that they were too late to take part in the scheme. This Government, in 1950, soon after it was elected, closed down on applications for war service land settlement.
Those who were fortunate enough to be placed on the land will, almost without exception, bear witness to the fact that the government of the day has honoured, in every respect, the promises that were made to them. We have all heard of the odd, exceptional case where there is ground for complaint, and I hope that the Minister and his department will apply themselves to the settlement of such cases. However, in the main, the success of war service land settlement is assured. Large numbers of men, once having been placed on farms, have developed their experience, and provided themselves with comfortable homes. They have carried on various types of agriculture - intensive cultivation, pasture improvement, fat lamb raising, dairying, woolgrowing and similar activities associated with primary industry. Moreover, the family units, and the group units, have become an acquisition to the Australian community.
The sum of £1,369,000 is to be allocated to New South Wales and £1,750,000 is to be allocated to Victoria. A further £4,881,000 is to be allocated to South Australia, Western Australia and Tasmania. Tasmania’s allocation of £2,042,000 is to be devoted, in the main, to the development of new projects. Some of those who are already on the land will be able to obtain extra assistance, for they still require working expenses and finance for the purchase of stock and equipment.
The claimant States of Tasmania, Western Australia and South Australia are administering applications on behalf of the Commonwealth Government. I can speak from some experience of conditions in Tasmania, in particular. The Minister referred to the development on King Island, in Bass Strait, where more than 140 farms have been taken up, and to the Reekara Estate, which will provide fat lamb units. He also mentioned the development of the Montagu Swamp in Tasmania and said that, due to excessive rain in 1956 some setbacks were encountered there.
I should like to mention here that in my view the Tasmanian Government has taken the right attitude towards war service land settlement. Over the years, the arable land in Tasmania has been fairly well developed. Although Tasmania is a small island, the rainfall varies from 120 inches at Queenstown and in the mining areas along the west coast to between 18 and 25 inches in central Tasmania and up to 30 inches on the north and east coasts. The State Government has taken this fact into consideration in planning its war service land settlement projects and has placed those projects in strategic positions. There, the State Government has undertaken new developmental work in preference to concentrating on the further development of land that has already been developed up to a certain stage. The tendency has been to move into new country. This Montagu Swamp project is basically an experiment, but I feel that in the end it will pay great dividends. In my opinion, this will be a very productive area and its development will bring great prosperity to those who are fortunate enough to obtain a block there.
Montagu Swamp is on the north-western corner of Tasmania. Without the aid of modern earth-moving equipment, and without the co-operation of the Commonwealth Scientific and Industrial Research Organization as well as specialists of the Department of Agriculture it would have been impossible to undertake this project. Certainly such an undertaking would have been impossible twenty years ago, but, with the aid of modern earth-moving equipment, and with the help of the officers to whom I have referred, huge areas of almost impenetrable scrub have been cleared and a network of small rivulets or canals is draining this huge swamp region. The area has a great depth of what might be called fertile alluvial soil which has a great primary production potential. The ultimate objective is to place the land under intensive cultivation. The area has been described by Mr. Cosgrove, the Premier of Tasmania, as the vegetable garden of Tasmania in the future. The whole of the north-west coast of Tasmania is a very fertile area. Individual farms have been developed under the aegis of the War Service Land Settlement Division, but there is not a great number of them and this Montagu Swamp project will bring about the proper proportion of settlement in that part of the island.
Another area that has been developed most successfully is the Ouse River project. That district was settled quickly, thanks to the favorable arrangement arrived at between the State Government and the very fine family who made the land available to the Government for this purpose. Farmers who were fortunate enough to obtain blocks there developed their subdivisions quickly. They have effected improvements that normally could not have been made in less than a generation of hard, bullocking, slogging work. Every one of the settlers there is enjoying a measure of success and prosperity that reflects great credit on the war service land settlement people in Tasmania.
Another successful project is the Woolmer’s settlement in the northern part where the primary producers have specialized in wool-growing and fat-lamb raising. The fortunate land-holders there have carried out their responsibilities and given of their best in improving their blocks. It is a source of great joy to me to drive through the settlements of Tasmania and see what the family units are doing. The usual demand made of members of Parliament by the settlers in these areas is that representations be made for the establishment of more kindergartens and other things of a progressive and developmental nature. This is just another of the dynamic and progressive steps being made in Tasmania at the present time. I always derive great pleasure from visiting completed projects and noticing how the settlers have formed themselves into communities with a common purpose and common ideals. In these areas, co-operation between neighbours is on the highest possible level. There one sees evidence of the application of that great Australian characteristic of being able to improvise and make shift in overcoming difficulties and meeting climatic and other hazards. The War Service Land Settlement Division has played no small part in developing throughout Australia these small communities that form a valuable section of the farming community and contribute much to the general production of our country.
I should like now to mention the allocation made previously to Queensland and to defend the preceding Queensland Labour Government. Up to 1954, certain funds were being obtained through these loans for war service land settlement in that State. For 40 years, Queensland alienated less land than any other State. In saying that, I emphasize that a big principle is involved. The Government of the day is only the trustee of the land and should always administer that land not from the point of view of the impact of the policy upon the present generation, but from the point of view of what is best for the generations to follow. In my opinion, Queensland has been far-sighted enough to provide for land development by making large holdings of land available under 33-year leases. The Queensland Government has made available areas large enough to enable land-holders to derive profit from the investment of their capital. At the end of 33 years, these leases are reviewed in the light of developments that have taken place in the interim. Construction of roads, development of transport, development of scientific aids and improvement in the carrying capacity of the land are taken into account. That scheme has more or less taken the place of war service land settlement in Queensland and, comparing what has happened there with what has been done in other States, I firmly believe that it will be found that the Queensland Labour Government, by its own efforts, has settled more people than any other government in the Commonwealth. Mr. President, I ask for leave to continue my remarks at a later date.
Leave granted; debate adjourned.
Sitting suspended from 5.45 to 8 p.m.
page 1381
Debate resumed from 13th November (vide page 1213), on motion by Senator Paltridge -
That the bill be now read a second time.
– The bill now before the Senate refers to one aspect of interstate airlines activity in Australia. On the face of it, it has a very small scope. It seeks approval of an agreement which incorporates some features of an agreement between the Commonwealth Government and Australian National Airways Proprietary Limited that was entered into in 1952. The Senate is forced back to a consideration of the 1952 agreement, if only by the fact that a number of its provisions are incorporated in this agreement. But in any event it would be necessary to refer to the 1952 agreement in order to understand what this bill does. It is necessary to consider the circumstances that led to the 1952 agreement, but before I trace the history of those events, there are four observations that I would like to make.
First, 1 want to avoid the confusion that arises because there are two A.N.A.’s in the picture, Australian National Airways Proprietary Limited, which is popularly known as A.N.A., and the Australian National Airlines Commission, the governmentsponsored body, which is popularly known as T.A.A. Throughout my address this evening, I propose, where possible, to refer to the government line as T.A.A., and to the private line as A.N.A., in order to avoid confusion.
The second broad comment is in relation to the Commonwealth’s power in the airlines field. The Commonwealth Parliament has absolute control of all air activities in its territories and of air services flowing to and from its territories. It has a similar absolute power in relation to overseas airline activities. Its power to control or regulate interstate activites is limited by the provisions of section 92 of the Constitution, which require that interstate trade and commerce shall be absolutely free. The net result of legal decisions and interpretations of the Constitution is that, whilst the Commonwealth can engage in interstate air activity, it cannot prevent others from engaging in it. That point was made completely clear in the High Court of Australia and in the Privy Council recently in the consideration of the interstate road hauliers’ cases. It was made quite clear that persons could not be prevented in any way arbitrarily from engaging in interstate activity. The decisions in those cases have a very direct application to the interstate airlines position in this country. There is no power for the Commonwealth to operate intra-state, unless it gets the consent of the particular State concerned. That consent has been given in two instances, and I shall refer to those two instances in a later context.
My third broad comment is in relation to Government policy. The Government announced for the first time, I think, in 1952, that its policy was that interstate air routes should be operated by two major operators, not more. The second point in its policy was that there should be fair and equal competition between those two major operators. Dealing with the Government’s first proposition, I say at once that it is completely unreal to endeavour to confine interstate air activity to two operators.
– Did the Government say that in 1952?
– It did say that in 1952, in announcing its policy, and I think the Minister for Civil Aviation (Senator Paltridge) indicated in the statement of policy he made not very long ago that he was repeating the policy that had been laid down in 1952. I think that the honorable senator will have no difficulty in finding that in the statement on civil aviation policy.
– He said that this year.
– Yes, but that was the policy announced in 1952. I say that that policy is completely unreal, first, because it has not operated. There have been more than two operators in the field. It is completely unreal, secondly, because of the presence of section 92 in the Constitution. No government can forbid other operators to come into the field, and the announcement of a policy to that effect, a policy that has no constitutional base and no base in actuality, is rather surprising, particularly as the Government has affirmed it again and again.
In relation to that first point of policy, I point out, too, that it is in very violent conflict with what the Government has done in other related fields. Take the field of overseas airlines. There are two bodies that operate from Australia, under Australian authority. The first is Qantas Empire
Airways Limited, a very successful airline, wholly government-owned, running services to 26 countries in five continents. It is an airline of which Australia is entitled to be, and is in fact, very proud. There are no private interests and no element of competition in that activity. In the only other overseas activity from Australia, we have a wholly government-sponsored organization in Tasman Empire Airways Limited, operating between Australia and New Zealand, owned equally, jointly, and wholly by two governments, the governments of New Zealand and Australia. One finds that same policy of complete government control running through another organization, the Overseas Telecommunications Commission (Australia).
My view is that if the policy is right in the international field, it is also right for interstate trade. It may be said that section 92 prevents the implementation of the policy in the field of interstate trade. My answer to that is that if the Government believes that its policy in relation to overseas airways is right, it might have taken that policy into the interstate airways field and sought the necessary authority from’ the people of Australia by referendum. When the position is left as it is, the Government is open to the allegation or charge that there is inconsistency in its approach to the airlines position.
The fourth comment I want to address to the Senate is in relation to the two States which have ceded powers to the Commonwealth. Queensland granted the necessary power, and in the 1945 legislation T.A.A. was authorized to implement services in that State. It has done so, to the vast advantage of Queensland. It has built up a network of services over some 300,000 square miles, not only in Queensland, in the Gulf and Channel countries, but also extending into western New South Wales and the northern part of South Australia. Those services are operating very well, although many of the routes are not economic propositions, but, as the T.A.A. report pointed out a year ago, the services were making a valuable contribution to the development of those areas. T.A.A. thought that to be the proper purpose of a national airline and, indeed, it is a very proper and useful function. What is the position in respect of Tasmania? The Parliament of that State in 1952 referred the necessary power to the Commonwealth, but T.A.A. has never been free to embark on intra-state activity in Tasmania by reason of the fact that there is no complementary federal legislation authorizing it to do so; the one thing from a legal point of view that prevents intrastate activity by T.A.A. in Tasmania is that the Government has not seen fit to follow up the Tasmanian legislation with the necessary legislative authority to T.A.A.
Passing from that, I should like to comment in some brevity on the history of interstate services in Australia. They were pioneered, in the first instance, by Australian National Airways Proprietary Limited, a company under the immediate management of the Holyman Brothers of Tasmania, a proprietary limited company with very few shareholders, nearly every one of which was a shipping company. In 1945, Labour established the national airline, T.A.A., and its charter restricted it almost wholly to interstate activity. That legislation provided that when adequate services were established between any two given points by T.A.A., all other airlines should cease to operate on that particular route. That provision was contested before the High Court in 1946, and the High Court ruled that it was invalid, that whilst the Commonwealth could engage in the field, it could not prevent others from joining in, too. At that point, T.A.A. proceeded very vigorously and successfully to establish and develop its own services interstate. A.N.A., the private line, from then on urged upon the Chifley Government the viewpoint that it expressed year by year up to the last minute that there was not room for two operators on the interstate air routes of Australia, that they could only be administered economically by one. A.N.A. pressed upon the Chifley Government what it recently pressed upon the present Government, that there should be a merger of all interstate operators in the one company. It pointed out that anything else was wasteful and uneconomical.
The company was very consistent in that view from the time that T.A.A. was mooted. After 1949, A.N.A. continued to press the present Government for relief and, indeed, for a merger of operators on the interstate air routes. At that time, the company was approximately £1,000,000 in arrears to the Department of Civil Aviation for air route charges. My recollection- is that the company had paid nothing at all, arguing against the validity of the charges that were imposed under the legislation.
– It was put aside; the company was prepared to pay.
– Yes, the company was standing on what it considered to be a matter of legal right - that the charges were improper.
– It was never challenged.
– No, but I point out that the company paid nothing over a period of five years.
– That is quite right. It had leases.
– We are talking about air route charges for interstate flights. It is not a matter of the leasing of land or premises or anything else. As to the position between the private airline and the Government, A.N.A. was in debt by £1,000,000 for air route charges that had accumulated over a five-year period.
I shall make one other comment. In 1952, A.N.A. announced, through Mr. Ivan Holyman, that during the preceding three years there was a very substantial loss on its airline activities. It was in 1952 that the Government announced the policy that I referred to earlier to-night, and introduced and passed what we now know as the Civil Aviation Agreement Act 1952.
We of the Opposition opposed that measure. We asked that the bill be withdrawn and that the proposal be submitted by referendum to the people. The Government rejected that proposition and carried through the bill. That bill authorized an agreement between the Commonwealth and the private airline, A.N.A. T.A.A. was not a party to that agreement in any way, but the Commonwealth, under the agreement, and through its legislation, contracted and arranged to compel T.A.A. to comply with the various obligations that were cast upon it by the agreement and by the act. That was a contract between the Commonwealth Government on the one hand and A.N.A., the private airline, on the other hand. I thought that the Minister, in his second-reading speech, made a masterly understatement when he put that position in these words, “ That, while effec tively bound, T.A.A. was not a voluntary party to the 1952 agreement”. The truth of the matter was that T.A.A. most violently opposed what the Government compelled it to submit to, pursuant to that agreement of 1952. The agreement was very comprehensive; it dealt with a number of matters.
I propose next, just very briefly, to review the main heads of the agreement. I have indicated to the Senate that at that time A.N.A. owed under the regulations approximately £1,000,000 to the Department of Civil Aviation.
– The company disputed it. I think it is unfair to say that it owed the money. ,
– It was a disputed amount. I thought I made that point quite clear. I am not seeking to be unfair or incorrect. If the Minister thinks that I did not make that clear, I do not mind repeating what I said. The fact is that there was this dispute regarding £1,000,000. The Government compromised and wrote off twothirds of the amount, pursuant to the 1952 agreement. Because the Government cut down the air route charges to A.N.A. to the tune of some £600,000 it had to go back over the preceding five years and make a corresponding refund to T.A.A. In point of fact, an amount of £444,000 was paid by the Commonwealth to T.A.A.
– Other airlines also would not pay the air route charges.
– This arrangement, I presume, applied to all. There was a wiping out of two-thirds of the charges that had been paid by T.A.A., and the matter was adjusted in the manner that I have quite clearly indicated. At the same time, the Government reduced the charges under the regulations by 50 per cent, to all operators, and gave to A.N.A. the right to defer payment of the one-third of the original amount that it had agreed to pay. The company was given one year in which to pay the amount of £337,000. That is the position in relation to air route charges.
The next thing was in relation to capital. A.N.A., being a private company, and particularly a proprietary limited company, was not obliged to file accounts and, therefore, one cannot look at its balance-sheet as one can in the case of a public company. So, I say that I do not know what the capital of A.N.A. was at this time. But having :regard to the fact that the company had not been gaining in recent years, and that it realized some £3,300,000 for its assets quite recently, I guess - and I think it is a fair guess - that its capital at that time was at least about £3,000,000 or £3,500;000. It very probably was more. Naturally, the company, and the Minister with whom the accounts are filed year by year under the 1952 legislation, would know what the facts were.
The Government then agreed, pursuant to this agreement of 1952, to give to A.N.A. a guarantee for loans up to the sum of £4,000,000 that that company might raise. They contracted that if the loans could not be raised, the Government itself would advance the £4,000,000. The Government undertook to guarantee any loans that the company might raise and that, in fact, was done. In truth, A.N.A. raised loans totalling some £4,350,000.
The point I wish to make in relation to that is that A.N.A. had a capital of £3,500,000. T.A.A., the government line, at that time had £4,370,000, which had been advanced by the Treasurer of the Commonwealth. That amount had been advanced up to 1949. Since then T.A.A. has not had one penny from the Treasurer. In the interim it has developed its own expansion and met all requirements without any further aid from the Treasury. I point out to the Senate the capital position at that time: A.N.A. had its capital, plus £4,000,000, and T.A.A. had a little over £4,000,000.
I merely direct attention to the vastly advantageous position into which A.N.A. was put vis-a-vis T.A.A. A.N.A. had its own capital and the money that had been made available pursuant to these loan resources. These were very nearly double the resources that were available to T.A.A. Although the Minister for Civil Aviation talked about fair and equal competition, I invite him to consider whether that situation put the two airlines on a fair and equal basis, and whether A.N.A. was not given a very high priority and preferment over the government line.
The third item was in relation to air mails. Up to that time, the government airline had carried the air mail. The agreement of 1952 compelled T.A.A. to hand over to A.N.A. one-half of the air mails. That stripped T.A.A. in that year of approximately £200,000 The loss to T.A.A. year by year ever since has run to the order of approximately £250,000. Let us have a look at the Government’s policy of fair competition. It claims that there was to be fair and equal competition between the airlines. Where is the element of competition in taking from your own airline one-half of the air-mail business and turning it over to the national line’s competitor?
Surely, if there was to be fair and equal competition, the ordinary course might well have been pursued. Why were not tenders called for the carriage of air mails? Why did not the two airlines compete in the way that every other contractor in Australia for the carriage of air mails must compete? Had there been open tenders, the competition would have been fair and equal, but that was not done. The normal and proper course was not taken. The business of T.A.A. was cut in two, and one-half was handed over to its competitor. That is certainly not fair and equal competition which the Minister has claimed to be the policy of the Government.
The next matter to which I wish to address myself is Government business. Up to 1952, Government business went through T.A.A. The agreement of 1952 provided that Government business had to be open both to A.N.A. and T.A.A.
– What is wrong with that?
– It is extraordinary that a government with its own airline should divert its own business to its competitor. That is one comment. My next comment is that I believe it did not make any appreciable difference to T.A.A., because, although all government personnel are free to use either airline, the fact of the matter is that the great majority of them have continued to use the government airline.
– That is wishful thinking.
– They do, in fact, use the government airline. That is well known, and 1 .am surprised that there should be any argument about it.
– There is nothing unfair about that.
– But there is something extraordinary about a father depriving his own child of his business. That is a. most extraordinary position.
– It depends on how the child was born in the first place.
– Government supporters will not divert me from my argument. I turn my attention now to the provision of aircraft. The agreement provided that neither T.A.A. nor A.N.A. was free to purchase aircraft without permission of the chairman of the rationalization committee. If one was granted permission to ^purchase aircraft, the other had to be granted permission. Where is the competition there? The net result was that one line was tied down to the slower pace of the two airlines. That is a brake on progress. It placed a dead hand upon enterprise, and it is completely to the national detriment.
I turn now to the sixth item in the agreement. That was the alteration to T.A.A. ‘s basis of finance. Prior to 1952, under the Chifley Government’s legislation, T.A.A. was required to pay interest at 3i per cent, per annum on the advance of £4,300,000. The interest amounted to £136,000 per annum. Under the legislation and agreement of 1952, that basis was completely altered and two burdens were imposed on T.A.A. For the first time, T.A.A. was required to pay income tax and a dividend to the Treasurer at such a rate as the Treasurer determined. That has become a very heavy and growing burden on T.A.A. because the dividend called tor in the past three years and actually paid from profits amounted to 3 per cent., 4 per cent., and 5 per cent, upon £4,300,000. T.A.A. earned the profits and paid the dividends. The point 1 wish to make in reviewing the .1952 legislation and agreement is that additional burdens were shackled on T.A.A. pursuant to the agreement in the matter of its financial structure.
The next point with which the agreement dealt was the rationalization of services. T.A.A. was compelled to confer with A.N.A. in relation to routes, time-tables, freights, fares and the rest. If the airlines could not reach agreement, they had to submit their proposals to arbitration of a chairman who was nominated under the legislation.
Again, 1 am prepared to concede that, in circumstances where there are several operators on a route, rationalization might well be a sensible thing. But it is completely idle for the Minister or the Government to pretend that that is competition. It is the complete negation of competition. It eliminates competition. 1 am merely pointing out, item by item, just how the announced policy of the Government does not fit in with the way in which, in fact, things turned out. Five years have elapsed. I have reviewed the main heads of the agreement which was expressed to operate for fifteen years. There are still ten years to run. Despite all the Government help, the airline that had all this assistance simply could not carry on. It sold out last August for £3,300,000 to the Ansett group of companies. Therefore, all the help that was given to this company, all the guarantees of loans and all the sacrifices that were made by T.A.A., were in vain.
– Sacrifices?
– Of course, they were sacrifices. I have detailed in what respect T.A.A. made the sacrifices. What, in fact, has the Government been doing? It has been propping up a company which developed quite recently, in June, difficulties in relation to repayment of loans. It has been propping up a company which has been proved not to be efficient. The Government has been propping up inefficiency.
– That is not a fact.
– The honorable senator has said that that is not a fact. He is contradicting his own Minister. He had better not say that that statement is not correct. In support of my allegation, I wish to make several points. There is, first, the evidence of the fact that the airline could not carry on. I refer, secondly, to what Senator Paltridge said in this chamber on 8th October last when he was referring to criticism by Mr. Haddy, the former chairman of A.N.A. T refresh the honorable senator’s mind by pointing out that the Minister said this -
The picture presented by Mr. Haddy is in some respects both misleading and incomplete. In assessing the reasons for the financial difficulties of A.N.A. he takes no account of that company’s responsibilities for efficient management and operation, complaining that “ all the great powers of the Treasury were used to smash us “.
He was referring to the Commonwealth Treasury. The Minister concluded with this statement -
The essential fact is that a private enterprise group with wide experience in transport has been prepared to purchase all the shares in A.N.A. and to carry on under the very conditions which the former shareholders were unwilling to accept. 1 urn confident that the highly skilled star! of A.N.A., under the driving force of its new managing director, Mr. Ansett, will provide effective and profitable competition.
So I say to Senator Pearson that the Minister has very plainly indicated his view - I am sure he will not deny it - that one of A.N.A.’s troubles was lack of efficiency.
I may call as witness to that fact the Ansett spokesman who indicated in the press, I think at the end of last month, that the amalgamation of the Ansett group and A.N.A. would mean some economies and savings by reason of the elimination of duplication. He also indicated that 500 persons were to be dismissed and that an economy or saving of £750,000 per annum should be effected. In reply to Senator Pearson, who interjected-
– It was Senator Wood who interjected.
– I am very sorry. [ apologize to Senator Pearson; I thought it was he who interjected. I regret that very much.
– I never interject!
– But he thinks a lot.
– Well, I shall regard Senator Wood as being the villain of the piece, and the remarks I have already made about Senator Pearson I now direct at him. I apologize to you, Senator Pearson. I have made the point that the Government has been supporting and bolstering that kind of company - a company which has failed as an interstate operator, despite all the help that has been accorded to it. I am not getting any pleasure from saying that; I am merely recording the facts.
Now let us look at T.A.A. While all this was going on, what happened to T.A.A.? T.A.A. expanded its routes and increased its business. Last year, for example, it made a profit of £302,000 on trading and a capital profit of £96,000 on the sale of aircraft. The trading profit was of the order of 7 per cent. For the year ended 30th June, 1957, it made a trading profit of £308,000 and a capital profit of more than £250,000 upon the sale of aircraft that had passed out of its fleet. It paid to the Treasury a dividend of 3 per cent, three years ago, of 4 per cent, the year before last, and of 5 per cent, for last year. The dividend for the year before last was £174,000. and for the year just ended £218,500. They are not inconsiderable sums. During the period of its existence, T.A.A. has paid to the Commonwealth £876,000 in air route charges and £4,500,000 by way of tax on aviation fuel. In those facts alone is a story of success and financial buoyancy. It is very interesting to take up the AuditorGeneral’s supplementary report of 24th October last and to note that, in dealing with the accounts of T.A.A., he had this to say -
Inspections and audits of the Commission’s accounts have indicated generally satisfactory accounting and financial control.
Of how few government departments has the Auditor-General been able to say that in his recent reports? There, from the Auditor-General, is testimony of the highest degree to the efficient financial and economic - perhaps I should not say “ economic “ - control exercised by the management of T.A.A.
Now we come back to A.N.A. Since August, its shareholders have changed. That is the one great change from a legal viewpoint that has taken place. The company still remains. The 1952 agreement between the Commonwealth and that company still holds, despite the change in its shareholding. It is perfectly certain that, apart from being required to do it under the agreement, the Ansett group will keep that company in being and will do so for two very good reasons - first, to ensure that it gets the benefit of the 1952 agreement, and secondly, for the very good business reason that A.N.A., having accumulated losses down the years, those losses will be available to the new management to offset against profits it may make during the years ahead. And that might be one of the vast benefits that the new management will derive from its ownership of A.N.A.
– That is not so with a change of 50 per cent, in the shareholding.
– But there is a complete change in this situation. I now pass to the Minister’s speech to refer to the negotiations that led up to the conclu-sion of the new agreement. The Senate is indebted to the Minister for the very frank, way in which he outlined the negotiations. He pointed out that A.N.A. had sought a merger of all companies and that, in its first proposal, it asked for £6,500,000, half to be in shares and half in cash. As Its second proposal, it asked for £4,500,000 and the right to withdraw £2,000,000 worth of assets. The Minister very kindly said that the proposals were heavily weighted in A.N.A.’s favour. I not only agree with him but also say that there was another gross understatement on the part of the company because, when it came to the actual facts of the situation, A.N.A. was able to realize only £3,300,000 but had not hesitated to ask for £6,500,000. Anyway, it is to the credit of the Government that it rejected those proposals.
I shall deal now with A.N.A.’s default in June last in regard to the three loans that were guaranteed by the Government. It defaulted to the tune of £435,000 in respect of three instalments due in June and a half-year’s interest running at, according to my estimate, £70,000, putting the company in default accordingly to the tune of approximately £500,000.
I come now direct to the bill that is under consideration. The bill provides for a new agreement. Five parties, including T.A.A. for the first time, are involved. Those parties are the Commonwealth Government, A.N.A., T.A.A., and two of the Ansett companies. The Minister said that T.A.A. has voluntarily entered into this agreement. I shall not comment upon that at this stage but shall remember to do so in a moment, because just now I want to deal with the re-arrangement of the loans. Pursuant to the new arrangement, A.N.A. under its new management will be forgiven the default made in June. The amounts that are outstanding will be treated as not being in default, the interest will be capitalized and added to the outstanding amount, and the three loans will be arranged over a five-year period, the company being under an obligation to pay half-yearly instalments and to meet interest half-yearly.
– That is, on the balance?
– The balance is approximately £3,000,000; the original sum of £4,300,000 has been reduced. The Commonwealth, pursuant to this legislation, will again come in with its guarantee of the re-arranged loans. Under the agreement, Ansett Airways is to cease operations within the next 25 months. Thereafter, that organization is to function through A.N.A. There is only one provision in the new agreement that really affects T.A.A. directly, and that is the rationalization provision. The new agreement extends the rationalization agreement of 1952 to the Ansett organizations and to any airline companies in which they have a controlling interest. It extends the rationalization scheme to routes that were not in existence in 1952. The Government claims that because T.A.A. has entered into this agreement, and will no doubt sign the agreement if it is approved by Parliament, T.A.A. has entered into it voluntarily. I think the Government and the Minister, in claiming that, are in the position of a gaoler who will admit that the prisoner was brought involuntarily to his gaol but maintains that the prisoner voluntarily entered his cell. T.A.A. opposed the 1952 agreement tooth and nail. The Government has not had the temerity to do what is the obvious thing when a two-party agreement becomes, in effect, a five-party agreement. It does not rewrite the whole agreement with all of the new parties. It writes one between the five parties, carefully not asking T.A.A. to give its blessing to the arrangement that was forced upon it in 1952. I see the Minister looking at me very hard.
– The Leader of the Opposition does not understand the position.
– I do understand it. I know that in its latest report T.A.A. has indicated that the new arrangement will give stability and justifies the Government’s policy on the point of no more than two operators, but I invite the Minister to observe that, very carefully, T.A.A. has not given any approval, in word or in deed, to the Government’s policy in relation to what the Government was pleased to call fair and equal competition but which, in fact, is a weighting of the position in favour of the non-Government line.
The present agreement, to an extent, implies acceptance of the 1952 agreement. For that reason alone, the Opposition will oppose this measure. Of course, it was obvious that T.A.A. would adopt this attitude to rationalization. It says, “ If there are to be only two operators, we do not want the other Ansett companies running free, not in the rationalization agreement. If we are all to be in jail, put Ansetts in the cell too “. That is the obvious thing for T.A.A. to say. Its attitude is, “ If we are to have rationalization, then include Ansett “.
It is an interesting thought that the rationalization provision in this and the earlier agreement may, if tested, be found not to be legally valid. After all, section 92 of the Constitution still applies. If airlines are told they can run only on alternate days, one can hardly regard them as being absolutely free to run when they like. If they are restricted in the purchase of their aircraft, that, too, may well be an interference with freedom of trade in the interstate field. I merely point out that rationalization can be carried to a point where it may well be declared to be invalid.
I now want to point out something in relation to the agreement. Under the agreement, the various Ansett companies undertake that no concern, firm or company in which they have a controlling interest will engage in airline activities. There is a grave defect in the agreement, in that that covenant simply refers to companies in which to-day or at the time of the execution of the agreement the Ansett companies had a controlling interest. The position may well be that after the agreement has been signed an Ansett company, formed hereafter, will come into the field and upset all the Government’s hopes of having only two major operators in the field. I am not going to develop that point at the moment. I merely give the Minister notice of an argument which 1 shall address to him when the bill is in the committee stage. I am suggesting that the agreement should have provided, not only for companies which the Ansett group controls at the moment, but also for the companies that the Ansett group may control in the future, during the currency of the agreement. I think that is a grave and serious omission from the agreement.
I point out to the Senate that this agreement is not the only thing. It deals with very little so far as T.A.A. is concerned. I point out that, pursuant to the Government’s tariff proposals filed on 23rd May last, customs and excise duties to the tune of 6id. a gallon were imposed on aviation kerosene for the first time in Australia. There is, in fact, a bill before the Senate at the moment to confirm and approve the tariff proposals, which have been operating since May last. As the Minister indicated, these duties will cost those in the field of aviation about £400,000 a year. Who is in the field? There are only two companies in Australia using aviation kerosene. T.A.A. has eleven aircraft using this fuel and one other company has one or two aircraft. It is completely clear, and I think it is common ground between the Government and the Opposition, that T.A.A. will pay the great bulk of that £400,000 a year. It will be mulcted of a sum of £350,000 or thereabouts - a burden which will completely wipe out its profits. Its profit last year was £308,000. If T.A.A. does not do any better during the current year, its profit will be wiped out by this additional burden.
I say that that is a block to progress. The imposition of these duties will do more than merely put T.A.A. at a disadvantage and wipe out its profit. It will also prevent Australian airlines from going in for the more advanced types of aircraft and bringing them here from other countries. It will stop the introduction of jet aircraft - aircraft without propellers - which use kerosene. Those aircraft fly faster and higher than others and are safer and more economical in maintenance and administration. I would say that this action will be disastrous, not only for T.A.A., but also for any other airline company which wants to make progress. The Government has imposed this tax just at a time when arrangements have been made by T.A.A. to go ahead. It is directed almost wholly at T.A.A. The Government cannot deny that.
– The other companies pay a tax on petrol.
– So does T.A.A. It uses petrol.
– What is wrong with this tax?
– It will act to the detriment of aviation development in this country. It is a complete bar to progress and will prevent companies from purchasing better types of aircraft. In short, it is a penalty on T.A.A. for showing enterprise in purchasing the latest types of VickersViscount aircraft, which are easily the best aircraft in this country.
If the Minister is seeking to recoup the Government in the civil aviation field by imposing a tax of this kind, I suggest that he have another look at the matter. I suggest that it would be far more reasonable to collect the money required on the basis of the number of flights undertaken, the number of passengers carried, or a combination of those factors. I invite the Minister to have a look at that aspect of the matter. I claim that the tax is directed at T.A.A. alone. It is bad from a national viewpoint, and it is completely discriminatory against the government line.
Let me prove other discrimination in the same field. On 17th May last, the primage duty on aviation spirit was 10 per cent. The primage duty on aviation spirit was lifted on that day, but the Government retained the 10 per cent, primage duty on aviation kerosene. I invite the Minister to say presently why he kept the primage duty on the fuel which is used wholly by T.A.A. and remitted it on aviation spirit?
– It amounts to lid. a gallon.
– It amounts to a tot of money in a year. The Minister has said that he wants fair and equal competition. Why has not that matter been adjusted? I will answer for him - simply because this Government’s face is turned, not towards T.A.A. at all, but towards its competitor.
– I do not mind you saying that, but do not say it for me!
– I do not say it for the Minister, if that will please him. 1 think that he is becoming unnecessarily disturbed about my words, because everyone understood the sense in which I used them. I made no claim that I was speaking with the Minister’s authority, and 1 think he might have appreciated that. If this Government were really interested in the welfare of T.A.A. it would do something for that instrumentality, instead of merely imposing burdens on it.
In the first place, why does it not take away from Qantas the air service to New Guinea, one of our Territories, and give it to T.A.A.? Is that not an appropriate field of expansion for the Government airline? That is one suggestion that I make to the Minister, in case he is interested in the welfare of T.A.A.
Further, why not give T.A.A. an opportunity - if it wants it - to operate in Tasmania, the State which has referred the powers in this matter? These are questions which the Minister may care to answer. The Government will pretend to be favorably disposed to T.A.A. - to have love for it. I am reminded of the story of the young man who was so devoted to his mother that he took her to a football match. A scrimmage occurred near the boundary, where they were standing, and, in the course of the swaying and the jostling, his mother fell to the ground. He stood on his mother’s face. Of course, he did not want to hurt her - any more than the Minister wants to hurt T.A.A. - but he did want to have a better look at what was going on. I suggest that that describes, in story form, this Government’s outlook in regard to its own airline.
I wish to refer now to something which concerns every one in Australia. It is quite obvious that the imposition of this additional burden of £350,000 on T.A.A. in this year of grace will result in it either accepting a debit, or deciding to raise fares. Therefore, not only T.A.A. but all air travellers and users of air freight are to suffer from the Government’s blundering. Already T.A.A.’s competitor, the private airline, is flying the kite. If the Minister will refer to the press of 14th November, he will see that Ansett-A.N.A. has predicted a fare increase of 5 per cent, on its part very soon. Therefore it is obvious that T.A.A., as a result of what the Government has done quite recently, must either suffer a financial loss this year, and be accused of inefficiency - thus allowing the Government to get ready for the kill, as it has done with so many other successful organizations - or set about raising fares. I suggest to the Government that what it is doing is to the detriment of every one interested in the interstate airlines of this country.
We oppose the bill, not only because of the circumstances I have mentioned, or the way in which the Government’s blundering intervention has added to costs, but also because of the way in which it discriminates against T.A.A., and has permitted two defects to occur in the agreement itself.
We believe that the Government is deliberately turning T.A.A.’s successful run of profits into a loss. We oppose the bill because it will result in higher fares and freights for those who wish to use the interstate airlines. We oppose it because this is all part of the one great pattern which has characterized government activity since it came to office. I refer to the way in which it has handed over to private enterprise, quite wickedly, some very successful government enterprises, each of which had 9,500,000 shareholders. Every man, woman and child in Australia was a shareholder. The Government sold out those concerns to private companies with shareholders numbering a few thousands at most. The Government sold out its interest in Amalgamated Wireless (Australasia) Limited, in Commonwealth Oil Refineries Limited, in Commonwealth Engineering Company Limited and in the Western Australian Whaling enterprise. It has continually tried to dismember the Commonwealth. Bank of Australia. I include in the list its past and present discrimination against T.A.A. For all these reasons, the Opposition is completely opposed to this measure, to all that lies beneath it, and to the whole history of the situation that has led up to it.
I do not want to conclude without saying three things that are not at all on a contentious level. First, I would say that everything I have pointed to leads to a justified fear that the Government is once again preparing the way for bringing this great Australian airline, which has done such a magnificent job, into debit, as an excuse for selling it to more of its friends. The Government is guilty, not of not permitting competition, but of preventing T.A.A. from competing properly. That is the Government’s whole purpose in intervening in this field.
I wish to express my very deep regret that the Holyman brothers are no longer associated with the active management of
A.N.A. As individuals and as Australians, they did magnificent work in pioneering interstate air activity. I also wish to express my admiration for the business acumen and enterprise of the Ansett group. I think that those who control it have revealed plenty of both. Finally, I most heartily congratulate T.A.A. on the magnificent success of its services, despite the setbacks and buffeting that it continues to receive at the hands of this Government.
.- The Leader of the Opposition (Senator McKenna) has given us a recital of many of the features of the bill, and what he has said has been quite in accord with the nationalization policy of the Australian Labour party. I suppose that it is reasonable to suggest that if that party has been violent against any company in particular, it is Australian National Airways Proprietary Limited. Any one who looks at the record of this company will wonder why. It has rendered great service to aviation in this country.
Let us recall for a moment the early days of civil aviation in the island State of Tasmania. Senator McKenna, who represents Tasmania in this chamber, should be proud of the fact that a Tasmanian organization began to operate this great airline. It began as Holyman Airways, using De Havilland planes; later it became A.N.A. Still later, it amalgamated with a company which operated along the New South Wales and Queensland coasts, between Sydney and north Queensland. This second company started as New England Airways and, with the introduction of some English capital, became Airlines of Australia. Ultimately, there was an amalgamation and the company which emerged was called A.O.A.- A.N.A. Later, the single name Australian National Airways Proprietary Limited was adopted.
Throughout the company’s history A.N.A., under the guidance and genius of the late Sir Ivan Holyman, who was then known as Captain Holyman, has displayed enterprise of which Australians, and particularly their representatives in this chamber, can well be proud. Honorable senators may recall that when Captain Holyman introduced the DC2 aeroplane in Australia he ran a twice-daily service between capital cities. People said that he was silly to do it because adequate traffic was not offering.
However, he provided such splendid service that he built the airline up. He saw it grow and grow and was finally able to replace the DC2 aircraft by DC3 aircraft. These planes then flew several times a day between the various capitals. Those honorable senators who have any knowledge of civil aviation in those days will appreciate what a venturesome step he took. The Leader of the Opposition has told us of the great work done by the government airline, T.A.A., but 1 ask honorable senators to look at the matter fairly. Which airline has done the most in building aviation standards in Australia? Unquestionably, it is A.N.A. Not only did that company bring to Australia the best aircraft available, but it established the best service, and it still gives the best service in the Commonwealth. Again, which company introduced the hostess service to Australia? It was A.N.A. Which company introduced the serving of meals in the air? It was A.N.A. Which company was the first to introduce free transport between airways office and airport, a service that does not operate in other great countries like the U.S.A. It was A.N.A. All those services are still being given, and they are copied by the government airline.
When the government established T.A.A., it offered higher salaries to executives and other efficient members of the staff of A.N.A. in an endeavour to induce them to come over to T.A.A., so that the new government airline could copy the business principles upon which A.N.A. was managed and conducted. That cannot be disputed, for I can name some of the A.N.A. personnel who went over to T.A.A.
The point I make is that it was a privateenterprise company which was doing a topline job in civil aviation. It did not need the spur of competition from a government airline to make its service sound or satisfactory. It was continually sending chief executive officers to the U.S. and other countries to study latest trends in transport and air service management. Because of this, it was continually introducing the most modern ideas to Australia. All in all, A.N.A. was a company of which we should be truly proud. Looking back over the history of aviation in this country, honorable .senators opposite must admit, if they are fair, that the present high standard of internal airlines in Australia is due mainly to the foundation laid by A.N.A. Because of the foundation laid by that company, it can be truly said that to-day the internal airlines services of Australia are the finest in the world.
Thanks to the enterprising spirit of this company, its planes were a most valuable asset to us in the second world war. I remember seeing A.N.A. Douglas aircraft passing over north Queensland carrying ammunition and urgently needed war supplies to the northern parts of Australia. That company’s planes were at the disposal of the Government, and, because of this, it allowed its public schedules to go haywire. Because of Captain Holyman’s foresight in having first-class aircraft in Australia, the services of A.N.A. were of tremendous value to us during the war. But for his enterprising spirit, this highly efficient airline would not have been available to the Government at that time.
– Nonsense!
– The honorable senator does not know what he is talking about. If he did, he would know that there were no other planes in this country at that time capable of rendering the service given by A.N.A. aircraft.
– And Cobb and Company had the best coaches in the early days.
– It is all very well for Senator Armstrong to talk about Cobb and Company. What he knows about civil aviation would not fill a sheet of paper. He and other honorable senators opposite hate A.N.A., and I can state the reason. Up to the time of which I have been speaking. A.N.A., because of its enterprise in venturing into this field of operations, and because of the service it was able to offer, obtained sufficient traffic to make its venture profitable. After all, every one who invests .money in an organization or company is entitled to a reasonable profit, .and I venture the .opinion that there are none more anxious to obtain profits from their investment than honorable senators opposite. And they are entitled to profit. I know also that those of them who have .invested money expect to receive a profit.
Then came the time when .the Chifley Labour Government set up the .government airline known as Trans-Australia Airlines.
Did it set up that airline for the purpose of competing with other airlines? It did not! Because the Labour party is socialist, because it believes in nationalization, the Chifley Government sought to create a monopoly by establishing T.A.A., despite all that A.N.A. and various small private airline companies had done. It was prepared to ignore all the efforts of private enterprise in achieving a high standard of aviation in this country in order to satisfy Labour’s desire to have socialization run riot in Australia. To support my argument, I quote the following from the report of the High Court case of Australian National Airways Proprietary Limited versus the Commonwealth and Others as contained in Commonwealth Law Reports, 1945-46, Volume 71, at page 29 -
The Australian National Airlines Act 1945 constituted the Australian National Airlines Commission as a body corporate with power to establish, maintain and operate airline services for the transport for reward of passengers and goods between States, between Territories and other places in Australia, and within any Territory. The Act required the Commission to exercise its powers as fully and adequately as might be necessary to satisfy the need for special services and provided that air licences (issued under the air navigation regulations made under the Air Navigation Act 1920-1936) should cease to be operative so long as adequate services were provided by the Commission-
The Government airline -
The issue of a licence under the Air Navigation Regulations to any other person than the Commission-
Again the Government airline - was prohibited unless the licensing authority was satisfied that, having regard to the airline licences operated by the Commission, the issue of a licence was necessary to meet the needs of the public with respect to inter-state airline services or territorial airline services. The Act further provided that a person should not enter into a contract for the transport of any person or goods in the course of any prescribed inter-state airline service or territorial airline service operated by any person other than a person holding an airline licence in respect of that service not being a licence which was inoperative by virtue of Section 46 of the Act.
This was the court’s decision -
In its relation to airline services between States the Act in general was a law with respect to trade and commerce among the States, within the meaning of Section 51 (i) of the Constitution, but, in purporting to confer on the Commission a monopoly in respect of services between States and to create the offences mentioned in Section 49, it contravened Section 92 of the Constitution.
There we see the true reason for the establishment of T.A.A. The reason was not to provide a competitor but to establish a monopoly as the thin edge of the wedge of socialization in this country. The reason why those honorable senators who belong to the Labour party hate the very sound of the name A.N.A. is that it was the first organization in Australia to fight the Chifley Government’s nationalization programme. Because A.N.A. was successful in that fight against nationalization, the Labour party has never forgiven it. I have always taken my hat off to A.N.A. for having the courage of its convictions, for having the courage to fight for and win its rights. Because of what that company did to protect the rights of free enterprise, it deserved a better deal from many people in this country. They should have stood by it and supported it in its operations over the years.
We hear now of the profits made by T.A.A., the government airline. What did T.A.A. do during the Opposition’s term of office? It made a series of losses. It was only when this Government came into office that T.A.A. made profits each year. The position was the same when the government shipping line was under Labour’s jurisdiction. It lost about £14,000,000. Likewise T.A.A., the government organization, was losing money under Labour. If honorable senators look up the records, they will find that that is correct, despite the fact that all government business was taken from A.N.A. and given to T.A.A. It was also unfair for Labour to take the air mail from A.N.A. and channel it, wherever possible, through T.A.A. Despite those actions, Labour could not make T.A.A. pay. Only in recent times, since this Government came into office, has T.A.A. paid.
The Leader of the Opposition said that A.N.A. was inefficient. I throw that back into the teeth of the honorable senator. I say that that statement is not correct. A.N.A. was considered to be a most efficient airline. It was operating under very difficult circumstances, and despite what people may say, it is very hard for two major airlines with really modern aircraft of the size required to-day to make a reasonable profit in Australia, because of our small population. If you added the profits of T.A.A. to the small profits of A.N.A., and re-allocated the business at all fairly, you would find that the total business offering to the two major airlines was really not sufficient for both to make reasonable profits. The Leader of the Opposition pointed out that T.A.A. made a trading profit of a little over £300,000 during the last financial year. lt was operating Viscount turbo-jet aircraft, which use aviation kerosene, which was then not subject to a tax, while A.N.A. was operating piston-engined aircraft, using petrol on which a heavy tax was paid. If T.A.A. had paid last year the tax it will now have to pay on aviation kerosene, it would not have made a profit. If it was fair to tax the fuel used by A.N.A., it was equally fair to tax the fuel used by T.A.A. The introduction of a tax on the aviation kerosene used by turbo-jet aircraft will equalize the position, and the position of T.A.A. will not be nearly as rosy as it now appears, if fares remain the same.
Senator McKenna referred to lack of efficiency in A.N.A. In doing so, he showed just how little he knows about civil aviation. The prime object of an airline company is to operate planes and keep them in the air, and it might be of interest to the Senate to know that because of the engineering and mechanical service which A.N.A. gave to its aircraft, in the interests of safety, it held the world’s record for operations without unscheduled engine changes in the running of DC3 and DC6 aircraft. That is a very striking illustration of the efficiency of the company and it is a matter of which we, as Australians, should be proud. An aircraft has to have an engine change after so many hours, but A.N.A. had fewer unscheduled engine changes than any other airline in the world operating aircraft of those types. The figures can be checked by any honorable senator. Because of that fact, there were fewer hold-ups, and the transport of passengers was facilitated.
The Leader of the Opposition talked about types of aircraft. He took great pains to say that the Viscount was the better plane. The allegation that when A.N.A. bought DC6 aircraft it bought the wrong type, has been continually thrown up at the company. I said in this chamber, and I say again, that there is more than one factor in the conducting of an airline service, and in the buying of aircraft it is not only the cheapness of operating that counts. In addition, there is the matter of keeping them in the air on as safe a schedule as possible. Despite what Senator McKenna says, DC6 and DC6B aircraft have a much greater range than the Viscount can ever possibly hope to have. Even on the Western Australian run, the Viscounts, with extra slip tanks, very often have to put down short of their destination in order to refuel. Aircraft of the DC6 and DC6B types have such a range that they have great advantages from a safety point of view. If one of these aircraft is travelling from Brisbane to Sydney, and Sydney airport is closed in because of bad weather, it can go on to Melbourne. If it cannot land at Melbourne, it can go to Adelaide. If it cannot land at Adelaide, it can go on to Perth, with fuel to spare.
Because of their great range, these aircraft are very safe. If a DC6 or DC6B aircraft left Tasmania for Melbourne, and every airport in Australia except Darwin was blotted out, it could land at Darwin. These aircraft therefore have a great safety range. That is a very important point in the conduct of airlines in this country. When Captain Holyman bought DC6 aircraft, he realized that they had a great safety range, and despite what honorable senators opposite might think, he had a public-spirited viewpoint. He knew that the fuel that they used would be more costly than the power kerosene used by turbo-jet aircraft, but, having had experience of the last world war, he knew that from a defence point of view DC6 aircraft would be of great advantage to this country. He expressed this view. I think that honorable senators opposite paid him a tribute for his services to civil aviation. I remember that it was mentioned by Senator O’Byrne. Sir Ivan Holyman said that in the integration of air force and civil aircraft, DC6 aircraft would be of great use to this country if another war broke out. If war were to occur in the areas where we think it could possibly occur, we would find that these DC6 aircraft, that honorable senators opposite have disparaged in comparison with Viscounts, would be in those islands, 1,000 miles or a few thousand miles to the north of Australia, carrying troops, munitions, or supplies, for the purpose of fighting battles outside this country, while the Viscounts were sitting within Australia’s shores. Captain Holyman’s purchase of these aircraft showed a public-spirited attitude. Their potential value in war-time was one of his reasons for buying them.
Let us not hear any more of this silly nonsense that we have heard, because in a comparison of quality of aircraft, the DC6 stands well above any other type of aircraft in this country. If honorable senators want to make a comparison, let them examine the construction of the DC6 and the Viscount aircraft. They will find that the wing of the DC6 has a triple spar, while that of the Viscount has a single spar. The strength of the wing is a very important factor in safe flying.
Senator McKenna spoke about the imposition of a tax on aviation kerosene and its impact on T.A.A. It will also hit Butler Air Transport Limited, which operates Viscount aircraft, and the new Ansett-A.N.A. organization, which proposes to introduce Lockheed Electra turbo-jet aircraft to Australia. When these aircraft are in operation, this organization will be in no different position from T.A.A. Both will be on an equal basis, so honorable senators opposite should not shed any tears. To say that only T.A.A. will be affected is not correct. It will be proved in the long run that Ansett-A.N.A., with the very fast Lockheed Electra, also will be paying the same tax. The intrusion of Ansett Airway made the position more difficult for A.N.A. in as much as there was a third major airline operating in Australia.
– Is not that free enterprise?
– Yes. No one has any objection to that. None at all! But the point is that when a government airline is in the field getting certain government business and concessions the operations of private airlines are made more difficult. It is worth pointing out that under the legislation which we are more or less repeating, half of the government business did not go to A.N.A.
– Why was that?
– Many factors come into it; because socialists put into certain positions during the period of the Chifley Government made sure, when they issued travel warrants that you went by T.A.A. All honorable senators know that that was the case. I believe that this bill is a correct and proper measure which will maintain free enterprise in civil aviation in Australia. I believe that we should encourage free enterprise. I believe that so long as people invest their capital in such concerns as airlines, we should encourage free enterprise in every respect. I am not one of those wedded to the necessity of having a government airline. I believe that if free enterprise wants to come in and fight it out, things will work out all right. But when there is a government airline, things become difficult because of certain favorable conditions applying to the government airline.
I consider the money that is invested in the government airline could very well be utilized for the development of this country. Throughout Australia, local authorities are unable to provide amenities for the people such as water and sewerage services because the Chifley Government put so much money into government enterprises.
What does a government airline in Australia do? It carries people around the country just as Reg Ansett’s pioneer coach service carries them. There is nothing strategic about it. As I have previously pointed out, if war came the aircraft of the government airlines would be sitting on the ground while those belonging to A.N.A. would be out helping Australia in its time of stress. I am very glad that Mr. Reg Ansett has had the courage and enterprise to take over and absorb A.N.A. into his organization, which will be known as Ansett-A.N.A. I feel that he is deserving of the encouragement of every person in this country who believes in free enterprise. Many people, mistakenly, I think, travel on the government airline because-
– It is safer.
– They do so because there was a change of government. I believe that we should carry out certain things on principle. But when it comes to safety, I could mention one or two things. I shall do so at some future time; I do not want to discuss that aspect at the moment. There are lots of things that I could mention. There have been very close shaves.
– Skip that!
– Let me say that Reg Ansett, in taking on this organization as he has done, deserves the approbation and encouragement of everybody in this country. To my way of thinking, he has taken Sir Ivan Holyman’s place as a grand ambassador for the rights of free enterprise. I am convinced that many people have already come to the decision that free enterprise shall not fail on this particular occasion, that the interference very often by the- competition of a government airline shall not weaken the patronage of free enterprise.
The Government’s decision to apply equally the tax on fuel used by various aircraft will make this competition much fairer than it has been in the past. To my way of thinking, the enterprise of Mr. Ansett will in the long run catch the imagination of the people. I know that he will do this country a great service in the field of free enterprise.
I do not want honorable senators to gain the impression that I think that a government airline is a soft-hearted airline. There has been talk about the Air Force and about the employment of Air Force personnel. The pilots of A.N.A. did a grand job during the war. When we are thinking of tough dealings by airlines, let us remember that a small airline comprised of three exmembers of the Air Force ran from Townsville to Mount Isa several days a week. Then the big government socialist airline came into operation. Did it run on different days from the service operated by those men, who were probably “ cobbers “ of Senator O’Byrne during the war? No! lt ran at the same time and on the same days in order to try to exterminate the little airline. The man and the company who came to their rescue were Sir Ivan Holyman and his organization. I give this bill my very hearty approbation, because I believe it is a step by the Government to assist tree enterprise to maintain in the Australian skies the high standard for which it has always been notable. I feel that this bill will enable the Ansett-A.N.A. organization - under the guidance and initiative of Mr Reg Ansett - to achieve great success.
,- The remarks that I shall make on the measure now before the chamber will be brief, but I feel that I should state clearly and definitely the principles upon which the Australian Democratic Labour party has determined its attitude to this agreement. We are not entirely happy about some of the terms of the agreement, including some that have been referred to by Senator McKenna, but we have decided to support the agreement because, in our opinion, the alternative is monopoly - State monopoly - and the party to which I belong is opposed to monopolies of all kinds, both State and private.
However, I do not want it to be thought that we agree entirely with what a Government supporter has described as free enterprise, because we realize that in the modern world there are certain undertakings that can be carried out only on a national basis. We also realize that, in certain circumstances to prevent exploitation, it might become necessary for the Government to place an industry on a national basis.
The principles that we would apply in determining whether nationalization or socialization were justified are these: Is it a public utility or service of an essential character? Is it being used to exploit the people? Is there any other effective way of preventing that exploitation? Applying those principles to the present case, we have decided that we are not justified in supporting the socialization of air transport. We say that conditions that conform to the principles I have enunciated do not exist. We realize that while T.A.A. exists, the Government and the people are always in a position to prevent exploitation of a character that would justify nationalization.
I am one of those who do not travel a great deal by air. On the only occasions that I travel by air, I use the Government airline. I pay a tribute to it for its efficiency and the safety with which it transports its passengers. If I want to look at an example of a nationalized form of transport, I can say as one who is transported by train frequently to Canberra from Albury, that if anything would induce me to oppose a State monopoly of transport, it would be the conditions under which people are called upon to travel by train in New South Wales to this national capital. I would suggest to all honorable senators - those who travel by train and those who do not - that if there were two train services operating to Canberra from Albury, I am perfectly satisfied that the conditions under which we would be called upon to travel would be very different from those of to-day.
Therefore, I say that we are not happy about certain things in this bill, but we are prepared to give it a go to try it out. We do so without giving a blank cheque. So far as we are concerned, if it is shown, as a result of experience, that under the new set-up the people are going to be exploited and not get a fair deal, we will be prepared to change our attitude. I would point out that, after all, something has been said of the attitude of T.A.A. on this matter. The chairman of T.A.A., who should be an authority, has had this to say -
The recent purchase by Ansett Transport Industries Limited of A.N.A.’s undertaking once more establishes the two major operator pattern. The circumstances leading to this position completely vindicate the 1952 policy view that there wasand still is - room for only two major operators on Australia’s main routes from Cairns to Perth.
There is now every reason to expect that with the main route competition confined to two operators, a greater degree of stability can be achieved in the Australian domestic airline industry, and that with due regard to the interests of the public, rationalization can provide effective and more economical services and bring earnings into a proper relation to overall costs.
There is the view of the chairman of the government undertaking. He thinks that the new system can be a success. Until it is proved to us that it cannot be a success, we will oppose monopoly in air transport. There are some other factors which influence us. Already, we are told that 500 persons will be dismissed from their employment. In the view of some persons, that might not be many, but it is always a 100 per cent, problem to the man or woman who loses a job. If we reject this agreement and force the other undertaking out of existence, a great many more people will be forced into unemployment. I think that they are entitled to a chance to retain their employment while we see whether the new system is going to work effectively.
The final point I wish to make is in relation to defence. I am one of those who resented very strongly the action taken by the Government to close down, in some cases, and nearly close down in others, the government aircraft factories, because in those factories there were workmen and women trained to carry out certain operations of a character essential for defence. Staff were assembled which were essential for our defence. .In some cases, they have been spread far and wide and will be very difficult to get together again in an emergency. Under the present system, if we have two airlines, we will have some duplication, but they will also provide additional trained staff who will be available for transport services in war. That is an advantage.
Summing up - and I said I would be brief - I repeat that I do not like some features, of the agreement, but I prefer it as an alternative to State monopoly when it has not yet been proved that State monopoly in air transport is necessary.
Senator GORTON (Victoria [9.37].- 1 should like to express my complete agreement with the opinion that competition does provide benefits for the people. It is undoubtedly true, as has been pointed out from both sides of the chamber, that competition involves those who are engaged in it in difficulties from which they would be free if they had a monopoly. However, it is equally true that the consumers and the people who buy whatever goods or services they need, are always benefited by being able to choose between the services or goods that are offering.
I would not have had much objection to the introduction by the previous Labour government of a government airline into the airline field if it had been proposed that that introduction was for the purpose of conferring’ on the people of Australia the benefits of that sort of competition. But that was not either the avowed reason for which the airline was introduced or the real reason. Trans-Australia Airlines, of which we have heard so much, was introduced to be a complete monopoly. It was introduced in the face of the most solemn undertakings, during a previous election campaign, by the government of the day, that it would not be anything of the sort.
As we have reached the last of a series of bills concerning this matter, it is as well that we should be reminded of the history of this transaction. We should remember that in August 1943, during an election campaign, the leader of the Labour government of the day went before the people on the eve of the poll and made a broadcast speech in which he stated, “ I say that my government will not, during the war, socialize any industry “. That was a clear and unequivocal statement that the powers given to the Government would not be used for the purpose of socializing industry. So there will not be any difficulty in understanding the situation, let me remind the Senate that the present leader of the Labour
Opposition as it is now, Dr. Evatt, said in an advertisement which appeared in the Melbourne “ Age “ -
During the present crisis it is somewhat futile to theorize about socialism. There will be no attempt to sneak in any reforms without proper mandate.
They were the undertakings that were given to the Australian people in regard to socialization.
In 1944, something which might perhaps have been regarded as the seeking of a proper mandate was undertaken by the then Labour government. It held a referendum to seek for itself full powers to control all air services in Australia. But that proposal was rejected by the people, and the result cannot in any circumstances be regarded as having been a mandate. Then in 1945, in defiance of the expressed will of the people, it introduced a bill, not to provide for competition, but by law to drive out of the field every interstate operator other than T.A.A.
When that legislation was defeated in the High Court, as Senator Wood has told us, the then government embarked upon a long-range plan to drive out all competition by the exercise of government power as opposed to law. It did so by providing great and far-reaching advantages for the government airline. The government airline was given, by government direction with the force of law, all government business in regard to passengers and freight. Whether or not an official wanted to use a private airline, he was not allowed to do so. The government airline was also given, by government direction with the force of law, the right to carry all air mails throughout Australia. Whether or not a private airline wanted to carry mails at a lower price, it was not allowed to do so. The government airline was also to be given, and was given, great advantages - indeed, monopolistic advantages - in the allocation of overseas funds for the purchase of aircraft to modernize its fleet, but private airline operators were denied overseas funds for that purpose. The government airline was to pay no income tax, no sales tax, no pay-roll tax - indeed no government impost of any kind. Moreover, the airline was to be provided with government capita] at any time it was required. No one with any sense of fairness or decency can regard that as providing competition, and as providing the benefits of competition for thepeople of this country.
The 1952 bill, which was introduced by the present Government, and the bill now before us, which in effect is a repetition of the 1952 measure, have been drafted to overcome the overwhelming monopolistic advantages that were given to T.A.A. and to make a fair and equal allocation of government business and advantages between the two major airlines in order to maintain competition.
I digress at this stage, if I may, to mention that the Leader of the Opposition in this place (Senator McKenna) seemed to indicate that it was the policy of this Government that there should be only two airlines, and that in 1952 that was stated to be the Government’s policy. But that is not so. What was said was that the Government wished to see at least two major airlines operating in Australia. I do not know whether honorable senators would like me to read the statement that was made by the Minister for Territories (Mr. Hasluck) when the 1952 measure was introduced in another place. Perhaps a later speaker could read his remarks. He pointed out that the chief principle of the Government’s policy was the maintaining of two major airlines. The Government’s policy, despite what the Leader of the Opposition sought to show, was not that only two should be allowed to operate.
As I said earlier, the 1952 bill and the present measure were drafted to overcome some of the overwhelming advantages that were conferred on T.A.A. It was provided that the government airline, as was the case with the private airlines, should be subject to income tax. The 1952 legislation also gave to the government airline and to private airlines equal rights in the purchase of aircraft and the allocation of overseas funds. It also provided that a private airline was to be furnished with capital by way of loan, on which interest was to be paid, to enable it to increase its fleet. It provided, too, that private airlines should have half of the government business in relation to men, materials and mail. We have been told by the Leader of the Opposition that that was a most unfair imposition on T.A.A. Does anybody really think that is so? Because one government wrongly gives to one organization a complete monopoly and then a subsequent government removes that monopoly and gives equal rights to both operators, it is argued that a terrific disadvantage is imposed on the operator that previously had the monopoly. No disadvantage is imposed at all. Rather has there been a removal of an unfair advantage which should never have been given. That is all that the 1952 agreement did.
The new agreement re-enacts the main provisions of the 1952 agreement with only some minor machinery changes in regard to the settlement of disputes between the government airline and the private companies. It provides that the new company, Ansett-A.N.A., because it has just concluded the purchase of the old A.N.A. shareholding, shall have a breathing space before it pays the principal and interest that is due to the Government in repayment of A.N.A.’s loans. In that regard, I wish to refer to words that were used by the Leader of the Opposition with, I think, a most misleading implication. He said that the new private company had been forgiven the debt that was owing to the Government. No such debt has been forgiven. An extension of time for the payment of the instalments of the debt that are due has been given, but that is completely different from forgiving a debt.
Pursuant to the new agreement, we shall see a greater rationalization than hitherto. We shall soon see competing for the skies of Australia aircraft belonging to the government airline and the private airlines. They will use the same kind of fuel. So there is no point in labouring the question of the payment of tax on aviation kerosene. We will see a new flight of aircraft in the hands of private operators, which I am sure in turn will lead to a modernization of the fleet of the Australian National Airlines Commission. That fact, together with the savings that we can expect from the greater rationalization for which this bill provides, lends confidence to the hope that both operators will carry more passengers and mail and will be able to make a profit, and that the people of Australia who patronize them will derive the greatest profit of all. It is my great hope that we shall never see in this country either a complete private monopoly of air travel or a complete Government monopoly of air travel. I believe that no instrument will prevent a monopoly of one kind or the other, and provide competition on the soundest possible terms, better than this bill and the schedule thereto. I support the measure.
– After listening to Senator Wood one would have thought that the Opposition was responsible for the downfall and default of Australian National Airways. The merging of existing competitive organizations, as instanced by the taking over of A.N.A. by Ansetts, will inevitably lead to inefficiency and to the reduction in staff. Already 500 dismissals have been effected as a result of the new agreement. The larger the trading unit becomes, the smaller is the wages bill on a proportionate basis.
For many years we have had in Australia one of the best and most efficient airline services in the world. That, I think honorable senators will agree, has been due to competition. Once a complete monopoly is established, whether it be by a private enterprise or a government enterprise, the incentive to give service to the people disappears. Reference has been made by Senator Wood to the fact that the Chifley Government financed T.A.A. to the detriment of water and sewerage schemes. I remind him that during the term of the Chifley Government the limitation to the provision of finance was the amount of man-power and materials that could be utilized. There was no question of any shortage of finance for the services to which Senator Wood referred.
Senator McManus dealt chiefly with the monopoly aspect of this agreement. Senator Gorton’s most pointed objection was to the fact that certain promises had not been kept. He quoted authorities going as far back as 1947. I remind Senator Gorton that advertisements published prior to the 1949 general election contained promises by the Prime Minister (Mr. Menzies) which have not yet been honoured. The Prime Minister promised to put value back into the Australian £1.
The Government claims that the purpose of this bill is to approve of an agreement supplementary to the 1952 agreement, which, in effect, granted substantial assistance to A.N.A. in the form of guaranteed loans for the purchase of new equipment, reduced air route charges, mail transport shared with T.A.A., access to government business and the rationalization of air services and related matters. The generous treatment then extended to A.N.A. by the Menzies Government, and extended again in the present proposed agreement to Ansett-A.N.A., indicates that the Menzies Government sets no limit, financial or otherwise, to its provision of assistance to cartels and combines, particularly when the dividends of those organizations are threatened as a result of competition from either national or State instrumentalities.
The principal shareholders in A.N.A. are William Holyman and Sons Proprietary Limited, the Adelaide Steamship Company Limited, Huddart Parker Limited, the Union Steamship Company of New Zealand and the Orient Line of Steamers. The Peninsular and Oriental Steam Navigation Company has a substantial or controlling interest in the Orient Line and the Union Steamship Company of New Zealand and, through the latter, a substantial or controlling interest in William Holyman and Sons Proprietary Limited. These are the principal shareholders which the Menzies-Fadden Government is protecting in this agreement and which it protected in the previous agreement in 1952. If a full investigation had been made in 1952 and the Parliament had been provided with the necessary documents, particularly balance-sheets, the Government would not be in the invidious position in which it is to-day. It would not be seeking to substitute another major airline for the one which defaulted, although sponsored and guaranteed by the Government. I appreciate that under the law there was no need for A.N.A. to produce its balancesheets or accounts. Although it was the right of the company to refuse to disclose them, one would have thought that the huge financial consideration being extended to A.N.A. demanded a full investigation - an investigation that would be possible only by an examination of the balance-sheets and accounts.
In view of the failure by A.N.A. to fulfil the terms of the 1952 agreement, I remind the Government that A.N.A.’s default emphasizes the necessity for the Government to ensure that the financial position of Ansetts is such that it will be able to carry out its part in the amended agreement. It must not be forgotten that
A.N.A. failed, although it had the backing of a wealthy shipping combine whose profits and reserves run into tens of millions of pounds. In the interests of the protection of the Australian taxpayers, it is the Government’s duty to ascertain the present ability of the Ansett company to carry out the agreement. Due regard must also be given to the new company’s stability and the prospect of it being able to fulfil its obligations in the future. We do not want a repetition of what occurred under the 1952 agreement.
It is evident from the limited portion of the discussions that have been made public that one of the proposals, a proposal for the formation of a holding company, was objected to. The objection was chiefly on the grounds that the level of capitalization proposed was too high to achieve a return of 8 per cent, on shareholders’ funds. What is the level of capitalization proposed by Ansetts? Is the target a return of 8 per cent.? Is that provided for in this agreement? I should like the Minister, when he is replying, to give some indication as to whether 6 per cent., 7 per cent, or 8 per cent, is the target aimed at under this new agreement. It is little comfort for the taxpayers to be told by the Minister that the financial crisis of A.N.A. was symptomatic of the entire air transport industry; that most other airlines have been incurring deficits and operating under marginal conditions; and that even T.A.A.’s profit was relatively small, judged by normal commercial standards. It depends upon what the Minister regards as normal commercial standards. Some people are satisfied with 5 per cent, or 6 per cent, profit. Others set very much higher standards. That is one of our troubles to-day, and probably the trouble so far as A.N.A.’s failure is concerned. It is difficult to understand how, with such great financial resources and the support and guarantee of a conservative government behind it, a member of a combine, as is A.N.A.. should fail in this way.
Mr. Haddy, who, incidentally, is also chairman of the Adelaide Steamship Company Limited, claimed that the proposal which his company made to the Government for the formation of a holding company of airlines, would have saved in operational expenses, £2,000,000 a year, the amount now wasted by duplication of services on routes already established by private enterprise. He also claimed that very substantial reductions in future capital expenditure on aircraft would have been possible. He said that these savings would have held down the cost of fares, while at least maintaining efficiency.
Mr. Haddy’s observation gives food for thought and. demands serious consideration by the Government. Mr. Haddy also said that our small population made such competition as had taken place unprofitable. He alleged that this was a major factor in the destruction of A.N.A. If the Government is determined to keep another major airline company in the air, long-range plans must be drawn up, on a just and fair basis, and safety and efficiency must be given the No. 1 priority.
The Minister, in a statement on civil aviation policy, said that it would be necessary to eliminate the wasteful effects of uneconomic competition on trunk routes by strengthening the rationalization provisions of the agreement. All honorable senators will agree that this indicates that there is to be an intensification of the rationalization scheme, and that greater facilities to make profit will be given to the new company. Does the Minister’s statement imply that rationalization will be extended beyond the main interstate trunk routes? Will it also be applied to the smaller operators such as the Butler Company? Already action is being taken by the companies sponsored and financially supported by the Government to obtain control of that organization, which has pioneered the development of outback New South Wales, especially in the western districts. It has given a great service to the people of the outback, and serves Adelaide by a route from Sydney through Broken Hill. Apparently it, too, is to be subjected to rationalization in order to foster the interests of the Ansett-A.N.A. combination.
All Commonwealth governments have been liberal in their treatment of airline development in this country. I have in mind especially the provision of aerodromes and other facilities for air transport. I appreciate that, in so doing, they are making a major contribution to the future defence of this country, and are spending public money wisely. During the last 30 years, the
Commonwealth has spent £40,000,000 on the development of ground facilities. It has also provided, either directly or through guarantees, £17,500,000 for aircraft purchases. It is spending more than £17,000,000 annually on maintaining and operating the ground safety system, but it derives in revenue from air navigation charges and the fuel- tax less than £2,000,000 a year. It is evident that unless some adjustment is made it will not be possible to get a fair return on expenditure.
I should like to know why A.N.A. and Ansett have been selected for favorable treatment. If A.N.A. suffered a loss, and had to default, it is difficult to understand why its financial backers did not produce the money that it needed. Has there been a realization that the size of the dividends is limited because of the efficiency and competition offered by T.A.A.? I should also like to learn what took place in the secret meeting between the Prime Minister, the Minister for Civil Aviation, and Mr. Ansett. Is there any record of those discussions or were they off the record? I should like answers to these questions: Did the Minister enter into any commitments with Ansett before the purchase of A.N.A.’s interests? Was the question of excise duty on aviation kerosene mentioned at that interview? Were notes taken of the discussions, and will those notes be made available to honorable senators? Did Mr. Ansett know that the Government proposed to impose the excise duty? Were others considering the purchase of A.N.A. given the same informal tion as that given to Mr. Ansett about the Government’s proposals? Who was present at the discussions between the Minister and the Ansett representatives? Can the Minister inform the Senate whether there are any oil interests involved in this transaction? Has the Shell Oil Company entered into any arrangement to assist Ansett Industries in the financing of this deal? Is it not a fact that oil sales to the value of £3,000,000 a year are held up in the transfer? Has there not been a change over from Vacuum to Shell oil products by A.N.A.? What are the encumbrances on Ansett’s assets, and where does the Government guarantee rank amongst such encumbrances?
Another interesting aspect of the AnsettA.N.A. merger is to be found in the personnel sphere. I am sorry that Senator
McManus and Senator Cole are not in the chamber at the moment, for we find that the new public relations officer of this Ansett-A.N.A. creature of big business is none other than Mr. Allen Manning, vicepresident of the disguised Liberal party, represented here by Senator Cole and Senator McManus. This is the Mr. Manning who, politically, has been everything in turn but nothing for very long. He transferred his loyalty from the struggling Butler airline to throw in his lot with the Ansett-A.N.A. outfit, which has started off in the best traditions of big business by sacking 500 employees.
– Of what party is he the vice-president?
– He is vice-president of the Australian Democratic Labour party, as it calls itself. It will be seen, therefore, that Senator Cole and Senator McManus have as their leader a man who is tied up with one of the combines of financial interests in civil aviation - Ansett-A.N.A. This is the Mr. Manning who talks glibly about the Australian Democratic Labour party’s policy of fighting monopolies but who is the creator of shipping and oil monopolies. He is the person who could leave the small, struggling Butler airline to become so-called public relations officer of the company which is seeking to crush the Butler organization and thereby sack more good Australians. What humbug and hypocrisy we hear from this disguised Liberal party when it poses as being the foe of big business! It is plain where these Labour renegades receive the ample finance with which they can conduct their antiLabour activities. Senator Cole and Senator McManus will have to defend the operations of the Ansett-A.N.A. combine lest they are led before the political changecoat, Allen Manning, now the paid stooge of monopoly capitalism.
Much has been said by Senator Wood in condemnation of Trans-Australia Airlines and the support it received from the Labour party. In reply, let me read the following tribute that appeared in the press to the foresight of T.A.A. in introducing the Vickers Viscount aircraft to Australia: -
As a prelude to the introduction by TransAustralia Airlines of six Vickers Viscount airliners into regular scheduled services on Australian air routes, the arrival of the first of these aircraft is an occasion of national importance.
Air transport is now so definitely an essential national service that Australians, who fly more miles per head of population than any other people in the world, will be fully conscious of the significance and importance of the coming of the propeller-turbine airliners.
The Viscount, which has captured not only the attention of airline operators throughout the world but the imagination of air travellers, has already proved a master stroke of British aviation achievement.
It is, therefore, a matter for much congratulation that T.A.A., with a most enviable record of accident-free service, should take this progressive step.
Both the Government and the people of the Commonwealth will join me, I am confident, in wishing T.A.A. a continuation of their splendid record.
The tribute was paid by the former Minister for Civil Aviation (Mr. Townley).
– I am one of those who regret the circumstances that make this legislation necessary. When the 1952 agreement was entered into, many of us had high hopes that that agreement would perpetuate in Australia a situation wherein we would have strong airlines throughout this country, and that the people of Australia would benefit by the competition of those airlines. Unfortunately, we have reached a stage at which we have to admit that the 1952 agreement did not work out in that way. It is now necessary to enter into a new agreement to provide what I said was definitely needed in Australia - competition between strong airlines operating throughout the land.
We are indebted to Senator Wood for his speech to-night. We all know what an enthusiast he is when dealing with any particular topic, and I certainly appreciate his enthusiasm for A.N.A.
– He demonstrated that all right.
– But at least he gave us an outline of the very valuable services performed by that organization in the early days of aviation in Australia. As he pointed out, that company rendered valuable service to this country down the years. It can be truly said that the company, as it was built up on the foundation of previous organizations, served Australia well; and I regret that A.N.A. has ceased to function as a separate organization.
One of the reasons for its ceasing to function is undoubtedly the establishment by the Chifley Labour Government of TransAustralia Airlines in the year 1945. There is no question about it. I was not in this place at the time, but I took an active interest in federal politics, and I had the benefit of “ Hansard “ reports and other sources of information. The conclusion that I reached at that time was that it was completely in conformity with Labour policy to destroy A.N.A. by the setting up of T.A.A. lt was in complete conformity with Labour’s policy of socialization. Labour believed in a monopoly air service, an airline controlled by the Government which would compete unfairly with private airlines and eventually destroy them.
In the first place, I remember clearly that the capital required for the establishment of T.A.A. was provided by the Government. Ample money was made available to equip it with first-class aircraft, which were at that time superior to any others in operation in Australia. The Government decided that all airmail would be carried by T.A.A., the government airline, that all government business would be handled by it, that members of the Federal Parliament and the freight of government departments would be carried by it, and that, in addition, other avenues of revenue would be available to it. What hope would a private airline have of COm.peting successfully with a governmentfostered airline such as T.A.A.?
There could be only one result, and that began to appear early in the 1950’s. As Senator Wood pointed out, T.A.A. had a succession of losses in its early years; but with the assistance of the Labour government it began to assert its superiority in financial resources, and that valuable airline, A.N.A., began to get into difficulties. Early in the 1950’s, or even before, A.N.A., working under the difficulties that I have mentioned, was beginning to make heavy weather of it. In 1952, the stage was reached where the Government felt it was essential to take some action to preserve an airline in competition with T.A.A. The history of the 1 952 agreement is well known to all of us. The agreement was designed to keep the two major trunk operators in commission, actively engaged in the transport of freight and passengers on the interstate routes, and in fair competition with each other.
The Australian National Airlines Commission, which was in control of T.A.A., was not, as the Minister for Civil Aviation said, a voluntary party to the agreement. It was supposed to abide by certain controls effected by that agreement, but it certainly was not a voluntary party to it. Consequently, there was no co-operation, or very little, between the two airlines in regard to rationalization. The 1952 agreement, of course, enabled the provision of financial assistance to A.N.A. Money was not given to thi company, but with the assistance of a government guarantee, the company was able to procure loans to enable it to buy ana operate better aircraft than it then possessed. It received three loans, totalling £4,350,000. One, amounting, I think, to £1,500,000, was from the Australian Mutual Provident Society, and the other two were from the Commonwealth Bank. But such was the unfair competition of T.A.A. thai A.N.A. was unable to meet its commitments in regard to those loans. The stage was reached where it had to take some action or go out of business.
Mr. Haddy, the managing director of A.N.A., claimed that rationalization, which was supposed to result from that agreement, never properly functioned, and I am inclined to agree with him. 1, at any rate, did not see any evidence of rationalization of services. As far as I could see, there was no alteration of services. 1 think that they operated exactly as they had operated formerly. The number of services to Western Australia remained unaltered, and 1 know for a fact that on many occasions two aircraft on one day flew to Western Australia with passenger lists that were far from full. Had rationalization been put into operation more effectively, I am sure that the result we are discussing would not have occurred. 1 suggest that the handling of this situation by the Minister for Civil Aviation should be commended most highly by honorable senators. I am reminded of the work that he did in connexion with the shipping legislation in 1956. I am not one to lavish praise unnecessarily or without reason upon an individual, but I think that Senator Paltridge’s handling of this particularly difficult situation is worthy of the highest commendation.
A.N.A.’s proposals were outlined in the Minister’s second-reading speech. He made it perfectly clear that the Government would not be party to an arrangement that was unfair or unjust to the people of Australia. No doubt A.N.A.’s proposals were, as any company’s proposals would have been, for the best possible terms it could procure, and I personally feel that its proposals were extravagant. I have no hesitation in saying that the company’s first proposal was extravagant, lt suggested that a holding company, with a capital of £15,500,000, be formed, that T.A.A. receive £7,000,000 in shares, that A.N.A. receive £6,500,000, half in shares and half in cash, and that other operators receive up to £2,000,000 in shares. To my way of thinking, that was an exorbitant price. It was rejected outright by the Minister. A.N.A. then came forward with a second proposal that was not verymuch better. I think the Government did the right thing in turning down the second proposal. A.N.A. had to choose between going into voluntary liquidation and selling out to another private enterprise organization that was willing to continue its services. There were protracted negotiations between the Minister, the company and prospective buyers and ultimately Ansett Transport Industries purchased all of the shares in A.N.A. for £3,300,000. By so doing, the Ansett organization assumed the obligation of A.N.A. under the 1952 agreement.
The Minister’s second-reading speech, which I have studied carefully, explains the agreement very clearly. I am convinced that if the terms of the agreement are carried out faithfully by the parties concerned, matters will work out successfully. The rationalization proposals were accepted in their entirety by both the Australian National Airlines Commission and the new company, and they will be implemented forthwith as to rates, freights, time-tables and the general running of the two airlines.
This bill will facilitate the preservation of the two major trunk .airline operators in Australia. I have no brief for those who criticize the manner in which T.A.A. functioned. I travelled by that airline long enough and often enough to know that it was run excellently; it provided a very fine interstate service. The Viscount aircraft operated by T.A.A. ,have performed magnificent service since their introduction into this country. I think that T.A.A. enjoyed a definite advantage over A.N.A. from the point of view of the type of aircraft operated. I shall not for a moment run down the DC6 and DC6b aircraft that are at present being operated by Ansett-A.N.A., because they are really magnificent machines. Having travelled by both Viscount and DC6 aircraft, I say without equivocation that one is not superior to the other from any point of view, except that the Viscount seems to be the more economical unit in regard to maintenance. I think that, to a large extent, this factor accounts for the sounder financial position of T.A.A. I do not subscribe to the invidious comparisons that have been made between the types of aircraft that are operated by the major airlines in Australia.
It is important for airline operators to keep up to date in the matter of aircraft. I am glad to know that, as time goes on, T.A.A. will replace its uneconomical DC3’s with a new type of aircraft. I believe that Ansett Transport Industries also looks forward to obtaining more modern aircraft than the DC3’s now in service. There is no doubt that the old work-horse of the air, the DC3, has had its day. Both airlines are fully alive to the necessity to introduce new and up-to-date aircraft on their air services.
Senator Wood referred to the tax on aviation kerosene. I do not criticize the Government for introducing that tax, because an operator of aircraft using kerosene as fuel, on which is paid only primage of Hd. gallon, enjoys a distinct advantage over a competitor using aviation fuel subject -to tax. I commend the Government for equalizing the tax payable by the operators of different types of aircraft.
I was disappointed that the 1952 agreement did not run to a successful conclusion, but I am sure that the new agreement will work out all right. In the past, it was suggested by A.N.A. that two major airlines could not operate successfully on the interstate routes. We cannot dismiss that suggestion as unworthy of consideration, because statistics have been compiled to show the extent of air traffic between the capital cities. It would appear from the way in which events worked out under the 1952 agreement that there has been insufficient traffic available for the successful working of two operators on the interstate air routes. As I am reminded by Senator Pearson, A.N.A. operated successfully up to 1945 and provided an adequate service between the capital cities of Australia. Why in the name of fortune the Labour Government should have found it necessary to introduce a socialized airline to compete in the airline field with a company which was providing the necessary service is beyond my comprehension. The fact remains that that was done and we have reached a situation where we have to consider a measure such as this.
This bill is most important. I have great faith in the commercial enterprise of the controller of Ansett Transport Industries Limited. As Senator Wood has pointed out, he is a man of extraordinary business acumen. That has been proved by the success he has achieved. We know that he has been making inroads into the routes on which the two major airline companies have been operating. Ansett Airways Proprietary Limited is excellently run and provides a very valuable service to certain places. This gentleman has undertaken a major task. He has taken over a big airline and has accepted practically all of its responsibilities. I hope that he will be able to continue to operate that airline on a profitable basis in competition with T.A.A.
If it is at all possible, I think it is most desirable that we should have competition between the major airlines on the interstate routes. I shall be disappointed if this agreement does not enable the Ansett group to provide a valuable service to the community.
There is not much more that I need say about this measure. I support the bill that provides for this agreement most heartily. We in Australia are very air-minded. We have vast distances to serve and great developments to carry out. If we are to keep pace with the development of other countries, we must have efficient air services. We on this side of the chamber are opposed to a monopoly. We are definitely opposed to a monopoly of air services and if we can keep two airlines in operation on interstate routes as a result of this agreement, we shall be serving the Australian community well. I hope that the agreement is as successful as it deserves to be. Finally, I congratulate the Minister for Civil Aviation on bringing to a successful conclusion the relevant negotiations.
– I suppose that one could say a few words about the speech that has been delivered by Senator Hannaford. He began by saying that the government of the day gave TransAustralia Airlines unlimited capital when it was inaugurated, but the facts are that the Government provided T.A.A. with £4,370,000 on which it charged the then ruling rate of interest of 3i per cent.
– I did not say anything about interest.
– I know that Senator Hannaford did not say anything about interest. I did not expect him to do so, nor did I expect him to come in so easily. He suggested that before 1945, when T.A.A. was inaugurated, everything was all right for Australian National Airways Proprietary Limited. That company was making a profit and he implied that there was no need for the competition that was provided by T.A.A. He implied that in 1945 he did not believe in competition because the competition was provided by a government airline against private enterprise. Then in the last part of his speech he said that he was totally opposed to the monopoly of air services by T.A.A.
All that one can judge from his remarks is that he desired a monopoly so long as it was a monopoly for private enterprise, but he threw up his hands in horror at the thought that we on this side of the chamber should believe in a monopoly for the nation’s airline. Without equivocation, I say that I want a monopoly for the nation’s airline. I say to my good friend the Minister for Civil Aviation that I believe he knows, as I know, that within two years T.A.A. will have a monopoly.
– Why two years?
– We will leave the intervening time to look after itself.
– They will establish their dictatorship by then.
– This is one time when Government supporters have got what they are always seeking - competition. I make the. prediction with some little knowledge - though it would be unfair of me to say how I know, and I do not propose to be unfair even to a competitor of T.A.A. I look forward two years hence and suggest that we will see then what will happen. Senator Wood made an impassioned speech about how the previous Labour Government started an airline in competition with A.N.A. He implied that the establishment of T.A.A. was directed principally against two very good citizens of Australia, one of whom was knighted and lives in Tasmania. When one examines the list of people who really owned A.N.A., it is apparent that the Holyman brothers were only two among a number of owners.
– He did not say that.
– No, I am saying it. I did not expect anybody else to say it. Senator Wood paid a tribute to those who inaugurated A.N.A. He said how unfair it was that the government of the day should start an airline and thus do so much harm that it eventually drove A.N.A. out of the sky. Throughout his speech, he implied that the harm that was done by such fierce competition from T.A.A. was done to two individuals. Now we shall see who actually owned A.N.A.
– You have it all wrong.
– Of course, one always has it wrong when his comments do not fit in with the Government’s policy of assisting glorious private enterprise. Huddart Parker Limited, the Union Steam Ship Company of New Zealand Limited, the Adelaide Steamship Company Limited, the Orient company, and the Holyman brothers each owned approximately 1,119,000 shares in A.N.A. In addition, some 356.000 shares were owned by Airlines of Australia Limited. So, with due respect to the Holyman brothers, they were only two of many shareholders.
– The two people to whom you referred earlier owned the company that operated between Townsville and Mount Isa.
– No. I do not mind you interjecting. You may continue to do so, because it will make my task a lot easier. Senator Wood spoke of the brutality of T.A.A. in entering into competition with and putting out of business an airline operating between Townsville and Mount Isa and owned by three men who could have been cobbers of my colleague, Senator O’Byrne. I am not doubting Senator Wood’s word, but, as I said earlier, he implied that the Holyman brothers personally suffered a great loss because their airline went out of existence.
Senator McManus made a rather remarkable speech. I can recall when in 1952 he was assistant secretary of the Victorian branch of the Australian Labour party and I was the federal secretary of the party. The amusing aspect of it all is that I have in my hand a pamphlet, 5,000 copies of which I sent to his office for distribution in Victoria. That pamphlet was issued in opposition to the 1952 agreement. I do not mind Senator McManus changing his views, but he should not mind my telling him that he has changed them. That is all I want to say on that matter. If any one wants to see the pamphlet, he may. I was fortunate enough to lay my hand on it. In fact, it was I who authorized the issue of it. I regret that I did not hear all Senator Gorton’s speech, but I shall read it later. I apologize to him for having been out of the chamber for part of the time he was speaking.
The introduction of this bill surely marks a humiliating moment in the experience of this Government. I can think of no more humiliating moment in its experience. I say quite candidly that the introduction of the bill is an acknowledgment of the superiority of the government airline to the private airlines. It is interesting to note what the present Prime Minister had to say about the ability of a government to run an airline when T.A.A. was inaugurated in 1945. His speech is recorded in “ Hansard “ of 25th July, 1945. He said-
Of all means of transport, flying is the one which requires in the highest degree enterprise, a willingness to take risks, a willingness to adventure capital, flexibility of mind, and constant contact with scientific development and commercial practices. Very few people would look for those things in a government department . . .
That shows that the Prime Minister, in his capacity as Leader of the Opposition in 1945, attempted to throw as much cold water as he could on T.A.A. and no doubt expected failure on the part of that organization. In so doing, I should say that he paid extremely little respect to officials of T.A.A. and other government departments. As the right honorable gentleman is a member of a committee that is to investigate the size and constitution of government departments, let us hope that his views have changed since 1949. If they have not changed, the position might be very bad for a number of public servants.
This bill is supplementary to the 1952 measure. It was known in that year that T.A.A. was driving A.N.A. out of the skies. In 1951-52, T.A.A. aircraft flew 320,000,000 passenger miles while A.N.A. aircraft flew only 277,000,000” passenger miles.
– They were running neck and neck. It was a close finish.
– If the honorable senator thinks that was a neck-and-neck finish, I advise him not to put any money on certain animals. It was a long way from being a neck-and-neck finish. It is also known that at that time T.A.A. was making a profit.
Debate interrupted.
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The PRESIDENT (Senator the Hon. Sir Alister McMullin). - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -
That the Senate do now adjourn.
Question resolved in the affirmative.
Senate adjourned at 11 p.m.
Cite as: Australia, Senate, Debates, 20 November 1957, viewed 22 October 2017, <http://historichansard.net/senate/1957/19571120_senate_22_s11/>.