23rd Parliament · 1st Session
The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 3 p.m., and read prayers.
– Has the Minister for Shipping and Transport seen reports of the statements made by the Premier of South Australia in the House of Assembly on Tuesday and Thursday of last week? Will the Minister comment particularly on the points made by the Premier, first that the basic difference between the State and the Commonwealth on railway gauge standardization was probably the question of the branch line of the Peterborough division, and secondly, that the standardization agreement on rolling stock was “ completely departed from “? Will the Minister comment also on the Premier’s claim that, so far as he could see, “ the proposals are foreign to us and a complete departure from what was put to us “? Is the Minister prepared to inform the Senate of the proposals that were put to South Australia?
– I have seen reports of the statements made by the Premier of South Australia in the House of Assembly. The rights and obligations of the Commonwealth and the State of South Australia under the Railways Standardization Agreement (South Australia) are set out in the Railway Standardization (South Australia) Agreement Act 1949. Clause 9 of the agreement states that any question as to the order and timing of standardization works will be determined by agreement between the parties. I emphasize that, because in all his statements the Premier of South Australia seems to have overlooked that clause of the agreement. If I may say so, the Premier seems to take the view that the priority and timing of these works are matters for his own personal resolution. The terms of the agreement make it plain that they are to be agreed upon between “the parties. , ,
The policy of the Commonwealth was clearly stated by the Prime Minister in his policy speech of October, 1958, when he said that where it could be shown that gauge conversion would bring tangible results commensurate with costs, the Commonwealth would consider assisting the State concerned to carry out the work, taking into account priorities amongst other developmental works. As honorable senators already know, the Premier of South Australia has made certain proposals to the Commonwealth about the standardization of the Peterborough division. It has been agreed with the Premier that, as a first step, the Commonwealth and the State of South Australia should consider the standardization of the Broken Hill to Port Pirie section. The Commonwealth Railways Commissioner has reported to me on the proposed conversion of this line and his report was communicated by me to the Premier on 2nd October. I told the Premier that I would be pleased to discuss with him at an early date whether or not, following examination of the situation by the Commonwealth Railways Commissioner and the South Australian Commissioner of Railways, he wished to vary the proposal which he had asked should be submitted to the Commonwealth Cabinet. I can only say that at the moment I am still awaiting a reply to the request I made to the South Australian Premier.
The” PRESIDENT. - I wish to inform the Senate that the Honorable Tunku Abdul Rahman, Prime Minister of Malaya, is within the precincts- of the Senate. With the concurrence of honorable senators, I shall invite him to take a seat on the floor of the Senate.
Honorable Senators. - Hear, hear! (The Honorable Tunku Abdul Rahman thereupon entered the chamber, and was seated accordingly.)
– I wish to ask the Minister for Shipping and Transport a question supplementary to the one asked by my colleague, Senator Pearson. In the report of the statement by the Premier of South Australia the following passage appears: - . . but I cannot but feel that South Australia’s Broken Hill line is being more and more pushed into the background.
Will the Minister explain whether that is so or whether it is not?
– I have already explained, in answer to Senator Pearson, that the Premier of South Australia made certain proposals. Those proposals were discussed in March this year, and since then there has been an exchange of correspondence and one or two conversations between myself and the Premier. There has also been this most important report to which I have referred, and which was forwarded to the Premier on 2nd October. As to the undertaking of this work, its priority, and whether it is slipping further and further back, those are questions which can be decided only after the Premier has complied with my own request to him to meet me and discuss with me this proposal which emanates from the report of the Commonwealth Railways Commissioner.
– Then the consideration of the Broken Hill line is not being pushed further and further back?
– As to where this work lies in the priority of Commonwealth works, that matter can be decided only after we have discussed this particular report of the Commonwealth Railways Commissioner.
– I preface my question to the Leader of the Government by saying that before the adjournment of the Senate nearly a fortnight ago I asked him whether he would discuss with the Prime Minister the possibility and advisability of taking with him, when he visits Indonesia and Malaya, an all-party delegation from both Houses of this Parliament. I ask the Leader of the Government whether he has had a chance to discuss this matter with the Prime Minister. If he has not, will he do so in the coming week because of shortage of time? Will he ascertain whether it is possible for the Prime
Minister to take this all-party delegation with him on his visit to both Indonesia and Malaya because of the obvious advantage that would accrue therefrom?
– I am sorry, but I have not discussed the matter with the Prime Minister. I shall endeavour to do so. Upon reflection, I do not think that it would be appropriate for such an all-party delegation to be led by the Prime Minister when he was visiting the country concerned as the representative of this country, not so much of this Parliament.
– I direct a question to the Minister representing the Minister for Primary Industry. Has he seen a published statement, credited to a visiting international wool promotion expert, that there is a fear that hire-purchase commitments will prevent people throughout the world from purchasing woollen fabrics? Does the Minister share this view? If he does, can he say what steps are to be taken to safeguard the future of our great wool industry?
– I have read some press reports of remarks on the lines mentioned by the honorable senator. The remarks were attributed to two visiting wool promotion experts - one from France and the other, I think, from Belgium. I cannot say that I take the gloomy view that the press attributed to them. If I remember correctly, they spoke about rising living standards throughout the world having led people to become engaged in hire purchase. I should have thought that rising living standards throughout the world would lead to an increased demand for wool, rather than to a decreased demand. After all, wool is the material which makes the bestwearing and best-looking clothing fabric of any yet invented. I remember that one of the people to whom I have referred concluded his remarks with words to this effect: “ Nevertheless, I feel that the future for wool will be as bright as ever it was, provided that production and research go hand in hand “. I remind the honorable senator that very early in the new year there will be marketed here, and throughout the world, drip-dry woollen clothing, such as men’s shirts, children’s clothes and women’s clothes of various categories. I think this will prove that research and promotion have increased, and will further increase, the demand for wool.
– My question is directed to the Minister for Civil Aviation. The increases in air fares, the charges for transport to and from airports and the reduction of meal services on aircraft have now been in operation for some time. Will the Minister give urgent attention to a review of the effect of these alterations? Will he request the airline managements to introduce a less irritating procedure for obtaining bus tickets? At present, intending bus passengers cannot obtain bus tickets and board the bus until all embarking passengers and their luggage have been checked to board the aircraft, and consequently the departure of the bus from the airport is delayed. Will the Minister also closely examine the rapid deterioration that is taking place in the quality of the ingredients used in the decoctions that are now served in place of the meals that were previously a feature of long-distance air travel? Will the Minister have the closest surveillance made of the new order in air travel so as to ensure that the high reputation previously held by our airlines will not be tarnished in order to obtain the miserable savings that may accrue from this reduction of standards? Will the Minister confer with the airline operators with a view to their making an increase in their charges and reintroducing the high standard of airline travel previously enjoyed in this country?
– I cannot emphasize too strongly that the variations which have been made by both operators-
– At whose instigation?
– If the honorable senator will possess himself in patience for a minute, I shall tell him. I repeat that these variations were introduced by the operators by common consent. If there ls, as the honorable senator suggests in his question, some deficiency in the service which is provided to air travellers in relation to the obtaining of tickets for transport to the city, I shall certainly be quite prepared to discuss with the airlines whether it is possible to improve that service.
As to the meals and what the honorable senator described as a decoction-
– A mess of pottage, or a proper mess.
– Whatever the way the honorable senator cares to describe the meals, I think I can say that, as a Western Australian, I have probably more experience of long runs than he has. Having travelled by both lines since these adjustments were made, I can only tell him that, in my view and in the view of people with whom I have travelled on both airlines, the meals provided are adequate in every way.
– When provided.
– On the Western Australian run, in which Senator Tangney is particularly interested, they are provided at normal meal times. In reply to the question asked by interjection by Senator Sheehan, let me say that these variations were notified to me by both airlines as having been agreed upon by both airlines simultaneously. I am very well aware of the suggestion that some sort of pressure has been brought to bear. The fact that both airlines reached this conclusion and notified me simultaneously of their views completely dispels that suggestion.
– I address a question to the Minister representing the Minister for the Army. Does the Commonwealth Government, and the Minister for the Army in particular, encourage Commonwealth governmental or semigovernmental authorities or instrumentalities to grant leave to its employees to attend Commonwealth Military Forces camps? If this is so, can action be taken to inform the relevant heads of departments and/ or instrumentalities in Tasmania of this policy? Will he invite the attention of the Minister for the Army to a statement of LieutenantColonel E. B. Le Fevre, the Commanding Officer of the 2/40th Battalion, now in camp, that he was very pleased with the co-operation of private employers and firms in making men available for camp, but that unfortunately some Commonwealth governmental or semi-governmental authorities or instrumentalities had not been so co-operative?
– I did not see the newspaper article referring to the statement by Lieutenant-Colonel Le Fevre, but I shall certainly take the first opportunity to bring the matter to the notice of the Minister for the Army. I am confident that the federal departments in Tasmania desire to help in every way, as does private industry, in the granting of leave, where that is possible,, to enable members of the C.M.F. to attend camp. However, I shall ask the Minister for the Army to have a look at the matter, and if there are departments in Tasmania that are not as co-operative as they perhaps might be, we can have the position overhauled. :v«V
– The .Minister representing the Minister for the Army will remember that on 22nd’ October last I asked a question concerning a broadcast by certain Victorian radio stations in which reference was made to the inadequate ‘provisions for troops participating in’ a camp held at Puckapunyal. The’ Minister ;’was kind enough to reply, stating that he nad had the matter investigated and that, from information he had received, it would appear that the 6th , Infantry Brigade was involved. He further stated that! he was satisfied, as a result of his investigates,’ that there was no insufficiency of rations,1 nor was anything lacking in their : preparation in company kitchens. In his letter to me, the Minister said - ( » - However, due to lack of experience; which is after all a reason for the training of the C.M.F., the distribution from the kitchens to the troops was, in isolated instances, below standard in the early days of the camp. 1
As the camp progressed the trainees profiled from their experience, and, before long, the distribution of meals throughout the units of -the brigade was up to standard. ,)r
In view of the number of years in which camps will be held at Puckapunyal, and. in the light of previous experience, . can the Minister say whether any steps have been taken to prevent a recurrrence, of the trouble complained of? If no steps have been taken, why has nothing been done? What does the department- intend (to do=k obviate this trouble in the future?
– I think that from time immemorial there have been instances’ of complaints such as this. Those of Ms who have attended these camps have found breakdowns in the kitchen department ‘‘at’ times, but I shall bring to the Minister’s notice again the questions raised by Senator Sheehan. I do not know what further steps, if any, have been taken. I asked the Minister for the Army to reply direct to the honorable senator and therefore did not see the letter received by the honorable senator. If he will be good enough to let me have a copy of it, I shall again refer the matter to the Minister for .the Army for any- further information the “honorable senator wishes.
; Senate^ DRAKE BROCKMAN-Is the
Minister; for -Shipping ‘and Transport aware at there -is an. -acute, shortage of water piping; of all descriptions in Western Australia? Is be . aware, that this shortage is due to the fact that shipping facilities from; the eastern- States were not available between. -5th July and 27th August of this, year?–. Is the Minister aware that fencing wire, and baling wire are also in very short supply, . due to the lack of steel rods? Is. he aware that although recent shipments have arrived at Fremantle there is a backlog of unfilled orders covering a period of from five to six weeks because, of the previous lack of 1 1 shipping facilities? -Is. the Minister -aware that the shortage of baling wire, at this time of the year could seriously affect hay-making operations ‘which are unusually important this year because of seasonal conditions? In view of the serious, effect this;, state of affairs will -have *on agricultural ; production unless remedied, will the Minister take prompt action towards, ensuring _the-, immediate shipment Qf supplies. of piping and steel rods /from the eastern States to Western Australia? In< order-‘’ to ‘ease, the grave concern of farmers, will he advise -me what action he proposes to take? :
– I direct a number of questions to the Minister representing the Minister for Immigration. By wayof preface, I ask the Minister not to regard this as being merely an individual instance of complaint, as it is, I think, symptomatic of a number of cases that have come before our attention lately in relation to dissatisfied migrants returning to England from Australia. An articlein an English paper bearing a large banner headline “ Left to rot “ has been sent to me. Articles of this kind leave a very bad impression of Australia with the Britishpublic.
Is the Minister aware of the extent of adverse publicity given in some sections of the press to dissatisfied migrants returning to Great Britain? As newspapers declare, as in the “ Nibre “ case, that there has been a slip-up in the sponsorship system, will the Minister inform the House what steps are taken in Australia to ensure that sponsors are in a position to carry out the responsibilities they have assumed? Will the Minister inform the Senate of the exact details of the investigations made by migration authorities in England to ensure that wouldbe. migrants are psychologically and physically fitted to comply with the standards required for migration to Australia? What steps are being taken by the department to counter such propaganda as is evident in the edition of “ People “ of Sunday, 13th September, 1959, in which it is stated that British migrants are left to rot in Australia?
– I think it is fair to Say that some sections of the British press do not approve of migration from Great Britain and that they have a vested interest in trying to stem it. I ask the honorable senator to put the question on the noticepaper, so that I may get a full reply from the Minister for Immigration.
– I direct a question to the Minister representing the Minister for Primary Industry. In view of the world overproduction of pearl shell, can the Minister advise me whether Japanese pearlers, by arrangemen with the Australian Government, fished mother-of-pearl in Australian Waters’ this year? If so, when did they arriveand when did they depart? What quantity of shell did they fish, and how does this quantity compare with their production last year?
SenatorGORTON. - Japanese pearling luggers come down to fish waters in the north of Australia each year, under arrangement and under observation. They came down this year and operated during the fishing season, which extended from about June until October. I do not remember the quantities fished by the fleet this year or last year, but I do remember that the amount fished this year was less, by 20 per cent, or a littlemore, than the amount fished last year. The fleet, during its sojourn in Australian” waters, is under the control and observation of the Australian Navy, in thisinstance represented by the ocean-going tug “ Emu “.
– I ask the Minister for the Navy two questions without notice. Accordingto the: press, the Government intends to purchase half a dozen submarines. Is this true? If it is, can the Minister say whether they be modern submarines or vessels discarded by Britain because they are obsolete?
– I can say only two things to the honorable senator First, he should not believe everything he reads in the press. Secondly, if he does read things in the press, he should read them correctly, because the press stated that we were going to purchase eight submarines, not half a dozen.
– Recently, I asked the Minister for Customs and Excise for information as to duties imposed on synthetic fibres that are in competition with wool. I now ask the Minister whether he is in a positionto give that information to the Senate.
– I undertook to get a short statement on this matter. I now have it, and it reads as follows: -
The more important fibres which may be regarded as competitive with wool to some degree are: -
Polyamides - including nylon and perlon; Polyesters - including terylene or dacron; Acrylics - including orlon and acrilan; and
Cellulosic - including viscose rayon, cuprammonium rayon and acetate rayon.
When imported in the form of tops or rovings these synthetic fibres are dutiable as follows: -
Polyamides, polyesters and acrylics - 171/2 per cent, from British preferential tariff countries, 50 per cent from mostfavourednation countries, 60 per cent, otherwise.
Cellulosic - free from British preferential tariff countries, 74 per cent, otherwise.
At the present time, because of lack of availability of synthetic fibre tops from Australian production, by-law admission is granted as follows: -
Polyamides and polyesters - free from British preferential tariff countries, 71/2 per cent, otherwise.
Acrylics but not including orlon - free from British preferential tariff countries, 71/2 per cent, otherwise.
Orlon and cuprammonium rayon - free from all countries.
The honorable senator may also be interested to have some comment on synthetic fibre yarns and piecegoods.
The duties on spun synthetic fibre yarns have recently been reviewed by the Tariff Board. The new duties on these yarns are incorporated in the Customs Tariff Bill (No. 5), which is now before the Senate. Piecegoods of synthetic fibres are at present under examination by the Tariff Board.
– The reply just read by the Minister for Customs and Excise involved a good deal of technical matter. It might be as well if Ministers obtained leave to incorporate such answers in “ Hansard “ without reading them.
– Some weeks ago
I asked the Minister for Customs and Excise whether anything could be done to recall or suppress films showing in South Australia purporting to expose social evils which, in fact, do not exist in the Australian community. Has the Minister any answer for me yet, as I consider the matter to be urgent?
– I have an answer which, although not technical, is somewhat long; it runs into four or five paragraphs. With the concurrence of the Senate I shall have it incorporated in “ Hansard “. It reads -
A number of films dealing with the drug traffic, the white slave traffic, prostitution and other social evils have been passed by the Film Censorship Board. The themes disqualify them for receiving a General Exhibition certificate and they have been classified to the effect that they are not suitable for children. In most cases the Board, to emphasize this fact, has imposed a further condition that all advertising matter should clearly indicate that these films are suitable only for adults. The Commonwealth has no power to enforce compliance with these classifications which are of an advisory nature only.
In the United Kingdom and New Zealand, theatre proprietors are required by law to prohibit the entry of juveniles to theatres showing films endorsed by the censorship authorities as being unsuitable for children. Under our Federal system the enactment and enforcement of legislation of this nature is a matter for the individual State governments.
I think it will be agreed that the Customs (Cinematograph Films) Regulations should not be used to deny adult Australians the opportunity to see films which examine the various social problems of contemporary life, provided they are presented in a manner that is neither obscene nor likely to encourage the practice portrayed. Every care is taken by the Censorship Board to ensure that these films do not put forward these social evils in a favorable light but, on the contrary, show the degradation and misery suffered by those who become involved.
By endorsing films as “Suitable Only for Adults “ the Board warns parents that they are not fit for children to see. The absence of State legislation to authorize restriction of entry of children to cinemas and the fact that many parents do not assume proper responsibility for ensuring that their children do not see unsuitable films may well be deplored. However, these factors do not give authority or sanction for the use of the Customs (Cinematograph Films) Regulations to prevent registration of films which are acceptable for adult viewing.
With regard to the question of withdrawing these films from circulation I would inform the honorable senator that once a film is registered and released by Customs it passes outside the jurisdiction of my department.
– I direct a question to the Leader of the Government in the Senate, either in that capacity or as the Minister for National Development. Has his attention been drawn to the statement by Professor Linus Pauling at a gathering in Melbourne quaintly called a “ Peace and Disarmament Congress”, that 150,000 people were doomed to die because of fallout from nuclear tests already conducted? As this statement has received wide publicity and is directly at variance with a report from the Australian Atomic Energy Commission on radiation, recently debated in this Senate, will the Minister issue a corrective statement setting this problem in its proper perspective?
– I am sorry to say that I did not read the statement mentioned by the honorable senator. Not having read it, I am rather hesitant to comment upon it. However, I confirm Senator Hannan’s statement that we did have before the Senate a comprehensive report on the effects of nuclear fallout, that we discussed the subject at some length, and that it did not lead to any alarming conclusion such as that which was attributed to the professor in the statement referred to. I shall examine the statement and discuss with, Mie chairman of the Australian Atomic Energy Commission the advisability of making some reply to it.
– I direct a question to the Minister for Customs and Excise based on a report in to-day’s Sydney newspapers that Mr. J. B. Priestley, speaking at the Australian and New Zealand Congress for Co-operation and Disarmament, said that all the good crooks have passports by the easeful. Can the Minister say whether that is so in Australia?
– I have no intimate acquaintance with good crooks. All I can say is that if Mr. Priestley is acquainted with them he is better informed on the subject than I am.
– My question, which is directed to the Minister for Custom’s and Excise, arises from the report of a decision of Mr. Justice Hudson to the effect that an innocent purchaser of a motor car which had been seized by the Department of Customs and Excise had failed in an action against the Commonwealth for compensation, on the ground that the action had not been brought within four months of what His Honour considered to be an illegal seizure. Has the Minister a copy of that judgment? If so, would he make it available to me? Will he give consideration to relieving the Commonwealth of the embarrassment of having to claim immunity from the payment of just compensation on the basis of an arbitrary limitation of time - in this case, four months?
– I have not seen a report of the case which the honorable senator brings to my attention. I will certainly have a look at it, and will examine the position. I shall also make available a copy of the judgment.
– My question to the Minister for Civil Aviation arises from that asked by my colleague, Senator O’Byrne, and concerns the savings made by reducing the standard of meals and other amenities provided during flights in Australia. I preface my question by saying that, as a Western Australian, I fly on one of the most tiring air routes in the world, but I have the strange gastronomical habit of never eating on a plane. Therefore, there is no personal bias to my question. First, [ ask the Minister - who, I think, is genuinely interested in this matter - whether he will ask the airlines to give him the figures showing the savings resulting from the grading down of the amenities and services which they provide. Will he compare the advantages gained from those savings with the effect that the reduction of amenities will have on the tourist traffic which we hope to inveigle into Australia? It is some eighteen months since he and I were overseas, so neither of us is. in a position to make a comparison personally of the amenities provided now by Australian airlines and other airlines. Will he, through the departments whose services are available to him, find out the facts and then indicate whether he still insists that the amenities provided by Australian airlines are up to world standards? Will he then honestly report to the Senate whether the continuance of these so-called savings would be in the interests of Australia and our tourist trade generally?
– As the effects of these adjustments reveal themselves, and as the figures relating to savings become known, I shall watch them with close interest. I shall be pleased from time to time, especially in regard to TransAustralia Airlines, which is the Government’s own line, to let the Senate know what savings are being effected and what, in the broad, are the effects of these adjustments on the economics of that airline. With regard to the possible adverse effect upon air traffic of the modified meal - I insist that it is a meal - on the long flights, I can only say that tourist traffic, as such, will not be affected. People who are” accustomed to patronising overseas’ airlines are not familiar with any meal Other than the type of meal which is now being served on our aircraft. It is true, as Senator Willesee reminded me, that it is’ eighteen ‘months since 1 was overseas. In fact, it is rather more. However, I keep myself very closely informed on these matters and frequently 1 have occasion to examine the menus that are provided by overseas airlines. I can assure the honorable - senator that what is now provided by our airlines is at least equal to that provided by the domestic airlines of any other country.
-;- 1 ask the Minister representing the Minister for Primary Industry: Is it a fact that’ a quota for the production of margarine is allocated to each State by the Austraiian Agricultural Council? If so, what quotas ate allocated to the States? Are they adhered to?’ What percentage of the components necessary for the’ production of margarine are imported? What is’ the total margarine production and the’ total butter consumption’, in “Australia?
– I cannot supply the detailed figures for ..which I am asked, and would therefore be /glad if. the honorable senator would put his question on notice. Each State is given a quota for the production of margarine, and the. figures are fixed by agreement between the States.
– My question to the Minister for Civil Aviation, though related to earlier questions on the subject of meals, is somewhat different in nature. It concerns the supply of meals to the crews of aircraft, and has nothing to do with the supply of meals to passengers. I understand that on the moderately long air routes no meals are supplied to crews or hostesses by the two major airlines. I am informed that, for example, no meals are supplied to the pilots or hostesses of the aeroplane which leaves Adelaide at about 6 a.m. on Tuesday and does not return until 1 p.m., and that the crew cannot get a proper meal until then. Is that the case? If so, will the Minister be good enough to consider whether air crews should be required to fly from early in the morning until 1 p.m. - or for similar periods - without being given proper meals?
– 1 am not aware that the situation is that described by Senator Vincent. If it is, I shall be very surprised indeed. Moreover, if there is a rule that meals should not be provided for those on the* flight deck or to the hostesses, it is honoured in the breach rather than in the observance.
– I wish to ask the Minister for Cml Aviation a question’ which does not refer to increases in fares or to meals. Is it a fact that’ airline operators either prohibit or discourage the use by passengers of broadcast receiving sets in modern civil aircraft, because of possible interference with the intricate radio and radar equipment of the aircraft? In view of recent tests of television receivers in passenger-carrying aircraft -operating . between Sydney and Melbourne, will the Minister say whether experiments have been made to ensure that the operation of television receivers will not cause interference with aircraft equipment?
– All I can say in answer .to the , very interesting question asked by the honorable senator is that I, too, have read that on recent flights within Australia television programmes have been made available to passengers. I have asked for a report on the subject from the department. My understanding of the situation is that the use of wireless receivers by aircraft passengers has not been encouraged.
– My question to the Minister for Civil Aviation is related to the recent reduction of the amenities provided, by airlines. .Tourist class passengers travelling between the eastern States and Perth are faced with many hours of flying but can have only biscuits and tea unless they have armed themselves with the iunch packs which are available for purchase at the various air terminals. A passenger may forget to purchase such a pack, or may not know that it is necessary. Can the Minister ensure that these -packs will be available to passengers on the aircraft rather than have i travellers arrive at their destination complaining of hunger as they have done, according to reports that have appeared df late in the Western Australian press? : .
– I understand that passengers who travel in the tourist section on long runs are supplied with what is described as a boxed meal.
– They have to buy it.
– A boxed mea is a meal which consists of sandwiches and fruit together with tea or coffee, according to the wish of the passenger. . The provision of these meals in the tourist section of the aircraft is one- of the conditions ‘of which the passenger is well aware before he embarks. The airlines make that fact quite clear to their intending passengers. If, through some unfortunate mischance, a passenger forgets tq provide ‘himself with anything he thinks is necessary in addition to the boxed meal, I have no doubt that the hostess on the aircraft will see that he is given an extra cup of tea or coffee.
– He has to pay . for an airline pack. . ;
– That is right. He is told when he gets on the aircraft that he has to buy an airline pack1.
– My question to the Minister ‘ for National’ Development has reference to the announcement made in the Tasmanian press last week that the Broken Hill Proprietary Company Limited is to establish a new heavy industry at Bell Bay, Tasmania. Has the Minister had any consultation with the company about the establishment of this enterprise and has he given the company an assurance that Commonwealth facilities will be made available to enable the successful economic establishment of -that industry?
– I have not had any direct communication with the company but there have been some indirect discussions going on between the Australian
Aluminium Production .Commission, at Bell Bay and the, ““company which have, been brought to my. attention. The .commission is co-operating with ‘ the company to ‘ the extent, I understand, , Of providing it with wharfage facilities at Bell Bay. I know of no request for any additional assistance. If there is any way in which the Government can help, I am sure it will be willing to consider doing/so.
asked the Minister for National Development, upon notice -
In view of a report in; the press of an American process for converting salt water into fresh water on a large scale- at approximately half the present cost, will the Minister investigate the newdiscovery and report to the Senate on the possibility of its practical application to the development of the millions- df acres in the Alice SpringsTennant Creek areas.of central Australia wherethere is excellent ret), loam soil similar in manyrespects to the soil in .Mildura and other fruitgrowing centres in the Murray valley?
– I had some inquiries made, and I now give the honorable senator the following answer: -
Over the last few years many optimistic statements have appeared in -the press regarding the possibility of converting, saline water into fresh for the purpose of developing arid areas throughout the world. ‘Frequently these statements’ have been based on estimates’, of the costs of desalination processes using techniques which are being developed in overseas countries. However, it is usually extremely difficult to estimate the costs at which these processes could be operated on a large scale in Australia. Commonly the quoted costs have been arrived, at by theoretical methods or under laboratory conditions. Large-scale development would require large -volumes of . fresh water. To produce this by the most promising, processes . would require substantial supplies, of electric power or fuel and in areas where power or fuel is expensive the cost of treating water would be greatly increased. It will be clear . to honorable, senators that . to allow permanent, extensive development - of areas remote- from markets, the costs of water availablefor stock consumption or for irrigation would need, to be relatively low. On the .other hand trie cost of electricity or fuel in these areas would probably be high and certainly much higher than the costs which are usually assumed in assessing the cost of new desalination processes. My department and the Commonwealth ^ Scientific- and Industrial Research Organization are constantly surveying the available .information on desalination processes which . might be applied in Australia, but ,the implications of the information so far available are that” there is so far hb- proved, .process’ which promises- to supply water under- ‘outback- conditions at a cost which would- allow extensive increases in primary production. We are pursuing’ inquiries on the report referred to by the honorable senator, but as yet have received no reliable information upon which the optimistic statement he quotes may have been based. When and if this information is received it will be carefully evaluated with regard to its possible implications for Australian development.
asked the Minister for National Development, upon notice -
– The answer to the honorable senator’s question is as follows: -
I am informed that no communication has been received from the Government of Western Australia containing the request referred to by the honorable senator.
asked the Minister for Customs and Excise, upon notice -
Is it proposed to construct a modern building and other adequate facilities at the customs reception points of the port of Fremantle?
– I now furnish the following answer to the honorable senator’s question: -
The Fremantle Harbour Trust is at present constructing a double-storied terminal building on Victoria Quay for the arrival of overseas passenger ships. Provision is to be made on the upper story for the examination of passengers’ baggage, and when designing the terminal, officers of my department were consulted on the facilities that would be required. The estimated cost of this building is £1,000,000 and when completed will provide a customs reception point in accordance with modern standards. It is anticipated that part of the terminal will be ready to receive passengers towards the end of 1960.
– On 15th September, Senator Hannan asked whether my attention had been drawn to a statement in the press to the effect that a film was to be made in Italy with American actors and to be financed by Australian capital.
The Treasurer has now advised me that the remittance of funds from Australia for this purpose would require the approval of the Commonwealth Bank which is responsible for the administration of exchange control. Information relating to individual applications of this kind is regarded as confidential, but the Treasurer is able to state that no application for the purpose mentioned by the honorable senator has been made.
– Recently, Senator Branson directed the following question to the Minister representing the Minister for the Interior: -
Because of the importance of statistics to industry, manufacturing and marketing, and because of the effect population has on federal electoral boundaries, would the Minister inform the Senate of the date of the next Commonwealth census?
The Minister for the Interior has supplied the following answer: -
As announced recently by the acting Treasurer, the next census will be taken on 30th June, 1961.
– by leave - I desire to inform the Senate that the Minister for the Interior left Australia on 8th November for an official visit to Indonesia. The purpose of the Minister’s visit is to take part in the discussions of the Consultative Committee of the Colombo Plan, which will be held in Jogjakarta from 11th to 14th November, 1959. The Minister is expected to return to Australia on 18th November. During his absence, the Minister for Air will act as Minister for the Interior and Minister for Works.
.- I move-
That the bill be now read a second time.
The purpose of the bill is to seek the approval of Parliament for the acceptance by Australia of the International Wheat Agreement of 1959.
The first post-war International Wheat Agreement came into force in 1949 and covered a four-year period to 31st July, 1953. That agreement was renewed, with certain modifications, by the agreements of 1953 and 1956, each of which covered a three-year period. The 1959 agreement, to which this bill relates, provides for a further three-year extension, with some important variations, of the arrangements covered by the earlier agreements. Copies of the new agreement have been distributed to honorable senators.
The text of the new agreement was negotiated at an international conference convened by the United Nations at which 38 countries participated actively and a number of others were represented by observers. Adherence to the agreement is dependent upon the deposit before 1st December, 1959, of a formal instrument of acceptance in accordance with the constitutional or legislative requirements of each individual country. In conformity with the practice followed in respect of the three earlier agreements, the Government is now seeking parliamentary approval for the deposit of an instrument of acceptance to permit Australian participation in the 1959 agreement.
In principle, the new agreement is substantially the same as the earlier agreements. The basic objective is to provide an element of stability in world wheat marketing. The agreement seeks to do this by providing that a significant proportion of wheat entering international trade will be bought and sold at prices within a prescribed range.
The previous agreements operated through a system of guaranteed sales and purchases, or quotas, for both exporters and importers. Each exporting country had an export quota, which represented the amount of wheat it was obliged to make available to member importing countries at the maximum price and which it was entitled to sell at the minimum price. Conversely, the quota of an importing country represented the amount of wheat that country was entitled to obtain at the maximum price, and which it was obliged to buy at the minimum price if exporters called on it to do so. Whilst prices were within the specified range, importers were not obliged to purchase their requirements from member exporters.
Although the principle embodied in these provisions worked satisfactorily during the time when the demand for wheat was strong, and the price of wheat sold outside the agreement was higher than the maximum price under the agreement, this has not been the case over recent years when the wheat market has been depressed.
There has been a tendency for importing countries to reduce the volume of wheat they committed themselves to purchase at the minimum price, and the 1956 agreement covered only about 300,000,000 bushels. The recent negotiating conference, therefore, examined a number of alternative arrangements with the object of devising a system which would encourage importers to put a greater volume of their wheat purchases within the agreement. As a result, the old quota provisions have been abandoned and have been replaced by an entirely new arrangement of rights and obligations.
Under the new form of agreement, the member importing countries undertake to buy from member exporters, at prices at or above the prescribed minimum, not less than a stated percentage of their total commercial imports. These percentages are shown in the annex to the agreement. They vary from country to country, and range from 30 per cent, to 100 per cent. The average is about 70 per cent., and based on the recent level of commercial imports of these countries, constitutes commitment* covering about 420,000,000 bushels.
Each importing country is entitled to purchase from member exporters, at prices not higher than the maximum, a quantity of wheat up to but not exceeding its average commercial imports from member exporters over a previous five-year period. Conversely, exporting countries have an obligation to supply these quantities at the maximum price. Once these entitlements and obligations have been met, exporters are free to sell at prices higher than the maximum, and importers are free to produce supplies from any source.
What this means for Australia is that whilst prices remain within the prescribed range,,, we Will be selling 114. . normal com.-: petition’ with .other exporters. At the minimum price, we ha,ye the protection afforded by. the (importers’ commitments to purchase stated proportions of their requirements at not less than the minimum .price. Should prices rise to the maximum, our commitment is limited tq _ our. average exports to member importing countries over the preceding five,, years. .As . with the earlier agreements, .there is, of course, a provision under which we could seek to be relieved of this obligation., in tha event of- a short crop.
The rights and .obligations of member countries relate only to commercial transactions in wheat and flour. At the present time, a large amount of wheat is moved Hinder non-commercial terms. This arises from the fact that,r oni-the one (hand, very great stocks of surplus* wheat are held by exporting countries, particularly the United States,, and on the other, many importing countries are unable, through balance of payments difficulties or for other reasons, to pay. cash for all their requirements. Whilst the agreement does not attempt to regulate transactions of a non-commercial type, the participating countries have agreed that such transactions shall be recorded, and their implications for commercial trade are to be examined annually.
It will be apparent that the minimum and maximum prices are very important provisions of the agreement. The new maximum price is $1.90 a bushel for No. 1 Manitoba Northern wheat, in bulk in store Fort William/Port Arthur, the main shipping points for Canadian wheat. This is 10 cents, less ‘than the maximum price under the 1956 agreement. The minimum price, for No. 1 Manitoba Northern wheat expressed on the same basis, is unchanged at $1.50 a bushel. These prices must be regarded as’ satisfactory in the light of present marketing conditions. Indeed,- the maintenance of an unchanged minimum price, to which the Australian Government attaches ‘particular importance, represented a- very- ‘Considerable negotiating achievement. -
Since ‘the basic prices refer to Canadian wheat1, the new’ agreement includes the same formulae as earlier , agreements for determining the equivalent maximum and minimum prices for wheat shipped from other exporting’ countries. These formulate take into account differences; in. transportation easts, , the .relative qualities of’ various types of wheat and -different currencies..
The equivalent maximum price ‘for Australian” f.a.ct. wheat, on ihe -basis of f.o.b. Australian ports, is approximately 17s. a bushel. This figure will be altered during the .course .of the. agreement only in the event of a variation in the exchange ratebetween the Australian- . pound and the United States dollar.
The formula under which the equivalent minimum- price for Australian wheat is calculated takes into account the relative transport costs in .moving Australian and Canadian wheat L to the United Kingdommarket. As charter freight rates are continually changing, the equivalent minimum price for Australian wheat can vary from day to day. On the basis of recent freight rates, the basic minimum price represents an f.o.b. equivalent for Australian wheat of about 13s. 6d. a bushel.
The equivalent maximum and minimum prices for Australian wheat which I have mentioned are in each case subject to an allowance, to be agreed by the buyer and the seller, reflecting the difference in quality between Australian wheat and the basic grade of No. 1 Manitoba Northern wheat. This allowance will vary from time to time and from market to market.
The membership of the new agreement is likely to be somewhat different from the old. By far the most significant change is the re-entry of the United Kingdom which is the world’s largest importer of wheat and the biggest single market for Australian Wheat. The United Kingdom participated in the 1949 agreement but not in subsequent agreements. I believe it is true to say that the return of the United Kingdom reflects the importance attached by the United Kingdom Government to the conclusions reached at last year’s Montreal Conference, when, largely -as a result of Australian initiative, the Commonwealth countries accepted the principle, of working towards greater stability of international commodity trade. The Government is particularly gratified to see- the United Kingdom again, a member of the Wheat Agreement.
A number of smaller importers who were members of the 1956 agreement, accounting for quotas totalling 15,000,000 bushels, have -not .yet signified their -.intentions regarding participation hu the new agreement, lt is .expected, however,; that most /of these will join The only .significant customers for . Australian wheat, and flour which, will not “be members of the agreement .are Ceylon and Malaya. These, countries, were, not members of .the. 195(6 agreement On the exporters side,’ Italy., Mexico and .Spain have joined for the first time, whilst Canada, Argentina, .the United States, France . -and Sweden have indicated their intention of continuing membership.
Australian participation in the new agreement will in noT way inhibit the ‘very strenuous efforts which this Government has .made, and is making, to expand- and protect Australian wheat and flour exports through bilateral trade arrangements. I think all -honorable senators will -be aware of the nature of- these effort* over, the last few years.- /n the case;of the United Kingdom, for.- example, the trade agreement negotiated three years ago provides an assurance of a market for at least 28,000,000 bushels a year, and is particularly valuable in view of the heavy competition which our soft wheat meets in that market. Prior to the negotiation of .the Japanese Trade Agreement, Japanese; importers were not buyer? of Australian .f.a.q. wheat Directly as a result of the trade agreement however, Japan bought 8,000,000 bushels in the first year of .the agreement .and 1 1 ,000,000 bushels in’ the second year.
Again, as a result of discussions which the Minister for Trade had with representatives of the Ceylon Government last year, Ceylon bought 30,000 tons of flour in the second half of 1958 and has purchased 100,000 tons for delivery in 1959. Ceylon has also undertaken to buy a further 100,000 tons in 1960. Our trade agreement with Malaya protects our sales of flour to that country to the extent of 80,000 tons a year. Recent, discussions with Indonesia will, I am confident, materially assist our flour exporters in maintaining their position in this very difficult market, and negotiations with Germany, which are not yet completed, will, I believe, strengthen our selling opportunities in that country. These are illustrations of the way in which our exports of wheat and flour are being assisted very substantially through bilateral negotiations. The continuation of the
Government’s very vigorous and successful endeavours in this field are fully compatible with! participation in 4ke «ew international Wheat Agreement.’
It would be misleading to suggest that the new agreement will effectively take care of all the problems confronting us in the marketing of Australian wheat. Huge stocks of surplus ‘wheat are held, by the United States and Canada. Domestic wheat production in the traditional importing countries of Western Europe continues to be stimulated by high price-support measures. This has reduced the demand .for imported wheat and in some cases, such as Italy, has resulted in the emergence pf heavily subsidized exports which’ enter into competition with Australian wheat. Many of the food-deficient areas of Asia, where import requirements are growing, are in economic difficulties , which ‘limit their capacity to buy wheat on’ commercial terms.
Clearly, we must continue the strenuous efforts which we are already making, through the General Agreement on Tariffs and Trade and bilateral arrangements, to reduce the impact of excessive protection, heavily subsidized competition and the disposal of surpluses. We cannot expect the wheat agreement to -solve’ all these fundamental issues. Nevertheless, the Government is very firmly of the view that participation in the new agreement offers benefits for Australian wheat-growers and the economy generally. Among the reasons for this view is that the existence of the agreement, under which a substantial proportion of world trade will take place within a defined price range, should help to stabilize prices in the present difficult marketing situation. This is the more so in view of the participation of the United Kingdom, whose purchasing policies exert a considerable influence on world prices. .
In short, the Government’s view is that international co-operation is essential to the orderly export marketing of wheat. ‘The new agreement is, necessarily, a compromise of, the conflicting interests of- exporting and importing countries. Having regard to all the circumstances, we believe it is the best agreement that could be obtained. We have no hesitation in preferring it -to the alternative of no agreement at all, which might well lead , to a break in world prices and a return to the chaotic marketing conditions of the early 1930’s, with disastrous consequences for the Australian wheatgrowers and the Australian economy.
In reaching its decision to recommend to Parliament acceptance of the agreement, the Government has had the advice of the wheat industry. The General Manager of the Australian Wheat Board and the President of the Australian Wheat Growers Federation were members of the Australian delegation at the negotiating conference. Both the board and the federation were consulted frequently throughout the negotiations, and have expressed their support for Australian participation in the new agreement. I commend the bill to the Senate.
Debate (on motion by Senator Sheehan) adjourned.
– I move -
That the bill be now read a second time.
The Commonwealth Scientific and Industrial Research Organization, as the Commonwealth’s principal agency for scientific and industrial research, has a most impressive record of achievement in the form of research results which have benefited the agriculture and industry of this country. I need not remind the Senate of the great advances in rural production that have stemmed from the C.S.I.R.O.’s work for agriculture in southern Australia. It is now clear that, through its efforts, many of the problems which have prevented us from developing the north are being solved. Nor need I spend time in detailing the part the organization has played since the war in providing the scientific basis for our rapidly developing secondary industries.
The Science and Industry Research Act 1949 vests the control of the C.S.I.R.O. in an executive of five persons, three of whom give their full time to the duties of their office and three of whom must be scientists. With the growing diversity of the activities of the organization it has become clear that an executive of five is too small for the task it has to shoulder. Furthermore, the C.S.T.R.O. is being asked to undertake more and more responsibility for research for primary industries under schemes put forward, whereby these industries contribute a considerable part of the funds involved.
In this regard, I would remind the Senate of the well-established scheme for financing wool research and the recently-introduced schemes for research for the benefit of the tobacco, wheat and dairy industries. The extent of the additional load which the executive is now carrying may be gauged from the fact that the organization’s budget has grown from £2,000,000 in 1949, when the present act was passed, to more than £8,500,000 in the current year.
The bill I am now introducing makes provision for amending the act to increase the membership of the executive from five to nine. Two of the four new members would be full-time members, bringing the number of members devoting their full time to the duties of their office from three to five. The other two new members would be part-time members, making four parttime members in all, thus enabling a wider spread of outside experience to be brought to the deliberations of the executive.
This change would permit the executive to act more effectively in discharging its important responsibilities in guiding the destinies of this important organization. It is intended that at least five of the nine members of the executive should have scientific qualifications, since the executive is concerned largely with matters of the utmost technical complexity. The quorum for a meeting of the executive will be increased from three to five.
A minor machinery amendment has also been included to change section 32, so as to include reference to the Minister fo, Territories, since his office has absorbed the functions of the office of the former Minister for External Territories. I commend the bill to honorable senators.
Debate (on motion by Senator Tangney) adjourned.
Debate resumed from 28th October (vide page 1245), on motion by Senator Paltridge-
That the bill be now read a second time.
– The bill now before the Senate, as its title indicates, establishes new forms of securities to attract money to the short-term market. They are entirely new securities. The project outlined in the bill was forecast in the Budget speech delivered by the Treasurer (Mr. Harold Holt) on 11th August last. It was forecast in general terms, the indication being given that a number of the details had then to be worked out. The bill, however, did not come before the Parliament until 22 nd October. I suggest that was a rather leisurely approach to a bill that it was sought to implement during the first half of the current financial year.
At once I put the view of the Opposition that, of all the financial measures introduced by this Government during its term, this is the most unjustifiable. In our view, it is completely unjustifiable. After ten years, the Government suddenly becomes aware that there are seasonal fluctuations in the banking system in this country, that they occur each year in the liquid assets of the banks and in the amount in the hands of the Australian public. The Minister explained in his second-reading speech that this liquidity rises over the financial year, reaching a peak in about March, and then declines very substantially over the remaining three months. That has been the cycle of events for very many years.
The Government has assigned three reasons for the fluctuations. The first is that it, itself, has been obtaining credit, by means of treasury-bills bearing interest at 1 per cent., from the central bank. It is well known that money comes in slowly at the early part of the year, from income tax, and then comes with rather a rush towards the end of the financial year. In the meantime, the Government must have ready money to meet its commitments. Hitherto - for very many years now - it has had recourse to the device of treasury-bills arranged with the Commonwealth Bank at the very low interest rate of only 1 per cent.
The second explanation was that during the early portion of the financial year there is an increasing tempo in the flow of export earnings available in this country. The third explanation made by the Government is that the situation is aggravated by advances which are made through the Rural Credits Department of the Commonwealth Bank to primary producers. These advances are made to primary producers from time to time against the proceeds of the sale of their products. Wheat, which is one commodity now before us in connexion with the International Wheat Agree.met, is an example of this.
As I have indicated, all this is not just a recent phenomenon; it has gone on down all the years during which this Government has been in office. It has gone on for the past ten years and for a very considerable period before this Government’s advent to office. One must ask, “ Why does the Government act now? “ Or, if that is not the proper question, “Why the delay for all these years if some good purpose was to be served by this legislation? “ I shall deal with the answers to those two questions, as the Opposition sees them, before I conclude. I leave them for the moment.
The magnitude of the Government’s use of treasury-bills through the central bank varies, of course, from day to day throughout the early portion of the year; but it is safe to say that at the peak it would run at an average of about £100,000,000 in the course of the year. If that were the average at which the burden of treasury-bills remained over the financial year, then it would cost the Government - and so the taxpayers - £1,000,000 a year in interest at 1 per cent. That would be the actual cost to the country. But the bill now proposes the issue of new kinds of securities to be called seasonal inscribed stock and seasonal treasury-bills. In the Budget speech delivered on 11th August, there was no reference to these securities taking the form of inscribed stock. In that speech, the Treasurer said -
With this in view, the Government has decided to issue a new form of Commonwealth security to be called seasonal treasury-notes, and he proceeded to describe their particular features. Since then, of course, the Government has thought up the development of providing, in addition to the seasonal treasurynotes, seasonal inscribed stock, even though the stock is intended to have a duration of approximately only three months and certainly is to be redeemed during the financial year.
In the Budget speech; it was proposed that the securities should have a term :of precisely three months. That, too, has been varied.: The term is now to be approximately three .months, which means, of course, that it may :be less, and again, it may be more.- :The duration1 is put in very elastic terms in -the bill. :
Now, as to the yield of the new” securities. These .new securities , will npt be .for a fixed amount bearing :interest at a. fixed rate; they will be more or less like the war savings certificates, or the special bonds . which the Government, after years of pressure from the Opposition, recently introduced with some success. They will be offered on the market at a discount on their face value The discount, of courses would represent part of the yield, or the amount of interest payable. ;
– What is the purpose of the provision that they shall be issued at a discount? ‘
– I should imagine that it creates some’ element of greater security in the mind -of :the purchasers of the bonds1 or treasury-bills. They will know in advance just exactly what will be repaid on the date due.– They will have that clear understanding. If issued at a discount of 3 per cent., they will pay £97 lor a £100 bond, and they Gan work out for themselves what the yield on £97 is. lt would be a fraction above 3 per cent, in those circumstances. I suggest to the honorable senator that this method appears to have attracted a good number of smaller subscribers to the special bonds that were issued only quite recently. I do not suppose it matters very much whether a bond is issued at its face value, bearing interest on the face value, , or whether it is issued at a discount in this way. The war savings certificates were popular and the new special bonds are popular, and I should imagine that the Treasurer had those two factors in mind when deciding that these bonds would be issued’ at a discount.
– .Is. it a means of inducing large, investors to take, up this form of, security and thereby get exemption from income tax?
– No. There will - be no small subscribers to these securities because, although no particular limit is laid down in the bill, the ^Government has indicated that the minimum subscription to;any of- these securities will be £5,000. “ ‘’:
– I asked whether it was the means of inducing large subscribers to invest for the purpose of getting exemption from’ income tax.j J “Senator £. McKENNAThe honorable senator is really asking. .mc what is in the mind, of the Government. . .
– I am only trying . to provoke discussion and get enlightenment, whether from the Opposition or from the Government. - r -. ; ‘
– I am pleased to canvass the matter with the honorable senator. On the income tax point, I invite his- consideration .’of clause 5 of the bill, which vests the widest possible power .in the Treasurer to lay down the conditions to:attach to this particular form of security. It reads -
The Treasurer may from time to time borrow money on the security of seasonal securities.
That provision leaves it wide open to him to restrict subscriptions to particular classes, to determine the amounts, rates of interest, ‘and conditions. At that point/ 1 stay for the moment. I come to what the honorable senator has said. That provision could even enable the Treasurer to provide that the yield from these particular securities be free of income tax. It is wide enough for that. I have regard to the fact that the broad terms of that particular provision of clause 5 are qualified by clause 11 and clause 12. I need not detail the provisions of those clauses at the moment, because I may , advert to them presently during this speech. If I do not, I shall certainly be taking them up at the committee stage.
It is one of the’ disappointments of the Opposition in relation to this matter that’ the Government has not been frank with the Parliament as to the rate of yield. It has made general statements, such as the following passage in the’ Minister’s secondreading speech -
Within the present pattern of interest rates, special bonds carry rates of interest ranging from 4 to 5 per cent., which are considerably greater than the yield at which the seasonal treasury notes: .are likely to be offered. The rate offered on the notes might normally be expected to be closer tq the. rate which other marketable Com.monwealth securities would, yield with approxi.mately the’ same period to run before maturity.
I say that that is not frank. One is left to guess. Itis not clear, and no information has beenvouchsafed to the Parliament as to just what the Government has in mind.
– What terms are likely for these - three, six, or nine months?
– As theMinister indicated in ‘his speech,they will be for approximately three months. . ,
-Any issues after 1st April will be for less than three months (Senator McKENNA.- They would necessarilybeI (mentioned a while ago that the seasonal inscribed stock (must be redeemed within the financial year. That is laiddownin one of the clauses of the bill. I think if isin clause 12.
– What is the purpose of that?
SenatorMcKENNA. -I should imagine that it is’ to” keep the issues strictly on a short-term basis. In answering any questions on this matter, I find myself in the position that I cannot understand what has driven the Government into this field. I should like it to be understood that I am not here justifying what the Government has done. I am here tooppose it, and I am building a case against it. The point I am making at the moment is that the Government has not been frank. One of the things that this Parliament should know is the type of yield that the investor is toget. We are left to guess about the matter. We know, for instance, that if the Government wishes to attract money to this short-term type of security, it has to be prepared to compete with the rate on deposit with a trading bank. That gives 21/2 per cent, for a three months’ term.
– What about the rate on deposit with a hire-purchase company?
– It will hardly be in competition withthat.
SenatorMcKENNA.- That type of investment is generally long-term. That is my view. The banks give 21/4 per cent, for three months. The new short-term money market that was created in February of this year with the support of the central bank is, I believe, offering 27/8 per cent. ‘Therefore, by a process of reasoning of that type, we conclude that the new rate of interest that willbe offered for approximately £100,000,000 over the year will be at least 3 per cent. I may be wrong in that, but is it not completely improper thatwe of the Parliament should be left tospeculate about what the rate of interest will be? After all is said and done, the Government has made up its mind in the matter. It has had maximum interest rates determined at the Australian LoanCouncil meeting. It must know the upper limit to which it may go. Why could, not the Government at least tell us what the. yield is to be?
– I do not think it is right that the Government should be bound by this bill to a rate, as circumstances may change over the nextfive years.
– The honorable senator must understand that I am taking for granted, as he apparently is not, that each of these loans is to operate within a year , I am only talking about one year, when I ask what the rate is this year.’ We should know at the onset of this new type of security just what yield theGovernment proposes to give to the investor. AllI can do is, by a process of comparison and deduction, arrive at the conclusionthat it will be somewhere m the neighbourhood of 3 per cent, at least I add. the words “ at least “. I repeat that it is completely unfair and improper of the Government to leave Parliament in that position when it asks usto consider this measure. This much is quite” certain: The Government, for the sake of a temporary accommodation, will pay very much more for the money that it gets.” At the present timewhen it wants money to tide it over until its revenues come in, it goes to the central bank and gets all the money it wants at 1 per cent. It is safe to say that in future, to get money for the same purposes, it will pay in the neighbourhood of3 per cent. I submit that that is verybad -business for the Government.
Sena tor Kennelly. - What is the rake-off in money? .
– Two million pounds a year.
– Not bad!
– Two million pounds a year, at least. Whereas the Government has, fora decade, been getting its temporary borrowings at 1 per cent., it is now saying, “ We shall have a new type of security and we shall pay 3 per cent.” The
Government will be to the bad to the tune of £2,000,000 a year. That is bad business for the Government and it is very bad business for the taxpayers of this country, because they foot the bill in the end.
– And it is good for the banks.
– I am coming to that. 1 want to save them up for something quite special in a moment. We can be completely assured that what is bad business for one of the parties to this transaction - the Government, or the people of Australia - is very good business tor somebody else. Before I pass to that, I want to advert to a most interesting passage in the Minister’s speech. He said -
At the end of each financial year, there will be no seasonal treasury notes outstanding, and the amount of treasury-bills outstanding will be precisely the same as if there had been no issue of seasonal treasury notes.
It will be exactly the same. Then why, in those conditions, does the Treasurer not use treasury-bills that would cost him approximately £1,000,000, instead of going on to the private market and paying £3,000,000 for the same money? It is quite obvious that as we approach the end of the year the Treasurer will go to the central bank. He will raise the money at 1 per cent, to clear up the balance of these securities that are falling due as 30th June approaches, and which under the act it is mandatory to pay off. On that statement of the proposition it seems completely assinine for the Government to throw overboard the possibility of raising the money at 1 per cent, and to go on to the open market and pay 3 per cent, for it. I have indicated that what was a disadvantage to the nation in this bill must be of advantage to some one else.
– Is the honorable senator putting forward the proposition that the depredations on the investor can create confidence in the loan market while all the reserves in the special account at i per cent, remain sterile which otherwise would be put out to interest by the private investor?
– I do not understand the honorable senator’s reference to i per cent.
– What rate does the Commonwealth Bank pay to the trading banks?
– It pays * per cent, under the special accounts system. Before I conclude I propose to deal at length with that aspect. I shall reserve my comments till later, but I shall certainly deal with it.
Who does get the benefit? Although there is no provision in the bill limiting the amount of speculation, the Government has indicated that it will be £5,000. It may increase in multiples of £1,000 only. That means that very few individuals, if any, in Australia, will take advantage of this shortterm money market. There will not be many individuals in Australia who will have £5,000 lying idle for a few months, and available for investment.
– Those people will take out special bonds.
– Those bonds are for long terms, not short terms, and are securities of an entirely different character.
– They are redeemable at par after fixed dates.
– Yes; that is in line with this proposal.
– They are for one year.
– They are for a longer term than are the securities proposed in this bill.
– They are redeemable at any time after the fixed date.
– At a discount, or a re-discount.
– At par.
– They vary over the term according to the time one picks them up. That is true. However, I repeat that very few individuals will use this kind of security. Surely the Minister will subscribe to that statement. Among those who will use this kind of security obviously are companies that have money standing by for capital undertakings.
– And for taxation.
– It will be used particularly by those which have money for capital projects to be spent over a period. The money may represent the proceeds of special loans or a special issue of shares. These securities will provide an outlet for them until the progress payments fall due on their capital works. Those companies can be expected to be heavy subscribers. Others who will take advantage of this type of security will be financial institutions of all kinds whose moneys are waiting placing for one reason or another. Money that has been ear-marked for special purposes and is not ready for drawing, and money at banks- and financial institutions will be used in this way. Hitherto these moneys have lain idle, and normally they would await their proper uses.
– It is not good for any country to have money lying idle.
– At a time when there is incipient inflation, would the honorable senator say that it is better not to have the money going into circulation? What virtue is there in the suggestion that money must always be earning something? That is the fallacy that underlies the whole approach of this legislation.
– It is a productive asset.
– The honorable senator must have X-ray eyes if he can see short-term money going into productive assets.
– Its purpose is to give facilities to capital investors.
– I do not know about that. I see it differently. I say that this legislation shows the most tender solicitude and concern for the holders of large capital. It makes sure that money they have ear-marked for particular purposes shall not lose a penny in earning capacity. This bill presents to them the opportunity to prevent even £1 lying idle and not earning money for them. I repeat that that is the whole purpose of this bill. In my view, much of this money would lie idle, exerting no pressures in the community, until wanted in the normal way as the run down in liquidity of the banks takes place towards the end of the year.
– There are vast sums of money lying idle to-day. It is at the will of the depositor.
– The honorable senator must acknowledge that this money cannot be lent by the banks for long-term productive work because, as the Treasure pointed out in his Budget speech, that money is drained out during the last few months of the year. It could be used only for a short term. I say again that that is the whole purpose for which this legislation has been designed.
– Does not the country need money for capital development?
– Does the honorable senator suggest that money that represents seasonal fluctuations could be made available for developmental projects? It could not be so used.
– Every depositor who withdraws money subtracts from the liquidity of the banks.
– I do not agree, and I think the honorable senator is wrong.
Let us look at these particular securities. If the banks invest in these bonds their liquidity will not be affected at all. Their L.G.S. will be identical both before and after the event. These are the things by which the liquidity of the banks is determined. The Treasurer said that investments by the banks in short-term securities will not affect their liquidity. I agree.
– What happens to the L.G.S. if, instead of the banks getting it, private investors get it?
– That is an interesting point. Here is the cycle of events. Private investors do not keep their money in oak chests. They deposit it in banks. If they wish to contribute to a security they withdraw their money from the bank. To that extent the liquidity of the banks is reduced. What happens then? The money is taken by the Commonwealth Government, but for what purpose? Is it to prevent further spending? No. It is needed for immediate spending. Is not that the whole purpose of this proposal? The cycle is completed when the Government gets the money and spends it and those who get it put it back in the bank.
– Is the honorable senator advocating a restriction on expenditure?
– I shall come to that point later. Before I conclude I shall deal with the central bank’s overall financial control. I have shown the case upon which the Government has based this bill”. It is embarrassing to the banks that their liquidity is too high for the time being, and therefore money has to be drawn off. As I have shown, if the moneyis taken from the bank theliquidity position of the bank is not affected at all. Ifitisdrawnby,members, of the public from credits that they have with the bank, it is merely withdrawn when otherwise it would lie idle. It is spent and having been spent finds its way straight back to thebank. So howdoyou cure the position? This is not an attackupon the liquidity position, as it is said to be. What clearly emerges is that it is a priceless opportunity for wealthy institutions, with money lying idle and awaiting particular purposes to invest that money usefully. This country to give themthat benefit, willpay £3,000,000 although it need pay only £1 , 000,000 bydealing with its own central bank. That is the whole case against the bill. No good purpose is served by it at all
– That argument about the cycle did not work out when the private banks began their savings bank activities.
– I do not follow the honorable senator’s line of thought. I should be interested to hear him develop it.
– You are suggesting that the liquidity is not varied. The money comes out from the bank, but goes straight back in again.
– That is so.
– When the private banks began their savings bank activities the same cycle of events might reasonably have been expected tooccur. In fact, it did not new money was found.
– I do not see the point of the honorable senator’s argument. I should certainly like him to develop it later. If I have any comments to make upon it, I shall offer them at the committee stage. I assure him that I am not avoiding the issue. I merely do not understand where his argument fits in. The Treasurer (Mr. Harold Holt), in referring to the banks, said that they would not be encouraged, or given an unrestricted opportunity, to subscribeto these particular securities. He said -
Although subscriptions by the trading banks would have little effect on their liquidity
That is the very point that I made - or, directly, on the liquidity of the public, we do not propose to prohibit entirely subscriptions by the banks. At the same time, we do not intendthat the banks should have unrestricted access to the securities. The amount of notes available to thetrading banks will bekept within limits which are reasonable having regard to this amounts subscribed by the public.
– Which provision enables the Treasurer todiscriminate in this matter of who shall invest?
Senator - McKENNA. - Clause 5 gives him the widest possible discretion. One other unsatisfactory feature of the bill, is that despite the Government’s expressed intention that thebanks should be restricted in the matter of contributing for these particular securities; no provision to that effect is madeinthe bill. Why is it all to be left to the wide discretion of the Treasurer? It would be simple to write in a clause to the effect that no bank shall subscribe to any of thesesecurities except for an amount that is not subscribed from other sources. A perfectly simple clause would have enabled thatview of the Governmentto be given effect to, but the gate has been left wide open. We all know what will happen - the horse will go straight through it.
– Is there anything to restrict a bank subscribing for ordinary inscribed stock?
– Not since your Government altered section 48, I think of the Banking Act. Until then there was a prohibition against any bank investing in securities listed on the stock exchange, or in Government securities. The repeal of that section - perhaps the only amendment of substance of the act by the present Government - opened the door for the banks to go forth into many other fields. There was a complete prohibition of such investment without approval, and no approval was given. That had been the policy, but the gate was opened to let the banks out into other fields. At the end of August they had £23,900,000 invested in the shortterm unofficial money market created last February. It was not bad going to get the money out so quickly - in six months. Subscriptions to that market may only be made in £25,000 lots, so again it is not a field for the small man. The unofficial short-term money market having been created, under the wing of the Commonwealth Bank so far as the ultimate line of resort for credit is concerned, there is a desire for some nice - short-term securities so that a proper portfolio of these will be available as a balance , against short-term borrowings. ‘Senator Wright -When you speak of. short-term investments of £23,000,000, are you referring to the special bonds?
-No, to the system about which’ the Parliament has been given very little information- the system under which a” number of firms, five in all at the moment, have been accredited by the Commonwealth Bank for dealings in short-term loans. They range, according to- the bank, from overnight loans to three-month’ loans. The firms are obliged to deposit certain moneys with the Commonwealth Bank, according to the state of their portfolios - according to whether ‘they are holding shortterm or long-term securities. They have to- deposit particular amounts, and certain securities. In return, the central bank guarantees to come to their-, aid, “extending what it calls a “ line of credit “ if they are in difficulties. The honorable senator wiT find that system explained in the last report of the Commonwealth Bank. The shortterm market is dealt with very thoroughly. That market deals only in units of £25,000.
– I think that the honorable senator will acknowledge that the bank imposes pretty stringent condi- tions before it makes available a line of credit.
– I imagine that it does. I am not questioning their viability, or financial stability. The backing of the central bank assures both. I am making the point that that short-term unofficial money market having been created, above all else they want to have on hand shortterm securities, for they have then to put only 1 per cent, of the money on deposit with the central bank. If they hold longterm securities in their portfolio, they have to put in 4 per cent.
We find that one of the purposes of this bill is to enable the five firms in the unofficial short-term money market to get a nice collection of short-term bills so that they need lodge only 1 per cent., not 4 per cent., with the Commonwealth Bank. It affects their own position. One of the primary purposes of this bill is to help that short-term money market. This country will have to pay £2,000,000 extra in order to provide that facility for these strongly backed financial institutions;
– Presumably the Commonwealth Bank is a party to all this? -Senator McKENNA. - The central bank has sponsored it, “apparently, by extending its accreditation to firms which comply with conditions laid down..
-Are you accusing the bank of having been- got at? ‘ ‘
– No. I am saying that ‘the Government now comes to the aid of that money market to give the people concerned a ‘nice set of portfolios’ and’ that the Government and the people of this country will have to pay the price. I think there is complete lack of frankness by the Government in relation to this bill and in relation to the principles upon which a bank will be entitled to subscribe at all. What are the principles that ‘animated the Government? Nobody in this Parliament knows. There is no mention of them in the Minister’s second-reading speech. Just as we:have no information about the yield to be won, so there is no real principle laid down and no real guide to this Parliament, or to anybody, as to the conditions and the circumstances in which the private trading banks will be allowed to subscribe to the new securities. I say that it is the height of audacity for a government to come to a parliament and ask it to pass a bill in these circumstances. The widest possible discretion is to be given to the Treasurer, but no adequate information is placed before the Parliament.
Let me carry the matter a stage further. One would think that if one wanted to affect the liquidity position of banks, the money to be withdrawn would be frozen in order to hold and prevent inflationary processes, but in his second-reading speech the Minister indicated that whilst no application will be made to list new securities on the stock exchange there will be a very free market. The stock exchange will get a nice handout for handling these securities. Where is the brake upon liquidity in the hands of the public if a member who has taken one of these securities can, the next day, of the day after, get cash for it? How does that hold liquidity in the hands of the public? It does not hold it at all.
– If he has his capital committed within the scope of the season he may be very content to rest on an interest rate of 2 per cent, or 3 per cent.
– He may well be, but I am making the point that if this bill is directed, as the Government says it is, to holding liquidity in the banks and in the hands of the public, why are facilities being made available for a person instantly to turn his security into cash? The Government goes even further and points out that a person can sell his security on the stock exchange to the benefit of the people on the exchange.
Next, arrangements have been made with the Commonwealth Bank to re-discount the notes during their currency. Whilst the money is drawn off to reduce liquidity in banks and in the hands of the public, this Government immediately points out how a person can get that liquidity again. He can go to the stock exchange and he can make arrangements for the Commonwealth Bank to Te-discount the securities for him. As I said at the beginning, this is the most unjustifiable financial measure that has ever come before this Parliament. No adequate explanation has been given for it. Whom will it benefit? The great financial institutions, the banks and the stock exchange!
– The present Government is their government, of course!
– Well, yes. There are many other matters that can more usefully be discussed at the committee stage. The bill looks simple but in order to understand it we must not only dive underneath it but also do a great deal of other reading. We find in the bill clauses which exclude, incorporate and sometimes qualify the provisions of five other statutes - the Financial Agreement, the Audit Act, the National Debt Sinking Fund Act, the Commonwealth Inscribed Stock Act and the Treasury Bills Act. I say that nobody can have an understanding of the effect of this simple-looking little bill until he has made a study of the provisions referred to in those five other statutes. Again, there is to be a sixth bill! Another bill is to be introduced to confer the same tax concessions in respect of the yield on these bonds and bills as apply to ordinary Commonwealth securities - a rebate of 2s. in the £1.
– You are not disagreeing with that, are you?
– Not at all. I am merely indicating that there is still another angle not covered in the bill. I am at the moment merely referring to the breadth of the whole matter and pointing out that, in order to obtain an understanding of the position, it is not merely a matter of reading the bill alone.
The Minister, in his second-reading speech, made the point that the Financial Agreement applies to this bill. It does. The very last paragraph of clause 6 of the Financial Agreement applies to this bill. This paragraph, in effect, throws out the window every other provision of the Financial Agreement. I shall read the paragraph to the Senate because a false impression was created by what the Minister said in his second-reading speech. The paragraph reads -
Notwithstanding anything contained in this Agreement,-
That is everything else aside - the Commonwealth may use for temporary purposes-
– From what are you reading?
– I am reading the last paragraph of clause 6 of Part I. of the Financial Agreement of 19.28. The paragraph reads -
Notwithstanding anything contained in this Agreement, the Commonwealth may use for temporary purposes any public moneys of the Commonwealth which are available under the Jaws of the Commonwealth or may, subject to maximum limits (if any) decided upon by the Loan Council from time to time for interest, brokerage, discount, and other charges, borrow money for temporary purposes by way of overdraft, or fixed special or other deposit, and the provisions of this agreement other than this paragraph shall not apply to such moneys.
So the only bit of the whole Financial Agreement between the Commonwealth and States that applies to these bonds is what I have just read - that and nothing else. What does that mean? It means that the Commonwealth does not have to consult the Loan Council as to whether it may borrow. It does not have to get the approval of the Loan Council for the amount it intends to borrow for temporary purposes. Under that clause, the only thing that the Loan Council may do is fix the maximum limits, if any, for interest, brokerage, discount and other charges. I have heard the argument advanced in relation to this measure that the Premiers at the Loan Council do approve the borrowing. I answer that argument by saying instantly that the Commonwealth does not have to consult the Loan Council as to whether it borrows for temporary purposes, nor does it have to consult that body as to the amount. The Loan Council has the right merely to fix the maximum rate of interest, discount and the rest.
– It may not be bound to consult the Loan Council, but does it in fact consult it?
– I cannot say, but I would imagine that the Loan Council would be consulted on this basis: The Commonwealth would say, in effect, “We have decided to have a new type of security “, and would mention the amount of the security and the total involved. The Cornwealth would further say, “We propose the maximum rate to be such-and-such. What do you say? “ In my view, the Premiers would be invited to pass judgment only upon the maximum rates. The Financial Agreement has very little effect and operation upon this particular provision.
I promised that I would come back to what the central bank will do in this matter. The central bank, under the Banking Act, is required to protect the monetary and financial policy of the Commonwealth to the greatest good of the people of Australia. Pursuant to that, this Government amended the Banking Act - we quite recently debated it in this chamber - so as to give the most complete power to the central bank to call money up into special accounts, at reasonable notice - on three months notice - and to keep on holding the money. Under the Banking Act, as amended by this Government, the central bank can call up the whole of the deposits in the hands of the private trading banks. Machinery is provided for that purpose. The central bank, from time to time and as the need arises, releases money from the special accounts to the trading banks. At the end of last month, it released £15,000,000 to them. There is machinery to control, not only the long-term credit policy - the central bank is doing that - but also these seasonal fluctuations, if they need to be controlled. If seasonal fluctuations cause some damage to the finances of the country, and some instability, why does not the Commonwealth Bank draw off the surplus money and place it in the special accounts? The power and machinery for dealing with short-term credit are no different from those for dealing with long-term credit.
– Does not the honorable senator think that the depositors would get a bit shy of going to the banking institutions if that power were used too much?
– No, I do not. They would have sufficient confidence in the central bank to feel that it would make releases as the occasion demanded. The honorable senator should remember that his Government has given far more power to the central bank to call up money than did the Labour government. We had a formula restricting the sums- that could be called up. The only limitation on the Government to-day is that imposed by the period of notice; there is no limit as to amount.
– That is different from what the honorable senator said five minutes ago.
– No, it is not different at all. I am answering your question as to whether there would be a loss of confidence. I say that there would not be a loss of confidence. I say that the people of Australia have complete confidence in the central bank, and that they would be happy to leave this problem of seasonal fluctuations in liquidity to the central bank.
I shall state my views very briefly, as I notice that my time is running out rapidly. We think that this bill should require the Treasurer to report annually to the Parliament on the operation of these securities; he is not obliged to do so at present. I should like the Minister to inform me of the constitutional basis for clause 21, which provides -
A trustee, executor or administrator may invest any trust money in his hands in the purchase of seasonal securities.
Although the Commonwealth has power to raise moneys for its purposes, I take the risk of doubting that it has power to carry the matter to that stage. I have raised this question before, in another context, but I have not received ‘an answer. I give the Minister notice that I will be looking for an answer to it in committee, if I do not get One during the second-reading debate.
I should like to spend a few moments in looking at the reasons that the Government has given for bringing down this bill. The Minister for Shipping and Transport (Senator Paltridge) stated in his second- reading speech - -
We believe that action to reduce the seasonal up-swing and subsequent declinei nliquidity would make a useful contribution to the working -of our financial system. I believe that the new seasonaltreasury-notes will facilitate the smooth working of our monetary system.
What kind of reasons are they to give in justification of this bill? I think that the reasons advanced should have contained a great deal more particularity than that. The truth is that there is no real reason, other than the one I have already indicated. One can see how it happened. I have before me the October, 1958, report of the Australian and New Zealand Bank Limited, in which the bank urges the advantages of this kind of security. In the “Economic Record “ of April, 1959, there appears a thesis by Mr. D. H. Murray - whose occupation and qualifications arenot described -on the short-term money market. Interestingly enough, although he has not acknowledged the fact, he took whole slabs out of the October, 1958, report of the Australian and New Zealand Bank Limited and incorporated them as part of his thesis. Perhaps, therefore, I may be pardoned for thinking that he is a member of the propaganda staff of that bank. It is more than a coincidence that a whole paragraph, word for word, should appear in both the bank’s report and his essay. If we pick up the report of the Bank of New South Wales for May, 1959, we find that this type of thing is advocated and its advantages enumerated. They make no bones about it. Let me read this one short sentence -
The latest move towards the development of a short-term money market is that it holds out the prospect of providing a service of considerable importance to the trading banks themselves as well as mobilizing funds for the capital market.
It is clear that, during the last year or two. pressure has been exerted on this Government for the benefit of the financialinstitutions of thecountry and that, as always, the Government has yielded. Having only three minutes of my time left, I want to say simply that we oppose the bill because it is bad business for the Government and for the country. Too wide apower is vested in the Treasurer. The liquidity of the banks will’ not be affected, as the Treasurer acknowledges. I also indicate that the liquidity of assets in the hands of the public will not be affected. The money will be spent and immediately will find itsway back to the banks . There is a lack of frankness on the part of the’ Government in presenting the measure. No real or good case has been made out for this type of security. Perhaps the Minister will tell us,if time permits, what alternatives to these short-term securities were considered. What is the real difficulty in the way. of allowing the central bank tocontrol the seasonal fluctuations? . We are entitled to be told whether that course was. considered and, if so, why it was discarded.
Mr. ActingDeputy President, I thought when I rose to speak that I would take about half an hour. Under the stimulus of thesubject, and of my questioners and interrogators, I have gone on for some time, but just to show that there is a modicum of reserve in me, I conclude; with one minute to spare.
– This debate hasbeen most interesting so far, but it seems to me to be obvious that the Leader of the Opposition (Senator McKenna) has followed the traditional Labour line in his argument. Obviously, he does not believe in surplus money - that is, the savings of the people - earning anything. He advocates that that money should remain sterile, as it were. He seems to advocate that the money should be put away in a sock, in a chest or elsewhere, and not used in any way for the short-term money market. At the outset, the honorable senator complained of the delay on the part of this Government in. bringing forward such a proposition. Having twitted the Government with, as he said, delaying the introduction of the proposition for ten years, he promptly pledged his opposition to it. He eulogized the Government for introducing the special bonds last year, and he indicated that that had been Labour policy. Frankly, Sir, Icannot see any, difference in principle between special bonds and the particular type of security that the Senate is discussing this afternoon. The only difference seems to be in the limit of investment. I understand that an investor cannot subscribe more than £5,000 in special bonds, while in the circumstances that we are discussing it will not be possible to subscribe less than £5,000. However, the same principle seems to apply.
With special bonds, investors take them up at £97, £98, £99, or whatever other -figure is applicable, and .at :a certain date they receive £100. In this case, the principle is exactly the same except that the amount, as I understand it, is different. The maximum for one type of investment is the minimum for the other. Also, the term of the special bonds appears to be longe than three months, whereas the term of the security now being discussed -is three months or less.
Senator McKenna also twitted the Government with not having been “frank with regard to the bill before the Senate and the second-reading speech of the Treasurer (Mr. Harold Holt). I submit that the Treasurer’s speech was quite ‘;clear. In effect, it stated that it was the intention of the Government to issue a new form of Commonwealth security, to :be called seasonal treasury-notes, with the object of reducing the large ‘ seasonal fluctuations which occur each year in the liquid assets of the banks and the public. The bill before us seeks authority from the” Parliament for the proposed borrowings. -Money that -would normally >be5 lying idle is to be siphoned off, and during the period :that it is siphoned off it will earn something. It does not offend ;me that the Treasurer did not declare in the bill what the rate of interest was to be.! - This bill will become an act, I feel sure, in a matter of hours, and I predict that it will- then become, for some years at least, a part of the financial structure of Australia. .It would be stupid, I think, to lay down in this bill, in the month of November, 19’59, what the present Treasurer or succeeding Treasurers should offer for this short-term money. The money market is a sensitive thing and has to be looked at almost from fortnight to fortnight. Therefore, I think it quite normal and usual for the provisions of the bill to be in the widest possible form, as they are.
An interesting point, as I see it, is that the Australian Loan Council has regard to these matters. The Treasurer, in the course of his -speech in the House of Representatives on 22nd October, stated -
As borrowings by the Commonwealth in accordance with the provisions of this bill will be for purposes other than defence, the issue of seasonal treasury notes is subject to the provisions of the Financial Agreement between the Commonwealth and the States. As I have said, the securities will all mature within the’ financial year in which they are issued. They will accordingly come within, the category of Commonwealth borrowings for temporary purposes, which are covered by the .provisions of clause 6 of the Financial Agreement. Under this clause, the terms and conditions of the notes will be subject to any maximum limits decided upon by the Loan Council from time to time with -regard to interest, brokerage, discount and other charges.
That means, Sir, that the State Premiers and Treasurers,- as they meet, will give an annual direction to the Commonwealth as to their wishes in that matter. I think that that is far better than to prescribe all the conditions in a statute.
The Treasurer went on to say -
The Commonwealth therefore took the opportunity at the last meeting of the Loan Council to discuss this borrowing proposal with the States, and received an appropriate .approval in principle. The precise terms-of the first issue of the notes will depend on market conditions then ruling and, as chairman of trie Loan Council, I shall again consult with the State Premiers before finally giving my approval to the actual -terms and conditions. These terms and conditions, together with the .opening date of the . first ..issue, will be announced as soon as possible’ after the passage of this legislation. ~
Therefore, this whole idea has been approved in principle by; the State Treasurers. It is to be remembered that, in the States, there are two treasurers of Labour persuasion and four of other political persuasions. Consequently, this proposal is the wish of the States of Australia. That being so, it is beyond my comprehension that the Labour Party in the Senate should be so violent in its opposition to this bill. As I have said, the idea is the same as for the special bonds which, honorable senators opposite take pride in saying, they originated in principle some years ago.
I cannot subscribe to the idea that money should be put away in a sock or a chest, as the Leader of the Opposition seemed to think it should. I feel that -this bill, simply provides that liquidity should be maintained. The Treasurer stated -
There are several causes which combine to produce the marked changes that occur from one season of the year to another in both public and bank holdings of liquid assets. One is to be found in temporary borrowings by the Commonwealth from the central bank to finance Government spending during those months of the financial year when revenue lags behind expenditure.
It is well known, Sir, that while the expenditure of the Commonwealth is fairly regular from month to month, the major part of revenue, that is, mainly income tax collections, comes in between March and 30th June of any year. I understand that about 70 per cent, or 80 per cent, of all income tax comes in during those months. So, in order to attract money in the earlier months, when there is a high degree of liquidity from the sale of commodities overseas, and so on, this system is to be instituted. I believe that, by and large, it is of great importance to the Commonwealth that the proposal should be adopted.
I am interested in a question raised by the Leader of the Opposition with regard to clause 21, which provides that such an investment as the bill envisages will be, as it were, a trustee investment. As I understand the position, the law relating to trustees is primarily State law. As is well known, the trustee of an estate undertakes a personal liability if anything should go wrong with the investment, unless the investment is made on behalf of the estate in what are known as recognized trustee investments, such as Commonwealth Government bonds. To me, it seems strange that in a bill such as this the Commonwealth should give the all-clear, over and above all existing State laws, and provide that a trustee, executor or administrator may invest any trust money in his hands in the purchase of seasonal securities. The Minister may have the answer to that question, but it does seem unique that in a Commonwealth measure such as this we should be giving the all-clear to trustees who are subject to the provisions of the trustee acts of the various States.
– Is there not a similar provision in the Commonwealth Inscribed Stock Act? I thought there had been such a provision ever since the Commonwealth started borrowing.
– As I understand the position, there is provision in the various State trustee acts covering the point. No doubt the Minister will clear up the matter when he replies.
I support the bill. That Australia is beginning to use every possible resource to make available money useful, to earn rather than allow it to lie idle and sterile, is a sign that Australia is growing up. I believe that it is wise for the Government to step in at the appropriate time - the seasonal time - and attract available money in the manner contemplated by the bill.
– in reply - I am grateful to my colleague, Senator Laught, for his very thoughtful contribution. Indeed, the fact that he has spoken relieves me of the need for replying to many of the points I noted while the Leader of the Opposition (Senator McKenna) was speaking. For that reason, my comments at this stage will be extremely brief.
The Leader of the Opposition took the well worn track of Labour’s approach to problems of this character. He started by asserting that this measure was another attempt by the Government to help the banks and the financial institutions. Then, having said that, he attempted to justify his statement. I hope he does not take offence when I say that I felt that this was one occasion when he was making rather heavy weather of the arguments he was presenting to the Senate.
– That retort is almost as hackneyed as any other phrase used by the Minister in trying to demolish a case. Every time the Leader of the Opposition puts up a good argument, that is the easy way followed by the Minister of glossing over it.
– If my comment displeases the Deputy Leader of the Opposition, I can only say that I am not surprised.
– It does not displease me at all. I am getting used to it now.
– You will probably have to condition yourself to being used to it on other occasions because, just so often as I think the Leader of the
Opposition is making heavy weather of a subject, will 1 say so, irrespective of whether it pleases you.
The purpose of this measure is clearly stated. It is not to help the banks or the financial institutions; it is merely to mop up the excess of liquidity which occurs despite the special accounts procedure, which was referred to by the Leader of the Opposition, and despite the practice of issuing treasurybills which has been adopted over the years.
We have only to look at the secondreading speech of the Treasurer (Mr. Harold Holt) to remind ourselves of the extent of the liquidity which can occur in banks even after the special accounts procedure has been applied and after the treasury-bill practice has been put into operation. The right honorable gentleman said that between June, 1958, and March, 1959, there was an increase of £164,000,000 in holdings of liquid assets and government securities by the major trading banks. This was followed by a decrease of £93,000,000 between March and June. In the previous year, the increase between June and March was £119,000,000, and even though substantial releases from special accounts were made during the June quarter, there was a decrease of £124,000,000 in that quarter. To suggest that the special account procedure might be used is to forget the purpose of that procedure which, for a number of years, has helped to reduce the magnitude of the seasonal swings in bank liquidity. I emphasize that the special account procedure is designed primarily to serve general credit policy objectives and to smooth out the long-term rather than the short-term variations that occur.
As for the use of treasury-bills in addition to the special account procedure, surely the figures which I have quoted indicate that this liquidity remains. By this measure, the Government takes the opportunity of using that liquidity. When Senator McKenna refers to it as being completely unjustifiable, I just do not follow him. He asserts that to use available liquidity, as this measure plans to do, is unjustified. The only argument that I recall he advanced to support the assertion was that it had not been done a number of years before. Perhaps we learn as we go along. There is no doubt that the economic progress of this country in recent years has brought many changes in our financial structure. This bill is merely the addition of another financial provision to our economic set-up. It permits us to make the utmost use of the liquidity which is available from time to time.
The Leader of the Opposition then criticised the fact that the issue was to be made at a discount. He also had a good deal to say about the discretionary power of the Treasurer. I do not think I need do more than repeat what Senator Laught said in connexion with that matter. The investment of finance of this sort is something that cannot be set to a long-term pattern.
– Does that justify the power of the Treasurer to discriminate between banks and other persons?
– The bill does not discriminate between this class of lender and the others.
– Is not there an indication in the second-reading speech that that is the intention?
– The banks are not to be given unrestricted opportunity.
– That is so. Indeed, the provision is wider than that. The Treasurer has power to determine the limit of the total amount and, I think, the limit of the amount from each investor. Because this is a financial measure that has to be played by ear, as it were, it has to be played in accordance with the conditions that prevail at the time of the issue. Although these are very short term securities, the conditions certainly can alter from three-month period to three-month period, and anybody controlling the issue of the loans must have the breadth of authority that is necessary to enable him to meet the changing conditions.
– How was the accommodation obtained formerly?
– I am coming to that point. The Leader of the Opposition assumed - his basic assumption was, I think, completely wrong - that this would be money that previously had been obtained by the issue of treasury-bills. I have made the point that despite the use of treasury-bills and despite the special account procedure, there remains an availability of liquidity that in the past has not been taken up, and this type of investment offers to the individual, rather than to the bank or the financial institution, the opportunity of effecting his own investment. The issue of treasurybills has never meant that either the central bank or a trading bank could determine the amount that ought to be invested in treasury-bills.
– Insofar as you get money on these securities,will you not have less need to issue treasury-bills?
– To some extent, butnot to the total extent.
– To a substantial extent?
– To the extent that money that otherwise would not have been invested in treasury-bills will now be invested,’ by either companies “ or persons, in securities of this type, thenthe issue of treasury-bills will not be required. The Leader of the Opposition made the point that if the money were withdrawn it should be frozen, and that that was the way to dry up liquidity. The point is that the Government will spend a certain amount of money in any case…. If it spends money provided by individual members of the public, it must reduce liquidity. If it spends money provided by the central bank against the issue of treasury-bills, itwillnot be able to dry up liquidity at all.
The Leader of the Opposition then referred to the provision in the bill for encashment before maturity of this type of security. I think the important thing to remember there is that if there is found to be a requirement by an investor to cash before security, some penalty will be suffered by that investor. Senator Laught took the important point that this bill had the approval of the Loan Council in general terms and that the council will be consulted from time to time as to the precise terms of the issues. As he pointed out, the measure has the approval of every State Premier who sees the advantage of using the available liquidity in this manner. For that reason, if only for that reason, I find it extremely difficult to understand the Labour Party’sopposition to the measure.
Question put -
That the bill be now read a second time.
The Senate divided.
Ayes . . . . . . 28
Noes . . . . . . 20
Majority … “ . . 8
Question so resolved in the affirmative.
Bill read a second time.
Clause l agreed to.
Sitting suspended from 5.46 to 8 p.m.
Clauses 2 to 4 agreed to.
Clause5. (Authority to borrow.)
– This very short clause provides -
The Treasurer may, from time to time, borrow money on the security of seasonal securities.
The clause, considered alone, gives an almost unlimited power to the Treasurer. It gives him power to accept or reject any subscription; to fix any minimum or maximum amount, and, generally, to determine not only the amount to be borrowed but also the yield - indeed, to impose any conditions.
Looking at that clause alone, one realizes that a condition could be that the yield should be entirely free of income tax. The
Treasurer has expressed a contrary intentionthat of merely allowing a -taxation concession of the typealready permitted - but the point that I am making is that the clause as so very wide as to enable him to make some such condition as that the yield shall be free of income tax. At the moment we have to rely upon his statedintention to bring in a separate bill.It is an extraordinarilywidepowertoconcedeto a Treasurer, especially when this bill imposes upon him no obligation to report totheParliament what is being done.
Under another clausethe Treasurer has power to repurchase a seasonal securitythe Consolidated Revenue Fund being appropriated for thatpurpose.Unlessthere is to be some kind ofreport to theParliament by the Treasurer concerning the operation of this bill, I thinkthat must be considered a great defect. I should like the Minister to indicate why some such provision has not been inserted.
I realize the limitations imposed by clause 11, but it,too, is very wide: The clause provides-
Subject to the next succeeding section, seasonal securities shall be issued and soldat such prices, on suchterms andconditions, in such amounts and insuchmanner as the Treasurer directs.
Then clause 1 2 provides -
A seasonal security - .
shall be issued at a discount and shall be redeemable at par. on maturity; and
shall mature beforethe end of the financial year in which the security is issued.
The bill vests in the Treasurer an enormous discretion as to terms and conditions, subject only to the limitations imposed by clauses 11 and 12. Under other clauses, he is free to determine the process by which the signature of the Secretary to the Department of the Treasury shall be affixed to notes, and so on. Generally, he has an extremely wide discretion. Why is it necessary to go so far? If. as the Minister indicated in his second-reading speech, the banks are not to be permitted to make unlimited subscriptions, why is no particular limit set out in the bill itself? I repeat the suggestion that I made at the secondreading stage - that if a clause providing that the banks could subscribe only to the extent to which subscriptions were not available from other quarters were inserted a clear principle would be laid down.I think that it behoves the Minister to tell the committee uponwhat principles the Government will act in limiting subscriptions by banks. I do not think that the Minister dealt with that at the second-reading stage, although I did pose the question.
Itmaybe appropriate, looking at clause 5 alone, to raise againthequestion of the Premiers’ approval of this bill. The Minister indicated that they approved in principle of the new securities, but I drew attention to the fact that they had no power to veto the Government’s desire to borrow, or to impose any limitation on the amount borrowed. I put it to the Minister that what happened at the Loan Council was that the Premiers were invited only to fix certain limits to the charges, discount and interest paid.
Ifind it difficult to believe that the Commonwealth - with no need even to consult the States - would confer with them on major points such as whether it would borrow in this way or that, what the amount of the borrowing should be, and so on. Would the Minister be so good as to give the committee some indication of the total amount per annum that the Government ; expects to borrow pursuant to these securities?
– Beforereferring to the clauses which the Leaderof the Opposition (Senator McKenna) has mentioned, may I again advert to the second-reading speech. The following,passage is relevant to a number of the points that he has raised -
The notes will be issued at a discount and will be repayable at par on maturity. They will not bear any separate interest as such, but any earnings fromholdings of the notes will be taxable, whether these earnings are by virtue of an initial subscription to the notes being held to maturity, or by virtue of purchases and sales on the market. I shall shortly introduce separate legislation which will include provision to make these earnings fully taxable, but eligible for the 2s. in the£l taxation rebate applicable to interest on Commonwealth securities under section 160ab of the Income Tax and Social Services Contribution Assessment Act.
Clause 5 of the bill was referred to. It provides -
The Treasurer may, from time to time, borrow money on the security of seasonal securities.
It is proposed that, at any rate for the 1959-60 securities, issues will be made fortnightly, that they will have a currency of three months, and that they will mature within the financial year of issue.
The issues will be open for applications -by the public generally. This clause will, incidentally, enable the Treasurer to limit subscriptions from any subscriber or class of subscribers, if that is desirable in his opinion.
Under clause 8 the overall amount of the individual issues which the Treasurer may direct is determined by the Executive Council. Under clause 7 the terms and conditions of the borrowing are to be subject to the approval of the Loan Council.
The Leader of the Opposition also referred to the power conferred on the Treasurer by clause 11. Under that clause the Treasurer is empowered to issue and -sell seasonal securities at such prices, on such terms and conditions, and in such amounts and in such a manner as he may direct. No interest, as such, will be payable -on seasonal securities but they will be issued at a discount. It is proposed that the discount will be such as will keep the yield to maturity of seasonal securities approximately in line with that obtainable on other marketable Commonwealth securities which have periods of about “three months to run.
– Will the Minister amplify that statement and put it in terms that will be a bit clearer to me?
– The discount -at which the bills will be issued will give a yield which will be approximately the same as the yield which would be returnable on other government securities with a comparable period of time to run. I do not -think I can express it any more clearly than that.
– Can the Minister say what the figure will be?
– No, I cannot say offhand. Whatever is the yield which would be returned by an outstanding -security with three months to run will be -applied to this security.
– That does not take onto account whether it is a long-term or short-term security. What are we comparing it with? You have fifteen-year terms and you have a one-year term. Which one do we look at?
– Any government security with a period to run to maturity comparable with a security issued under this bill.
– The value of a fifteenyear period, three months before it is due.
– 1 take it that the figure will vary from year to year, according to the state of the market?
– That is right. That is why I repeat what I said in my second-reading speech, that this is a case where the harp has to be touched very gently. It has to be played as the terms and conditions of the market demand.
As I mentioned earlier, the terms and conditions of these securities are subject to the approval of the Australian Loan Council, which has already been obtained in principle. We cannot mention the specific yield until we have consulted the Loan Council again, but it will approximate the yield which would be returnable on the type of stock to which I have referred. The clause empowers the Treasurer to limit or reject subscriptions from certain subscribers or classes of subscribers. It is proposed that the minimum subscription will be £5,000, and that amounts in excess of that should be subscribed in multiples of £1,000. Seasonal treasury-notes will be issued in denominations of £1,000, £5,000, £10,000, £50,000 and £100,000.
At any rate, for the time being, seasonal securities will have a term of three months to maturity, and will be issued fortnightly. The terms and conditions on which they will be issued will be announced from time to time. The power given to the Treasurer by clause 11 is limited by clauses 8 and 9, under which the GovernorGeneralinCouncil sets overall limits to the amounts of seasonal securities he may issue, by the need to obtain the approval of the Loan Council to the terms and conditions of issue, and by the provision that the securities issued are to mature before the end of the financial year in which they are issued. The reference is to clause 12 (b).
Clause 12 deals with the terms and conditions of seasonal securities. Seasonal securities are to bear no interest as such but, as with treasury-bills, they will be issued at a discount and repaid at maturity at their face value. Separate legislation will be introduced during the current sittings to provide that any income earned by seasonal securities will be taxable, and that it will attract the rebate of 2s. in the £1 of income tax extended to earnings from interest on Commonwealth securities by section 160ab of the Income Tax and Social Services Contribution Assessment Act.
AH securities are to mature within the financial year in which they are issued. They will therefore be issued during the December and March quarters, in which public liquidity is seasonally high, and will mature before the end of June. As such, they are issued for temporary purposes, and comply with the requirements of clause 6 of the Financial Agreement.
– I thank the Minister for the information that he has supplied, but there are two questions I have asked to which he has given no answer. I asked him, in the first place, upon what principles the Government would act in restricting the subscriptions that could be made by banks. The Government has indicated that the banks will not be permitted to subscribe in an unrestricted way. It is quite obvious that the Government has in mind certain considerations which will induce it to prevent the banks from subscribing. I am interested to know on what principles the Treasurer will exercise that discretion. Is he to act quite arbitrarily, or is he to be guided by some reasoned principle? If he is to act arbitrarily, the Opposition objects, but if there is some reasonable principle upon which he will act, the Opposition is entitled to know what it is.
I raised a further point. This is a matter where very wide discretion is given to the Treasurer. The Parliament is being asked to appropriate an amount of money on the blind. In effect, the Parliament purports to appropriate now the whole of the moneys that may be required down all the years ahead to redeem all these securities. Why is the Parliament being asked to act on the blind and give in effect a carte blanche authority? If such authority is to be given surely some string should be placed on the Treasurer! He ought to be obliged to make some formal report to the Parliament. This short-term market that is now being developed in Australia began with the unofficial short-term transaction back in last February. The whole thing is wrapped in too much obscurity and far too much power is being placed in the Treasurer with no obligation upon him to inform the Parliament.
We of the Opposition think that that is a grave defect. The bill we are dealing with provides that both borrowings and repayments are not to be taken into account for the purpose of determining the national debt. They are not subject to the normal provisions to which sinking fund payments are subject. Those provisions are completely by-passed and there is no obligation on the Treasurer to record these things or report upon the workings of this market. But the Parliament has had no real information from the Treasurer about the unofficial short-term market that has been set up already.
I fear that this is being kept carefully away from the Parliament and from thepublic to enable this matter to run along without the searchlight of regular parliamentary scrutiny and without express information being made available year by year.
I ask the Minister to return to these twoquestions that I have already asked. Upon what principles will the Government act in excluding banks, as it intends to do according to the second-reading speech? Why should there not be some restraint upon the Treasurer and some obligation on him toreport annually to the Parliament?
– I remind the Leader of the Opposition that the questions he poses are directed to a schemewhich is in its infancy. We are embarking upon a form of short-term’ finance which has not been attempted before in Australia. We cannot say with certainty or precisionwhat the amount of the issues will be until” we have some idea of what the responsewill be to what, I repeat, is an entirely new form of security in Australia. The overall’ result of each issue will, of course, be announced. That will inform, and keep informed, both the Parliament and the public of the results of these issues as they are made, in the same way as the results of other Government floatations are made known to the public.
The Leader of the Opposition asks what principles are to be applied to the subscriptions to this security which will be made by the banks. Quite obviously this question, too, will have to be resolved from time to time in the light of the market conditions existing at the time of the issue and in the light of the availability of liquidity which lies with the banks. It is not possible at this time to say with any precision just what limits or what tests will be applied to the subscriptions that will be made by the banks.
.- I agree with the contention of the Leader of the Opposition (Senator McKenna) that this clause has the effect of making the Treasurer practically a law unto himself in that he will be able to determine the extent to which indirect taxation, ‘in the form of increased interest charges, will be imposed, to the detriment, mainly, of wage and small salary earners. That is exactly what is intended. In my opinion, the Golvernment is yielding - quite willingly, of course - to the pressure :of the private,banks In accordance with’ its policy it is. prepared to depreciate the purchasing power of money to the lowest practicable point. This is proved by the fact that the prices, of all commodities are increasing. As we know, prices increase as the purchasing power of money decreases.. The main object of this measure is to give the banks increased power in this direction. I say quite de,deliberately - and I. shall not withdraw the comment - that the whole process is “a colossal racket, although it is not peculiar to Australia.
– It is bushranging t6 the tune of a couple of million pounds, which is not chicken feed.
– The bushrangers ran the risk of going to gaol. These gentlemen - the word should be in inverted commas - control the machinery of business. The result is that a great number of small salary and wage earners are being subordinated, exploited and- impoverished down to the lowest possible level. That is the purpose of this measure. Despite the terminology that is used - the liquidity and the velocity of money, and that sort of thing - the fact is that this is a scheme to bring about the result I have mentioned. In consequence of the pressure that the banks have brought to bear on the Government, they are becoming wealthier and fewer in number. They are becoming large owners of land and capital, whilst an increasing number of non-owners of land and capital are becoming impoverished. All the wordspinning by the. Minister and : his advisers cannot cloud the real issue, and the objective of this measure. I feel that it is incumbent1^ on me to ‘say this because Senator McKenna, by his very capable post-mortem examination, has” shown, quite clearly and convincingly, what the Government intends this ‘meas’ure to” achieve. The only difference’ between Senator McKenna and myself is ‘‘that lie adopted a much more gentlemanly approach to the ‘matter than J,, am prepared to maKé. I am prepared to say that honorable senators opposite are in the same category as the most capable of the confidence men .who are in gaol to-day.
The banks - are acquiring - more land. They arc claiming the right to put small businessmen- out -of business, and they are conducting -take-over deals in conformity with the policy that is evinced in the measure now before us. All the involved terminology .that “was used? by the Minister in? his second-reading speech does’ not cloud the issue! in:. relation, to- this’* clause. The Treasurer is given a- ‘free hand: he will become ra law; unto himself; In other words, what is: intended iis: the creation- in the near future of -an -economic or financial dictatorship in this country, f The words “ freedom “ ‘‘and “‘democracy*?’ are being used”- by the Government and by the people behind the i. ‘Government, to mislead the public’. ‘If you, fead, Sir’, as I try to read as closely and .-as tieri tically as I can, the financial Journals and publications which are issued from time to time you will find that they .-are .becoming; .very concerned about this matter r for the, simple reason that the small people are being absorbed by the . monopolists. , In other words, the greater is absorbing the lesser all along the line, with the Government’ leading the way. To use a phrase used by the “ Financial
Review “ on many occasions, the boys in the back room are dictating the policy, with the able assistance of the officers who provide the Minister with all the excuses that he is trying to put up for this whole scheme.
What I am concerned about more than anything else is that the so-called increases of age pensions, of other social service benefits, and of wages, are being cancelled out by increased interest charges which are really a form of indirect taxation and which reduce the purchasing power of the recipients of social service benefits and wages. This subject is so involved and so clouded, as I have said, by the terminology that is adopted, that the average person does not understand it. Mind you, there is nothing new in the technique. As far back as 1916, when Sir Denison Miller, the then Governor of the Commonwealth Bank, was challenged on this subject in New Zealand, he said that banks speak a language which is not understood by the public and which is not intended to be understood by the public. That is exactly the kind of language that the Minister and his officers are using to-day. However, we cannot ignore the effects. As I said previously, the law of cause and effect can neither be ignored nor repealed by act of Parliament. The repercussions that can arise from what the Government is doing to-day may have the effect of making it face reality, though it refuses to do so now.
– The use, from my side of the chamber, of the term “ gentlemen in inverted commas “ and the interjection by Senator Scott of “ chicken feed “ in relatively the same context, reminded me of a little doggerel poem I saw scribbled on the first page of a bankrupt’s book on one occasion. It was a book in which he recorded the amounts that he had borrowed from innumerable people and, of course, had never repaid. The opening two lines went like this - “lis mean to rob a hen roost of a hen, But stealing largely makes it gentlemen.
– I was only referring to an interjection by Senator Kennelly regarding communism.
– I have married the two expressions as an excuse for putting before the committee the thought in that little jingle. There is a thought to be drawn from it.
A fortnight ago, in this chamber, we saw the Minister in charge of this bill being most forthcoming to every question that was asked of him, supplying all the information that everybody desired, and doing it with great particularity and skill. Having seen him then, we cannot help but notice the contrast in his role in relation to the bill. He is now fighting a rearguard action, an evasive action. He is not forthcoming and is not prepared to tell us what we want to know. For the third time, I press him for information, or even for a hint, as to the principles that the Government will apply in allowing banks to subscribe or not to subscribe. Of course, the Government has some ideas in its mind. Let me remind the Minister of what was said in the secondreading speech on that point. The Treasurer (Mr. Harold Holt) stated -
In other words, he contemplates some restrictions. I am asking what they are. The Treasurer went on -
The amount of notes available to the trading banks will be kept within limits which are reasonable having regard to the amounts subscribed by the public.
I put an exact case to the Minister, in an endeavour to get some kind of principle out of the mind of the Government. Let us assume that subscribers are available from sources other than the banks to the total amount required and that, in addition, subscriptions are offered by the banks. Will any of the subscriptions from the banks be accepted, or will they be rejected? If some of them are to be accepted, how much of them? There we have a perfectly clear, simple and obvious case. If the Minister is not in a position to answer that question or will not answer it, that will merely show that this committee is being deliberately kept in the dark.
I invite the Minister to address himself to that question with more particularity. He said, when dealing with that very subject a while ago, that what would be done with the banks would depend upon the liquidity of the banks at the time.
– Amongst other things.
– Amongst other things. Let me deal with the one point. On that point, the Minister has no ground at all, because in his second-reading speech, repeating what the Treasurer has said, he indicated that if the banks subscribed, that would have no significant effect at all upon the liquidity of the banks. How, therefore, can the Minister say that what the banks will be permitted to do will depend upon their liquidity at a particular time - when the Treasurer and the Minister himself have already told us that the liquidity of the banks will not be affected in any case, even if they subscribe? T hope that the Minister will revert to the form he showed on the track a fortnight ago and will be a bit more forthcoming with his answers.
– I completely understand the enjoyment which the Leader of the Opposition extracts from posing to me the particular question that he has asked. Indeed, if I occupied his seat I should, possibly without the same skill but certainly with the same tenacity, blow down the neck of the Minister in charge of a bill such as this. But let me repeat that this is a departure into a completely new scheme of financing which has to be operated according to the circumstances as they exist at the time.
I have noted very emphatically Senator McKenna’s desire that a report should be made available to the Parliament by the Treasurer as to what happens in connexion with this type of flotation. I have told him that results will be made public as they occur, in precisely the same way* as the results of loans are made public.
– But you never give any particulars of subscribers to loans. In your announcement, and in other statements you do not say how much the banks have subscribed.
– I merely say that banking statistics which, if my memory is correct, are published every month, do reveal the treasury-bill holdings of the banks. The question whether the holdings of seasonal notes by the banks also should be published is currently under discussion. I can only repeat that the point that Senator McKenna presses so hotly to-night - that those holdings should be revealed in the same way as treasury-bill holdings are revealed in the banking statistics - will be kept very much in mind and that the overall results of these flotations will be made known as soon as possible.
– But will you answer the specific question I put to you? Where subscriptions are available from the public for the full amount of the loan and also from the bank, does the bank get a proportion, or does it get none?
– That question would have to be decided at the time in the light of conditions then obtaining.
– What type of restriction does the Treasurer contemplate when he says the banks will be restricted? Never mind about the particular case; what type of restriction does he contemplate?
– The crossexamination is pursued with increasing vigour.
– It is completely fair. The committee is entitled to some explanation.
– I have said again and again that, this being a new type of finance, decisions of the nature about which you are now inquiring will have to be made in the light of experience and in the light of conditions as they apply at the time of the flotation. I am not prepared to go further than that.
– I conclude my comments on this clause by expressing my very grave disappointment with the answers that have been given by the Minister. In effect, if I may paraphrase the Minister’s statements, they boil down to this: “ I do not intend to tell the committee anything “. That leaves the door wide open for the Treasurer, in the very simple case that I have put, to discard all subscriptions from the public and to grant them to the banks alone. The Minister leaves it in that position.
– No. You are not justified in drawing that conclusion.
– But you give no information. I have asked broadly, and with more particularity - as the Minister says, with increasing particularity - for information, and when he avoids giving it, I am entitled to draw any conclusion. The Minister’s usual form is to make available to this chamber all the information that he has. He is not running true to form on this occasion, and that only adds to the disquiet of the Opposition in relation to this whole matter. Either the Government has something to hide or it does not know what it is doing. It is either one or the other.
.- I accept the Minister’s statement that the bill makes provision for a new type of finance so far as the Commonwealth is concerned. 1 ask the Minister whether it is true that this bill is a copy of an act that has operated in the United Kingdom for some years, and also in the United States of America.
.- The Minister said this is a new type of finance. It is nothing of the sort! It is the old type of finance brought up to date. The intention is to make it more effective in the future than it has been in the past.
In my opinion what should be understood in connexion with clause 5, indeed in connexion with the whole bill, is that taxation is the very basis of the machinery of Government, and absolutely nothing else. What is happening is that the incidence of taxation, through the medium of short-term loans - and long-term loans if you like - is being directed to the detriment of those people least able to pay and not against those who are most able to pay.
Reference has been made to idle sums of money. Instead of borrowing this money the Government should tax it. But that is the last thing the Government is prepared to do! Borrowing, whether it be for a short term or a long term, is a form of indirect taxation, and the people who are compelled to pay the most are those least able to pay. And this is done with the blessing of the Government! As I have said, the fact is that those least able to pay are the people who are suffering most.
Senator McKenna is inclined to be a lot more generous than I am in his dealings with the Government. He is inclined to say that the Government may not know exactly what it is doing. I say dogmatically and emphatically that the Government knows exactly and precisely what it is doing. And what it is doing is quite in conformity with its policy of impoverishing the people least able to pay for the benefit of those who are best able to pay!
Although the Government may use the weight of its numbers to secure the passage of this bill, and give effect to it to the extent of its ability, the inevitable result will be a repetition in Australia of what is happening in other countries. We read of unauthorized strikes in England and America. For instance, consider the steel strike in America.
The CHAIRMAN (Senator the Hon. A. D. Reid). - Order! The honorable senator is getting a bit wide of the clause. I have given him a good deal of latitude. I am afraid I cannot allow him to go on in that way. This clause does not give him the opportunity to wander round the world or to make reference to what is happening in other countries. I ask him to confine his remarks to the clause.
– The clause gives the Treasurer the right to be a law unto himself, to wander round the world if he wants to.
– Order! You have no authority to wander round the world,
– It gives the Treasurer full and complete power of action. I am trying to point out, very modestly, I hope, what the effects are likely to be in this country. I am suggesting that the effects of a similar policy have been disastrous in other countries to date. Do we want to see the same state of affairs in this country? Is that the Government’s ambition? Is that the Government’s desire? Is the Government satisfied with the misery and the poverty it will cause? Are its members political sadists, or are they posing as humanitarians? Those are the questions I ask.
– Order! The honorable senator may not ask those questions under this clause. The clause relates solely to the granting of certain powers to the Treasurer. The honorable senator is moving away from that question and I cannot allow him to continue along those lines any further.
– I want to know what the Treasurer intends- to do under this bm. The Minister is completely silent. He edges away from the questions directed to him by Senator McKenna, That being so; I am: entitled to draw my own conclusions, and those conclusions- are as I have stated..
– I want to make what I hope is a final comment on the question that Senator McKenna has pressed. It is a comment that I hope will give him some satisfaction, even if it is only limited. Decisions in respect of this matter will be taken each fortnight when it is. planned these issues will be made. The Government’s general’ attitude, however, to the whole question is obvious from the second-reading speech. Indeed, there would be no point in the issue if the major portion came from the trading banks; but, as the Treasurer said, we do not propose to prohibit entirely subscriptions from the banks.
The1 Leader of the Opposition has pressed, me fairly closely on this. I suggest that that is the answer, and the- only answer that he can reasonably expect me to give at this juncture, in the light of the fact that this is an entirely new departure. Senator Benn asked whether this was a copy of some measure that is extant in the United Kingdom. The answer is, “No”. This is an Australian production in its entirety.
– I should like to ask the Minister one more question. I can see. that I am not going to get the solution, and I face the. fact. Can the Minister say when the first issue of the new securities will be made?
– I cannot tell the honorable senator now. To-day being Tuesday, we expect that an announcement will be made later this week.
– Then I take it that the terms, and conditions of the loan, are now well known to the Government. If the Government intends to float a new issue in the. latter part of this week, it is now completely clear that the Government has the knowledge and refuses to disclose it.
– No, that is not the point a* all. As I have tried to indicate to> the Leader of the Opposition’ right through this- debate, the particular points of this, issue are still’ a matter for decision’ by (he Australian Loan Council I put it to the Leader of the Opposition- that he, as a former Minister of the Commonwealth’, knows what goes- on when a decision’ of this nature is being taken by the Loan Council in these circumstances.
– The Minister must recognize that the Loan Council does no more than- fix certain maximum terms, rates and conditions. It does not determine the amount. It does not determine whether a borrowing may be made. It is quite competent for the Government, looking at such maxima as the Loan Council’ may or may not fix, to take a lower amount or to take the maximum amount. In the finish, it is the Government’s decision. I understand that maximum rates have already been approved by the council. We have been told that. Why consult the council again? There is obviously no need. The Government has. the authority of the Loan Council in the limited sphere in which the council may function in relation to temporary borrowings of the Commonwealth. The Government cannot go beyond it. Perhaps the Minister will answer this: Is the new approach to the Loan Council to get it to raise the maxima already fixed? Perhaps, that may be the explanation.
– The answer to the last part of the question is, “No “. The details of the flotation are a matter now for consultation with the Loan Council, and as soon as a decision is. reached in the matter, details of the flotation will be made known.
Clause agreed to.
Clause 6 (Money borrowed may be expended’ for Consolidated Revenue Fund purposes).
– The clause prohibits the application of section. 57 of the
Audit Act to these securities.. Section 57 of the Audit Act is excluded for a purpose. It states - (1.) It shall not be lawful for the Treasurer to expend any moneys standing to the credit of the Loan Fund except under the authority of an Act. (2.) Such Act shall show the nature of the proposed work or other object of the proposed expenditure and the amount of the proposed expenditure in each case and the total amount proposed to be expended for such work or object.
There, in relation to loan funds, is the most clear and specific provision that the Treasurer must have the authority of an act, which has to prescribe the particular object to which the money is directed. That is obviously a provision to make for good housekeeping and good accounting. 1 rise only to direct attention to the fact that that general precaution has been thrown out of the window and, pursuant to this clause, the Treasurer may apply these borrowings for any of the purposes of any appropriation made from the Consolidated Revenue Fund. 1 direct attention again to the breadth of the authority conferred upon the Treasurer under this bill.
– I merely comment that this clause is similar in form to section 3 of the Loan (Temporary Revenue Deficits) Act 1953, and in the same manner provides that section 57 of the Audit Act is not to prevent such expenditure. It is merely a repetition of that section.
Clause agreed to.
Clause 7 (Borrowing to be subject to the Financial Agreement).
– I direct a question very shortly to the Minister. Does he claim that the Loan Council may intervene in the matter of whether or not the Commonwealth may borrow for temporary purposes, or does he claim that the Loan Council has any jurisdiction over the total amount to be borrowed?Is the Loan Council not completely confined to matters connected with the rate of discount, return, or yield, and terms and conditions of that nature? In short, is the Loan Council’s jurisdiction in this matter not confined to the last paragraph of clause 6 of Part I. of the Financial Agreement, which is in size a most infinitesimal portion of the agreement?
– I believe that is quite right, but by enforcing maximum limits the Loan Council exercises a very rigid control over the issue.
Clause agreed to.
Clause 8 agreed to.
Clause 9 (Power to make out and issue seasonal treasury-notes).
.- When I read clauses 8 and 9, they left me in doubt as to whether stock was to be in specific units, or whether “ the face value of an amount specified in the order “ in each of the clauses means the total amount. I take it from something the Minister said earlier that the Governor-General’s order will relate to a total amount, not to multiples of £5,000.
– Yes, it will relate to a total amount.
– Is there anywhere, in relation to these clauses, a requirement that the minimum subscription shall be £5,000, or is that merely in the mind and intention of the Government.
– No, it is stated as the intention of the Government.
– Again I direct attention to the fact that although the Governor-General is entitled to determine this matter of amount and to authorize the Treasurer to issue stock so created, the authority really comes back to the Treasurer himself. The Treasurer will draw up the order. Two Ministers, one of whom may or may not be the Treasurer, will visit the Governor-General, to whom the name of the order will be read out, and it will be approved.
– Clause 11 is relevant. It specifies the Treasurer.
– I am speaking of the Executive Council. The GovernorGeneral is the GovernorGeneralinCouncil.
– Clause 11 reads, “Subject to the next succeeding section, seasonal securities shall be issued and sold at such prices, on such terms and conditions, in such amounts and in such manner as the Treasurer directs”. That is the relevant clause.
– Clauses 8 and 9 dealing with inscribed stock and treasurynotes relate only to the total amount of the issue. The other clause mentioned by the Minister refers merely to the terms as to the yield and the discount, and the breaking up of the total amount fixed under clauses 8 and 9. Let us deal with the fixation of the total amount to be borrowed. I say that although clauses 8 and 9 both refer to the Governor-General as the authority who shall determine the total amount, they mean the Governor-General-in-Council, which in turn really means the Treasurer.
.- Clauses 8 and 9 mean that the GovernorGeneral, acting on the advice of the Government, can issue bonds and seasonal treasury-notes to the face value of the amount specified in the order - that is, of any amount the Treasurer decides. That is another way of saying that the GovernorGeneral can issue money considerably in excess of the values represented. When we speak of inflation we mean that the currency is inflated, representing values considerably in excess of the actual values created. Figures published in 1957 that I have before me show that money had been issued considerably in excess of the actual value. That has the effect of increasing both prices and profits. It is a form of corrupt indirect taxation. This clause is so worded that it makes the GovernorGeneral, at the instigation of the Government, a law unto himself with power to inflate the currency. That is happening everywhere to-day. People speak of a money-operated economy, but I regard it as a money-faked economy. This clause and others give the Government power to continue faking the currency to the degree that it will be tolerated by the community. It means that the purchasing power of wages and salaries is reduced to the lowest level. The clause is worded in legal terms, but that will be its effect. We have had certain assurances from the Minister as to what the Government will do from time to time, but they do not influence me in the least. What the Government intends to do through the medium of this legislation is to reduce the purchasing power of wages, salaries and pensions to the lowest level possible. All I can say is that it will be done only to the limit that such action will be tolerated by the people. All the assurances that we have been given today that the Government intends to act in the interests of the people do not cut any ice with me at all. The Government intends to use its authority to act to the limit in the interests of the private banks which control the machinery of finance to the detriment of those who have no control.
Clause agreed to.
Clause 10 (Requirements for seasonal treasury-notes).
– This clause provides that a seasonal treasury-note shall be in accordance with the prescribed form and shall bear the signature of the Secretary to the Department of the Treasury. It provides further that such signature may be made in the handwriting of the secretary, or may be made by engraving, or by any other process determined by the Treasurer. Two points arise. This is a bill setting out a new kind of security. Any one who wants to know the full effect of this clause must get hold of at least six other acts of Parliament to be read in conjunction with this bill. The difficulties are increased by the fact that the form is to be prescribed by regulation. Therefore, a person who wishes to understand what lies behind this new security will need to have this legislation, six other acts of Parliament, the regulations made under this legislation and also the regulations under the Commonwealth Inscribed Stock Act. To say the least, it is a clumsy approach to a new set-up in securities. I ask the Minister why it is that the form is not set out in a schedule to this bill. I ask him further why it is to be prescribed by regulation. Sub-clause (2.) provides that the signature of the Secretary to the Department of the Treasury may be in his own handwriting or may be made by engraving or by any other process determined by the Treasurer. It gives unlimited authority to the Treasurer. If the wording were, “or by any other prescribed process”, the
Treasurer would have to give notice of it. At least the process would be set out in a regulation. The point I make is that he may prescribe a given process, but is under no statutory obligation to notify any one of it. That may raise uncertainty in the minds of people handling these notes, so I suggest to the Minister that the wording in sub-clause (2.) of clause 10 should be, “ or by any other prescribed process “. Then there would be an obligation upon the Treasurer to notify every one interested and to do this by way of regulation. As the clause is drafted now, the signature can be affixed by any process determined by the Treasurer - and he may keep the details to himself.
– The form adopted will be similar to that at present used for treasury-bills. Regulations to cover that point are at present being drafted.
– Why could it not have been set out in the bill?
– I understand that the bill follows the style adopted in other similar legislation. It has become established practice for the Secretary to the Treasury to sign Commonwealth bonds by a facsimile process. A similar provision is to be found in the Commonwealth Bank Act, and other legislation, relating to the signature on bank notes.
– Surely something should be laid down to require the process to be notified.
– The practice adopted has proved satisfactory over the years.
– The Minister is merely saying that this is a scissors and paste job; that no real thought has been given to the bill.
– That is not so. The bill was drafted on the pattern of many similar bills that have gone before and that have, in operation, worked satisfactorily.
– The Minister said that the process had never been used. Why provide for it again?
– The way in which the legislation has been drafted follows a pattern which has been satisfactory down through the years.
Clause agreed to.
Clause 11 agreed to.
Clause 12 (Terms and conditions of seasonal securities).
.- I understand that in the past, when the Government has received financial accommodation by way of treasury-bills issued from the central bank, an interest rate of 1 per cent, has been charged. I assume that if fi 00,000,000 were needed, and treasury-bills were issued, it would cost, in interest, £1,000,000. How much would such borrowings, under this bill, cost the taxpayers of this country? Most of my colleagues are astounded that a bill such as this should have been presented, but the Government should at least tell us what it is to cost the people. The issuing of treasury-bills to the value of £100,000,000 cost the taxpayers £1,000,000. What are we to pay on this occasion? That is what the people want to know. I hope that the Minister will be able to give us some figure so that we shall be able to see, in plain figures, what the rake-off is to be. I have never known a bill more obviously got up for one purpose. I give the Government great credit for the audacity that it has shown, but it should let the people know what they are up for.
– The Deputy Leader of the Opposition is certainly correct when he says that the bill was brought down for one purpose only. That purpose, as has been clearly explained, is the absorption of excess liquidity. The actual interest cost cannot be calculated until the response to the issues is known, but it is quite wrong to estimate it by applying the increased interest cost to the average amount of treasury-bills outstanding during the particular year. Issues of seasonal treasury-notes will only be made between November and March of this year. They will replace some treasury-bills for only a portion of the year.
.- I am afraid that I must follow the matter up. We should be told the estimated cost in respect of the portion of the financial year that remains. The people - who, in the long run, will have to be taxed either directly or indirectly in order to meet the cost - should be given an estimate of their liability. Will it be £2,000,000, or will it be £3,000,000?
I might say, with great respect to the Minister, that we have seen him to much greater advantage in dealing with other bills, but he ought to be able to tell us what we are up for. That is what the people want to know. This is a most interesting bill. It will be most interesting for me to be able to say, in a month or two, “The average cost last year was so and so, but under the new act the cost will be X pounds more - or less “. I appeal to the Minister to give us some idea of the cost.
– The Deputy Leader of the Opposition seems to assume that the interest chargeable in respect of these notes will involve the country in more cost than hitherto. He assumes that the rate will be greater than that paid on treasury-bills. I wish that the Minister would tell us what rate of interest, or of discount, is proposed.
Insofar as investments are made in this form, they will relieve the Government of paying the interest applicable to orthodox securities, such as Commonwealth stock and bonds. I think that I am right in saying that the rate of discount for these bills, which are of three months’ or six months’ duration, would certainly be less than the rate of interest on long-term or short-term Commonwealth stock. Quite obviously, one has to make one’s own business judgment as to the saving that will accrue in interest alone.
The other aspect of the matter is the balancing of the economy by inducing temporary investment in this form of security during a period when the money -would otherwise be floating and directed to longterm investment. This will be an inducement to gather in money that otherwise might be dissipated. It seems to me that the advantages of this form of security, in those circumstances, are fairly obvious, even to an unpretentious financier.
– Before the Minister replies, I should like to direct attention to paragraph (a), which provides that seasonal securities shall be issued at a discount. At the second-reading stage I asked why the Government did that, and I presumed to answer that question by saying what I thought was in the Government’s mind. Would the Minister take this opportunity to say what reasons influenced the Government to provide that the bills should be issued at a discount instead of being issued for a fixed amount which would bear interest?
– The answer is that interest on Commonwealth stock is usually payable six-monthly, and as these securities do not run for a greater period than three months the more appropriate course seems to be to issue them at a discount.
The other question that my friend, Senator Kennelly, has asked is how much this will cost and that depends, I repeat, upon the result of the flotation. As to the rate to which he referred, and to which my colleague, Senator Wright also referred, I can only inform the committee that the yield for September, 1959, securities When they had three months to run was about 3 per cent. In the terms of my previous comments, the yield for the new securities will be somewhere about the same as the yield for those securities.
.- I take it that the Minister agrees that the Commonwealth paid 1 per cent, on treasurybills issued last year and in preceding years, and I take it also that the Commonwealth intends to pay 3 per cent, for a similar amount of money under the new scheme. If the Commonwealth issues £100,000,000 worth of treasury-bills at 1 per cent, the interest payable is £1,000,000, but it will be up for £3,000,000 if it issues the same amount of seasonal notes at a discount of 3 per cent. This amounts to a rake-off of £2,000,000 for some people; there will not be very many who will be able to put in £5,000. The Government cannot blame the Opposition for thinking that it is just another time when the Government says to the wealthy, “ You have been good boys. We hope you will be as good in future. “
Clause agreed to.
Clauses 13 to 16 agreed to.
Clause 17 (Application of Commonwealth Inscribed Stock Act).
– I refer to subclause (2.) which reads -
In Pan III. of the Commonwealth Inscribed Stock Act 1911-1946 in its application to Seasonal Inscribed Stock, “ prescribed “ means prescribed by regulations under that Act in their application to Seasonal Inscribed Stock.
Frankly, I do not understand that. To what does that clause refer? To regulations to be made under this act when the bill becomes an act or to regulations made under the Commonwealth Inscribed Stock Act in relation to this bill? I certainly do not understand it, and I would like the Minister to explain it.
– Subclause (1.) of clause 17 invokes the operation of the inscribed stock provisions of the Commonwealth Inscribed Stock Act 1911- 1946. The only section in Part III. of the Inscribed Stock Act - it provides for the inscription of stock - that is not applied to the seasonal inscribed stock is section 27. The reason for this is that section 27 prohibits any transactions in inscribed stock within one month of its maturity, and it is proposed that no similar limitation should apply to seasonal inscribed stock. Part V. of the Inscribed Stock Act prescribes the penalties which will be incurred by persons who forge or alter stock certificates or transfers, or commit other offences against the act in connexion with inscribed stock. It is to be applied to similar offences committed in relation to seasonal inscribed stock.
Sub-clause (2.) of clause 17 is included because it will be necessary to promulgate new regulations to govern the issue and transfer, &c, of seasonal inscribed stock; otherwise, the frequent references to regulations made in Part ITI. of the Inscribed Stock Act, especially to prescribed forms, would cause the inscribed stock regulations to apply, inappropriately, to seasonal inscribed stock.
– I still am not very much better off. My question was directed to sub-clause (2.) and not to subclause (1.). However, the Minister gave some interesting information about subclause (1.). I ask this one question and I hope the Minister will be able to answer “Yes” or “No” to it. Will the regulations contemplated under sub-clause (2.) be made under this act or under the Commonwealth Inscribed Stock Act? That is the very simple question I ask.
– They will be made, under this act.
Clause agreed to.
Clause 18 agreed to.
Clause 19 (Seasonal treasury-notes transferable by delivery).
– The provision in clause 19 that a seasonal treasury-note is transferable by delivery makes these notes exceedingly negotiable. They can be passed from person to person and the holder in due course will be the person entitled to collect the money. How will a settlement be effected? The notes are transferable by delivery. I take it that makes them completely negotiable without a document of transfer.
– It is the same as with other Commonwealth bonds.
– I am interested to know how they are paid.
– On presentation.
– Are they paid by cheque or cash or in the manner the holder nominates?
– According to the convenience of the holder as required.
– Is any record kept by the Treasury at that point as to who the payee is - his name and address and that type of thing?
– No record is kept.
– I am wondering whether any consideration has been given to people who may have money that the Commissioner of Taxation has not been told about. They may seek the negotiability offered by this type of security in order to put money out of the way in a safe place.
– For three months?
– That is the limitation on it, but my comment applies if what I am told is correct, to the ordinary long-term Commonwealth bonds. If they are negotiable on mere delivery I do see an opening there for the convenient disposal of what I may term hot money. That is why I ask whether any record will be kept at the time of payment and whether the name and address of the payee will be recorded. That is why I also ask whether it is open for the holder to nominate the method of payment, whether by cheque or cash. I wonder whether thought has been given to that matter.
– The procedure is precisely the same as for Commonwealth bonds. The same opportunity for the type of practice to which the Leader of the Opposition refers is available in respect of Commonwealth bonds, and I have no doubt that the taxation people will use the same methods of detection as they have in respect of Commonwealth bonds.
– But not if no record is kept of the payee in each case.
– No record is kept in the case of Commonwealth bonds. They are negotiable.
Clause agreed to.
Clause 20 agreed to.
Clause 21 (Trustees may invest).
– Both Senator Laught and I have asked the Minister to advise us where the Commonwealth claims to derive power to make a clause of this type. I should be glad if he would now do so.
– As the Leader of the Opposition (Senator McKenna) knows, I particularly like answering questions about constitutional provisions! The question has been raised as to the constitutional power of the Commonwealth to authorize trustees, executors and administrators to invest trust moneys in the purchase of seasonal securities. Paragraph (iv.) of section 51 of the Constitution enables the Parliament to make laws “ with respect to borrowing money on the public credit of the Commonwealth “. The ambit and extent of this power was discussed by Mr. Justice Isaacs and Mr. Justice Rich in a joint High Court judgment in the case of “ The Commonwealth v. the State of Queensland”, reported in (1920) 29 C.L.R.l. The following passage, at page 21, probably summarizes their views: -
This is much more than a power in the Commonwealth to borrow. It is a power to make laws with respect to Commonwealth borrowing. It includes power to fix the terms of the bargain between the Commonwealth and the lenders, and to ensure by appropriate and paramount legislation that the terms it provides shall be enforced. The loan is a transaction outside the jurisdiction of the States. And, being created by the Commonwealth for its own purpose, it may be surrounded with such characteristics as to secure to the Commonwealth the full benefit it desires to obtain.
The Parliament has for many years now acted on the assumption that a provision, such as clause 21 of the bill, authorizing the investment of trust funds in Commonwealth securities, is a law with respect to borrowing within the meaning of the paragraph of the Constitution I have just read. Similar provisions are to be found in section 52 of the Commonwealth Inscribed Stock Act 1911, section 2 of the Commonwealth War Loan (Investment Enabling) Act 1915, and section 11 of the Treasury Bills Act 1914. I am informed by my advisers that they have not, in the time available since the question was raised, found any reported case that casts doubt on the validity of the clause or criticizes in any way the views of the High Court judges that I have just quoted.
– Perhaps, as the Minister has expressed his delight in answering constitutional questions, 1 can ask him another. Will he please indicate to me whether Justices Isaacs and Rich were among the majority or among the dissenters in the case that he cited?
– Oh, Lord!
– They had the numbers.
– I have heard the answer. They had the numbers. I noticed from the extract which the Minister read that their Honours based their decision on the ground that the legislation was legislation about borrowing. I submit with very great respect, first to the Minister, and secondly, to their Honours, that this is a provision dealing with lending by a trustee, an executive or an administrator. The Minister has answered my first question, as to whether their Honours were included in the affirming majority. I should like to pursue that a little further and ask: Did the decision go to the ratio decidendi - to the point of the case - or was it merely obiter dicta?
– I am advised that the case was not concerned with the borrowing powers of trustees, but that the judgment did go to the basis of the question that Senator McKenna posed to me.
Clause agreed to.
Clause 22 (Liability to stamp duty).
– The clause reads - (1.) An instrument or document to which this section applies is not liable to stamp duty or other tax under a law of the Commonwealth or of a State or Territory of the Commonwealth. (2.) This section applies to-
I should like the Minister to comment upon the provision for exemption from stamp duty. Are these instruments or documents in a special position vis-a-vis other Commonwealth documents such as Commonwealth cheques and the rest? Why should they be exempt from State charges? Are they put in a special position, or is this the situation governing Government bonds - their transferability and the rest?
This clause provides that, as for other Commonwealth securities, stamp duty levied by the Commonwealth or a State or a territory of the Commonwealth will not apply to seasonal securities. All forms of dealings in seasonal inscribed stock and seasonal treasury-notes, including their redemption, are exempted by this clause. The provision is similar to that contained in section 52a of the Commonwealth Inscribed Stock Act 1911-1946.
Clause agreed to.
Clause 23 agreed to.
Title agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
CUSTOMS TARIFF BILL (No. 3) 1959. Second Reading.
Debate resumed from 27th October (vide page 1167), on motion by Senator Henty -
That the bill be now read a second time.
– I regret that the bill that we are now considering gives us no opportunity to continue the discussion in which we have been engaged until now and in which, I think it will generally be agreed, the honours were with the Opposition. To the tariff proposal before the Senate, we on this side of the chamber have no opposition whatever. It relates to customs duties which have been in operation for approximately six months, so that the passage of the bill will really be ratification of customs duties that came into operation about six months ago.
Having regard to the volume of imports from Japan and the serious impact that they have had on our economy and our industries, it seems to me that the very small amount of customs duty that is imposed reflects creditably on our secondary industries. I derived great satisfaction from the appointment, some time ago, of Mr. McCarthy, a former chairman of the Tariff Board, to keep an eye on the situation in relation to imports from Japan. It seems to me that the Government has succeeded in preventing our markets from being saturated by imported goods, to the detriment of our own industries. That is very pleasing.
Australia is a young country, and its secondary industries have a difficult task in competing with industries in other countries, such as Japan, with large populations. The Government should always appreciate that fact. If it considers the history of the development of America, it will realize that we can hope to develop this country adequately only if we give reasonable consideration to our secondary industries and ensure at all times that they do not suffer from overseas competition.
This bill was passed by the House of Representatives without opposition, and I am pleased to be able to say that we in this chamber do not intend to oppose it but wish to expedite its passage.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without requests or debate.
Debate resumed from 27th October (vide page 1167), on motion by Senator Henty -
That the bill be now read a second time.
– The Opposition does not oppose this bill. As honorable senators will remember, the Government announced, in the Budget speech of the Treasurer (Mr. Harold Holt), that a reduction of one half-penny per gallon was to be made in the customs duty on motor and aviation spirit. The Government had the opportunity, if it so desired, to continue to collect that half-penny a gallon excise, but it decided to give the public the benefit of that amount. We are indebted to the Minister for Customs and Excise (Senator Henty) for the information that he has supplied in regard to the duty on motor and aviation spirit, and we do not oppose the bill.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without requests or debate.
Debate resumed from 27th October (vide page 1169), on motion by Senator Henty -
That the bill be now read a second time.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without requests or debate.
Debate resumed from 27th October (vide page 1169), on motion by Senator Henty -
That the bill be now read a second time.
– This bill proposes a reduction of 3d. a ton of the excise on coal mined in Australia. The new rate of 5d. a ton has been in operation since 1st September, 1959. I think it was in 1948 that the Chifley Government first imposed this duty for the purpose of providing a fund for, amongst other things, the payment of long service leave for miners. This Government has been able to reduce the amount of excise by 3d. a ton. We are really pleased to see that the position on the coal-fields is such that that has been possible.
.- I think we all agree that the coal-mining industry is not now faced with the bright future that faced it ten years ago. Not only in the Commonwealth but in many other countries, the use of coal is daily diminishing. At the moment, it is very difficult to make an accurate assessment of what the employment position in the coalmining industry in Australia will be in another ten years. I need not go into details and introduce local matters, but I ask honorable senators to consider the effect that the harnessing of water in this district, for instance will have on coal industry policy.
We know that the purpose of this bill is to reduce from 8d. a ton to 5d. a ton the excise payable on coal. I have satisfied myself that the fund is sufficiently healthy to meet its commitments in respect of long service leave. I have also examined the Auditor-General’s statements and I am satisfiedthat there are sufficient funds for the purposes for which they are required. Even to-day we have a situation in which the miners are asking for increases in their pensions. Perhaps something could be done towards increasing pensions by amending the act to make provision for that.I am looking ahead to some of the problems with which we may beconfronted in anotherfive or ten years. It was only recently that I read that there were millions of tons of coalat grass in Germany, Belgium, France and other European countries, and that those countries continued to produce coal in order to keep the miners employed. We may be forced to do that here.
Now that the fund is in a healthy condition, we should preserve it in that condition, if possible, and extend the benefits to coal-miners. For example, it is possible that in the future we may be compelled to repatriate largebodies of coal-miners. The fund wouldbe very useful then. Evidently no one in the community has found the excise that has been paid on coalin the past in any waya severe impost. We have not been embarrassed by it and it would seem that only because the fund is in a healthy condition is it now proposed to reduce the excise rate. I think it is a bad step to reduce the excise rate when theGovernment may be required to face up to serious problems in the ‘future and to afford some further relief to coalminers.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without requests or debate.
Debate resumed from 27th October (vide page 1169), on motion by ‘Senator Henty-
That the bill be now read a second time.
– This is really a machinery measure, the provisions of which are complementary to those of the Excise Tariff Bill (No. 2) 1959, to which wehave already agreed. We offer no opposition to the bill.
Questionresolved in the affirmative.
Bill read a second time, and passed through its remaining stages without requests or debate.
Declaration of Urgency.
– I declare that the Appropriation Bill 1959-60 is an urgent bill.
Question put -
That the bill be considered an urgent bill.
The Senate divided. (The President - Senator the Hon. Sir Alister McMullin.)
Majority … … 7
Question so resolved in the affirmative.
Allotment of Time.
Senator SPOONER (Vice-President of the
Executive Council and Minister for National Development) [10.0]. - I move -
That the time allotted in connection with the consideration of the bill be as follows: -
For the remainder of the committeestage of the bill, until 12 o’clock midnight, Thursday, 12th November,
Far theremaining stages of the bill, until 12.45 p.m. Friday, 13th November.
That, in Committee of the Whole, unless otherwise ordered, the remaining votes be considered in accordance with the following schedule: -
Payments to or for the States, £1,030,000.
Department of Immigration, £2,039,000.
Miscellaneous Services - Department of Immigration, £9,369,000. - until 4.45 p.m., Wednesday, 11th November.
Department of the Navy, £42,612,000.
Attorney-General’s Department, £2,011,000.
Miscellaneous Services - Attorney-General’s Department, £29,500.
Department of Labour and National Service, £2,336,000.
Administration of National Service Act, £175,000.
Post Discharge Re-settlement Training, £1,000.
Department of Primary Industry, £1,860,000.
Miscellaneous Services - Department of Primary Industry, £785,000.
Bounties and Subsidies, £13,500,000. - until 10.30 p.m., Wednesday, 11th November.
Repatriation Department, £83,021,000.
Department of the Interior, £5,115,000.
Miscellaneous Services - Department of the Interior, £138,300.
Civil Defence, £300,000.
War and Repatriation Services - Miscellaneous, Department of the Interior, £287,000.
Australian War Memorial, £94,300.
Australian Capital Territory, £4,191,000.
Department of Territories, £310,000.
Northern Territory, £5,881,000.
Norfolk Island, £32,000.
Papua and New Guinea, £13,142,000.
Cocos (Keeling) Islands, £36,000.
Department of Works, £3,915,000.
Postmaster-General’s Department, £105,066,000.
Broadcasting and Television Services, £9,626,000. - until 4.45 p.m., Thursday, 12th November.
Prime Minister’s Department, £3,228,000.
Miscellaneous Services - Prime Minister’s Department, £4,608,400.
War and Repatriation Services - Reconstruction and Rehabilitation, £2,459,000.
Department of External Affairs, £2,582,000.
Miscellaneous Services - Department of External Affairs, £2,012,000.
Economic Assistance to support defence programme of SEATO member countries, £718,000.
International development and relief,
Department of Trade, £2,164,000.
Miscellaneous Services - Department of Trade, £663,000.
Department of National Development, £1,931,000.
Miscellaneous Services - Department of National Development, £1,288,700.
War Service Homes Division, £1,121,000.
Australian Atomic Energy Commission, £2,186,000.
Commonwealth Scientific and Industrial Research Organization, £6,772,000.
Miscellaneous Services - C.S.T.R.O.. £144,000.
Department of Defence, £1,258,000.
Recruiting Campaign, £310,000. - until 12 o’clock midnight, Thursday, I2th November.
In explanation, I ask the Senate to look at the notes showing the allocation of various departments to the responsible Ministers. It will be seen that we are very far short of having half completed the debate on the Estimates, although this chamber has already devoted a considerable amount of time to them, perhaps even as much as it takes normally each year for the whole debate.
In addition, we have on the business list some fifteen bills, a number of which, such as the Income Tax and Social Services Contribution Assessment Bill 1959, and the International Wheat Agreement Bill 1959, are wanted urgently in order that the legislation may become effective, having relation to its importance in this financial year. As against that, I hope the Senate will agree that we need to get our Estimates through before we start dealing with the legislation, important though the legislation may be. We are, as I say, less than half-way through the Estimates, we have some fifteen bills already on the businesssheet, and we know that some 25 bills are still to come to the Senate from the other place.
After giving consideration to this situation, Ministers and Government senators take the view that the most orderly way to deal with this situation is to apply a timetable to the remainder of the Estimates debate. The time-table has been evolved, having regard to the time available, and to the fact that we are asking the Senate to meet four days a week - to sit on Fridays as well as the days on which we normally sit. The motion is designed to enable senators to debate any of the votes included in each group. For instance, when the votes for the departments for which I am responsible are before the Senate, honorable senators may select any item. We shall not go through the votes line by line. This will give honorable senators a chance to range over all departments.
The programme contemplates that the departments under the care of Senator Henty that have not been dealt with will be considered until 4.45 o’clock to-morrow afternoon. We shall then proceed, until 10.30 p.m. on Wednesday, with the departments that are the responsibility of Senator Gorton. We shall then come to Senator Sir Walter Cooper’s departments. Consideration of these will continue until 4.45 p.m. on Thursday. Then, consideration of the departments for which I am responsible will extend until midnight on Thursday. The motion for the third-reading of the bill will be debated on Friday until 12.45 p.m. This will give an opportunity for a general debate on certain financial principles, as was requested during the Estimates debate.
I hope that the Senate will agree that the proposals are businesslike and proper, having regard to the heavy business list that confronts us.
– The Appropriation Bill is probably the most important financial measure to come before the Parliament in a year, lt enables us to review all the activities that are covered in the ordinary annual services of the Commonwealth. There ought to be no haste to consider it in a house of review, as the senators are supposed to be. It is quite inappropriate to the broad function of the Senate to “ guillotine “ a measure like this. If, at the beginning of the committee stage, some such schedule had been laid down, after consultation with the Opposition, I could have understood it. But the imposition of the “ guillotine “, when we are half way through the Estimates, is in my view completely wrong. The Opposition was not consulted as to the time it wanted to take on any particular matter. Quite arbitrarily we are told that these hours, and these alone, are available to us. There is no consultation at all. I submit that that is quite wrong.
Let us look at what is laid down for to-morrow. We shall discuss matters for which Senator Henty is responsible. They include the Department of Health, Payments to or for the States-
– The vote for the Department of Health has been agreed to.
– Has the vote for Miscellaneous Services - Department of Health been agreed to?
– That has to be discussed further. Then there are such important matters as Payments to or for the States and the vote for the Department of Immigration. The debating time allowed to both the Opposition and Government senators in relation to those matters is from about 3.45 p.m. to 4.45 p.m. to-morrow. One hour is to be given honorable senators to address themselves - in this States’ House - to the question of Payments to or for the States, and to some of the biggest subjects with which this Parliament has to deal - vital matters associated with immigration and so on. Senator Spooner has said that the apportionment of time is reasonable. The Opposition believes that it is not. The Government has Supply until the end of November; it is in no real hurry. It may have in mind a date in November upon which, arbitrarily, it wishes the Parliament to rise, but that is not a good and sufficient reason why debate on any of these matters should be curtailed. It is not the fault of the Opposition if the Government so mismanages the business of the Parliament that the usual end-of-session rush occurs with midnight sittings, sittings on four days a week and insufficient time to give proper consideration to the measures that come before the Parliament. That is the kind of thing that tends to bring this institution into contempt, and in such circumstances it deserves contempt.
We feel that adequate time has not been given to enable us adequately to consider the Estimates. It may well be that if we had been given some choice we would have, asked for a different arrangement, but we were not consulted. I want that point to be clearly understood and recorded. The Minister based the need for haste on the fact that there were fifteen bills on the notice-paper. He prepared his speech somewhat prematurely because to-day we have removed six from that list. It is not a question of obstruction on our part. We realize that certain of these bills flow from the Budget, and that many of them are machinery measures. They have a very quick passage when we are not opposing them. It has never been our habit to delay for delay’s sake. In short, we find ourselves curtailed. .. .
What, an untidy debate it is going to be! What will happen when we come to the important department which is administered by Senator Spooner? I invite honorable senators to look at the list of departments and instrumentalities which we are to consider so hastily. Among them are War and Repatriation Services, the War Service Homes Division, the Australian Atomic Energy Commission, the Commonwealth Scientific and. Industrial Research Organization, the Department of External Affairs, and the Department of Defence. Between them, they pose vast questions for discussion, yet the debate is to be subject to the “ guillotine “. On that basis, I may speak about the Department of External Affairs, then another honorable senator may rise to speak about defence. We shall have a most incoherent, horrible debate, with neither beginning, nor end’.
I felt that the debate so far had been one of the best on the Estimates for many years. A great deal of time was spent in discussing the departments administered by the Minister for Shipping and Transport, and Civil Aviation (Senator Paltridge). The Minister gave a very good exhibition of one who knew his department and was prepared to answer for them. That is a very healthy sign, but from now on, under the “ guillotine “’, there will be a. most untidy and inconclusive debate that will’ certainly not redound to the credit of this Parliament”. 1 regret that the Government has seen it to introduce the “guillotine” half-way through the Estimates. However, I must thank the Minister for having taken notice of the request which I made to him for am opportunity to reserve until the thirdreading stage what I wanted to say on the question of financial, relations’ between the Commonwealth and the’ States.
– You will have about three-quarters of an hour in which to’ speak.
– We shall meet on Friday at 1)0.30> a.m. I imagine that questions will continue until 11. IS a.m., and that we shall be left an hour and a quarter in which to dispose of that vast question. Itf the Leader of the Government and I hustled along we would probably manage to say something: on the subject, and that is all.
I regret that the Minister, by his decision to impose the “ guillotine “, will spoil what has been so far a very informative debate, in which the Opposition has offered probing arguments,, as. is expected of us. We have been given complete answers by Ministers so far, but that will now be spoiled; and 1 record my disgust and disappointment at the fact that we are now tO’ be severely curtailed in our attempt to do our job in this Parliament. We oppose the “guillotine *”.
.- I wish to indicate that I am opposed to this motion. I believe it to be an impudent proposal, which offers no respect whatever to this chamber as a house of review. It asks us to give responsible debate, in a very short time, to a measure which involves the spending of £1,600,000,000 of the people’s money. During the course of this debate we are constantly reminded that it provides a very real opportunity for the Senate to scrutinize government expenditure. I particularly regret the application of the- “guillotine” during the present session when, if ever, the Senate should be mindful of its responsibilities.
There is not the slightest justification, on any practical’ basis, for the Government’s proposal, having in mind the management of business during this sessional’ period - a management which resembles closely what we have seen in every budget session since 1949. It stems from a resolute determination not to programme the Parliament’s work so that there will be reasonable continuity. We are asked to support a proposal which really amounts to an insult to the Senate. The Estimates having gone through the House of Representatives, we are asked by Ministers to dispose of them, in two days - a few hours of debating. We are asked to give our judgment upon all this governmental expenditure. I very much regret that- an interesting debate is being interrupted in this Way by procedure which is wholly unwarranted and, I think, a discredit to this house.
– I object to the time-table which has been put before us, very largely on the same grounds as those stated by my leader (Senator McKenna)’ and Senator Wright. We shall have before us for discussion matters which should be the concern of this house - the apportionment of funds, of which the Commonwealth has now largely become the.’ sole controller, between the Commonwealth and the States. That subject will be disposed of by this House with unwarranted haste. We do not challenge the right of the Government to pursue the policy which the electorate has endorsed, but some departments have been making radical changes. There has been, for instance, grave questioning by the public of the need for alterations in postal and other charges.
The Department of National Development, for which the Leader of the Government is’ responsible; has become very much a subject of discussion, an’d it should certainly receive reasonable attention in this place. The Senate is at least entitled to sufficient debating time to enable it to deal’ with such matters.
It would be in the interest of the Government to introduce a budget at such a stage in the year’s operations as to permit honorable senators time to consider its various aspects. The Government seems to prefer to curtail the time and, by reason of its weight of numbers, to let us suffer rather than progress under its administration.
– I wish to say a few words on this matter. Like Senator McKenna, I am rather surprised at the introduction of the “’ guillotine “ at this stage. The debate on (he Estimates up to this point has been the best that I have taken part in- in this chamber for many a long day, and I hoped’ that it would continue in the way it was going. But the Leader of the Government (Senator Spooner) has got all his strength back after his illness’. He is now showing’ us that strength by imposing the”guillotine’*.
I wonder whether this matter was put to a meeting of the two parties opposite. I wonder whether they were told that this, was going to happen and whether they actually signified their approval of their leader’s proposal that the “guillotine” be applied’. In the Estimates debate up to the present stage Government senators have taken just, as virile a part as have Opposition senators. I would think that they have been very happy with the progress of this debate1. Many searching questions have been levelled at Senator Paltridge and* Senator’ Henty, whose departments have’ been- considered so far, and they have stood up to> them to the best of their ability. They have satisfied the great majority of requests for information that have been made upon them in regard to their departments. I had hoped that that would have continued. Quite frankly, I cannot follow the reasoning of Government rank-and-file senators in approving the imposition of the “ guillotine “ at this stage. If there had been any indication of stone-walling by the Opposition, or even by Government senators, up to this point, there would have been a reasonable case for the introduction of the “ guillotine “, but I think that all will admit there has been no stone-walling. There has been intelligent, valuable debate right up* to: this: point.
Let us. consider what the- position will be to-morrow.. I have not worked out the time-table, but according to my leader we will have a full hour to- discuss,, amongst other things, immigration. I, for one, would, like to have a very full, debate on immigration. To my mind, it is- the bloodstream, as it were, of our national growth. There are many of its aspects that could he well1 and truly discussed to the- benefit of the department and to the- country as a whole.
I can quite understand the imposition of the “guillotine”’ when it is a’ matter of urgency. In those circumstances, of course,, we could approve of it up to a point. But the Leader of the Government cannot make out a case for the “ guillotine “ and giving us such a short time, as Senator Wright said, to discuss the departments of three Ministers, or really threeandahalf Ministers if I may so express it, because the consideration of the proposed votes for the departments represented by Senator Henty has not yet been completed. Tn two days we are going; to rush, through the Estimates of this concentration of departments. Because of the short time available I know what will happen. Ministers will not even bother to answer requests. Why should they?1 They just wit! not have the time: If half a dozen speakers get up and talk about three or four departments, and Ministers’ do not know the answers Offhand, they will’ take the easy course and’ will not answer the requests. That is a very undesirable situation to develop in this chamber and I am sorry indeed that the “ guillotine “ has been introduced at this stage. I do not wish to repeat myself ad nauseam, but I think that a debate of excellent quality up to this point is to be curtailed in a very unnecessary fashion.
– We have been faced with this position almost ever since there has been a Commonwealth Parliament. This is nothing new to the Opposition. When Labour was in government the same set of circumstances arose as have arisen now, and at that time the then government did not hesitate to use exactly the same procedure as the Government is using now.
– Only it did so earlier.
– It is quite right Labour did so earlier! I point out that we have spent already more time on the debate on the votes we have dealt with than we usually spend in dealing with all the Estimates. We have already spent three days on the section of the Estimates which we have dealt with up to date.
Perhaps we would have had a more orderly debate if we had applied the “ guillotine “ earlier. I have always been in favour of applying the “ guillotine “ to the whole of the debate on the Estimates. Every year we are faced with the same thing. The first departments to be dealt with get the lion’s share of the questioning and as the debate proceeds towards the finish there is very little discussion on the proposed votes for the remainder of the departments. When I was a back-bencher it was my experience that many times the debate on departments was completed before I had an opportunity to ask certain questions because we did not have the orderly debate that is the result of the introduction of the “guillotine”. I think the Opposition is talking a lot of nonsense. I know that it has to oppose the “ guillotine “, as it has done regularly, but this proposal will mean that at least the consideration of the proposed votes for the balance of the departments will proceed in an orderly fashion. Every honorable senator will have the opportunity to deal, in an orderly manner, with the various departments as they come along.
– Will you cut out the word “ orderly “.
– It will be very orderly. If, over the last three days on which we considered the Estimates, honorable senators opposite had dealt only with the items in the Estimates, instead of making second-reading speeches, they would not have wasted the time they did and we would have been further ahead than we are now. The position is entirely in the hands of the honorable senators themselves. I took the initiative one time to point this fact out to them. The time that was wasted then could have been more profitably spent. They cannot have their cake and eat it, too. That is the position. They now have the opportunity to deal with the balance of the Estimates in an orderly fashion. For goodness sake let them realize that we have an immense amount of work to do! Many bills are still to be considered.
I hope that eventually we will adopt the “ guillotine “ as a set procedure so that the Estimates can be debated in an orderly manner. We tried it last year and I think it worked most successfully. We tried to do it the year before but it was torpedoed. Personally, I think that it is the proper procedure and I have always advocated it.
– The Minister for National Development (Senator Spooner) is not a first offender in this matter by any means. I do not wish to labour the question and so take up some of the little time we will have at our disposal. I can understand the eagerness of the Minister to get the business of the Parliament done, but probably he has not given this matter the consideration that it deserves. In view of the short time he is allowing for the discussion of these Estimates, and in view of the number of new senators we have in the chamber, I think that the Minister has not given this matter the consideration he should have given to it. I appeal to him to withdraw this motion. We on this side have not offended. The Minister for Customs and Excise (Senator Henty), who has just sat down, is the greatest offender in making second-reading speeches during the debate on the Estimates.
I am sure honorable senators will agree with me when- 1 say that at no time in our history has public opinion been focussed more on the Parliament than it is to-day. It is no use our trying to ignore the fact that Parliament to-day does not enjoy the prestige that it enjoyed at other times that I can remember. We cannot ignore the facts. The number of hours and the number of days we sit and the way in which the business is conducted give some people an opportunity to criticize the Senate in a way that we really do not deserve. I think that the safeguarding of the interests of the Parliament should be our responsibility. I know that the Leader of the Government is very sincere in this matter. I do not think he wants to curtail discussion. I think he is anxious to get things done.
The PRESIDENT (Senator the Hon. Sir Alister McMullin). - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -
That the Senate do now adjourn.
Question resolved in the negative.
Allotment of Time.
Question put -
That the motion (vide page 1331) be agreed to.
The Senate divided. (The President - Senator the Hon. Sir Alister McMullin.)
Majority . . . . 6
Question so resolved in the affirmative.
Motion (by Senator Spooner) proposed -
That the Senate do now adjourn.
– I crave the indulgence of the Senate for five minutes or so to put forward a proposal with respect to the development of the north of Australia and to tourism. I believe that there is to be a meeting of representatives of some of the Australian airline operators tomorrow. This is the only way, under the Standing Orders, that I can bring this matter to the notice of the Senate, and I do so in the hope that my remarks will have some influence on the meeting I have mentioned.
I wish to direct the attention of the Senate to an imaginative and a well-conceived scheme. It is the brain-child of a journalist by the name of Lloyd Marshall, of the Perth “ Daily News “. He proposed the scheme in July, 1958, and it has since been promoted by Mr. Kleinig, of MacRobertson Miller Airlines Limited. I believe that the Victorian Tourist Bureau has shown some interest in the scheme. Lloyd Marshall can speak with some authority on tourism, as it is a subject in which he has shown a vital interest over a number of years. He recently returned from America and SouthEast Asia, after having won the blue riband for journalism in Australia in 1957 - the Niemann Fellowship. The opening remarks of Lloyd Marshall on his proposal should immediately claim the attention of honorable senators. He stated -
The north of Australia, and particularly the north of Western Australia and Queensland, cannot be expected to prosper and advance until people of the twentieth century begin to explore it.
How true those words are! I had heard people who know the north talk about it.
I had seen films of it. I had also seen colour slides of it. But I did not have an appreciation of the terrific potential, and the magnitude, of the country there - the ruggedness of it, and its rather exciting and dramatic possibilities. How do we get people to see it? I think that Lloyd Marshall supplied the answer in his proposal.
A tourist attraction known as the Flinders Flight around Australia could be provided at an approximate cost of £200 first class, or £175 tourist class, including accommodation for a period of a fortnight. A Flinders flighter would not be precluded from stopping off at any spot for any length of time, if he wished to do so.
I emphasize that the north of Australia cannot be expected to prosper unless people of the twentieth century go along and have a look at its possibilities. I think that one way of assisting its development is to encourage tourism. Therefore, a definite way to attract tourists to the north must be found. The reason why I call the proposal the Flinders Flight is that the first man to circumnavigate Australia was Captain Matthew Flinders. “Investigator” set out from Sydney in July, 1802, under his command. He sailed northwards to the Torres Strait. He charted the Gulf of Carpentaria and sailed on to Timor for repairs. Then he sailed south, around Western Australia, to Sydney, where he arrived on 9th June, 1803, having taken about twelve months to circumnavigate this country. He was the first man to circumnavigate the world’s largest island and its smallest continent, which he named Australia. Since then, it has been an equally arduous undertaking to do what he did. I am told that to do the trip by ship to-day will take, including the waiting period for bookings, up to eighteen months. It took Flinders only twelve months. To do the trip by car costs the price of a car and involves unlimited discomfort. There remains hut one way to see fight round Australia, and that is by air. Under this proposal, it is suggested that Australia’s regular airline systems and scheduled flights should be used to inaugurate a tourist attraction to “be known as the Flinders Flight.
– Would it be an .austerity .flight?
– You could travel first class or tourist class. It would be a package tour. At any airline office in Australia or overseas, a Flinders flighter could book for a package tour. This would entitle him to join a flight at any stop point on the Australian coast. He would then be joining other Flinders flighters already on the aircraft from previous stop points, and would receive the Flinders Flight treatment. He would have paid an inclusive fare of approximately £200 for first class and £175 for tourist class, which would take care of his travel and accommodation. He would then circumnavigate the continent and get off where he got on. The fare would be the same for embarkation at any point, because all Flinders flighters ultimately would cover the same track and use the same accommodation facilities.
In my opinion, this tourist facility would fill a gap in tourism and offer something long desired by Australian tourists - the opportunity to see Australia first. I wonder how many Australians have been right around Australia, I should say that less than 1 per cent, have done so. Admittedly, hotel accommodation in some far-flung centres is not terribly attractive. Flinders flighters would therefore see Australia as it really is. But that could be a selling factor. I have dined out on two wonderful stories, one of a stay at Wyndham and the other of a stay at Broome. If we were trying to sell this tour to Americans, they could be told that they were seeing the frontiers of Australia. The package deal that the Flinders flighter would get with his ticket would have to include such things as the Flinders background, and the historical and present-day significance of the places visited. It would have to list the facilities there are for seeing the things as well as the things to be seen. It would have to be emphasized that those making the tour were visiting Australia’s pioneering frontiers.
It will be remembered that Flinders reached Sydney on 9th June. The first Flinders flight could be timed to get to Sydney on 9th June, thus .cashing .in on .the historical significance of the date. It is suggested that passengers on the .first flight should include representatives of newspaper, magazine and television interests. A 16-mm. colour film could be made for private showing afterwards to interested people, to give them an appetite for the
Flinders flight. A check in England would let us know whether there were any descendants of Flinders in Australia. If there should be a descendant who was also a photogenic female, so much the better. She would be worthy of inclusion as a part of the scenery and the publicity.
– Would all this be done in a fortnight?
– lt could be done in a minimum of a fortnight. Quite a lot of people receive only three weeks’ leave a year. If a tourist wanted to stay longer than the scheduled time at a particular place, all it would cost him would be the price of accommodation.
I suggest that a selection of colour slides taken by the first party of Flinders flighters would be excellent publicity when shown in the various tourist bureaux. I think that this is a suggestion with a lot of merit. Last year, some £28,000,000 went out of this country through spending by tourists overseas. This scheme would help to retain that money in Australia. More important than that, however, is that it would let people see the terrific possibilities that exist in the north of the continent. I should like the airline operators of Australia to give this suggestion serious thought, with a view to promoting the scheme.
.- Having listened to Senator Branson’s suggestion, I should like to say that if you want to see the country, do not travel by air. Having regard to the height at which pressurized aircraft travel these days, even rather large mountains tend to flatten out when seen from the air. It is essential to have an adequate ground organization at each stopping point, so that travellers may see the country by coach or other motor vehicle.
Many of the views that have been expressed in regard to the tourist industry are not considered as practical by people engaged in the industry. Senator Branson suggested that in order to see the north of Australia tourists should take a trip right round the continent. Any one who knows the tourist industry will appreciate that it is possible to go about the matter in a more effective way than that. If you wanted to show people the northern part of Australia you would make sure that the tour was really going to show them the north.
– You could see the north on the way round, could you not?
– For people living in certain parts of the Commonwealth, there would be no need to travel right round Australia to see the north. I am a northerner. If I wanted to see the southern parts of Australia I would not travel right round Australia to do so.
– You could not travel right round Australia without seeing the south.
– I am trying to be sensible, and I am speaking as one who knows something about the tourist industry and how to develop it. Tourists must be directed to the areas that you want them to see, instead of talking this airy-fairy stuff about going right round Australia in order to see a few spots.
Question resolved in the affirmative.
Senate adjourned at 10.48 p.m.
Cite as: Australia, Senate, Debates, 10 November 1959, viewed 22 October 2017, <http://historichansard.net/senate/1959/19591110_senate_23_s16/>.