5 August 1958

22nd Parliament · 3rd Session

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

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– It is with much regret that I have to inform the Senate of the death on 27th June last, of Senator the Honorable William Patrick Ashley, and on 23rd July last, of Senator the Honorable Harrie Stephen Seward. On behalf of honorable senators I sent expressions of sympathy to the widows of the deceased senators, pending the more formal resolutions of the Senate.

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New Senator Sworn


– I desire to inform the Senate that, pursuant to the provisions of the Constitution, I notified the Governor of the State of New South Wales and the Governor of the State of Western Australia of the vacancies in the representation of those States caused by the deaths of Senator Ashley and Senator Seward, and that I have now received, through His Excellency the Governor-General, from the Governor of the State of New South Wales, a certificate of the appointment of James Patrick Ormonde to fill the vacancy in the representation of New South Wales.

Certificate laid on the table and read by the Clerk.

Senator Ormonde made and subscribed the oath of allegiance.

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General · QueenslandVicePresident of the Executive Council and Attorney · LP

– toy leave - I am sure honorable senators on all sides will have learned with great regret of the death on 27th June of our friend and colleague, the late Senator Ashley. Long before he was elected to the Senate, Senator Ashley took a great interest in local affairs, and became an alderman and mayor of Lithgow. He was elected to the Senate in 1937 and held hia seat until his recent death. He was a member of the Senate Standing Committee on Regulations and Ordinances from 2nd December, 1937, to 27th September, 1938, and of the Parliamentary Joint Committee on War Expenditure from 3rd July to 12th November, 1941. He was Minister for Information from 7th October, 1941, to 21st September, 1943, PostmasterGeneral from 7th October, 1941, to 2nd February, 1945, Minister for Supply and Shipping from 2nd February, 1945, to 6th April, 1948, Vice-President of the Executive Council from 21st September, 1943, to 2nd February, 1945, and Deputy Leader of the Government in the Senate from 21st September, 1943, to June, 1946. He was a member of the Censorship Committee from 14th March to 27th July, 1944, and of the Production Executive of Cabinet from February, 1945, to 7th January, 1946. He was Minister for Shipping and Fuel from 6th April, 1948, to 19th December, 1949, Leader of the Government in the Senate from June, 1946, to December, 1949, and Acting Minister for the Army from 11th January to 23 rd January, 1949, and from 28th. March to 28th April, 1949. He was Leader of the Opposition in the Senate from 20th December, 1949, to June, 1951, and a member of the Select Committee on Constitution Alteration (Avoidance of Double Dissolution Deadlocks) Bill in 1950. In 1901 and 1902 he served, as quite a youth, in’ the South African war.

Such is the cold, though impressive, record of the public life of our deceased colleague. His personal qualities are enshrined in the memory and affection of those who were privileged to know him. In debate he was forceful and tenacious. He neither sought nor gave quarter, but he was never personally offensive. Over the years there developed between Senator Ashley and myself, and between him and many other senators on this side of the chamber, a bond of mutual respect and affection. When he was the Leader of the Senate, and also when he was the Leader of the Opposition, I received many kindnesses and courtesies at his hands. Sad occasions such as this afford us the opportunity of contemplating that even in the hurly-burly of party politics, where views differ widely, and in some matters fundamentally, there is still room for deep personal affection which transcends political differences.

To his widow and family, and to his colleagues, I extend my profound sympathy. May he rest in peace.

I move -

That the Senate expresses its deep regret at the death of Senator the Honorable William Patrick Ashley, former Commonwealth Minister, who was at the time of his death senator for the State of New South Wales, places on record its appreciation of his long and meritorious public service, and tenders its sincere sympathy to his widow and daughter in their bereavement.

Senator McKENNA:
Leader of the Opposition · Tasmania

– On behalf of the Opposition, I second the motion. I express the Opposition’s appreciation of the remarks with which the Leader of the Government in the Senate (Senator O’sullivan) supported his motion of condolence on the passing of our very dear friend and colleague, Senator William Patrick Ashley. When the Parliament rose on 15th May last not one of us, I think, gave a thought to the possibility that we should never again see or hear him in this life.

It is perhaps salutary to pause for a moment in the midst of our mundane engrossments and contemplate that death is the one real certainty for each human being, and that no one, young or old, knows the day or the hour when its portals will open for him. When that hour comes nothing is of consequence except that in his period of trial he has remained true to the purpose for which he was created. A proper understanding of death would lead us, I submit to the Senate, not ‘to mourn for one who has passed, but to extend our sympathy to those who, holding him dear to them, are afflicted, sorrowing and suffering a sense of personal loss. This is the idea, I suggest, that is implicit in the terms of the motion proposed by the Leader of the Government.

One sometimes ‘hears it said -that a person is never praised until after his death, lt could be embarrassing for everybody if it were otherwise. It does not require words to indicate friendship or .mateship. A nod, a look, a grin, a ‘handshake, or a word of kindness can be most eloquent of these things if they are inspired ‘by a ‘heart that -has a place for (tolerance and goodwill. Words are not required for these things while a person lives, but words are all that we have ‘left when he departs.

Senator Ashley lived a good life. He was a , devoted husband, father and grandfather. Though tough and combative in debate, as Senator O’sullivan indicated, his toughness was liberally diluted by his everpresent sense of humour. He respected a tough opponent and relished an encounter with him - win, lose .or draw. He was without malice and never harboured a grudge. He was neatness itself in person and dress, and set great store on .punctuality. He was a man of simple tastes and regular habits.

A man of few words in private conversation, he Jacked neither words nor thoughts when it came to advocating Labour’s cause or fighting its battles. He was assiduous in attending to his parliamentary duties. He was a most regular attendant in this chamber and at his office when the Parliament was not in session. It was appropriate that he was on the way to his parliamentary office when he suffered the attack which soon afterwards caused his death. He was indefatigable in the cause ‘for which he laboured. It was -quite :in character that he should die in harness. He had a directness of approach to everything and a really remarkable persistence with an idea that appealed to him. 1 like to think .that his final incapacity,, whilst giving him time to prepare for his end, was mercifully of short duration.

In the sickness or distress ‘df another person he was the personification of kindness and attention. !I was much touched by my personal experience of this when last year I was immobilized by an injury for some weeks. Like all men of strong and well-formed character, he was completely predictable. One would know in advance how he would act in any given set

Of circumstances. In other words, -Bill Ashley, ‘as we all affectionately knew him, rang true at all times.

His funeral, which was attended by his friends in all wafts of life, was a wonderful tribute to ‘his ‘character, his personal qualities and his work. Those who attended came from .every part ‘Qf New South Wales; indeed, they came from all parts of Australia. The Opposition greatly appreciated the attendance on .that occasion of you, Mr. President, the Leader of the Government in the Senate and the Minister for National Development (Senator Spooner). We .appreciated also the attendance of a large number of supporters of the Government.

Senator Ashley displayed marked ability in the administration of the numerous portfolios that he held in the Curtin and Chifley Governments. Those portfolios have already been .described by Senator O’sullivan. Senator Ashley was trusted and loved by those two great Labour leaders. He not only reciprocated their regard but repaid it with the utmost loyalty. Bill Ashley was a gentleman, a sportsman, a great Australian and a great mate. His record, which has been detailed by the Leader of the Government in the Senate, was one of continuous unselfish and effective public service. We are the better for having had the privilege of working with him - of knowing him. He will be greatly missed by every one of us.

The Opposition thanks members of the Government and their supporters for their kindly .expressions of sympathy with us in our loss. We join in expressing to his widow and daughter our deepest sympathy in their .bereavement and trust that they will “be given strength to hear their burden of sorrow.

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

– 1 crave the indulgence of the Senate to associate myself with this motion. I do so because Senator Ashley had the very great honour of leading the Australian Labour party’s Senate team in New South Wales and -I had the honour of leading the Liberal party team at the series of elections that have occurred since 1949, .and because the portfolio I hold covers many of the activities associated with the portfolios that were held by Senator Ashley during his -term as a Minister df the Crown. Thus it will be seen that in very many ways he and I were opposite numbers in New South Wales. W,? had the task of fighting each other politically at various elections and of putting forward opposite viewpoints in the Senate.

I must say that, when I subscribe to this tribute to his memory, my recollections of him run along these lines: First, I do not remember his ever yielding a political point. He always stood for what he believed and never gave way; he fought every inch of the way. Secondly, despite the fact that I had just contested a Senate election against him, he was friendly and helpful to me personally in the early days of my occupancy of ministerial office. It is no overstatement to say that, stern as he was as a political opponent, in every way he was a generous political opponent. Therefore, Mr. President, it was of great satisfaction to me, as I am sure it was to every one on this side of the chamber, at the time of his passing not to have one harsh recollection of him but in every way to be able to think of him in friendly terms.

Senator COLE:
Leader of the Australian Democratic Labour party · Tasmania

– I desire to associate the Australian Democratic Labour party with the condolences that have been expressed by the spokesmen of other political parties here to-day. Mr. President, 1 believe that Senator Ashley, a forthright and very courageous speaker, will be sadly missed from the Senate. To his sorrowing widow and family I express the deepest sympathy of the Australian Democratic Labour party.

Senator REID:
New South Wales

– I wish to associate the Australian Country party with the motion moved by the Leader of the Government in the Senate (Senator O’sullivan) and seconded by the Leader of the Opposition (Senator McKenna). Both honorable senators have given a detailed account of the activities of the late Senator Ashley, particularly from the time that he became a member of the Senate. The record, as stated by those honorable senators, could not fail to impress not only those present in this chamber to-day, but also people outside it who had the opportunity to make contact with Senator Ashley in some of the many activities in which he engaged.

As Senator O’sullivan and Senator McKenna have said, Senator Ashley will be missed from this chamber. When you had him as an opponent, you appreciated at once that he was a man of very definite views. He never failed to express himself in terms that he felt were justified by the cause for which he was fighting, but in expressing his views, he always gave the impression that he was stating them because he believed they were in accord with the principles that he had advocated over the years. I became quite closely associated with him, particularly when I was elected Chairman of Committees. If Senator Ashley thought that he could get a little bit of fun out of doing so, he would raise all sorts of points, but he would do so in a good-humoured way. He did not get many victories, and when a ruling was given against him he would often say, “ Well, it was worth a try “. I think that that typified his outlook and his attitude on many occasions. He felt that he had a duty to perform in this country and he did his duty to the best of his ability.

The Australian Country party, in associating itself with the motion of condolence, extends to his widow and family its deepest sympathy in the great loss that they have suffered.

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

– I desire to be associated with the expression of condolence to the family of the late Senator Ashley. If I were asked to recollect the outstanding characteristics of the honorable senator, 1 would recall particularly his amazing political vitality and the way in which he retained over a long life a political enthusiasm which the years normally dissipate. He sustained that intense interest, energy and activity until the end.

Senator Ashley, Mr. President, was one of those rather rare figures whose work, speeches and record of activities will pass ultimately into that limited and somewhat exclusive hoard of parliamentary anecdotes and reminiscence. For that reason, the honorable senator’s memory will always remain fresh and green amongst us. I recall him in a rather intimate manner. I remember that always, when he caught the plane to leave Canberra for his home at the end of a week’s sittings, he took with him a rather humble, neatly wrapped bunch of flowers, obviously for his wife and family. That indicated a great softness in his nature. It indicated, too, affection and regard for those who were near and dear to him. To those whom death has deprived of that affection and regard, I offer my profound sympathy.

Question resolved in the affirmative, honorable senators standing in their places.

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General · QueenslandVicePresident of the Executive Council and Attorney · LP

– by leave - I am sure that honorable senators have learned with great regret of the death of Senator Seward on 23rd July last and 1 wish to outline his distinguished record of public service. Prior to becoming a farmer, Senator Seward was a bank officer in Victoria and New Zealand. He was an executive member of the Primary Producers Association, a past president of the Pingelly Agricultural Society, and secretary of the West Australian Democratic and Country League.

Senator Seward was elected to the Legislative Assembly of Western Australia as member for Pingelly in 1933. He held that seat until the general election in March, 1950, when the seat was abolished by redistribution. From 1st April, 1947, to 6th April, 1950, he was Minister for Railways and Transport. He was elected to the Senate as a representative of Western Australia in 1951, and held his seat in the Senate until the time of his death. He served as a member of the Public Accounts Committee from 27th September, 1952, and was a member of the Senate Regulations and Ordinances Committee from 16th September, 1953. He enlisted in the first Australian Imperial Force in 1915, attained commissioned rank in 1916, and was wounded and invalided home to Australia in 1917. Here-enlisted in 1918.

The foregoing is a brief summary of the long and distinguished record of public service of our deceased colleague. His private life was devout and exemplary. Western Australia has lost a devoted senator. We have lost a good friend and a loyal colleague. I extend to his widow my profound sympathy in her sorrow. May he rest in peace,

I move -

That the Senate expresses its deep regret at the death of Senator the Honorable Harrie Stephen Seward, senator for the State of Western Australia, places on record its appreciation of his long and meritorious public service, mid tenders its sincere sympathy to his widow in her bereavement.

Senator McKENNA:
Leader of the Opposition · Tasmania

– On behalf of the Opposition, I second the motion, and endorse all that the Leader of the Government in the Senate (Senator O’sullivan) has said in support of it. Senator Seward was with us in this chamber for more than seven years. During the whole of that time he gave us example after example of courageous and thoughtful utterances and actions. We came to appreciate the kindliness that appeared unobtrusively in all his personal relations. His end was not unexpected. He was stricken with a mortal illness which, I learned, he accepted, as I would expect him to, with the utmost fortitude and submission. I feel that in the person of Senator Seward a very good and wholesome man has gone to his reward.

His was a life of distinguished public service to his country, a service which, as Senator O’sullivan has indicated, was rendered at various levels, and at very high levels. Opposition senators express to Government senators our regret at the passing of their very worthy colleague. We extend to his widow our deepest sympathy in her sad loss and trust that she will find solace in the thought that her distinguished husband commanded the respect and regard of all in this Parliament.

Senator COLE:
Leader of the Australian Democratic Labour Party · Tasmania

– I desire to associate my party with the sentiments expressed by the two previous speakers. As a politician, Senator Seward was probably unique, because he had a mind of his own on virtually all questions. To his sorrowing widow we express our deepest sympathy.

Western Australia

– On behalf of the Australian Country party and with feelings of deep personal regret I join with the Leader of the Government in the Senate (Senator O’sullivan), the Leader of the Opposition (Senator McKenna) and the Leader of the Australian Democratic Labour party (Senator Cole) in paying tribute to our late colleague and friend, Senator Harrie Seward, of Western Australia.

The Leader of the Government has outlined Senator Seward’s distinguished war service and public service, both in the Federal and State Parliaments. He was unceasing in his efforts to promote the welfare of the Australian Commonwealth, and was particularly vigilant in matters affecting the advancement of Western Australia. His wide experience in public life made him a valuable member of many committees, not the least of which was the Public Accounts Committee to which he rendered excellent service. His intense interest in Australia’s primary production is shown in the many informative speeches which he made in this chamber. His attendance in Parliament, and indeed to his many duties, was most regular.

The Australian Country party extends its deepest sympathy to Mrs. Seward and prays that she will be sustained in her hour of sudden and grievous bereavement.

Senator VINCENT:
Western Australia

– T desire to associate myself with the motion of condolence. I was a friend of the late Senator Harrie Seward for many years prior to his election to Parliament, and grew to know, like and respect him. To me he will always represent a very high degree of courage and upright bearing as a man, a soldier and a politician. His courage as a soldier is epitomized by the fact that after he was wounded in World War I. and invalided home he re-enlisted and went back to fight. We in this chamber all have seen - and many of us have personally experienced - numerous instances of Senator Seward’s personal courage in debate. His conscience was always his guide. In his final serious and painful illness he again showed that he was a man of great courage.

I join with the previous speakers to this motion, and; offer my sympathy to the sorrowing widow of the late Harrie Seward.

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

– On behalf of the party of which. I am a member I associate myself with the resolution conveying our, condolences to the widow of the, late Senator Seward.

Senator Seward was a man of quiet disposition, tremendous integrity of character and strength of will whose like we have not seen toe often, in the past and possibly will’ not see- too frequently in the future.

It was- my personal- pleasure to be associated with him on the Public Accounts Committee and the Standing Committee on Regulations and Ordinances. I was always impressed by the orderliness of his mind and by the common sense and judgment which he invariably brought to bear on the rather difficult and intricate problems that presented themselves to both those committees. He had an amazing personal assiduousness, and I cannot recall him being absent from a committee meeting or even late for a meeting. He had always done the preparatory work and therefore brought an enlightened mind to our deliberations. Honorable senators and this chamber will be honoured if the coming years give us more men of his calibre.

To his widow, and from a deep sense of personal loss, I extend my profound sympathy.

Senator WOOD:

– The lae Senator Seward; was a member of the Standing Committee on Regulations, and Ordinances and, as- its chairman,. I should Eke to- associate myself with this resolution and, at the same time, express the very deep loss which will be suffered by the Senate and that committee as a consequence of his passing. I share Senator Byrne’s opinion that his work on the Regulations and Ordinances Committee was of a very high calibre. Senator Seward possessed an independent mind; and his great knowledge and honesty of purpose were attributes that fitted him admirably to be a member of that committee. I know, speaking on behalf of all members of the committee, that we shall miss him greatly at future meetings; we shall miss, particularly, the benefit of his valuable work. I desire to associate myself with the motion of condolence to his widow.

Question resolved in the affirmative, honorable senators standing in their places.

Senator O’SULLIVAN (Queensland:VicePresident of the Executive Council and Attorney-General). - I suggest that as a mark of respect to the memory of the late Senator the Honorable W. P. Ashley and the late Senator the Honorable H. S. Seward, the sitting of the Senate be suspended until 8 p.m.

Sitting suspended from. 3.37 to 8 p.Bi.

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Assent to the following bills reported: -

Public Service Bill 1958.

Commonwealth Employees’ Furlough Bill 1958.

Bankruptcy Bill . 1958.

Tariff Board Bill 1958.

Customs Tariff Bill 1958.

Customs Tariff (Canadian Preference) Bill 1958.

Customs Tariff (New Zealand Preference) Bill 1958.

Customs Tariff (Federation of Rhodesia and Nyasaland Preference) Bill 1958.

Excise Tariff Bill 1958.

Customs Tariff Bill (No. 2) 1958.

Customs Tariff (Primage Duties) Bill 1958.

Petroleum Search Subsidy Bill 1958.

Beer Excise Bill 1958.

Cotton Bounty Bill 1958.

Income Tax (International Agreements) Bill 1958.

Overseas Telecommunications Bill . 1958.

States Grants (Universities) Bill 1958.

Western Australia Grant (Northern Development) Bill 1958.

Wheal Acquisition (Undistributed Moneys)Bill 1958.

Conciliation and Arbitration Bill 1958.

Snowy Mountains Hydro-electric Power Bill 1958.

Appropriation Bill (No. 2) 1957-58.

Appropriation (Works and Services) Bill (No. 2) 195.7-58.

Supply Bill 1958-59.

Supply (Works and Services) Bill 1958-59.

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Bill returned from the House of Representativeswithout amendment; assent reported.

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Senator SPOONER:
New South WalesMinister for National Development · LP

– I lay on the table the following papers: -

Estimates of Receipts and Expenditure, and Estimates of Expenditure for Additions, New Works and other Services involving Capital Expenditure, for the year ending 30th June, 1959;

The Budget 1958-59- Papers presented by the Right Hon. Sir Arthur Fadden in connexion with the Budget of 1958-59; and

NationalIncome and Expenditure 1957-58, and move -

Thatthe papers be printed.

To-night, the Treasurer (Sir Arthur Fadden) is delivering in another place his budget speech for 1958-59. I should like to refer briefly to some of the main features of the budget.

This year the Government is budgeting for an overall cash deficiency of £110,000,000 and we plan to finance that deficiency by borrowing from the Central Bank. We are doing this advisedly because we judge that, in the circumstances of our economy, expansive action of that kind is more appropriate than the conventional course of trying to match total receipts and total outgoings. We believe that what we are doing will materially support business investment and consumer spending and so help to offset the effects of continued low export earnings.

During 1957-58, our economy, taken as a whole, made notable progress. Total employment rose and, although unemployment increased to some extent, it did not at any stage reach large proportions. In manufacturing, a great many industries increased output - very considerably in some cases - and, of the other industries, the great majority succeeded in keeping output high. Private investment expenditure is estimated to have increased during the year by more than 7 per cent. The rate of dwelling construction rose and other forms of building activity remained high. There was a large increase in purchases of motor vehicles. Public works nearlyeverywhere made good headway. Total consumption expenditure for the year is estimated to have been some 7 per cent. greater than in 1956-57.

These results were achieved despite a heavy fall in exports and farm income. Our total exports for the year were £814,000,000, whereas in 1956-57 they were £978,000,000. Farm income fell by nearly £180,000,000, or about one-third of farm income in 1956-57.

It is undoubtedly significant that, notwithstanding this setback to the rural industries, the economy as a whole continued to advance as strongly as it did. This demonstrates that the expansionary forces which have operated in this country during recent years have great strength and have imparted a high degree of resilience to our economy. Because of this, and because our economy is now much more diversified than formerly, it is better able to withstandexternal shocks than it once was. Last year also showed how much can be done by timely and well-judged action in the fields of monetary and budget policy to offset adverse trends and support the initiatives that make for local expansion. For the Government is entitled to recall how, in its Budget for 1957-58, it provided for substantial tax concessions, for increased social service payments, for larger payments to the States and larger works expenditures - all of which unquestionably helped to sustain and increase levels of community spending and provide opportunities and incentives for private enterprise. Moreover, even before 1957-58 had begun, restraints on bank lending . were being eased and that process was carried on throughout the financial year. During the twelve months to June last, advances of the major trading banks increased by some £77,000,000.

The task ahead of us is, essentially, one of maintaining a steady rate of growth in Australia, at the same time preserving stability of prices and costs. Within Australia conditions are, in the main, favorable. Externally they are much less so and, for the present, show little sign of improvement. Few authorities foresee any strong upturn during the coming months in prices of raw materials and we would certainly not be justified in counting upon any major rise in the prices of our chief exports.

If that is to be the way of things, we have to envisage another year of comparatively low export income. The Government has said that it intends, if possible, to maintain imports at about £800,000,000 f.o.b., which is approximately the same as in 1957-58, and we certainly hope that we will be able to do this. So far, our external position has been supported by a fairly strong inflow of private capital from overseas and, most fortunately, our international reserves are still reasonably high. At 30th June last they stood at £525,000,000 so that even if, as seems likely, they have to be drawn upon fairly heavily this year, we still have a considerable way to go before any action to reduce imports will become necessary. At the same time we must be careful to avoid doing anything that would materially accentuate demand for imports.

Whilst it may be possible, with careful handling, to hold our external position for some time to come, a prolonged spell of low export earnings could not fail to have harmful effects, perhaps of increasing severity, upon our internal economy. As the Government sees the position, the chance that this may happen constitutes the chief potential difficulty of the period ahead. The essential problem is to ensure that employment, investment, production and sales continue to rise, notwithstanding the effects which lower rural incomes and spending may have. There must, in other words, be an enlargement of activity sufficiently widespread to ensure employment opportunities for additional labour and absorption of the increased output of mills and factories. This in turn requires some increase both in total expenditure and in each of the main sectors of the expenditure - private and public investment expenditure and expenditure on finished goods and services. At the same time, we do not want to promote such a growth in spending as will, at a somewhat later stage, give rise to excessive demands for goods and resources and, in particular, for imported goods.

In our approach to this task we have, as I have said, taken as our primary aim the general advancement of the economy under stable conditions. In our present financial situation the dominant fact is that, for the first time in many years, the total revenues of the Commonwealth for the current year are estimated to be less than the actual revenues of the previous year. There are three chief reasons for this. One is that revenue last year was, without doubt, exceptionally high, owing a great deal to the good fortune of a high wool market in 1956-57. Secondly, in the current year, income tax will reflect the heavy fall in primary producers’ incomes during 1957-58. Thirdly, our revenues this year must show a fullyear effect of the substantial tax concessions which the Government made in its 1957-58 Budget. Although these tax concesions were estimated to cost revenue some £28,000,000 in 1957-58, they were also estimated to have a full-year cost of some £57,000,000.

Very briefly, whilst revenue from most of the other taxes is expected to increase this year, revenue from income tax on individuals and companies is estimated to be £40,000,000 less than in 1957-58. The estimate of total revenue is about £9,000,000 less than actual revenue in 1957-58. Revenue - and especially taxation revenue - is of course the principal Commonwealth source of finance. Borrowings are always very difficult to predict, but we have no reason to expect that we can raise more this year from all sources, local and overseas, than we did last year when our ordinary loan raisings yielded £115,000,000. Apart from revenue and loan money, it is possible that there will be available, for purposes of redeeming matured debt, current receipts of the National Debt Sinking Fund up to an amount of £45,000,000. The only other funds at present in sight are some small accretions to trust account balances, amounting perhaps to a net total of £3,000,000.

On the expenditure side, there are three main elements in the position. One is an increase in the normal expenditures of the Commonwealth itself. A second is the commitment we have to . assist the Australian Loan Council borrowing programmes. The third is the problem of debt redemptions. The items of Commonwealth expenditure ordinarily charged to Consolidated Revenue show a total increase of approximately £71,000,000. Of this, about £6,000,000 represents increased business undertaking expenditure and is covered by increased business undertaking revenue. Of the £65,000,000 increase which this leaves, some £45,000,000 is accounted for by the three items of payments to the States, National Welfare Fund payments and war and repatriation. The increase of £16,900,000 for payments to the States includes the amount of £15,000,000 which the Commonwealth has undertaken to add this year to the tax reimbursement grants, lt should be noted that we are making this large addition to State resources in a year when our total revenue from income tax is expected to be £40,000,000 less.

Social service payments are estimated to increase by £26,300,000. One reason for this is that the Government is proposing some additional benefits which are estimated to cost £3,900,000 in this financial year. Another reason is that there will this year be five twelve-weekly payments of child endowment. This accounts for £6,400,000. But some £9,500,000 of the total increase is due to the fact that the number of beneficiaries under the various schemes is continually increasing and that, in other ways, the demand for medical and health services is widening. In addition, the Government last year made certain additions to pension rates and other benefits. Those concessions were estimated to cost £9,500,000 in the last financial year; this year they are estimated to cost £16,000,000, a rise of £6,500,000.

Much the same applies to the estimated increase of £2,000,000 in war and repatriation expenditure. Here also the Government is making provision for some additional benefits, and here again the estimate shows the effect for a full year of increased benefits granted in the 1957-58 Budget. The remaining items ordinarily charged to Consolidated Revenue, other than these, show a total increase of approximately £20,000,000. Defence expenditure is estimated at £190,000,000 or nearly £5,000,000 more than last year, an additional £5,000,000 is being provided for capital works and services while the departmental item shows an estimated increase of £5,260,000.

The second main element on the expenditure side is the undertaking given by the Commonwealth at the Loan Council meeting in May to support, subject to certain conditions, a governmental borrowing programme of £210,000,000 for State works and housing in 1958-59. This is an increase of £10,000,000 on the programme of last year. At the same time, we cannot count on raising any greater amount of loan money than in 1957-58 when our ordinary loan raisings yielded £115,000,000. This means that, once again, the Commonwealth will probably have to provide from its own resources a very substantial amount of assistance for the Loan Council programmes. A further amount, estimated at £7,000,000, will be needed for war service land settlement. How much these commitments will, in total, require it is, of course, impossible to estimate precisely; but it seems advisable to make substantial provision towards meeting them. The Government is accordingly seeking for the purpose an appropriation of £102,000,000 from Consolidated Revenue to the Loan Consolidation and Investment Reserve.

Redemptions of maturing debt have emerged rapidly in recent years to become a major factor in our overall financial problem. A very large amount of debt, a great part of it arising from 1939-45 war borrowings, falls due in the next few years; and it was with this problem in view that the Government some years ago established the Loan Consolidation and Investment Reserve. Through the operations of tha reserve, it has been possible: to effect a very large reduction in the amount, of earlymaturing debt. But the amount of debt outstanding remains very large, and. in the current financial year £337,000,000 falls due in Australia and £26,000,000 in London. Of the Australian debt, some £291,000,000 is held outside the Commonwealth Trust Fund and, since a great part of, it is war debt, the number of individual holders is large. Last year, redemptions of securities offered for conversion totalled £59,000,000. This year, because the maturing debt is much more widely held, it seems probable that the amount redeemed will be considerably larger. In addition, provision has again to be made for maturing savings certificates. It is not possible, of course, to make any exact estimate at this stage but we have thought that, for purposes of our financial reckoning, we should not put the total amount lower than £80,000,000. Towards meeting this, we estimate that the National Debt Sinking Fund may have available, from current receipts, up to £45,000,000. It is proposed that the remainder1 will be met by drawing upon the accumulated- balances of the Sinking Fund and of the Loan Consolidation and Investment Reserve. For that purpose, investments of these two funds will have to be realized and; that means, in effect, obtaining cash from the central bank.

Thus we estimate that there, will be available, on the one hand,, revenue of £1,302,000,000, borrowings of perhaps £11.5,000,000, net Sinking Fund receipts of £45,000,000, and minor Trust Fund balances of £3,000,000. This makes a total of £1,465,000,000 for resources available in. cash during the year. On the other hand, expenditure ordinarily charged to. Consolidated Revenue is estimated at £1,278,000,000. The Loan Council borrowing programmes involve an amount of. £210,000,000 and war service land settlement an amount of £7,000,000. Besides this, we are estimating debt redemptions in the year at £80,000,000 which makes, in all, an estimated amount of £1,575,000,000 for which cash will be required’. If cash resources are £1,465,000,000 and. cash requirements £1,575,000,000; the’ estimated’ overall deficiency becomes £110,000,000.

As I mentioned earlier,, the Government proposes, that arn appropriation- of £102,000-.000 be made from Consolidated Revenue- to the- Loam Consolidation! and Investment Reserve. Defence expenditure to an amount of £78^.0.00,000 will be charged to Loan Fund where it will be financed- from- the proceeds of treasurybills. The amount of- defence expenditure charged to Consolidated Revenue therefore becomes £112,000,000. It is intended, that all. redemptions of maturing debt will be made from, the National Debt Sinking Fund and the Loan Consolidation and Investment Reserve. Insofar as it becomes necessary for that purpose- to- realize- investments- held by these two funds, a further issue of treasury-bills will be required. It is- estimated that the total increase in- outstanding treasury-hills during 1958-59 will- be approximately the same as the1 estimated cash deficiency - that’ is to- say, £00,000,000.

The. Government’s policy on the Budget has been shaped’ as part of a wider economic policy. The Budget is, of course, a highly important element in that policy - perhaps the most important of all - but it is not the only one. For example, monetary and’ banking policy- has a great influence on the position.

Consistently also with its general policy, the Government has decided to maintain this year the same target for immigration as in recent years - that is to say, -a gross intake of 115,000 migrants for the twelve months. Immigration is, without doubt, a powerful influence in sustaining demand. It would therefore be a great mistake at this time when, in one sector of the economy, there is a shrinkage of demand, to cut the intake of migrants. Moreover, the steady growth of population, in which immigration plays such an important part, has undoubtedly become the basis of forward planning by many people in industry and- trade.

M yet another field, the Government is intensifying its efforts to secure greater outlets for our exports abroad. It is, exploring market possibilities in more and more countries, encouraging trade missions, negotiating with, various countries to secure better treatment for our exports and striving by every means- at hand to combat policies, such as: agricultural protectionism, surplus: disposals, and other exports-, on uneconomic terms*, which are restricting opportunities for our trade’ overseas.

These, matters illustrate the breadth, diversity and consistency of the policies the Government is following. Its policy on the Budget has its place in that general pattern. Essentially, we believe our internal position is sound: - and not merely sound, but highly progressive. Industry, in all its main sectors, is doing a tremendous job. If the primary industries are currently suffering a setback, it is no fault of the primary industries themselves. For, taking them as a whole, their achievement in recent years has been remarkable in point of increased output, greater capacity for production, efficiency and conservation of resources. Equally can that be said of manufacturing where, as we all know, astonishing progress has been, and is being, made in establishing ‘ new industries, applying new processes and techniques and building foundations for still greater development. There has also been great progress in mining, a development which we should particularly welcome because of the promise it holds for increased exports. All these constitute the great processes of growth which must be kept moving.

Something over two years ago, when, for various reasons, total demand had become excessive and there was undue strain on resources, the Government shaped its budgetary policy to reduce demand and ease the pressure on resources. It brought down additional taxation to ensure that, overall, the inflow of public funds would match the outgoings and, if need be, show a surplus. That policy was unquestionably the right one for the time. To-day, conditions are somewhat different. Labour is no longer scarce as it was then; additional labour is coming forward and will have to be absorbed. Demand for goods is no longer excessive; in the important rural sector, indeed, demand has contracted and may possibly contract still further.

These then are the grounds on which the Government has decided to carry an overall deficiency in this financial year. The deficiency is, in part, due to a short-fall in revenue which, in itself, follows upon a drop in rural incomes. That is ground we can reasonably hope to recover before too great a time has. passed. Partly also it is the result of tax concessions made by the Government last yeal which will, in :this year, yield their full benefit to industry and. commerce. The rise in expenditures of various kinds will also serve to support activity- over a very wide field. That is obviously true .of works, expenditure, payments to the States and social service payments. But it is also true of debt redemptions because people who obtain cash for their maturing bonds or stock will, for the most part, either re-invest it somewhere or spend it on consumption goods. In general, the effect of the Budget will be that, whilst rather less is being taken from the public in. taxation revenue,, more will be added to incomes through, the increase in public expenditure.

Naturally, we gave a lot of thought to the question’ whether any further tax concessions ought to be made in this Budget. That, of course, is something we would have wished^ to- do had it been practicable. But various considerations weighed against it. One was that it would have increased the-.over.ail .deficiency this year; and we were not prepared to ,do that. In effect, tax concessions would have been made by borrowing still more from the central bank. The second consideration was that, by the nature of most tax concessions, the cost to revenue would have fallen more upon the Budget for next year than upon the Budget for this year. We did not think that we ought to mortgage the future in that way. We are not, therefore, making any tax concessions of a general character. Those of which I shall give details presently either provide for the continuance of existing concessions or, at the most, widen their scope to some extent.

On the other hand, we have taken up the problem of providing for that class of social service pensioners who have little, if any, means of support other than their pension, and we have drawn up proposals which should give valuable help to such people.

The tax concessions the Government proposes to make are as follows: - Since 1951, a special depreciation allowance of 20 per cent, per annum has been provided for primary producers’ plant and structural’ improvements. This allowance was originally granted for a period of four years but was later extended to the end of the present financial year. It is- proposed to extend’ ;the allowance for a further- three years- to” 30tt

June, 1962. The cost to revenue in the first year of the extension is estimated to be £3,500,000, but there will be no effect on the revenue of the current year.

It is proposed to allow depreciation at a special rate of 20 per cent, on plant acquired after 30th June, 1958, and used wholly and exclusively in the fishing and pearling industries. Certain buildings used in the pearling industry, including accommodation for employees, will also be subject to the special allowance. The income of individuals carrying on a business of fishing or pearling will be subject to averaging to determine the rate of tax payable. As in the case of primary producers, the taxpayers concerned may withdraw permanently from the averaging provisions if they so desire. The proposals will not extend to the whaling industry. The annual cost to revenue is estimated at £110,000 for a full year, but there will be no cost in 1958-59.

It is proposed to increase the zone allowances granted to residents of remote areas of Australia. The present allowance for residents of zone A is £180. This will be increased to £270 plus an amount equal to one-half of the total deductions allowable to the taxpayer for the maintenance of dependants. By way of example, a resident of zone A maintaining a wife and three children will thus be entitled to a total zone allowance of £452.

A corresponding increase will be made in the allowance of £180 granted to members of the defence forces serving at declared localities overseas. In the case of zone B, the present allowance of £30 will be increased to £45 plus one-twelfth of the deductions allowable for dependants. The increased allowances will commence to apply in assessments based on income of the current year 1958-59. The cost to revenue is estimated at £1,000,000 in a full year and £600,000 in 1958-59. Allowance has been made for this in the estimate of taxation revenue I gave earlier.

The Government has had under consideration many aspects of development in the remoter areas of Australia and the special problems of the people who live there and carry on the work of development. These tax concessions will serve to show that we have the needs of these areas very much in mind.

Action is to be taken to ensure that, on the sale of rural land, capital previously expended on the development of the land will be offset against the sale proceeds in calculating the taxable profit on the land. The existing deductions allowed to primary producers for the cost of developing rural lands in Australia and Papua will be extended to the Territory of New Guinea. The amendments will apply for the 1958-59 income year. The annual loss of revenue is estimated at £50,000 but there will be no cost in 1958-59.

Encouragement is being offered to the investment of Australian capital in companies engaged in mining or prospecting for oil in Australia, Papua or New Guinea. At present, investors are allowed one-third of calls paid to any of these companies. In future, application and allotment moneys and calls paid by residents of Australia to the companies may be deducted in full. A right to the full deduction may be secured by the company exercising an election to forgo the present exemption of profits to the extent of the deductions allowed to its shareholders for capital subscribed. The present exemption applies in the event of oil being discovered in commercial quantities. The exemption operates until the profits from mining restore the capital invested in mining and treatment of petroleum. The full deduction is not being made available to overseas investors, including Australian companies controlled from abroad, as adequate allowances are provided by the revenue laws of the countries in which the investors reside. Where an election is not made, the present allowance of one-third of calls will continue as well as the exemption of the companies’ profits and dividends paid out of those profits. The new basis will apply to shares issued after the amending provisions come into force. The loss of revenue for a full year is estimated at £300,000 but there will be no cost to revenue in 1958-59.

The Government proposes to make increases of 10s. a week in the special rate war pension for cases of total and permanent incapacity, making the pension £11 10s. a week, and 5s. and 4s. a week in the pensions for the first child and each later child, respectively, of a deceased exserviceman, except where the child’s mother is also deceased, when the increase will be 15s. a week. The domestic allowance payable to war widows will also be increased by 7s. 6d. a week to £2 7s. 6d. a week. Increased pensions and allowances will be paid from the first war pensions pay day after the necessary amending legislation is passed.

Other proposals include increases from 1st January, 1959, in the education allowances payable under the Soldiers’ Children’s Education Scheme to children undergoing professional training, the extension of eligibility for medical treatment under Repatriation Department regulations to nurses who served in World War I. and the provision for certain service pensioners of supplementary assistance, trie basis of which I shall explain in a few moments in referring to expenditure from the National Welfare Fund. The total additional expenditure involved in these various proposals is estimated at £1,337,000 in a full year and £1,002,000 in 1958-59.

In reviewing its social services policy, the Government has given consideration to the needs of certain groups of age, invalid and widow pensioners with little or no means apart from their pensions. It proposes to introduce a form of supplementary assistance to relieve hardship and improve the circumstances of single pensioners (and married persons, where only one is in receipt of a pension and the other is not in receipt of an allowance) who pay rent and are deemed to be entirely dependent on their pensions. The rate of supplementary assistance will be 10s. a week.

In addition, it is proposed to liberalize the means test in a number of ways. The limit of property beyond which a person is debarred from receiving a pension will be raised by £500, that is, from £1,750 to £2,250, or by £1,000- from £3,500 to £4,500 - in the case of a married couple. Gifts or allowances from a brother or sister of a pensioner will no longer be taken into account as income, and payments from hospital and medical benefit organizations registered under the National Health Act, which are at present partly excluded, will be completely exempt from both pension and unemployment and sickness benefit purposes. At present, if a person receiving sickness benefit also receives a payment from a friendly society in respect of his incapacity, any amount over £2 a week counts as income. The Government will completely exempt such payments.

Two changes are being made in regard to eligibility for the Commonwealth Rehabilitation Service. The requirement that a person must be incapacitated for at least thirteen weeks before he can be accepted for treatment or training will be abolished and persons claiming or receiving a special benefit or a widow’s pension will be included among the classes of persons eligible for rehabilitation. The proposed supplementary assistance and other liberalizations will come into force from a date to be proclaimed. These proposals are estimated to cost £5,887,000 for a full year and £3,925,000 this year.

The Government has endorsed the principle of Commonwealth assistance to special insurance funds established by registered health insurance organizations for persons who cannot be insured at normal rates because of age, and pre-existing or chronic illness. The Government has had discussions with the insurance organizations concerned with the object of arriving at a plan to give effect to this principle.

The maximum rates of living allowances payable to holders of Commonwealth scholarships will be increased by 10s. to £4 5s. a week for a scholar living at home and by 15s. to £6 10s. a week for a scholar living away from home and the means test governing the payment of living allowances will be liberalized. It is also proposed to provide post-graduate awards. These changes in the Commonwealth scholarship scheme follow on the report of the Murray Committee on the Australian Universities. They will add to the living allowances of students now receiving them and will also give living allowances to students beyond the range of the present scheme. They will benefit especially country scholars.

The introduction of graduate scholarships will supplement, not replace, scholarships for graduates already available from other sources. The development of this scheme will provide new opportunities for young graduates to embark on further training and research. It is of national importance that we should increase the number of graduates with advanced research experience both in science and in the humanities.

These proposals will be given effect from 1st January, 1959, and are estimated to cost £125,000 in this financial year.

These financial proposals of the Government face up to the realities of our situation. Despite much that has been said, this country is not lagging and depressed; it is, on the contrary, highly prosperous and it is moving ahead. But there are some weaknesses in our position which could develop further if they were not countered.

In this Budget, the Government aims to do that by giving a broad stimulus to the economy.

Debate (on motion by Senator McKenna) adjourned.

Senate adjourned at 8.52 p.m.

Cite as: Australia, Senate, Debates, 5 August 1958, viewed 22 October 2017, <>.