27 August 1959

23rd Parliament · 1st Session

The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 11 a.m., and read prayers.

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Senator McMANUS:

– In view of the urgency for the development of Australia’s northern areas, and also in view of the keen interest of honorable senators in this problem, will the Minister for National Development arrange to supply honorable senators with copies of the address delivered by Mr. C. S. Christian, head of the Land Research Section of the Commonwealth Scientific and Industrial Research Organization, to the conference of the Australian and New Zealand Association for the Advancement of Science, in which he is said to have declared that waste land in northern Australia could be developed to produce agricultural crops worth £50,000,000 a year?

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

– I read the press report on that statement this morning with very great interest, and I think the honorable senator’s suggestion is a quite useful one. I shall make inquiries from the Minister administering the Commonwealth Scientific and Industrial Research Organization to see whether copies of the statement are available and, if they are, whether they can be furnished to honorable senators.

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Senator SCOTT:

– My question is addressed to the Minister representing the Minister for Immigration. In view of the fact that Australian tourists’ may now freely visit Russia, what arrangements exist for Russian citizens freely to visit Australia?

Senator HENTY:
Minister for Customs and Excise · TASMANIA · LP

– I think that question is really one for the Leader of the Government in the Senate, but I shall make inquiries. I do not think there are any procedures other than the normal ones regarding immigration, but if the honorable senator will put his very important question on the notice-paper, I shall get the information for him.

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– I preface a question to the Minister representing the Postmaster-General by saying that about four weeks ago I forwarded to the Australian Broadcasting Control Board a petition from the residents of Leigh Creek requesting the re-zoning of the area because of the inferior reception by radio sets there. The board has not had the courtesy to acknowledge receipt of either the petition or my accompanying letter. Will the Minister cause inquiries to be made of the board to ascertain whether it has received the petition and what is the result of the request contained in the petition submitted by the residents of Leigh Creek?


– I assure the honorable senator that I shall discuss this matter personally with the Postmaster-General and let him have a reply as early as I can.

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Senator McCALLUM:

– Does the Leader of the Government in the Senate know that the University of Melbourne intends to sever its connexion with the Canberra University College? If he does, can he inform us whether the Government intends to grant to the Canberra University College a charter as a university?

Senator SPOONER:

– There has been a lot of discussion on that matter. I did not think that events had moved to the stage where it was clear-cut that the University of Melbourne had decided to sever its connexion with the college. There has not yet been a Government decision on the matter. I know that it has been under consideration from time to time by the Government, but I am not aware of any decision having been made. If I am wrong in that respect, I shall let the honorable senator know. Later in the morning I shall be tabling the annual report of the Canberra University College, which contains much information, but I do not think that it refers to that matter.

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Senator BROWN:

– Did the Minister for the Navy note the press statement that the American vice-chief of naval operations, Admiral Russell, had said that the United

States Navy recognized the Russian submarine fleet as one of the most serious military threats to our national security to-day? Have the Russians a similar weapon to the American Polaris? Has Australia any really effective defence against modern submarines?

Senator GORTON:
Minister for the Navy · VICTORIA · LP

– Yes, I did notice the report of the remark made by the American vice-chief of naval operations, to the effect that the Russian submarine fleet was regarded as a military menace. The answer to the second part of the question is that I do not know whether the Soviet submarine fleet includes submarines capable pf firing weapons equivalent to the Polaris, but I would expect that the Soviet either has them or will shortly have them. The answer to the third part of the question is that Australia has anti-submarine vessels and antisubmarine aircraft which are perfectly capable of locating either the (conventional type of submarine or the atomic type of submarine, and attacking and sinking it, but as in all amphibious .operations one can never be 100 per cent, sure that a submarine will be located and sunk. We do have the capacity to attack and to sink and that is all that any navy can expect to have.

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– Has the attention of the Minister for Shipping and Transport been directed to the criticism appearing in the Tasmanian press resulting from a recent news item .concerning those persons who will be guests of the Australian National Line on the maiden voyage -of the “ Princess of Tasmania’”? In order to put the record right, will the Minister give, as soon as possible, details as to who Will make the trip? At present it appears that the Tasmanian critics believe that all members of Parliament from near and far will make up the majority of the passenger list. If Tasmanian members of the Federal Parliament are to be honoured with invitations, will not the Government save money, as they will be returning to Tasmania in the normal course of their duties on that day, and fares on the “ Princess of Tasmania “ will be considerably cheaper than prevailing air fares?

Minister for Civil Aviation · WESTERN AUSTRALIA · LP

– I have not read the report to which Senator Marriott refers, although I learned this morning of its existence, and I shall take the opportunity of reading the criticism at the earliest possible moment. As soon as possible I shall also let the honorable senator know precisely who will be invited to take part in this quite notable function. But I can tell him now that it is not proposed to invite members of Parliament from near and far.

Senator Ormonde:

– You should invite Joe Cahill.


– Order!


– Will the honorable .senator let me proceed? It is Intended to ask - and I do not think that any one will argue against this - Tasmanian senators and Tasmanian members of the House of Representatives. It is also intended to ask members of the Tasmanian Government and selected members of the Tasmanian Parliament. Members of the press will be invited - in what strength I do not know, but I will find out.

The shipping commission thought it would be appropriate, and indeed I agree, that State Ministers for Transport should be asked to go on the initial voyage. I had not considered whether it would be cheaper to ;convey federal members ‘by ship on this trip than to let the Commonwealth -pay the air fares, as is ordinarily the case. Indeed, that suggestion may be use to combat any criticism that this is in the nature of a junket. Indeed, it is not! It is merely regarded as a function - a suitable function - to mark an occasion which should be marked, and marked appropriately.

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Senator ORMONDE:

– Is the Leader of the ‘Government in the Senate in a position to explain to honorable senators the discussions that have been taking place in the press lately about dissatisfaction in Great Britain with Australia’s purchases of arms ^overseas? The discussions referred principally :to radar. I have not seen any denials from the Government, and I am wondering whether the Minister can enlighten us on the matter.

Senator SPOONER:

– I am -sorry to say that Senator Ormonde is ‘one :jump ahead of me; I have not even noticed the press reports on the matter. That being the case, I can only ask the honorable senator to place the question on the notice-paper and I shall see what information can be obtained.

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– I should like to address a question to the Minister for. the Navy. Has the Minister seen a report relating to a recalcitrant torpedo in Pittwater yesterday? This torpedo apparently jumped from the beach on to a reserve, ploughed into the grass, smashed into an iron gate and then stopped. Will the Minister let the Senate know the circumstances of this extraordinary occurrence and the action to be taken to ensure that it does not occur again?

Senator GORTON:

– The answer to the first part of the question is that. I did notice a report to the effect that a. torpedo had veered off course and beached itself on the Pittwater torpedo range. I have not yet received any detailed report as to why that should have happened, but if I can anticipate the report with a suggestion of what may, or is likely to, have happened, I suggest that it is probably one of the type of torpedoes driven by compressed air, and consequently it is possible that there was a leak in the casing of the torpedo on one side, allowing the air to escape out that side. That would cause the torpedo to veer off its course. I do not know that that is the reason, but it is likely to be the reason. The torpedo testing range at Pittwater has been testing torpedoes of this type since shortly after the first world war, or at any rate for a considerable time. There is always a chance that a torpedo will run off course when it is. being tested. Indeed, in the last war a couple of submarines sank themselves with their own torpedoes when the torpedoes ran in circles. But these torpedoes never carry explosive charges when they are being tested. Full safety precautions are taken before a test takes place at this range. Whistles are blown and flags are hoisted.

In the whole course of the operation of this range I am sure that nobody has been hurt by torpedo testing. Although there is now, with the coming of people to live by the range, always a slight chance that somebody will be hit - not by ex plosives, but by a torpedo -I would say that the risk involved is infinitely less than the risk of injury to a citizen, occupying a house in line with the runway of an ordinary aerodrome. I do not. know that any other safety precautions could be taken by the Navy, but if I find that there are others, I shall see that they are taken.

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Senator HANNAN:

-I direct a question to the Leader of the Government in. the Senate. Will he examine with sympathy the rating difficulties of. those municipalities which have within their boundaries large Commonwealth instrumentalities which are not directly rateable? Is it a fact that Commonwealth instrumentalities make an annual ex gratia payment to the municipality in which they are situated, which is very much less than the rates which would be obtained by the municipality if the properties were directly rateable? Has the municipality of Heidelberg, in. Melbourne, made representations to the Government on this point? Is it not a fact that the Heidelberg Repatriation General Hospital covers a vast area in this municipality and that the amount of its annual payment to the Heidelberg Council is only about one-third of what might normally be obtained’ from rates? In view of the vastly increased responsibilities and services of municipalities these days, will the Government take some action to correct this anomaly?

Senator SPOONER:

– I am sorry that I am not able to reply in detail to the question. I do not know the circumstances of the Heidelberg Repatriation Hospital in relation to the municipality. I thought that the Government policy was well settled along the lines that the Commonwealth made ex gratia payments when an instrumentality or an activity was in the nature of a trading activity, but I think it is as well to be sure. Therefore, if the question is placed on the notice-paper I shall obtain a correct answer for the honorable senator.

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Policy Decisions


– Has the attention of the Leader of the Government in the Senate been directed to a. statement by

Sir John Crawford, head of the Department of Trade, that the complexity of federal economic problems caused civil servants to participate in the making of government policy and, even in narrow fields, to initiate and carry through decisions without prior ministerial approval? If this is true, will the Minister discuss the matter with the Prime Minister in order to provide the necessary checks advocated by Sir John Crawford?

Senator SPOONER:

– Again I am at fault in that I did not see Sir John Crawford’s statement. The matter having been mentioned, I will ensure that I see a copy of it and learn what Sir John has said, because 1 always feel that anything he has to say is worth reading and thinking about. As to the rest of the honorable senator’s question, not having read the statement I think it is preferable for me to ask that the question be placed on the notice-paper so that I will be able to cover the ground adequately.

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Senator BRANSON:

– As the Kimberley Research Station has proved that safflower can be grown successfully in the Kimberleys, in the north-west of Australia, can the Minister representing the Minister for Trade state what markets exist in Australia and overseas for the vegetable oil that is extracted from this plant and the stock feed that is made from the residual pulp? Can he also state what is the market value of safflower oil per gallon, and what is the market value of the stock feed cake per ton?

Senator SPOONER:

– Again I shall have to ask for the question to be placed on the notice-paper. I know that a good deal of work has been done on this matter within the Department of Trade and the Department of Primary Industry, and indeed within the Department of National Development. I know that one of the principal potential uses of the safflower product is as a substitute for linseed oil, and that the problems associated with the growing of safflower are being overcome. But one of the real problems is whether a competitive market can be found for safflower oil in substitution for linseed oil. If the honorable senator places his question on the notice-paper, I have a hunch that we shall get a very interesting reply to it.

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Senator SCOTT:

– I ask the Minister representing the Minister for Trade the following questions: - ls it a fact that at least four important trade fairs this year, which will be attended by a considerable number of visitors, thousands of different types of articles of Australian origin will be presented? In view of the introduction of the jet age, which will enable tourists to come to Australia in complete comfort within a few hours, and in view of Australia’s loss of about £15,000,000 on tourism, will he consider having a representative of the Australian National Travel Association at these fairs to advertise Australia as a tourist resort and to encourage visitors to this country, and thus improve our balance of payments?

Senator SPOONER:

– I have noticed with a good deal of interest the statement of my colleague, the Minister for Trade, about these trade fairs and Australia’s participation in them. As I recollect the situation, the Government subsidizes the activities of the Australian National Travel Association but leaves its management in the hands of other contributors to its funds. It seems to me that the suggestion that we should link with these trade fairs some form of advertisement or publicity to attract additional tourist trade to Australia is worth a good deal of thought. I think this is the first time it has been put forward. I shall not only see that it is brought to the notice of Mr. McEwen officially, but I shall also make a point of mentioning it to him personally.

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through Senator 0’Flaherty

asked the Minister representing the Minister for External Affairs, upon notice -

In view of conflicting claims of the Koreans and the Japanese, will the Minister make a statement to the Senate regarding the recent alleged deportation of Koreans resident in Japan to Communist North Korea and indicate the attitude of the Australian Government in this matter?

Senator SPOONER:

– The Minister acting for the Minister for External Affairs has supplied the following answer: -

In February of this year the Japanese Government announced its intention to arrange for those Koreans in Japan who wished to do so to go to North Korea. Since that time discussions have been going on between the Japanese Red Cross, the North Korean Red Cross and the International Committee for the Red Cross on suitable arrangements. The reaction of the Government of the Republic of Korea was to denounce the proposal and to suspend the negotiations with Japan on the overall relations of the two countries. At the beginning of this month, however, the two countries agreed to resume the negotiations and a meeting was held on 12th August. The Australian Government has been kept informed by the two Governments of their viewpoints and has several times expressed the hope that an agreed solution on this particular problem will be reached by discussion.

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Senator McMANUS:

asked the Minister representing the Postmaster-General, upon notice -

  1. Can the Postmaster-General inform the Senate of the result of talks, which the Senate was advised were to be held earlier this year between Government representatives and amateur radio operators to discuss protests by the latter against alterations in radio frequency bands recommended by the Frequency Allocation Subcommittee?
  2. Does the Frequency Allocation Subcommittee intend to persist with these proposals for frequency band changes when the International Telecommunications Union meets at Geneva?
  3. Will the Postmaster-General give consideration to charges by radio amateurs that they have no representation on the Frequency Allocation Sub-committee, that its proceedings are secret and that they have no appeal against its decisions?
Minister for Repatriation · QUEENSLAND · CP

– The PostmasterGeneral has supplied me with the following information: -

  1. The talks referred to were those which took place in Canberra on 12th May, 1959, between officers of the Postmaster-General’s Department and members of both Houses of Parliament, some of whom had received representations from amateur radio operators on the question of the allocation of certain portions of the frequency spectrum. The many problems confronted by the Frequency Allocation Sub-committee in determining the frequency requirements of all users were explained at the meeting which did not result in any change to proposals submitted for consideration by the Administrative Radio Conference to be held at Geneva under the auspices of the International Telecommunication Union.
  2. The aim of the Australian delegation will be to secure the most equitable distribution of spectrum space for all users of radio frequencies including amateurs. The draft proposals submitted by Australia could be varied after consideration of proposals put forward by other countries.
  3. Although several licensed user groups of radio frequencies including amateurs are not directly represented, provision exists for the committee to co-opt or consult interested bodies as occasion demands. Prior to the formulation of the proposals to be considered at Geneva, representatives of the Wireless Institute of Australia attended two meetings of the committee to present the views of amateurs. As practically all matters discussed affect defence and security services, either directly or indirectly, the proceedings are necessarily confidential and committee representation restricted. No obstacles are placed in the way of appeals against recommendations of the committee or decisions which might follow.

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Motion (by Senator Spooner) - by leave - agreed to -

That Senators Pearson ami Vincent be discharged from attendance on the Joint Committee on Foreign Affairs.

That Senators Scott, McCallum and Buttfield be members of the Joint Committee on Foreign Affairs.

That, until such time as the vacancies for members of the Senate on the committee are rilled by members of the Opposition, Senator Mattner be a member of the committee.

That the foregoing resolutions be communicated to the House of Representatives by message.

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Motion (by Senator Spooner)- by leave - agreed to -

That Senator Wardlaw be appointed to fill the vacancy now existing on the House Committee.

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Senator SPOONER:
Vice-President of the Executive Council and Minister for National Development · New South Wales · LP

– by leave - For the information of honorable senators I propose to read a statement made in another place by the Minister for External Affairs (Mr. Casey) concerning the Australian Government’s attitude to the question of the recognition of Communist China. Honorable senators will appreciate that I am reading the statement precisely as it was made by my colleague. It is as follows: -

The emergence of mainland China as a unified centrally controlled State in the process of industrialization and with a population of 650,000,000 people, increasing by something like 15,000,000 a year, would be bound, in any circumstances, to have significant international consequences. When it develops, as it has, as a totalitarian and regimented State with a Marxist view of world developments, its impact is likely to be formidable and far-reaching.

Communist China is making a large-scale effort to project itself on the world scene through the exercise of both its national power and its membership of the Communist bloc. Through its armed forces, its propaganda machinery and cultural links, trade, so-called “people’s ‘ diplomacy “, and in other ways, Communist China has increasing influence in regional and in world affairs.

The periphery of continental China is the scene of many unresolved disputes. There is a divided country and armed truce in Korea, an armed stalemate in the Formosa Straits, a divided country in Viet Nam, the armed suppression in Tibet, and unresolved frontiers with other countries. In addition, other Asian countries which are not contiguous with continental China are conscious that a threat could develop to their security and their independence.

There are some people who argue with obvious conviction that Australia should take steps to recognize the Peking administration - which describes itself as the Chinese People’s Government -jas the Government of China, irrespective of what others may do. They believe it is the proper course to take, on formal legal grounds. They say it will contribute to international stability. Beyond this, more specific advantages to Australia are sometimes claimed. It is argued that all the normal rules for diplomatic recognition are satisfied - that is, that the Government is established and that it is in a ‘position to exercise sovereignty and ‘to carry out its international obligations. It is contended that, if the Australian ‘Government :accepts the .Tact of the existence of the Chinese Communist regime as, of course, we must do, then logically it should take steps towards diplomatic -recognition.

There are several things .to say about this line of reasoning. The first lis .that moral :and humanitarian considerations cannot easily be passed over. They .have <great weight and they influence our national attitudes. Then again, it is at least open to question whether the ‘Communists .-accept the international -obligations of the Government .of -China. Their own statements cast doubt on their willingness to assume all the obligations and responsibilities undertaken by the Government of ‘the Republic of China before 1949. Finally, a régime’s capacity to govern is not -the sole and only .test for recognition by other governments. International .practice certainly supports the view that while capacity to govern is a primary -requirement, recognition remains in fact within the national discretion to be determined .in the national .interest -In .point of fact, -some SO States, .other than Australia, have not .recognized the Chinese Communist regime. There are only 33 countries which recognize -the (Peking .Government as the Government of -Communist China - and ‘this figure includes all ‘the Communist bloc countries, ‘including some -that we do not regard as independent States. The States which do not recognize Peking include the United States and other -countries with particular interests in the South-East Asian anti Pacific area. “These -include Canada, New Zealand, Korea, Japan, Viet -Nam, Laos, Thailand, Malaya and the Philippines. -For various -reasons -deriving from their -national and international interests, these countries ‘have not so far recognized Peking. Some Asian countries, having large Chinese -minorities or -insurgent Communist -movements, do -not want accredited

Communist .Chinese representatives and agencies on their ‘territories. ‘In another case - that of Japan - the Chinese -Communist ‘pressure for -recognition is accompanied by a demand that Japan should abandon the general aims and direction of that country’s foreign policies. As Japan is unwilling to yield to these demands, Peking has cut off all trade with Japan.

The separate problems and attitudes of nonrecognizing countries reflect the .complex political :character of this question of recognition. It is not to be .assumed that Australian .policy .on this matter can be treated as purely a matter arising between Peking and Australia, and with no wider significance.

In itself, recognition merely indicates a readiness on the part of the recognizing government to enter into diplomatic relations -with the recognized State. Conditions have been laid down by the Peking régime for countries which, having recognized them, wish to negotiate for the establishment .of diplomatic relations with them. One of -Peking’s conditions .is the breaking off of diplomatic relations with the Government .of the Republic of China - the Nationalist Chinese Government in ‘Formosa. This requirement by the Peking regime has ‘been in force since 1949, and it has ‘been frequently and authoritatively reasserted. Compliance would require the Australian Government to terminate the .Nationalist Chinese mission in Australia.

This action would bring to an end our relationship with the Nationalist Chinese Government, and, amongst other things, would deprive us of diplomatic relations with .that government which ;is .responsible for the .population of .10,000,000 people on Formosa.

There are also the problems .which are raised by the fact that the Chinese Communist regime makes -vehement claims to sovereignty over Formosa. The Communists .say it is an “ inalienable part of China” and, .in .their own words, “no plot to carve up Chinese territory can be tolerated “. This is directly relevant to the argument for and against recognition, and is relevant to the fact that some people hold that Australia should recognize “‘Mainland “ or “ Continental “ ‘China.

This means, as we believe, that we cannot, in present .circumstances, -expect to obtain Peking’s acceptance of diplomatic relations by our recognizing (Peking as the Government of a China which excluded Formosa, while continuing to support the .position of the Chinese Nationalist authorities in Formosa. Nor should we -suppose that the Chinese Nationalists would accept diplomatic relations with a country recognizing them other than as the Government of the Republic of China. The record is clear - in that we have to recognize that the solution of the .so-called “ two .Chinas “ is rejected by both -the Communists and the Government of Formosa.

It may be that some would argue that these obstacles could be avoided by Australia recognizing Peking and offering to enter into diplomatic relations with .Peking as the lawful government of China and .-Formosa.

The consequences of -such a policy deserve examination. ‘Should Australia “ignore the claim that Ihe indigenous Formosan people, and the anti-Communist Chinese mainlanders who went to Formosa, arc entitled to an alternative political system to communism and to a voice in fashioning their own future? The question arises - should Australia acquiesce in Peking’s objective of eliminating the Nationalist Government on Formosa and its armed forces, or in the elimination of Formosa as a centre of non-Communist cultural and political influence? Are these implecations to be accepted lightly or to be dismissed as of no account? Are they all accepted by the advocates of recognition?

Moreover, the United States is committed by treaty obligations to defend Formosa. A consequence of recognition by Australia would be a fundamental breach in policy between Australia and the United States. Once having accepted the Chinese Communist claim to be the legitimate government of Formosa, Australia’s position could become immensely difficult, if not untenable, in the event that the United .States, under the provisions of its security treaty with the Nationalist Chinese on Formosa, should have to take action militarily, or in the United Nations, or perhaps both, in the defence of Formosa against armed attacks from the Communists. Such an attack is of course hypothetical. But in the face of repeated Communist declarations it cannot be dismissed as impossible or indeed even improbable.

The advocates of recognition of Peking claim to have logic on .their side - that recognition flows logically from the fact that Communist China exists. But we must recognize that there are other facts. Communist China is a formidable military threat. The most important .military counterpoise ito Communist China is the United States. Australia and her allies want the United States’ presence in the Western Pacific region for their collective defence. The Chinese .Communists clearly do not. The view of ‘the Australian Government is that recognition by Australia at -this time could be exploited by Peking in such ways as to affect adversely attitudes in Asian countries towards, and confidence in, United States policies and objectives. We believe that the American objective in the countries bordering China is to fortify the elements standing for independent policies with the -knowledge that the United States will come to their aid if their independence is under threat.

This simply amounts to the fact that recognition of Peking by Australia would clearly affect profoundly Australian-American relations.

It is sometimes argued that if .we were to recognize the Chinese Communist régime we -could then support its participation in the activities of the United Nations. But recognition of Peking in itself would not overcome the practical problems relating to Chinese representation in the United Nations. These are governments which extend diplomatic recognition to the Communist Chinese regime, but which, conscious of the practical problems, nevertheless have not voted in favour of motions to admit Chinese Communist delegates to .the United Nations.

It is not a question of admitting China to the United Nations. China :is a foundation member -of ‘the United Nations :and a permanent member of -the Security -Council. The question -is- who is to represent China in the United Nations? The fact is that the United Nations General Assembly, each year since 19S0, has had before it the question of the representation of China. That is, in effect, whether to admit the representatives of -the Chinese Communist regime in Peking in place of the representatives of the Government of the -Republic of China in Formosa which would mean expelling the latter from the proceedings of the United Nations. By a substantial majority each year the General Assembly has decided not to alter the status .quo. The Chinese Communists have made it clear, by declaration and by practice, that they will not sit in any international gathering with representatives of the Chinese Nationalist Government.

A review of all the facts that I have endeavoured to bring together leads us to the view that -nothing should be done at the forthcoming session of the ,General Assembly of the United Nations to deprive the Nationalist Chinese Government of the role that it has played since 194S in discharging the duties and enjoying the rights prescribed by the Charter of the United Nations for the Republic of China.

Let me put the question: What benefits to Australia do the advocates of recognition of Peking offer? In some important respects recognition would not add anything to the contacts and relationships which already exist between Australia and mainland China. Not only Australia, but other countries as well, have entered into relationships without diplomatic recognition. For several years, the United States and Communist China have maintained a contact through the meetings of Ambassadors in Geneva and in Warsaw. Communist China has taken part in international negotiations where her military power required it - such as the Geneva Conference on Indo-China and on Korea.

As to -material Australian interests, trade has (developed between Australia and Communist China and we are a .not insignificant exporter of goods to <Communist China. There is no real evidence that our -trading position would be appreciably improved by an act of diplomatic recognition. .Chinese Communist trade can be expected to .fluctuate widely, .as is ‘.customary with Communist systems, and to be dictated by a combination of economic and political motives. But there is nothing ito suggest that, aside from the community of Communist countries, the Chinese Communists make >a distinction : between recognizing .and non-recognizing countries.

Similarly, recognition would not appear likely to have any appreciable effect on conditions governing travel between -the two countries. There is no reason to suppose that recognition would gain more .Australians admission to .China. Peking will invite - or .admit - the people she wants to admit. Various Chinese .Communist groups have already visited Australia, each application being considered in the light of -the -purposes of the visit. -This would -.continue to be the position. These -exchanges .take place on a practical basis. We do not .propose -to depart ‘from .this attitude.

Is -it claimed that ‘by recognizing :Communist China, Australia would acquire any influence or effect on Communist China’s international policies, or gain insight into Chinese Communist thinking and information? Up to the present time, the experience of diplomatic missions in Peking - some representing greater military or economic strength than Australia’s gives no real basis for holding such an expectation. Contact with the authorities in any but the most formal sense does not appear to exist at present in Peking. Travel restrictions are more severe than in the Soviet Union. Indeed, there has been a tendency for the Chinese Communists so far to regard diplomatic missions as agencies to be exploited as pressure points upon the Governments concerned. This was forcefully expressed by the Canadian Minister for External Affairs in the Canadian House of Commons on 26th February of this year when he said: “We do not see much point in extending recognition to Communist China if the result of such an act will be to put us in a position similar to that of other countries which have recognized China and then have been berated and extravagantly attacked because they have not always backed Communist China pursuant to what the Peking Government feels was an obligation arising out of recognition”.

What, then, are the advantages to Australia - to our security or to our standard of living or to our economic, scientific or spiritual progress as a nation - in our extending diplomatic recognition to the Poking authorities on Peking’s terms? The disadvantages have been stated. Considered as an issue between Australia and China, recognition is unlikely to improve, with advantage to Australia, the present state of our relations. Recognition would forfeit the good relations we enjoy with the Chinese Nationalist Government. We should have satisfactory diplomatic relations with neither - and even possibly no diplomatic relations at all. An act of recognition by Australia would not contribute towards removing the Communist threat of war over Formosa - nor would it solve the problem of divided Korea or divided Viet Nam - nor indeed would it achieve anything towards frustrating the underground subversion of independent countries in Asia directed from Peking.

On the contrary, recognition by Australia could encourage the Chinese Communists to remain overbearing and inflexible in their international attitudes. Co-existence with States that recognize her means little where a Chinese Communist interest is to be served. Recognition by Australia would not bring about reasonableness, a desire to settle differences, or a renunciation of force that we all would earnestly wish for.

What I have tried to present is no agonizing re-appraisal. It is an attempt to bring together in an objective way all the principal factors that bear on this situation that have been apparent to the Government for some considerable time, and which I believe have got to be brought together in an effort to assess this situation and to reach a logical conclusion which is in the interests of this country and which will stand up to critical examination. It is not a slamming of the door for all time. The world does not stand still.

The simple fact is that, for the greater part the reasons for our Australian attitude have been created by the Peking Government itself, and not by us or others. The Australian Government does not propose to enter into speculations as to what the effect would be if fifty countries were to recognize Peking. The question is whether Australia should do so. The Government regards recognition as not primarily a juridical question but as a question of Australia’s national interests in the broadest sense, in all the existing circumstances. These justify, indeed I believe they compel, the Government’s policy of continuing to recognize the Government of the Republic of China.

I lay on the table the following paper: -

Communist China - Speech by the Minister for External Affairs, 13th August, 1959. and move -

That the paper be printed.

Debate (on motion by Senator McKenna) adjourned.

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– Pursuant to Standing Order No. 38, I lay on the table my warrant appointing Senator Hannan to be a member of the Committee of Disputed Returns and Qualifications to fill the vacancy on that committee caused by the expiration of the term of service of Senator Wordsworth.

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Debate resumed from 26th August (vide page 333), on motion by Senator Paltridge-

That 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, 1960.

The Budget 1959-60- Papers presented by the Right Hon. Harold Holt in connexion with the Budget for 1959-60, and

National Income and Expenditure 1958-59- be printed.

Upon which Senator McKenna had moved by way of an amendment -

At end of motion add the following words - “ but that the Senate is of opinion that their provisions and omissions inflict grave injustice on recipients of social service benefits (such as child endowment, age, invalid and widows’ pensions, repatriation benefits, maternity benefits, funeral benefits, amelioration of means test), on taxpayers, on the family unit and on other sections of the Asutralian people and that they make no effective contribution to correcting seriously adverse trends in the Australian economy including unemployment and rising living costs”.

Senator O’BYRNE:

– I was pointing out, when the debate was adjourned last night, that we are moving towards government of the people by a favoured few monopolists in this country, and that this trend is unknown fully to the people who elected the Government into power. As an illustration of this trend, I mentioned that one firm, L. J. Hooker, is expanding and accumulating capital at such a rate that, in the long run, it could quite easily have a monopoly of real estate business throughout Australia and also exert power in other fields.

I refer again to one of the ways in which the Hooker group is operating- It is buying up a bankrupt company - Constructors (Engineers and Industrial) Limited - that has accumulated losses of £823,295, which will represent a taxation gain to the Hooker group of £308,725. This is a direct assault on the Commonwealth Treasury. Why should a firm have full authority to be able to buy up a bankrupt company solely for the purpose of beating the Treasury, thereby increasing its assets? According to the “ Sydney Morning Herald “ of 21st August, L. J. Hooker Investment Corporation Limited has offered £5,750,000 for Richardson and Wrench Limited, which is an old firm with quite wide ramifications. This is an illustration of the tendency towards monopoly to which I have referred. In the Sydney “ Sun-Herald “ of 16th August, an article on take-overs appeared under the heading “ Paying the Penalty of Conservatism “.

I shall now leave Hookers and come to another aspect of the take-over bid - the methods being used and the vast confidence trick that is being played on the Australian public by so many of the big companies that are operating throughout this country. The Adelaide Steamship Company Limited has been conducting along the coast of Australia a legitimate shipping enterprise. We find now that H. C. Sleigh Limited, the Golden Fleece petroleum people, has made a bid to take over the Adelaide Steamship Company. The article in the “ Sun-Herald “ states -

In the particular take-over climate of to-day, the Adelaide company has been “ asking for it “.

This is the attitude of members of the Stock Exchange and members of the Government in relation to this matter. The article continues -

The policies of this company have been commented on before. This is the company that traditionally showed profits almost exactly sufficient to pay the dividend rate. This is the company that in the years 1954, 1955, 1956 and 1957 showed the following net profits, £139,515, £139,518, £139,516 and £139,519- a £3 range.

This means that the company allocated a certain amount of its profits as dividends, to the shareholders, whom this Government is supposed to be protecting. These shareholders just took what they were given by the directors. The newspaper then had the courage to state -

This is a mockery of shareholder reporting.

I submit that the whole company set-up throughout Australia to-day is a mockery of shareholder reporting, and it is obvious, with this boom in take-overs, that the public in general and the shareholders in particular are not being told the facts about their companies’ activities. The following article appeared in the Melbourne “ Herald “ of 15th August, under the heading “ Takeover Fever Is Growing “: -

Spectacular takeover, or merger, bids have recently become one of the main features of company developments in Australia.

Last financial year at least 50 takeover moves were completed. In the past six weeks there have been about 40 attempts at takeovers or mergers. And more are ahead!

The article goes on to deal with the Ade- laid8 Steamship Company Limited, Huddart Parker Limited, Richardson and Wrench Limited, and Ansett Transport Industries Limited. The last named company has bid £1,700,000 for Guinea Airways Limited. The Treasurer (Mr. Harold Holt) stated in his Budget speech -

Similarly, there must be partnership between government and business in its various forms. The main task of production belongs to industry, with public authorities providing basic facilities and services.

Evidently the Treasurer meant that the Government, out of revenue, subsidizes organizations like Ansett which, in turn, can use the money so provided to engage in take-over bids. I am putting it to the Senate that unless this Government checks this tendency, Australia will eventually become a monopoly capital country. I feel quite certain that the Australian people do not want it that way and that they have not given’ this. Government a mandate to sponsor, aid and abet that trend’.

I issue a warning to the Government that there are many dangers implicit in this trend towards monopoly capitalism that is gaining momentum in- this country to-day. These concentrations of capital, resulting in great capital power, are not in accordance with the. wish of the people. The members of the Government parties will have great cause to regret their complacency and their lack of understanding of the present trend in Australia. By their complacency, they are aiding and abetting a threat to the basic principles of democracy as. we know it in Australia.

Senator Maher:

– - By what line of reasoning does the honorable senator argue that the Commonwealth Treasury is subsidizing these take-over bids?

Senator O’BYRNE:

– The Treasury has subsidized Ansett for instance, and shipping companies. And companies are using the money for take-over bids.

Senator LAUGHT:
South Australia

– I support the Budget, but I reserve the right - as every honorable senator does - to make certain observations, and I should say that my observations on certain aspects of the Budget will be critical because I think -that now is the time that one should expound one’s views on certain matters.

First of all, I am completely out of step with a number of speeches that have been made in opposition to this Budget. As far as I can see, very little constructive data has come forward from those sitting on your left, Sir. Apparently they think that the business of running a country should be conducted by re-allocating the revenues of the country, by busy-bodying themselves in relation to- business activities, and by paying no attention to savings and the re-investment of savings. Not one member of the Opposition, as far as I can recall - and I have listened to a number of these speeches and read others - has referred in an enthusiastic way to the dramatic improvement in Australia’s trade position. The speakers have talked about pensions, postage, and a number of matters relating to the redistribution of money, but they have not stressed the desirability of Australia expanding its earning capacity and its overseas balances.

I think at the outset of my speech I should, therefore, invite the attention of the Senate to some interesting data which emanated from. Canberra under the date line of 24th August, and which appeared in the- Adelaide “ Advertiser “ the next. day. It was contained, in. a statement made by the Minister for Primary Industry (Mr. Adermann). In particular, the statement referred at the outset to the money that had been received from meat and meat byproducts. In the financial year which ended on 30th June last, exports of meat and meat’ by-products were worth £110,000,000; compared with £64,000,000 in the previous year. There has not been a word from the Opposition about this matter. The quantity exported is possibly more important than actual money when you are making a comparison, because the quantity shows the expansion of production more clearly than do the money figures. Nearly 52,000 tons were sold in that year to the United States of America, compared with a combined total of 7,000 tons for the previous three years. In one year we sold 52,000 tons, whereas in the previous three years we sold only 7,000 tons. I could go on in the same strain about butter and cheese.

We hear a good deal from some members of the Opposition regarding the position of the dairy-farmer, but they do not acknowledge that the value of butter and cheese exports rose last year by £12,000,000 to £29,500,000. The value of wool exports declined, but the quantity of wool shipped last year was the largest in any year except 1956-57. Wheat earned more, and so did flour. The most encouraging aspect is that the United Kingdom remained Australia’s best customer, with imports of Australian goods worth £250,000,000, which was an increase over the previous year of £34,000,000. The second biggest buyer was Japan, whose purchases amounted to more than £102,000,000. So I think that in making a survey of the Budget position it is important to have a look at the trade situation. I propose to discuss our overseas trade in the first portion of my speech to-day, and I shall do so against the background of the figures which Mr. Adermann was good enough to- supply a few d’ays ago.

When we are considering our overseas trade it is very interesting to look at what is happening within the economy of our best customer, the United’ Kingdom. To read the Budget speech of Mr. Heathcoat Amory, delivered in the House of Commons on 7th April last, is really an inspiration, because of the account given of the grand way in which the Conservative Government of the United Kingdom has attacked the problems that beset that country, and the interesting, imaginative and quick relief in the Budget that the British Treasury has afforded to the taxpayers of the United Kingdom. At this point, I might remind my two ministerial friends now in the chamber that I think more inspiration could have been got from the United Kingdom Budget than is apparent in the speech of their colleague, the Right Honorable Harold Holt. So, for a few minutes, I think I should assist them in their consideration of this matter by making several references to Mr. Heathcoat Amory’s speech. His- opening remarks were of great importance. He said -

The account I have to give to the Committee this afternoon is, I believe, an encouraging one, but the note I want to sound throughout is not one of satisfaction at past achievements but one of challenge to the opportunities that now confront us if we have the enterprise and the vigour to exploit them. Above all, any feelings of complacency that easy times lie ahead, and that we can now sit back and’ enjoy them, would be an utterly misleading recipe for our future conduct.

On that note he gave his survey of the previous year. He struck a challenging note. Then, Sir, he went straight to the question of how to keep up momentum. Later in his speech he said1 -

I turn now to my major proposals. … I shall begin with the Purchase Tax. . . .

Purchase tax is somewhat equivalent to’ our sales tax -

In my last Budget I simplified the structure of the tax, reducing the rates from seven to four.

In this respect, there is something of which I want to remind the Ministers in the chamber. In Australia we have now six rates of sales tax. It would be interesting if one could engage in research with a view to finding out the cost that those six separate- rates of sales tax must mean to the thousands of businesses in Australia-.

Mr. Heathcoat Amory last year reduced the number of categories of purchase tax from seven to four. In consequence, he said - the tax on some important classes of goods was then sharply reduced. I said then, and I must repeat now, that we must continue to look to this tax for an important contribution to the revenue.

Just as we in Australia look to sales tax. He went on -

I recognized that because of the problem of retail’ stocks violent and abrupt change - or the anticipation of such change - has a disturbing effect on trade, but I remind the Committee that anything approaching a major reform of the tax was bound to involve substantial changes in the rates on some goods. That being so, my aim was to- get the tax into a form which would not only be fairer and simpler to administer-

Then he said’, and this is important - but would also enable any future changes to be made with the minimum disturbance to trade.

I feel that there was something encouraging for the British people in that speech. Having reduced the number of categories of purchase tax from seven to four, Mr. Heathcoat Amory proceeded to remove the tax from commercial vehicle chassis and replacement tubes for television sets. He reduced the rates by one-sixth in certain categories. He went on to say, with regard to investment allowances, that he was conscious of the fact that it was necessary for modernization of businesses in the United Kingdom to take place. He said -

I want to emphasize that my main object in taking this step is to encourage firms, who are planning either extension or modernization schemes, to put them in hand now. The new investment allowance will fortify the effects of the increase in initial allowances made last year.

He applied those initial allowances to buildings as well as to plant. That is the very point that was stressed by the Hulme committee on depreciation allowances a few years ago.

I feel, Sir, that a very careful study of the imaginative Budget that was introduced in the United Kingdom in April last would have repaid this Government because, as was evident from the speech of one of the senior Ministers of the British Board of Trade, delivered over the air last Sunday night when he was “ Guest of Honour “ of the Australian Broadcasting Commission, the United Kingdom is simply surging ahead, full of confidence. She is enjoying a state of greater prosperity than she has possibly ever had before in our time. I think a good deal of it stems from imaginative budgeting, reducing the number of categories, simplifying tax collections, providing what I consider to be imaginative depreciation deductions, considering the plight of self-employed persons in regard to superannuation, and so on. The people respond to that sort of thing. Consequently, I feel that the present Budget is lacking in a number of important regards when one compares it with the budget introduced in England in April last.

I could mention especially a number of points of criticism, but I am aware of the fact that Mr. Harold Holt, in his Budget speech, referred to the appointment of a committee of inquiry on taxation. I was interested to read that in another place yesterday a learned honorable member, Mr. Bland, asked a question of the Treasurer relating to the setting-up of this committee.

Senator Wright:

– 1 hope he got more information than I did.

Senator LAUGHT:

– Perhaps at this stage 1 should read, for the benefit of Senator Wright and of the Senate as a whole, what the Treasurer said yesterday. He said -

Work is currently proceeding on the terms of reference for a committee on taxation and I hope that I shall be in a position to place some recommendations before the Cabinet next Tuesday as to their precise form. Some consideration has also been given to the personnel to comprise the committee. Whether or not it is desirable that, whatever may be the final range of the committee’s examinations, it should proceed, in the first instance, to some general inquiry, has yet to be resolved. My own disposition is to think that the committee will do more useful work if it can concentrate its attention, in the first instance, on the income tax field, though not necessarily being excluded, before its job is completed, from dealing with other matters, or from having certain other matters referred to it from time to time for interim report, if that would appear to be desirable. I think the honorable member will agree that such a committee could get into a much too tardy and complicated examination if the terms of reference were cast so widely that it was not called upon to report as speedily as possible on some of the more pressing aspects of taxation.

That is the latest word from the Government on the setting-up of this important committee. Of course, Senator Wright has had experience with another committee that has been in existence for four years but which possibly has not yet reported fully. I quite appreciate the concern that no doubt he feels - a concern that I have - about the danger of having a tardy committee.

Although I hope the proposed committee will eventually look at all aspects of federal taxation, I agree that income tax is a matter which calls for immediate attention. I should like to see the committee make interim reports with great regularity. Because of the great importance of this committee, I hope that men will be appointed to it who will give it their almost undivided attention. At the moment Australia is emerging into a very prominent commercial position; I understand she is the sixth or seventh trading nation in the world. But it should be known that the income tax act under which all our citizens work was passed in 1936 and that, apart from a mass of alterations, the structure ot that act has not been materially altered. It was passed in the days when Australia was a primary producing country, with its overseas trade almost limited to primary products. It was passed at a time when the States dealt with the major aspects of income taxation. To govern Australia in 1959 with a tax act which was passed in 1936 is like, to use the words of the Bible, pouring new wine into old vessels. In those circumstances the skin vessels, as they were then, were inclined to leak. I feel that this committee has a major task ahead of it, and I hope that when the Cabinet considers its appointment it will require, as a prerequisite, that the men to be appointed are agile and fit and prepared to get into the task straight away. I can think of nothing more urgent than a complete high level consideration of our taxation laws. The question of rates, of course, is a question for the government of the day, but the structure of legislation governing sales tax, income tax, estate duty, pay-roll tax and any other federal tax should be devised scientifically.

While I am on that point, I think I should mention that we must be proud in some ways of the fact that there are 4,000,000- odd persons paying income tax in Australia. The 37th report of the Commissioner of Taxation contains most enlightening figures. The report includes a series of appendices which contain a number of large tables. One such table, which appears at page 113, sets out the number of taxpayers, the taxable income and net tax by sex, the grade of actual income and the office of assessment. In the grade of income of from £105 to £199 there are 162,000 taxpayers. They pay only £207,000 of the total receipts of approximately £500,000,000. So the average payment per head for those taxpayers is approximately £1 5s- In the range of from £200 to £299 there are 206,000 taxpayers, and they pay £910,000. The average for each taxpayer in that range is £4 10s. I suggest, Sir, that those 368,000 taxpayers yield very little net to the Commonwealth, especially when we consider all the botheration that is associated with tax stamps and group certificates, the cost in time to employers of putting on tax stamps or fixing up group certificates, and the cost in time to the department of checking returns, sending out assessments and of having 368,000 separate dockets for those taxpayers. I suggest that if we eliminated all taxpayers earning less than £300 a year possibly the Commonwealth would be better o’f in the long run from the standpoint of departmental expense, and also from the standpoint of the cost to industry of doing all the “ pay as you earn “ work that is required. That is a line of thought which I feel should be presented to such a committee. Some honorable senators may say, “ Why should not these people pay something? “ 1 suggest that people with incomes under £300 a year pay a fairly large amount to the Commonwealth in sales tax, excise duty and so on. Most of them are either young or elderly people.

As an example, I remind the Senate that we already exclude from income taxation elderly couples - females over 60 and males over 65 - who have a joint income of less than approximately £830. I suggest that we should not give them full taxation treatment until their annual joint income is over £ 1 ,000. I think it would be fair and reasonable to do the same thing at the other end of the scale, and cut out from taxation, for a start, people earning under £200, with the aim eventually of extending the exemption to people earning under £300. If exempted people earning up to £300, we would, on present figures, eliminate all the work involved in dealing with 368,000 taxpayers, and we would lose in revenue only just over £1,000,000.

Senator Wright:

– When was the minimum of £104 first established?

Senator LAUGHT:

– It was established probably thirty years ago.

Senator Wright:

– Surely £300 is not now the equivalent amount.

Senator LAUGHT:

– I am just putting this matter to the Senate, without being prepared to argue that point. My main consideration is: What is best for the Commonwealth? It must cost the Commonwealth approximately £1,000,000 to deal with those 368,000 returns, and it must cost industry, in view of all the clerical work required, well over £1,000,000 to do all the processing of fixing tax stamps and so on, monthly. I give that as an example to show that surely the time has come to look at taxation objectively. As a matter of fact, I think that if you started an inquiry based on the figures that have been presented to us in this magnificent report by the Commissioner of Taxation, you could streamline many of the taxation processes of the Commonwealth. I do not want it to be thought that I am in any way critical of the officers of the Taxation Branch, for whom I have the greatest respect, from Sir Patrick McGovern downwards. They are people who are trying to do the job that has been set for them. I think we should look objectively at our taxation processes from every angle.

I want to say a few words about Australia’s overseas trade, because it really makes a most exciting story. I was tempted to read to the Senate some remarks made by the Right Honorable John McEwen in the address that he delivered the other day to the Australian Country Party Convention in Perth. I apologize, of course, to my Liberal friends for directing my attention to such reading material, but I think that the story that Mr. McEwen unfolded to the convention should thrill every Australian who reads it. He disclosed the attention that the Department of Trade and he, as Minister, are giving to problems as they blow up. That is what I like. Problems arose in connexion with our metals, and Mr. McEwen went to New York and negotiated a settlement with the very experienced American negotiators. Problems arose with our wheat, and he went to

Canada. I feel that we should pay a tribute to the great energy that Mr. McEwen is devoting to these matters. He is prepared to negotiate and to hit hard while the problems are hot. He does not let things develop and then say, “ I am sorry, but we have missed out on that, it is just bad luck “. He goes forward and hits the problems while they are hot.

Senator Robertson:

– It was an inspiring address.

Senator LAUGHT:

– You were lucky; you were there. It was my good fortune to go round the world last year on my way to attend a conference in South America. While I was ‘travelling - largely at my own expense - I had a look at various matters. Some honorable senators will recall that on my return I criticized the Government for not having had an exhibit at the great Brussels Fair that was held during the last European summer. You may recall, Sir, that I indicated that the only exhibit depicting Australia at the Brussels Fair was a picture of the Sydney Harbour Bridge, and that was in the United Kingdom’s exhibit. I invited the attention of the Government at the time to the importance of these fairs. I am very pleased to note that the Government has been stimulated into greater activity and that it is to be an exhibitor at a number of European and Asian fairs in the near future.

I was interested to hear Senator Scott ask a very good question this morning about travel and tourist promotion and make the suggestion .that such promotion should take place at these fairs. That is a line of thinking in which we Australians .must engage. We must go out and sell our tourist attractions as well as our goods and -everything else. Although the Minister for Trade is, quite rightly, taking the lead in this matter, ti think a group of Ministers should support him with their own departmental activities. At the Brussels Fair ;one of the great exhibits was the -Canadian exhibit. It was not so pretentious as .the Belgian Congo exhibit or Russian exhibit, but it was compact and direct. A half of the Canadian exhibit was .devoted to immigration, the theme -being “What Canada .Means to You “^meaning the migrant.

As there ‘was no exhibit ‘from Australia, 1 spent plenty -of ‘time looking at the other exhibits. When going through the Canadian exhibit I was rather envious to see the surge of people of Scandinavian, Dutch ,and German origin who were breasting up to the Canadian counter to obtain information about immigration to Canada. The exhibit was displayed at a time when Canada was not particularly anxious to get migrants, but nevertheless it had its eye on the future. The theme of the whole exhibit was, “ What Canada means to you “. I would recommend to the Minister for Trade (Mr. McEwen) that the Department of Immigration be given a prominent place at these fairs. At such gatherings we have to sell not only our migration possibilities, and our goods and chattels; we have to sell Australia. We have to supply information about this country - about the things that we are doing. At these fairs, we ought to tell of our efforts in the Territories. At Brussels a number of the European countries made a special feature of what they were doing with their colonies. The Belgians referred, of course, to the Belgian Congo. The French told of the work in their African colonies, and so on. We have a magnificent story to tell of our work in New Guinea, in the Northern Territory, in Nauru and even in the Antarctic. It is important that that story should be known, in Europe and Asia especially, because all these countries are represented at .the United Nations and our handling of Territories may well come up for .discussion.

A -portrayal of ‘the work of the Royal Flying Doctor Service would also be received extraordinarily well. I have in mind a small working model showing just what was being done to help develop Australia. In that way, Europeans who may be potential purchasers of our goods would become interested in us. When I was abroad I was often described as .an Austrian. To many European people reading quickly, Austrians -and Australians are the same, but such people are potential customers, given enough information about this country. I would make yet another suggestion to the Minister for Trade, through his representative in this chamber.

Senator Ormonde:

– You will be wasting your time.

Senator LAUGHT:

– One never ‘knows. I had always thought it a waste of time speaking to you fellows, but I have noticed that -sometimes you do listen. My suggestion is that colour films on Australia should be screened at these trade fairs. At Brussels (most of the major countries had beside their exhibit a little cinema to which they admitted a fewpeople at a time. There was usually a queue of peopleeager to look for half an hour at films about the particular country.

I would also suggest that some of our wines and foods be available for sampling, especially at European trade fairs, which are usually held in the summer. At that period of the year darkness does not fall until 10 o’clock and the practice is to eat and drink out of doors. It is a very pleasant custom, and I noticed that most of the countries which exhibited at Brussels had small cafeterias where people might dine. The Americans had a kind of drug store, where hamburgers were offered, but most other countries provided a boulevardtype cafeteria.

Senator Ormonde:

– You must have had a pretty goodtime!

SenatorLAUGHT - I did not close my eyesto what was going on about me. Australia willbe able to get its story across with great force if it uses theimaginative methods now envisaged by the Minister for Trade.

By and large, theBudget will get us through the year very nicely. However, the Government should not be at all complacent, for there has really been some fairly top level criticism of the Budget. I feel that the Associated Chambers of Commerce of Australia is not too wide of the mark in “ Canberra Comments “, which appeared in the August issue of the publication of that body. I believe that, given a quick decision to appoint a taxation committee, quick reports on the more important matterswhich come before it, and quick action to implement recommendations, this country can surge forward in the same way as, I am proud to say, Britain is doing at present. I feel that an imaginative Budget, with particular reference to incentive taxation, would do a lot in that direction. After all, we have a tremendous responsibility to the migrants coming to these shores. By expanding our economy, and our methodsof obtaining money from overseas, we can relieve : the Treasury of theneed tolevy the present high rate of taxes. We can obtain a satisfactory trade balance by the energetic expansion of exports, and will not then have to use the taxation weapon to balance, or nearly balance, our annual budget.

I leave these ideas with the Senate. I do indeedwelcome the change that is apparently coming over the Government in regard to the taxation structure.I hope that the Governmentwill speedthat change. I would commend the expansion policies of theMinister for Trade. I feel that the problems so oftenstressed by Opposition senators -inadequate social services and thelike - willbecome comparatively minor if we accept the challenge whichispresented to usand surge forward to greater things.

Sitting suspended from 12.44 to 2.35p.m.

Senator DITTMER:

– I should like to express, through you, Mr.Deputy President, my appreciation of the courtesy extended to me by thePresident of the Senate and my gratitude to the various honorable senators on both sides for the consideration theyhave shown me since my entry into thisParliament.

Recently, I listened in another place, with a measureof real interest and a tingling of eager expectancy, to the statement of the Government’s financial proposals for the ensuing twelve months. Realizing the brilliance of the man who was to deliverthe Budget speech, recalling that thehadbeen a Commonwealth Ministerat the age of 32, andknowing that ; an orthodox accountantfriend of mine, Sir Arthur Fadden, had departed from the parliamentary scene, I thought thatthe Budget wouldhave been embellished with a measure of imagination,with an appreciation of the unrestthroughout the world and with ameasure of responsibility shownby;a government which hadenjoyed the confidence of the people fortensuccessive years. Of course, we might say that it enjoyed thisconfidence for diverse reasons,not especially because it is loved but mainly because of a set of unfortunate circumstances existing within the ranks of its opponents. Butwhen oneunderstood whatwas contemplated in the Budgetone realized that there was no concrete attempt to give any relief in respectof taxation. The Budget contained a concrete picture for every one to see. It demonstrated clearly that the movement is getting further and further away from direct income taxation. Over the last five years, receipts from excise have increased from £168,000,000 to £246,000,000. The revenue from sales tax in the same period has risen from £110,000,000 to £150,000,000. Further, the collections from the wages tax have increased from £45,000,000 to £53,000,000. This burden, plus the proposed increases in telephone and postal charges, will fall upon the backs of those least able to bear them, as will bc admitted by all who appreciate the disproportionate distribution of wealth. The burden will fall on the shoulders of the poor, the not-so-poor and the families.

I do not propose to make a detailed analysis of the various items outlined by the Treasurer (Mr. Harold Holt) because they can be dealt with more fully when the estimates for the respective departments are before us. But what did interest me in particular was the repetitive pattern of neglect of the northern half of Australia, apart from £6,000,000 proposed to be allocated to the Northern Territory and the pittance of £650,000 for Western Australia. As is always the case, there is to be nothing for Queensland. Even though I am new to this Parliament, I was disappointed that nothing was to be allocated to Queensland; but we have been led, from habit, to expect nothing for Queensland.

I do not intend my remarks to be wholly destructive; I hope to be able to make some constructive suggestions which, if not a complete solution, at least will be an attempt at solving the problem of the development and settlement of North Australia. I do not know whether the Government realizes it, but, north of the Tropic of Capricorn, there is less than 3 per cent, of the population of Australia; that north of a line drawn across Australia from the border between New South Wales and Queensland, there is an area occupying three-quarters of the total area of the Commonwealth, and here, after 100 years of settlement, there is only 14 per cent, of Australia’s population. Some might argue that the reason for this is the inhospitable nature and barrenness of the country, but I propose to quote figures to show the great productivity of Queensland at least. I point out that for last year Australia’s overseas credits amounted to £813,000,000 and that of that figure the sum of £168,900,000, or 20.75 per cent, of the total was earned by Queensland. I mention that matter to emphasize the real contribution that we of the north are making to the establishment and welfare of the southern people.

Let me now quote figures to illustrate the productivity of Queensland. For the year 1957-58, primary production, including mining, in that State, was worth £253,867,000. The products from other industries totalled £143,958,000, and the value of the sugar produced there was £61,000,000. While expressing a measure of appreciation to the people of the south for having subsidized sugar, I point out that but for the wisdom of a Labour Government in Queensland in stabilizing that industry, there would not have been any settlement in North Queensland and the Commonwealth’s role would have been extremely hazardous during the last war. Because of that stability, the people of the south enjoyed the cheapest sugar in the world during the war years and in the immediate post-war period. I say that in answer to those who may be complaining about paying a relatively high price for sugar now.

The value of beef produced in Queensland in 1957-58 was £60,000,000 while that of wool was £47,000,000. Base metals were responsible for production worth £20,000,000 while the return from mining in general was approximately £30,000,000. Butter production was worth £18,000,000, cheese £2,000,000, wheat £11,000,000, barley £4,000,000, and sorghum, eggs and peanuts £13,000,000. Those figures amply prove that this part of Australia has a real measure of productivity. If time permits, I hope to be able to deal in some small way with the Northern Territory and Western Australia. I mention these points in answer to those who question why we should make responsibility for the development of what they call this inhospitable area - admittedly some of it is desert - a national matter.

Now let us examine the world picture. I think we all realize that at the moment the world is engaged in a life and death struggle, in a struggle for mastery of the mind of man and in a struggle to subjugate the people. Admittedly, Christian democracy is handicapped by monopolistic capitalism while in other places the battle is one between democracy and atheistic paganism. 1 think, however, that our problem in Australia is more immediate in that we are faced with the menace of those countless millions in Asia who are entitled to a place in the sun and to sustenance because they are human beings and God’s creatures. We cannot hope to stop the march of those people, irrespective of whether their leaders be Communists or some other type, because in my opinion the restlessness in Asia is due to the starvation and denial suffered by those countless millions over the centuries.

We often speak of history as being the story of the reigns of the various Icings and queens and battles lost and won. In my opinion, history is really the story of the evolutionary march of the poor and the denied against starvation and privilege. This is exemplified to-day in Asia, and in China where there are countless millions controlled by communistic and atheistic leaders. Another example of it is to be found in the fact that at the present time Laos is in chaos, and if we do not do something about developing the northern half of Australia we shall have no moral right to hold it. Certainly, if we do nothing we will not hold it!

We always argue that to us a white Australia is sacrosanct. I agree with that belief. We say that we do not desire certain settlement on racial grounds, but actually there is no biological difference, and if we are to persist in a policy of selective immigration we must justify our tenure of this land by increasing its productivity and settlement.

Let us consider generally the area to which I refer before attempting to discuss what I believe to be a solution of the problem.

In Queensland we have the best beef cattle producing country in Australia, and we have some excellent sheep country, as is revealed by the prices for which Queensland wool was sold last year. In term’s of agricultural productivity, we have the fertile lands of the Cape York Peninsula, which are not being utilized at present. I know that some persons will say that the land on the western side of the peninsula is not fertile, but the fertile areas are fairly extensive. In the hinterland of Cairns, around Ingham, in the Burdekin Delta, around Mackay and Bundaberg and in the Isis scrublands, are the rich sugar producing areas. In the north is the Atherton Tableland and in the south the Darling Downs, that most magnificent belt of country which is probably unrivalled anywhere in the world. When we consider these areas, we realize just what are the potentialities for agricultural production in that State. Queensland, through the years, has produced magnificent timbers in the form of silky oak, maple, cedar, and various species of pine. There is little need for me to recall to the minds of honorable senators the great mineral deposits that are being developed. Mount Isa has one of the two major base metal deposits of Australia and is located in what is probably one of the great mineral belts of the world. Weipa will in the process of time be shown to possess possibly the largest commercial deposit of bauxite in the world. At Mary Kathleen, there is uranium. When we think in terms of Mount Isa, we think of the denial of its requirements by the Commonwealth Government of which honorable senators opposite happen to be supporters. That denial is a tragedy, not for Mount Isa alone nor for Queensland alone but for Australia.

There is little need for me to tell the Senate the story of the Barrier Reef, a structure which is unique from a marine point of view, awaiting exploitation and the establishment of a large marine biological station. Queensland is a State that rests on a bed of coal and shale, but more particularly of coal. The Blair Athol coal deposits are unrivalled anywhere in the world, and Callide has an enormous deposit. Even as far west as the Cooper there are coal seams 30 feet thick. Collinsville coal is eminently suitable for coking and other purposes, and the other coal deposits of Queensland are second only to those of New South Wales on a British Thermal Unit rating. Australian Governments - I am not particularly concerned with their political colour - have spent millions of pounds in other States. 1 do not deny the rights of those States to have their assets and potentialities exploited. Millions of pounds were spent on the construction of a standard-gauge railway to the low-grade coal deposits of Leigh Creek, in South Australia.

Let us look at the-. Northern Territory and. see whether it contains any resources that can- be developed in the interests of closer settlement. There is the Barkly Tableland, of 19,600,000 acres, embracing such stations as. Avon, Alroy,. Rockhampton Downs, Brunette, and* Alexandria, with country equal to any other pastoral, country in Australia. It is endowed! by nature with everything. It has a reasonable rainfall. It is covered with Mitchell and Flinders grasses- and it has sub-artesian water at the comparatively shallow depths of from 100 to 600 feet. It is denied only the one thing that man- can provide - transport. The result is that when- a drought- occurs every five or six years the breeders die, and it takes from five to eight years- to recoup losses. Then, there is the Victoria River country in the north-west, of the Northern Territory, with 26,000,000 acres of reasonably good land. Some of it is excellent, but other parts are not so good. It will be said that the southern- part of the- Northern Territory and central Australia are largely desert, but around. Tennant Creek are 2,000 square miles of country that is worthy of further prospecting. Much prospecting has been done and one of Australia’s copper producers, the Peko mine, is in that area.

Let us come now to the north-west of Western Australia. I want to make it quite clear that I am not as familiar with this area as I am with the other areas I have mentioned. There, at least, we have cattle country of a reasonable standard. The existence of various metals has been revealed, and the area contains Australia’s only blue asbestos deposit, located in the Hammersley Ranges, which has been developed and is being utilized by the Colonial Sugar Refining Company Limited.

When we retell the stories of what has been- revealed, and when we realize that increased settlement must lead to a greater revelation of assets and potentialities, we can appreciate what must be done. Geologists have told me that the best prospect for oil is in Western Australia. We hesitate to spend there a few million pounds, yet England, the United States and France have not hesitated to spend millions of pounds in the Sahara and elsewhere in an endeavour to find oil, not especially, I think, because it was likely to be found in lands of low labour costs and low standards of; living. If that was the reason that prompted the- great, nations to go to such countries in search of oil, is not democracy a travesty and a farce? If we are to go to’ such countries only because of their low labour costs, democracy must die: These great nations went to these, countries because of the- potential value of their oil deposits. I recall the excellent case put up by the Leader of the Opposition’ (Senator McKenna) for increased funds for oil exploration. The search of the Sahara cost tens of millions of pounds, and in Sumatra £24,000,000 was. expended before oil was discovered. The same is true of Alberta and every other oil-bearing land.

On these grounds we have a case foi submission to the Commonwealth Government for real assistance. I am not particularly concerned with the political colour of the government involved. Let us apportion the blame in a reasonable manner. Let us be scrupulously fair about the whole matter. Of the 58 years that, have passed since federation, Labour has ruled this Commonwealth Parliament only for seventeen years, for seven of which we were involved in war, three of which were years of economic depression when Labour did not control the Senate, and four of which were years of post-war rehabilitation. Considering those facts, it might be conceded in fairness that Labour had little chance to play its part in the development of the northern half of Australia. The antiLabour forces have all followed a similar pattern. The wealth and the power were concentrated in the south-eastern corner of Australia and the denial was of the northern half. Honorable senators opposite may say to’ me, “ All right, doctor, that is a very telling case and interesting enough, but we have had innumerable investigations “. It is true that there have been committees and commissions of inquiry. Investigations were carried out by South Australia prior to its ceding the Northern Territory to the Commonwealth on 1st January, 1911, because of administrative difficulties and for defence purposes. Queensland has had inquiries on inland abattoirs, railways and pastoral and agricultural problems. Western Australia has conducted’ innumerable inquiries, as also- has the Commonwealth. But all of these have, by and large, been isolated in their approach and not dissimilar from the committee recently established by the Minister for Territories (Mr. Hasluck). -He nominated three men - a professor of agriculture in Melbourne, an agricultural .economist in the Commonwealth Scientific and Industrial Research Organization, and a practical farmer and member of Parliament in South Australia, to investigate the possibilities of closer settlement and the production of economic crops in the Northern Territory - but again an isolated inquiry. As a result of these innumerable inquiries I think a co-ordinated approach is required to the whole problem in which we can assess the assets as revealed and the potentialities. If we think in terms of re-afforestation, timber, mining, pastoral and agricultural production and co-ordinate these, then we might arrive at something definite and substantial. Let us establish a co-ordinated body as between Western Australia, Queensland and the Commonwealth - preferably with the goodwill of New South Wales, Victoria and South Australia, and for a further measure of goodwill, while not being parochial, I will throw in that threepenny allotment known as Tasmania. A consultative body could be set up. There could be a conference of the Commonwealth, Queensland and Western Australian Governments and, as I say, if the other governments are imbued with a sense of national responsibility and interstate goodwill all the better.

The governments could then determine the type of structure that would be fabricated. It is not peculiar to have a body such as this. The Commonwealth Scientific and Industrial Research Organization, though under Commonwealth control completely, is relatively autonomous, and it has done a marvellous job from the point of view of industry in the Commonwealth. I suggest that the three States should send representatives who are imbued with a sense of the urgency and the necessity for financial solutions of the problem and this -conference so-called, could set up a body to be known as the North Australian Development and Settlement Organization. And as we are so fond of abbreviations, or abbreviated terms, this organization could be termed Nadso. Certain rights could be conferred upon it - whether advisory, authoritative or a combination of each does not matter. Preferably, .it should have a measure .of real authority - ‘not divorced from Parliament; I would not concede that. But if capable men - and women, if necessary - were appointed to it, it should be given a measure of real authority. This problem would .have to be approached with a measure of conciliation and goodwill and a realization of the tremendous size and magnitude of the matter. Some might ask: Who would constitute the personnel? Just for what it is worth, I shall give you my idea. Naturally, we would have to have as .chairman a man of outstanding administrative and organizing ability, an expert in industrial relations, a silviculturist, a tropical hygienist, a pastoralist, a defence authority, an agristologist, a mining engineer, a transport authority, an irrigation authority, a civil engineer and a financial authority. Some may say that it should be a Commonwealth body. Very little has been achieved since federation in the northern half of Australia, certainly on a Commonwealth basis. Let us have a look at what has been done. In Queensland, admittedly, governments of various political colours over a century have attempted developmental projects. Railway lines have been built, meat works established, sugar mills built, agricultural lands divided, cultivated and harvested, and sugar produced, and a measure of re-afforestation has been carried out. The South Australian Government, with its limited resources when it had possession of the Northern Territory, did complete the overland telegraph - a pioneering feat - and it is entitled to be particularly proud of the work of Sir Charles Todd. South Australia built the line from Darwin to Pine Creek, and attempted the development of the Darwin Harbour.

Western Australia has done, within the limit of its financial resources, all that it was possible to do. But the problem is too big for the States individually. They have the personnel and the know-how in no small measure, but the Commonwealth Government has the finance and the responsibility. It is inevitable, I think, that the Commonwealth must ultimately get greater powers; the States will have theirs whittled away. Various councils and shires must be given increased autonomy if we are going to develop the northern half of Australia. That must be one phase of development - a measure of autonomy for the magnificent people who are prepared to settle in the tropics and to contribute to the wealth of Australia as a nation.

Some may say that if we establish this body it will have to engage in a lot of research, that it will have to do much travelling and that it will have to seek advice. The problems, as revealed by innumerable inquiries, are there for members of the body to put their teeth into immediately. Let me recall to the chamber some of the problems that would immediately face a body such as Nadso in order to meet the defence requirements of north Australia and Australia in general that the north would serve. There would be the tropical needs, hours of work and types of labour and conditions of housing, clothing, food and recreation. The body, Nadso, could immediately investigate these matters: The Mr Isa-Townsville railway; the Dajarra-Newcastle Waters railway; the Walch River irrigation scheme; the development of the Cape York Peninsula lands; the establishment of a large marine biological site on the Barrier Reef; the possibilities of establishing secondary industries and re-afforestation; abbatoirs; general amenities, including housing; pasture and crop improvements; the possibility of sheep versus cattle on the Barkly Tableland; the improvement of stock routes; a railway in the Victoria River area; the administrative difficulties; the taxation anomalies and cost of living disabilities; air transport; the integrity of aboriginal reserves; and mineral and oil search and development. Would not those problems be big enough? Surely they range widely enough for the best minds in the country to devote their attention and their abilities to. They are worth while - each and every one of them.

Let us take some in particular in the time available to me. First, I shall deal with defence requirements as we in Queensland have seen them, and I do not think it has been any different in Western Australia. Over ten years almost a billion and a half pounds has been spent allegedly on the defence requirements of . this country. I am not going to say that all of it has been wasted, but we have very little to show for it after ten years. Is a soldier any better because he is trained south of the border? Is a sailor any better in the

Pacific Ocean because he has been trained in New South Wales or Victoria? Is an airman, because he flys over the Australian Alps, better than if he flys over the Great Dividing Range? It has been the established practice to keep the defence forces as far south of the line I have mentioned as possible. It has been grossly unfair to the northern half of Australia and I do not know that it has contributed to the efficiency of the country any more than if those services, in some measure at least, had been stationed in the area under discussion.

As regards tropical needs, here is a field of research that is wide open. The Queensland University has done something in the matter. The people who have settled in the tropics have been reasonably happy, but much remains to be done particularly, as I have said, in relation to the type of work, the conditions of work, clothing, housing, food and recreation.

While I am on this subject, I may as well deal with the disabilities that distance has brought to the people of the north. There are administrative difficulties, delay in receiving replies to correspondence, slowness of action and, above all, the taxes they have to pay. In some small measure there is a discriminatory approach in their favour, so far as taxation is concerned. There are the various zones, but the allowances made to them are almost pittances when one thinks in terms of distance and the high cost of living. It must be appreciated that the ordinary man and woman, with a family, living in the north of Australia cannot afford to take a holiday or experience a change of scenery because they are not left with enough money at the end of the year, although they have a responsibility to their families to take a holiday. If they were able to experience a change of scene, they would be all the better for it.

I do not want to be parochial in my approach to this problem, but I ask honorable senators where any of them would rather invest his money - in Sydney, Melbourne, Adelaide or in the northern part of Australia, if taxation in each place were much the same. Not only should there be greater discrimination in favour of the individuals who live in the northern areas, but there should be a more partial view of the rights of those people who are prepared to invest in the northern part of Australia. If the Government approached the matter in that way, I think it would find that there would be a greater urge to spend money in that area. After all, capital in the form of money - I am not speaking about monopoly capitalism as the theoretical basis of capital, but in terms of money which purchases goods - would assist in development and would encourage people to speculate and invest in northern areas.

I come now to the Mr Isa-Townsville railway. I am a little sad about this, Mr. President, because I feel that it is a reflection on the Commonwealth Government that it has not shown a measure of national appreciation of this tremendous problem. I do not propose to use only my own words in speaking of this matter, but to utilize a statement made by the Honorable Frank Nicklin, the anti-Labour Premier of Queensland, in traversing briefly the story of the negotiations. Irrespective of what the Prime Minister (Mr. Menzies) may say, it is inevitable that there will be no loan for the rehabilitation and reconditioning of the Mr Isa-Townsville railway. As you know, Sir, the proceedings have gone on for over three years. The Mr Isa mines company saw the necessity, or the desirability, whichever we prefer, of doubling its production of ore from 7,000 tons a day to 14,000 tons. Incidentally, it must be remembered that Mr Isa to-day is producing more than 40,000 tons of copper a year and thousands of tons of lead and zinc, and that it is, with Mr Morgan, one of the four major copper producers of Australia. Another is Mr Lyell, which is fast declining in importance, and the fourth is the Peko project in the Northern Territory. I understand that there is also a mine in Western Australia, with a 25 per cent, copper content, but as yet it is not yielding a great tonnage.

The Mr Isa deposit is of vast area and has 50 years of assured ore reserves leaving aside the potentialities for expansion. The whole area is mineral-riddled. North of it is an area known as Lawn Hill, where there is a base metals deposit. The amount sought for the railway was £29,000,000, of which the State of Queensland was to provide £7,000,000. The Commonwealth was asked, in one way or an other, to provide £22,000,000. The Mr Isa people approached the Queensland Government, expressing a desire to double their tonnages and to have the railway line reconditioned. If I may digress for a moment, perhaps I may tell the Senate the story of the line, because some honorable senators may not know it.

The line runs for a distance of 773 miles. From Townsville to Richmond it is constructed of 60-lb. rails. From Richmond to Duchess there are light rails, and the more recently constructed line from Duchess to Mr Isa has 60-lb rails. The first proposition, which the Queensland Government accepted - incidentally it was then a Labour Government - was for the reconditioning of the line between Richmond and Duchess with 60-lb. rails. The Commonwealth Government was approached for assistance by the then Premier. Let me say that the anti-Labour premier of Queensland, Mr. Nicklin, also approached the Commonwealth for assistance to carry out this project. The proposal was examined by Commonwealth officers, for whom, I take it, this Government accepts responsibility. Mr. Nicklin said -

It was the conviction of the Commonwealth that a much more substantial approach was desirable. The Commonwealth’s view was that rehabilitation should be directed towards much more than the correction of the weakest link. The Commonwealth urged that the whole line should be brought up to 82 lb. standard, capable of permitting the use of large diesels of 90 tons weight, with the equalizing of grades to allow the building up of very large trains.

In other words, it was the Commonwealth anti-Labour Government that urged the desirability of undertaking the £30,000,000 project for reconditioning and rehabilitating the Mr Isa-Townsville railway and then, having brought the Queensland Government into its parlor the Commonwealth spun a web around it and left it there to die, although it was a government of similar political colour. I refer, of course, to the Nicklin Government. The statement to which I have referred was made before the Queensland Parliament by the present Premier, and he is not too happy about the position.

It is not as though the reconditioning of the line would be an uneconomical proposition, even on the £30,000,000 basis.

Representatives of the firm of Ford; Bacon and Davis Incorporated, of: New York,, were brought out, and this* is what they had to. say -

The’ level of traffic from the mine would in) itself be sufficient to fully service- the debt of£30;000,Q00 amortised, oven twenty years and allow a small’ margin of profit to the State.

It further showed that the State would derive a very considerable profit from the handling, of the- existing- volume” of traffic’ on- the- line, a- profit which* they* estimated’to be- of the order* of approximately’ £1,250,000 per annum.

We, have had the. Commonwealth Govern? ment urging the’ Queensland Government, on, and we have had. American; consultants saying: that’ the project would be an eco? nomic proposition. As a result,, an approach has. been, made to the World Bank. Some people are now attempting to attribute the blame to. the Mount Isa. mines company. The company did a veryfair, thing when it; was- approached. It must be realized that, for £7,000,000 or £8,000,000, the. weakest link, that is, between Richmond and Duchess, could be reconditioned, and that would meet the needs of the Mr Isa mines. The laying of 82 lb. rails was merely to assist in the development of northern Queensland. Yet the Mr Isa mines company agreed to the project, although it was going to provide ultimately only 49 per cent, of the traffic. Ford, Bacon and Davis Incorporated have said that, even on a capital basis, the company should be financially responsible for only 58- per cent, of the capital cost. The company guaranteed 60- per cent., subsequently lifted it to 70’ per cent., and. further said that it would, over a period, pay 10 per cent, extra, until a lay-by fund of £5,000,000 was established, in order to meet the- possibility that it might, in a particular year, not be able to meet the . requirements of amortization. That was eminently fair. The World Bank wanted a LOO per cent, guarantee from the Mr Isa mines company. The Commonwealth Government did not do much, about the matter, and subsequently the World Bank reduced the percentage, but would not reduce it to. the extent suggested by Mount Isa mines.

Because the State Government, said that it would recondition the line between Rich mond and Dajarra,, Mr Isa’ Mines Ltd. have walked out the contract, and we. cannot blame them after all the’ bungling that has gone om Forgetting- all’ about the possibility. and- desirability of development in* northern- Queensland, the Premier hassuggested that trie’ Government will proceed’ with that particular section- to meet Mr Isa’s’ need. The government considered’ that that work was urgent. But the interesting aspect of the matter is this:’ When it was suggested’ by the State that iti would undertake this work, the Prime Minister was kind enough to- make it clear that the State’s’ proposal involving, the spending-, of money which ought to remain, in the Queensland Treasury was natural and unobjectionable.’ from! the: Commonwealth’s point’ of’ view; How delightfully condescending it was of the Commonwealth Government1 to1 permit’ the Queenslanders to. spend’1 their- own- money in their own way!

Let us think-, of- what is happening in Queensland in. the light of the money that has. been spent in the southern States. All credit should go to the Chifley Government for sponsoring- the Snowy Mountains Hydro-electric scheme. A sum of £2,500,000 . was spent on that project in 1.949-50 and provision has been made for an expenditure of £25,000,000 this year. Much more than £100,000,000 has been spent on the undertaking, and ultimately £400,000,000’ or £500,000,000 will have been: spent’ on it. I point out, too, that £9,000;000’ was spent on the Bell Bay aluminium project in Tasmania; that £9,000,000 is- to be spent on the standardization of the Melbourne-Albury line;, of which’ Victoria, and: New South Wales- will each have to- find 15 per cent, over a period, of 30 years; that millions of pounds are to be spent on the south-eastern division railway in South Australia, only 6 per cent, of the capital cost of which will have to be found by South Australia over a period of 50 years, and that the Stirling-Brachina-Leigh Creek-Marree railway is to be constructed with Commonwealth, money. In, addition,, a sum of £650,000 is- to be made available to Western. Australia. But nothing is provided for Queensland! That does not suggest that there, is any sense of national responsibility.

The Queensland Government conducted an. inquiry into the possibility of constructing a railway from Dajarra to Newcastle Waters. Mr. Moriarty, who is the Commissioner for Railways, Mr. Creighton, who! is a land expert, Mr. Hope, the manager of the Brisbane, abbatoir, and Mr. Arthur Bell, a. scientist and then Under-Secretary of the Department of Agriculture and Stock but who is now dead, conducted an investigation into the justification or otherwise of building, a railway from Dajarra to Newcastle Waters in order to touch the Barkly Tableland, to which I ha “e already referred. Those gentlemen said that such a railway would cost £15,026,000 and that, the rolling stock would cost £2,500,000. The Commonwealth said that it would cost twice as. much. T am not saying who was right and who was wrong because I am not an authority on such matters; but if there were in existence an authoritative body of experts such as I visualize the public would, be in a position to apportion blame. The opinion of such a body would be the opinion of experts and, irrespective of the political beliefs or ideologies of the Commonwealth, the Queensland Government, or the Western Australian Government, the facts would be revealed and the public would be entitled to assess them.

We had a similar experience with regard to the Burdekin dam proposal. The Queensland experts said that it was a practicable scheme and that it would cost £19,000,000. To-day it would cost probably £100,000,000. Those experts said it would irrigate 600,000 acres of arable land, that it would provide 80,000 kilowatts of electrical energy, that it would mitigate flood damage, which has cost the Burdekin sugar lands millions of pound’s, and that it would settle 50,000 people. Reports on the proposal were tabled in Parliament and are available for all to read, but the Commonwealth Government entered the picture and said that it was not a practicable scheme and that: it would not assist. I am not quarrelling with the Commonwealth experts, but let us be fair about’ the matter. The Queensland. Labour. Government did put its reports before the- public but the Commonwealth Government did not, so- the poor unfortunate public is’ not in a. position to attach blame to one- party or the1 other. The result, is that little: has been, done..

I suggest that serious consideration should be given to these problems that I have outlined for the North Australian Development and Settlement Organization. I have recorded them and I could deal with them in detail if time permitted. I suggest that the Senate, as distinct from the Lower House - or the other place, as it is traditionally referred to - has a national responsibility. The Senate has been established on a national basis to protect the rights of the poor States and the smaller States. They are poor in terms of money, but they are not poor in terms of assets and potentialities. I suggest in all humility that it is not beyond the power of honorable senators to appoint a select committee to face up to this urgent national problem - the development and settlement of the northern half of Australia. The Senate has been referred to as - a mausoleum in which are enshrined the fossilized remnants of men and women who have been or areprominent in their parties. I want to make it clear that I have not referred to them in that way. I would not think of the Senate as being a mausoleum, even though it is painted a sepulchral white. I do not think any of us are fossilized remnants, and I certainly would not know who have been prominent in their respective political parties, and when. I am just saying that that is the attitude of the people. The Senate is not loved. The party to which I belong is pledged to abolish it, the Liberals do not care for it, and the Australian Country Party does not care whether it lives or dies. I am not talking, of course, of the members of the Senate; I am talking of the members of the parties outside.

I suggest that honorable senators have a responsibility to face up to this task of development. If they face up to it, it will be a task well done. They will have earned the gratitude of the nation and particularly of those magnificent people who live in northern Australia. Honorable senators opposite have in their leader in this place an able man. Some say he is ruthless; I regard him as being, forceful. We all realize that he is able and energetic. He is the Minister for National’ Development, and is-, the one’ man who, with- his forcefulness, energy and ability; could, do something’ really substantial: in the direction I have indicated:. He has been heralded in certain! Liberal) circles! as being; a. future

Prime Minister - that is, if he were to move from this chamber to another place. Let him, therefore, establish a name for himself. If he did as I suggest, he would be acclaimed not only as a great Prime Minister but as a national figure.

In conclusion, Mr. President, let me recall the words that were enunciated by the present Prime Minister when he sought to woo the electors of the Commonwealth as recently as last year. He said -

The vision of a growing Australia Unlimited is inadequate unless we regard the development of our northern and north-western resources as a matter of moment. Those of us who live in the great cities of the east and south have a real degree of trusteeship in these matters. We must think constructively about them.

He must have thought about them prior to 22nd November, 1958, but no real thought has been given to them since. He is a man of brilliant mind but lazy in body. He has enjoyed a record term in control of the Commonwealth of Australia. His ability is such that he could leave an impression in the annals of the history of this nation. I appeal to him through the Leader of the Government in this place, with his good graces, his ability and his forcefulness, to do something for that part of the country which is crying out aloud for development and let us then all hold our heads up proudly before the nations of the world.

Senator McKELLAR:
New South Wales

– Before supporting the motion for the printing of the Estimates and Budget Papers 1959-60, I should like to congratulate Senator Dittmer warmly on his maiden speech. It is perfectly obvious to all of us that he is going to be a very strong force in the Senate, and I am quite sure that honorable senators on the Government side welcome that just as much as do Opposition senators. I also congratulate those other honorable senators who have made their maiden speeches. While I am in a congratulatory mood, I should also like to congratulate the Treasurer (Mr. Harold Holt) on bringing down his first Budget. No doubt it is a great ordeal for a Treasurer to present his first Budget.

That brings me to the thought that this country owes a great deal to our erstwhile Treasurer, Sir Arthur Fadden. I pay him a very warm tribute, and express my deep appreciation and that of my party for the splendid work that he did for Australia, both during his period in office and when he was in opposition. It goes without saying that this country owes a great deal to his unswerving devotion to his work and to his keen financial brain, but I cannot help but feel that we have failed miserably to accord him the recognition that is his due.

I must confess that I have a very warm regard for the debating ability of the Leader of the Opposition (Senator McKenna). His remarks are invariably thoughtful and delivered in a courteous manner that we could all well emulate. However, I was distinctly disappointed the other night when he led the case for the Opposition. I am not a racing man, nor do I take much interest in racing, but I do know that no matter how good a jockey may be, he cannot win a race unless he is on a good horse. If I were asked to give the pedigree of the speech delivered by the Opposition leader the other night, I would say that it was sired by criticism and delivered from envy - envy of the splendid record of achievement and progress for which this Government has been responsible during the last twelve months. We have seen, during the period of ten years since the Menzies Government first took office, progress and stability hitherto unparalleled in the history of Australia. It was said a little while ago that the people did not put this Government back because they loved it. The only conclusion to which I can come is that if they do not love us, they love the Opposition less.

I now wish to deal in some detail with the remarks made by the Leader of the Opposition. He spoke on the subject of unemployment and said that in 1956 the unemployment figure was never lower than 31,000, that in 1957 it was never lower than 46,000, that in 1958 it was never lower than 56,000, and that in 1959 it was never lower than 63,000. He overlooked the fact that during that period of four years Australia’s migrant intake was considerable. In 1956, it was 132,628; in 1957, 126,601; in 1958, 107,978; and in 1959, 116,697, making a total of 483,904. That is the migrant intake over those four years, during which time our unemployment figure was never greater than 63,000. That is something of which the Menzies

Government can well be proud. We were able to provide employment for so many of our people and at the. same time find employment for almost half a million immigrants. lt was said yesterday that the Government should have settled on an immigration quota that could have been filled. For the benefit of the honorable senator who said that, I wish to explain that during the four years that I have mentioned, in only one year, 1958, was the target for immigration not reached. In 1956 the target was 125,000, and we brought in - I am using round figures - over 132,000; in 1957 the target was 115,000, and we brought in over 126,000. In 1958 the target was again 115,000. That was the only year out of the four in which the quota was not reached. In that year we brought in only 107,000 people, so we were down by 8,000 - the difference between 107,000 and 115,000. In 1959 the target was again 115,000, and over 116,000 immigrants were brought into this country.

When we examine the unemployment figures, we find that we have less than two in every 100 of our working force unemployed. As a matter of fact, the proportion is nearer to 3 in every 200. The fact that we have had so many people coming to Australia for whom we have been able to find work, despite the difficulties that existed, shows that the Government has not a- bad record in this field, particularly when we consider that during this period there has been a high figure of unemployment in overseas countries, rising in some cases to several millions. We should remember when we are considering employment and unemployment that, on reliable estimates, we have something like 900,000 married women working in industry. I think, Sir, that I have answered the criticism that has been levelled against this Government on the question of unemployment. We all recall very vividly the cries that were raised by the Opposition during the last general election campaign, when it said to the people, “ If you put Menzies back, you will have unemployment “. I have shown what has, in fact, happened.

We were criticized in relation to age pensions. I have checked on some of the figures relating to age and invalid pensions.

I find that in 1949 there were 397,383 age and invalid pensioners in Australia, and that in that year they were paid the sum of £41,535,909. In 1959- ten years laterwe have 597,640 pensioners, but the sum paid out in this year has risen by something like 300 per cent. It is £129,132,741. So there again, despite our supposed shortcomings, we have not done too badly. I am one of those who are concerned about the tremendous cost of social services. I do not suggest for a moment that they should not be continued on the present basis, but the total expenditure creeps up year by year. Where will it end? I know that, from time to time, contributory pension schemes have been suggested - and objected to - but I should be much happier if a committee were appointed to go into the whole matter. A scheme complementary to the contributory scheme might be necessary. In any event, an investigation would be well worth while.

For some time now the Government has been criticized up hill and down dale for financing capital works out of current revenue, instead of from loans. Every one should know that all available loan moneys have been handed over to the States, yet we still hear the same old argument. If loan money had been available the burden of paying for capital works by taxation would not have fallen so heavily on the present generation. We may be accepting a heavier burden for the time being, but our children, and prosperity, will benefit thereby. I suggest that we can carry these burdens. We have never been better off financially. We have never had a higher standard of living and, much as we may deplore the financing of works in this way, we have very little option.

Senator Wright:

– Does it not also have an inflationary effect?


– Yes, but what is the alternative? Should we curtail our works programme? Ours is a young country which is developing quickly and we may have to accept a mild degree of inflation if we wish the trend to continue. Many honorable senators have had the experience of trying to develop private undertakings. They know that sometimes it is necessary to get into debt in order to expand. Unfortunately, Australia must do that also.

Senator Wright:

– But the Government does not get into debt. It raises the money by way of taxation.


– The alternative is to borrow more money from outside the country. The amount available in Australia is already accounted for by the States. When I said that we were never better able to carry the added burden I had in mind the fact that the figures to March, 1959, show that savings banks deposits amount to £1,349,300,000, an average of approximately £135 for every man, woman and child in the Commonwealth. That is easily the highest figure ever attained. Senator Wright, who is interjecting, will be able to put his viewpoint later. I have certain views, and I am sticking to them. Only yesterday I read in the press that the average weekly wage in Australia had reached the record figure of £20 a week. Despite this, we have been told by Opposition members that our standard of living is not as high as it should be; that every one is in distress; that everywhere there is woe with a capital “W”.

The Government has also been criticized on the ground that too much capital is coming into this country from overseas. It seemed to me very ironical that that should be alleged. Indeed, I detected a note of envy in the voices of honorable senators opposite. Doubtless they recall the very low financial reputation that this country possessed only a few short years ago. Today, Australia is looked upon as a very good financial risk, and a great deal of money is available for investment here. Apparently, the Mr Isa railway project has not yet made the grade.

One other factor to which little prominence has been given is the reduction of £91,635,356 in our public debt during the last twelve months. That is a huge sum. Every one will agree with me on that. I think that we should take it into account when we are considering what the Government has, and has not, done. I have obtained my figures from -the AuditorGeneral’s report. If I am wrong, he is wrong also.

I turn now to housing, another field in respect of which criticism has been levelled at us. We must remember that 490,000 immigrants have come into this country. Homes have had to be found for them. We have not caught up with the lag, and 1 shall not be so foolish as to prophesy when that might happen, but the Government’s housing record will stand up to examination.

In another place our war service homes policy was criticized. A few weeks ago 1 had an opportunity to inspect some of our war service homes in company with the Deputy Director of War Service Homes for New South Wales. I was very glad to have that opportunity. 1 have been more than a little interested in this subject because a few months ago I joined the ranks of those who were looking for a home. In the event, my knowledge was improved to the detriment of my bank balance. I looked at these houses with a critical eye and inspected many with a view to purchase. The homes that we saw were well built and well finished. They seemed to be very good value for the money demanded. Another factor which pleased me was that one did not see 20 or 30 other houses in the same street exactly the same - designs varied. That important matter is very often overlooked by housing authorities. I should like to pay tribute to the splendid value offered the buyer of homes built under the war service homes scheme.

Another criticism has been that the Budget has been of no assistance to primary producers. As ohe who has been a primary producer all his life I would remind the Senate, and many of my fellow producers, of the many benefits that we have received since the Menzies Government took office. We have received benefits worth millions of pounds from the trade treaties negotiated by our present Minister for Trade (Mr. McEwen). We have received tax concessions which -were unheard of, and indeed undreamed of when we had a Labour government. Because of this treatment, primary producers are now in a far better position to withstand a fall in the sale of their products, or the ravages of a drought, than they were years ago. This assistance has enabled them to build up their capital assets. The Treasurer has seen to it that they have not been able to build up great amounts of liquid funds at the same time. I point out that, in addition to all this assistance, the Government makes provision in this Budget for £13,000,000 to :be expended upon assistance to the dairying industry. Further, we know that recently a committee was set up to inquire into all aspects of that industry, and, in all those circumstances, it is obvious that the criticism to the effect that this Government has not assisted primary producers will not stand examination. 1 come now to the postal proposals contained in the Budget; and they call for a drink of water! I am one of those who are strenuously opposed to the proposals outlined in the Budget for increasing postal charges. I am very pleased indeed to know that Cabinet has undertaken to reconsider its proposal relating to the minimum rate of postage for I felt that it was unjust. In common with many others, 1 am hoping that there will be a reconsideration of the other proposals, for I feel that if the proposed increases are persisted with they will strike a very heavy blow at our country newspapers in particular. I am more concerned about the effect upon our country newspapers than 1 am about the effect upon metropolitan newspapers because the country journals give us far better, unbiassed news. These country newspapers have to meet many charges that the metropolitan newspapers are not required to pay. Further, with television in the offing, competition for advertising wil] certainly be very much stronger than it has been in the past.

Although the proposed increases in telephone charges are not palatable, it has to be remembered that during the last few years we have seen a tremendous improvement in telephonic communication throughout Australia, and I pay tribute to the PostmasterGeneral (Mr. Davidson) and his department for the work they have done. But while I bear with some fortitude the proposed increase in telephone charges, I cannot look with pleasure at the proposal to increase postal charges to newspapers. I feel that I must voice some protest there.

If we were to have increased postal facilities to compensate for those increased postal charges in country districts, it would not be so bad, but, as I see the position, we are not to have this benefit. Already a number of towns throughout New South Wales have suffered a curtailment of their postal services by reason of the fact that the Cahill Government has restricted the rail services to them. The town in which I live - Gilgandra, in the central west - is one of them. The train service to that town has been cut out on one day of each week for the past twelve or eighteen months and no alternative means of getting mail to it has been adopted by the PostmasterGeneral’s Department, despite the many requests and suggestions that have been made. 1 know that all mail is to be carried by air, wherever that is possible, but this facility is not available to Gilgandra, nor does it look like being available within the near future. Coonarbarabran, about 60 miles away, has also suffered from a curtailment of rail services, but it might be possible to have mails carried by air to a village about 30 miles away and thence to the town.

I mention those points to illustrate the problems confronting people in country towns. With the curtailment of train services, many towns will be faced with restricted postal facilities. If, in addition to this restriction, the people are to be asked to pay increased postal charges, it will simply be a matter of rubbing salt into the wound. I sincerely hope that the Government will see fit to modify its proposals. I know that if we look at the matter from the point of view of pounds, shillings and pence a very good case can be made for increasing postal charges; but why double them overnight? If financial leeway is to be made up, it would be far more equitable and far more sensible to do it gradually than to take the drastic step outlined in the proposals now before us.

I appreciate that postal matter is carried to many outback districts at a rate very much below the actual cost, but, if we are to develop the country, if we ask people to go out into these areas, we must give them some encouragement to put up with all the other disabilities they suffer through living great distances from lines of communications, cities and towns. The fact that we are losing money on the postal services in these districts does not worry me one scrap, because, if these people were not living out there Australia would not be developing. For those reasons, it is up to those of us who are not living so far out to bear some of the burden.

Senator Wright:

– They ought to be given telephones free of charge.

Senator McKELLAR:

– There is something in that suggestion, but I shall not pursue that aspect at this juncture. On the whole, I think the Budget is another of the many that have tended to foster the productivity, development and progress of the country, and I have very much pleasure in supporting it.

Senator RIDLEY:
South Australia

.- At the outset, I should like to support the sentiments of my colleague, Senator Dittmer, in expressing appreciation of the courtesy and helpful advice extended to us by Mr. President and all honorable senators. It is obvious that, while some of them may have been here for very many years, they have not been here so long that they have forgotten the difficulties associated with new membership of the Parliament. Each and every one of them has gone out of his way to assist me, and I am thankful for it.

I rise to support the amendment moved by the Leader of the Opposition (Senator McKenna). I am certain that if the whole question could be discussed free from party political allegiance, the censure would have the support of the vast majority of Australians. The censure is directed as much at the omissions as at what are considered to be errors in the proposals, because they have just as big an effect. To my mind, the lack of any indication whatsoever that there will be any remission of the sales tax which has been added throughout the years to various consumer commodities, is one of the most serious omissions. Honorable senators on this side have devoted a great deal of time to criticism of sales tax as a worthwhile, honest medium of raising revenue. I think the fact that it is not an honest medium is generally recognized and conceded. To my mind, it is equally repugnant to use that form of taxation as a method of either curbing expansion or of creating unemployment in any industry.

I propose to devote my contribution to the debate to my experience of the effect of increased sales tax on motor vehicles in the motor-body building industry; When sales tax was increased to its present level, both the Prime Minister (Mr. Menzies) and Mr. Holt, who was then Minister for Labour and National Service, said that the purpose was to reduce imports of petrol, thus saving dollar expenditure. It was stated also that any unemployment resulting would not be in the nature of real unemployment, but would only be disemployment. I. understand that as a result of representations by both the trade union movement and certain companies engaged in the industry, the Prime Minister was satisfied that the increase in sales tax had achieved the purposes for which it was designed: I can only assume, from the lack of any mention of it in the present Budget proposals, that that satisfaction is shared by members of the Government as a whole.

I quarrel with the Government on that issue for a number of reasons. To my mind, it is clear that the expectations of the Government when it increased sales tax on motor cars were not fulfilled, and continuance of increased sales tax is not good government for these reasons -

  1. It created unemployment in the motor vehicle industry;
  2. There was a disparity in its effect as between States;
  3. There was a disparity in its effect as between company and company;
  4. It was a handicap to Australian manufacturers in competition with overseas companies;
  5. It treated the motor car industry as a luxury industry;
  6. It was a visible or invisible tax on every section of the community; and
  7. It caused a depression of the living standards of the Australian people, with only an infinitesimal, if any, saving in the consumption of petrol.

The reaction of the workers in the industry who were dismissed gave the lie to the old saying that a rose by any other name would smell as sweet. In other words, the coining of the word “ disemployment “ meant little to the fellow who was dismissed. It was not true to say that the measure did not create unemployment. The recession caused in the motor industry by sales tax increases did create unemployment. Many of the people who were dismissed are still unemployed. Others, after long periods out of work, are now employed in jobs that are completely unsuitable for them and most certainly of a standard lower than that which is warranted by the years of service they gave to the industry from which they were dismissed.

I shall cite Chrysler Australia Limited as the best example, at least in South Australia, of the effect of increased sales tax. At the time the Chrysler company employed 4,500 people; the number was reduced to 1,800. This meant that nearly 3,000 employees were dismissed. As a result of the company’s policy that shorter-term employees be dismissed first, the longer-term employees who were dismissed later found the employment market much more difficult, and many of these are unemployed to-day. I do not quarrel with the policy of the company in relation to the dismissals. I mention this aspect only to show that sales tax as a means of control of employment is not equitable. If certain flaws in the economy require correction, I cannot for the life of me believe that a more humane method cannot be found than the use of sales tax.

Conditions reached such a sorry pass in the later stages of dismissals from the Chrysler organization, when the company hoped from week to week that matters would improve, that some employees took long service leave with the idea that in the three months they were away the position might improve and some of their mates would thus be saved from dismissal, only to find that they in turn were dismissed while they were on long service leave. I mention in lighter vein that a popular joke throughout South Australia was that the new definition of an optimist was a man who took his lunch to work at Chrysler’s. Although that was a joke, conditions were nevertheless nearly as bad as that. Not only workers on the floor were affected. Dismissals occurred amongst employees in all sections of the establishment, because it is obvious that dismissals of that magnitude cannot be confined to people who are on productive work. The dismissals extended to men who had been employed all their lives in the motor industry, and included foremen and inspectors. Some of the men had become green, or too old to hold positions on the production line. Thy became unemployable after leaving the company which had engaged them for so many years.

At the time that sales tax was increased, both the Prime Minister (Mr. Menzies) and the Treasurer (Mr. Harold Holt), who was then the Minister for Labour and National Service, said that the object of the increase, apart from effecting a saving of petrol, was. to discourage employment in the motor industry. They said there might be some disemployment, but not unemployment. I shall quote the case of Chrysler Aust; Limited in order to prove that this step did far more than discourage employment in the industry. If that was all it did, I do not think it would have been regarded as altogether obnoxious. But what it did, in fact, was to cause the dismissal of people who had helped as much as anybody the establishment of the motor car industry in Australia. If there has to be some sort of control in the industry, the Government should apply a method other than one that causes misery. I say this advisedly, because misery was caused to many thousands of people. It has been reliably computed that for every person dismissed from the motor industry proper, at least one other employee is dismissed by the sub-contractors and the suppliers of materials.

I wish now to deal briefly with the comparative effects in the States. It is generally known, I think, that the motor body building industry, on a mass production basis, was born in South Australia, and employment in the industry is more concentrated in that State than in other States. In other words, the percentage of factory employment in South Australia is much higher than in other States. As I have said, the position in relation to Chrysler Aust. Limited was particularly bad. If the effect of increasing sales tax had been even in relation to motor companies throughout Australia, the effect on South Australia would still have been greater because of the greater percentage of employment in that particular industry. As I have pointed out, the employment opportunities in other industries are fewer in South Australia than in the eastern States. I believe that, for a law to be good, the effect of it must apply equitably in the various States, but I could not be convinced that the effect on South Australia of the increase of sales tax on motor vehicles was not much greater than on the other States.

The third point that I have made, on which I wish again to touch briefly, is that the increased sales tax has had a disproportionate effect on companies dependent on the value of the product they manufacture. This factor accounts for the disproportionate effect on Chryslers and, to a somewhat lesser degree, on the Ford Motor Company of Australia Proprietary Limited. The effect on the higher priced Ford cars was as great as it was on the Chrysler products, but the Ford Motor Company had its eggs in more than one basket, in that it was making two lower powered cars. Consequently, the same degree of unemployment did not occur at the Ford Motor Company’s plant. General Motors-Holden’s Limited suffered less, but the increase of sales tax did have a retarding effect on this company. It is true to say that a proportion of the workers dismissed by Chryslers was absorbed by General Motors-Holden’s. But again, the long-term employees of Chryslers - those who did not get the axe early in the piece - found, after being dismissed from the Chrysler organization, that all available jobs at GeneralMotorsHolden’s had been filled.

The effect of the increase of sales tax on the buying public was that many persons who normally would have bought Chrysler products went further down the line and purchased Holden cars. Similarly, those who normally would have purchased Holdens bought a low-powered vehicle - the Volkswagen. Any honorable senator who cares to consult the figures in relation to the sales of new motor vehicles will see that they confirm what I have said. I should mention in passing that the Volkswagen is not constructed of Australian components. The engines and body panels are imported, and the vehicle is assembled in Australia. However, I understand that the company is now tooling up to enable body panels in future to be pressed in Australia. It will be seen that there was a disproportionate effect on Chryslers, because they were in the higher price range but nevertheless there was an effect on Holdens with high Australian content and less on other cars having little or no Australian content.

The fifth point I wish to make is that the effect of increased sales tax on motor vehicles has been to handicap Australian manufacturers in their competition with overseas companies. It will be recalled that in the immediate post-war years the Chifley Government encouraged motor firms to increase the Australian content of their cars, the idea being to make available more employment to assist in the rehabilitation of ex-servicemen and to provide jobs for immigrants. Furthermore, in the event of another war occurring, we would have in this country factories which, practically overnight, could be converted to the production of munitions. Skilled employees could be transferred from the making of dies and tools and patterns for motor cars to the production of munitions. It has been said that the difference between a motor car factory and an assembly factory is that the latter need be little more than a roof over a paddock. That statement is pretty nearly correct. A factory which assembles motor vehicles with imported engines and chassis but Australian panels requires no tool room pattern shop, and no developers. It does not require the technical staff that is required in the case of a motor car wholly developed in Australia; so a comparison between the two establishments is impossible to make. One requires a large organization and the other, as I have mentioned, needs little more than a roof over a paddock.

Another point that I want to mention, Mr. President, is the tendency in some quarters to regard a motor car as a luxury. I think that only a little thought is needed to realize that that is not so. With due deference to the members of the Australian Country Party on the opposite side of the chamber, I believe that they would find it extremely difficult to convince one of their farmer supporters that a motor car was not necessary for him in this day and age. By the same token, I believe that it would be difficult to convince a businessman that a motor car was not essential for him in carrying out his business.

The worker, on the surface at least, perhaps has the weakest argument for car ownership, but possibly in the long run it will turn out to be the strongest. With the spreading of the cities into suburbs and the undoubted fact that public transport has not kept pace with such development, we can visualise the chaos that would be caused in industry if every motor car, at a particular time, went out of use. The dislocation would be much greater than in the case of a stoppage of public transport. Generally speaking, during a stoppage of public transport motor cars that were not being used could be pressed into service to enable employees to get to work, but I think that public transport would find it impossible to cope with the number of people who, in this day and age, use motor cars to travel to and from work, if the people ceased to use their cars.

Let me turn for a moment to a broader aspect of this matter. Improved production methods and scientific advances have made possible the production of a motor car in considerably fewer man hours than were necessary in the past, and I believe that the benefits of those advances should be passed on to the community as a whole. It should not be made more difficult for people on the lower wage scale to own a motor car of some kind or another. It has been said, and I think it can be verified by people who are statistically minded, that a motor car can be built to-day in the time that it once took to paint a car.

The next point that I want to touch on briefly is the fact that sales tax is a tax on every section of the community. It goes without saying that sales tax is a tax on the person who buys a new motor car. Sales tax also affects the person who buys a second-hand motor car, because the prices of second-hand vehicles are governed by prices in the new car market. Sales tax is also passed on to the person who does not own a motor car but who purchases goods, because, as a natural consequence of good business, commercial firms pass on the increased cost of the motor vehicles that they use in their business by adding it to the cost of the goods that they produce. Therefore, the customer comes in for his share of the burden of increased sales tax. The overall effect is to depress living standards.

Since 1956, when the sales tax was increased to the present level, many people have purchased motor cars of less value and lower power than they would have purchased had sales tax not been increased, while others have gone into debt to finance companies to meet the increased cost of new motor cars. There may be some fortunate people who purchase new motor cars other than through finance companies, but I think they are in the minority. Because of the high rate of sales tax a farmer may purchase a Holden, although he knows that he really requires a heavier car that will stand up to the rougher usage that vehicles experience in country areas. By doing so, he is most certainly depressing his living standards. The person who would have been in the market for a new car, before sales tax was increased, may carry on with a second-hand car.

I have been told by people in the trade that although the number of cars on the road to-day is no smaller than it would have been had the recession created by the increase of sales tax not occurred, the quality of the cars on the road has slipped down the scale. It is possible that in purchasing a lower-priced car there may be an infinitesimal saving on petrol. I think it is correct to say that there are on the roads to-day more older cars than there would have been but for the increase of sales tax. Generally speaking, old cars use more petrol than do modern ones. Perhaps at a later stage I shall be able to check those statements. In any event, I do not think that the saving on petrol has warranted the hardships and miseries that have been caused.

I have made my speech brief, Mr. President, partly because of your advice. I know that I could have elaborated many of the points that I have mentioned, and I also know that I might have been a little less parochial and dealt with companies other than those in my own State. In conclusion, I am positive - and I would take a lot of convincing to the contrary - that sales tax is just as repugnant when introduced by a government as a method of control as when it is used as a method of raising revenue.

Senator WOOD:

.- I should like to say, before actually dealing with the Budget, that I was very pleased to hear Senator Dittmer supporting in his maiden speech the development of north Queensland and northern Australia generally. The honorable senator stated, perhaps due to the excitement of the occasion, that the Queensland sugar industry was subsidized by the gracious generosity and kindness of heart of the southern people. Let me say quite clearly and without equivocation that the sugar industry has never been subsidized by any people in the south. The sugar industry has not been a subsidized industry since its inception. That is a fact which no one can deny.

I think that what this Government does in respect of the industry should be made clear. It fixes a price for sugar for home consumption. That is, for sugar consumed in Australia. Lest any one may think there is generosity on the part of the people in the south, let me say that this is one of those things in relation to which there is a two-way traffic. Because of the high tariff protection that is afforded Australian secondary industries, we in the nonindustrial areas have to pay very much more for the manufactured goods we buy. Therefore we help to keep those industries in the south in production. It is one of thi reciprocal arrangements which operate in a country like Australia, and if we adopted an Australian outlook we would all be happy about it. But let me emphasize that in no circumstances do we feel that in any way whatever the people in the south subsidize the sugar industry. That is just a myth. The sugar industry operates on a price which is fixed by this Government from time to time following an investigation. No other industry has ever been subjected to the exhaustive investigation to which the sugar industry has been subjected.

The Australian sugar industry is the most efficient sugar industry in the world, but that cannot be said of some of the secondary industries whose products we in Queensland ‘have to buy. If the Queensland sugar industry were to collapse tomorrow, a lot of secondary industries in the south would suffer such a shock that they would .either wobble or collapse altogether. I have offered those comments in order to put the record straight. It is quite .possible that Senator Dittmer, as a new senator, in the excitement of the moment may have said what he did say quite unintentionally. I know that if such a statement got out to the people of Queensland, particularly to those engaged in the sugar industry, there would be an immediate reply to prove otherwise.

In addressing myself to the Budget, I wish to say that it has -been introduced In circumstances different from those surrounding the presentation of any other budget since I was elected to tb> Senate. I refer to the fact that we have u new Treasurer and that the Treasury portfolio is no longer administered by that colourful figure, Sir Arthur Fadden, who introduced so many budgets in both good and difficult days. Whether budgets have been presented .in good or difficult times, I have always expressed my honest opinion. 1 think of the so-called horror budget; 1 supported it whole-heartedly when many honorable senators on this side of the chamber were not very keen about it. 1 felt that Sir Arthur Fadden on that occasion displayed the courage of a true Australian in facing up to the responsibilities and difficulties of the time and in presenting a budget which he must have known was very unpopular. But he presented it because he felt it was the dose of medicine that the country needed at the time, add I believe that events have proved to him to be correct. I think this country owes Sir Arthur a very great debt for the many years of service he rendered not only to the Parliament but as Treasurer of the Commonwealth. I am sorry that the Commonwealth did not see fit to use his service in a financial capacity when it had the opportunity to do so.

I said that on this occasion the . Budget has -been presented by a new Treasurer. I have also stated that I have never baulked at supporting an unpopular budget. I again point out that I sood behind the horror budget when many honorable senators on this side of the chamber did not want to speak upon it. On this occasion again, I want to be quite honest and frank. I hope I shall be constructive in my criticism of the Budget. I indicate that it does not electrify me in any way. It is a budget which disappoints me in many respects. Naturally, it has many good points, but there are some aspects of it which indicate that the Government has not seized the opportunity available to it to stabilize the economy. I know that the Government, in presenting this Budget, has followed a certain trend, but I think that we in this chamber should try to be constructive in our criticsm. In looking for the theme of my remarks, I arrived at the following passage in the Treasurer’s Budget speech -

For while expansion of the economy ‘ is our objective and while we have been prepared to take strong measures and, at times, considerable risks to promote expansion, it is our belief that expansion must be founded upon a secure state of internal stability. As we all know, stability has two related aspects. One is the preservation of a balance between the demand for goods and services and the supply of these factors. The other-

This is very important - is stability of prices and costs.

I cannot see where the Treasurer, in presenting his Budget, has given effect to that last salient point - the stability of prices and costs. I refer in particular to the proposed increase of postal charges. I know that most people, when they look at these charges, relate them to the manner in which they affect the small man; but there are wider considerations than that. What concerns me is that most of this burden will be carried by business and industry. We must recognize the fact that inflation increases the costs of production and that those costs are passed on to the individual in the community. Therefore, I think it was a bad thing for the Government to consider at this stage an increase of postal charges. I cannot help feeling that the proposed charges will not do any good from a national viewpoint.

To my mind, it is essential that everything possible should be done to keep down inflation. Unfortunately, the recent basic wage rise was a further inflationary step. Honorable senators will recall that, when we debated the parliamentary salaries bill, I issued a warning about the trend that was taking place. I cannot help feeling that that trend was accelerated by the basic wage decision and by the decision of the Parliament in relation to salaries. Unless we are careful, the inflationary trend could rise more steeply than it has in the past. All our energies should be bent towards trying to keep the trend downwards rather than let it rise. To my way of thinking, increases in postal and telephone charges will be added to the costs of industry and business and in turn will lead to a rise in the prices that the people have to pay for various commodities. I feel, therefore, that in that section of the Budget the Treasurer has failed to preserve the stability of prices and costs.

To me, this Budget displays a lack of imagination and enterprise. I think that some imagination and enterprise on the part of the Government is needed to battle with rising costs in industry. Too often I have heard parliamentarians telling those engaged in industry what they should do. What does the Parliament do about keeping down costs?It is easy for us to tell industry what to do, but what do we do to help in the matter? I think that very often we help to increase costs rather than keep them down.

Senator McManus:

– By putting up our own salaries?

Senator WOOD:

– I do not wish to make any further reference to that, because I have already said enough about it. No doubt the Government had certain factors in mind when it decided to reduce income tax by 5 per cent., butI think greater success would have been achieved if the Government had taken the bold step of abolishing pay-roll tax. I think that if payrolltax were abolished, a great step forward would be taken in helping to reduce the costs of business and industry.

Senator Wade:

– What does pay-roll tax amount to per annum?

Senator WOOD:

– The pay-roll tax collections for 1958-59 are estimated to be £49,619,000, and for this year they are expected to be £53,200,000.

Senator Kendall:

– That is a fair slice to wipe out at one go.

Senator WOOD:

– It is a fair slice. However, when we refer back to Sir Arthur Fadden’s last budget, we see that the Government was prepared at that time, in order to finance certain activities, to budget for a deficit of £110,000,000. Actually the deficit turned out to be about £29,000,000, if my memory is correct. We were £81,000,000 better off than we expected. This year we are prepared to budget for a deficit of £61,000,000 or £49,000,000 less than the deficit that we were prepared to accept last year. It is estimated that the 5 per cent. income tax concession granted in this Budget will cost £20,000,000 in a full year. It will be seen, therefore, that we should have £69,000,000 to play with if we were bold enough to budget on the same deficit basis as last year and not grant the 5 per cent. taxation concession. The revenue from the pay-roll tax for this year is estimated to be slightly over £53,000,000. With a bit of courage, imagination and enterprise we could wipe out the pay-roll tax, and in doing so we would give industry the greatest shot in the arm that it has had during the whole term of office of this Government. if I remember rightly, pay-roll tax is payable at the rate of 2i per cent. In a factory where the average wage is £15 a week, the abolition of pay-roll tax would represent a reduction of costs by 7s. 6d. a week for each employee. That reduction could very well be the starting point of a downward spiral of costs in this country. Once we started a downward trend, the movement would be accelerated if everything else moved in sympathy.

When this tax was introduced, it was intended to be only a temporary tax. A friend of mine in Brisbane, Dr. Karl Langer, a noted architect and town planner, once said that there is nothing so permanent as a temporary building. I am quite satisfied that in the financial world there is nothing so permanent as a temporary tax. Pay-roll tax was introduced as a temporary measure. What a wonderful opportunity the Government had to wipe out the tax completely and demonstrate that it is out to help industry to keep costs down. I know that the Government has missed the opportunity to do that on this occasion, but I hope that it will take advantage of the opportunity that offers when the next Budget is being prepared.

I admit that over a period of time the Government has eased the pay-roll tax in a certain direction, but I think it has done so in the wrong direction. This tax does not apply to a business or an industrial undertaking where the wages bill does not reach a certain amount each year. Each time an alteration has been made in this tax. it has been made on that basis. To my way of thinking, the only way in which to obtain a real benefit from a reduction in pay-roll tax is to reduce the rate of tax so that all industries and all businesses get the benefit. Most of the manufacturing concerns in this country employ more people than the minimum number specified for exemption from the tax, and as a consequence, the costs of industry are not reduced by the method of easing the tax which the Government has been adopting. I suggest to the Government that it give consideration to this matter when the next budget is being framed. Nothing can be done now, but the Government should seize the opportunity to do something in the next budget. If it does so, not only will it reduce costs in industry, but also it will give industry an impetus by making it feel that the Government is out to encourage a reduction in costs, and is not content just to lecture the leaders of industry, as it has done so often.

To my mind, the Government has a marvellous chance now to do something constructive. It must be admitted, of course, that if the Government did abolish the pay-roll tax, that action would be of benefit, not only to industrial undertakings by enabling them to reduce costs, but also to a number of businesses which are not engaged in production. 1 refer, for example, to businesses employing only office workers. Such businesses would make greater profits because of the abolition of this tax, but the Government would get back a fair proportion of the money it had lost in pay-roll tax because of the greater profits on which taxation would be levied. I make my suggestion to the Government because I feel it is a constructive one, and, if acceded to, would have a beneficial effect throughout the nation.

Serious consideration should also be given to reducing the sales tax, although I know that this tax has become a very important source of revenue. We remember that a few years ago the sales tax on certain items was increased. I think a concentrated effort should be made to reduce the sales tax. If goods are cheaper, more people will buy them, and we shall have less unemployment. I am one of those who are not greatly worried about increased consumer demand. I think that we want a greater consumer demand, because there are certain ripples so far as employment is concerned in various regions. I feel that it would not do any harm if there were a stronger demand for goods produced in this country. That, I think, is another aspect of the Budget to which close consideration should be given.

The Government, in my view, should concentrate every effort on reducing costs in industry. It can do more in that way to strengthen our economy than by granting concessions which are not really vital to the development of our industries. Those are the suggestions I wish to make so far as the Budget itself is concerned. I think that consideration should be given to the abolition of the pay-roll tax and to the continued reduction of the sales tax. The

Government should stretch itself to the utmost to accomplish those two things. If it does so,I think it will find that the task is not nearly so difficult as might be thought at the present moment.

The next subject with which I wish to deal is development. Senator Dittmer, the new senator from Queensland, devoted most of his speech to this subject. I am very glad to see a member of the Opposition who comes from my own State taking so keen an interest in this subject. Development is vitally important for Queensland, because it is a big State. The difficulties are great, but so also are Queensland’s natural resources. Every effort should be made to develop those regions of Queensland and other States which would repay such concentration of effort.

I know that the Commonwealth Government has given help to Western Australia to develop the north-western part of’ that State. I am one of those who believe that if development can be achieved in various parts of this country, the effort should be made. I feel confident that the northwestern part of Western Australia has a great future and that any money spent there will prove to be a sound investment. I think it can be said that government after government has done a great job in developing Queensland to the present extent. If you look at a map of Queensland, or tra vel through the State, you will find that, in proportion to its size, it has the best over-all development of the larger States. A great deal of credit is due to successive State governments for the rail transport system, for instance, which extends far and wide. However, now that the Commonwealth has become the master of finance, collecting nearly all the taxes levied in Australia, it should give close and sympathetic consideration to the needs of Queensland.

I want to refer to the development of the Mr Isarailway line and to the Mary Kathleen area. Yesterday the Minister for National Development said that there might not be a renewal of certain agreements relating to uranium. Naturally that is a matter of great concern to the company operating at Mary Kathleen. I ask for leave to continue my remarks at a later stage.

Leave granted; debate adjourned.

Senate adjourned at 4.46 p.m.

Cite as: Australia, Senate, Debates, 27 August 1959, viewed 22 October 2017, <>.