23rd Parliament · 2nd Session
The PRESIDENT (Senator the Hon. Sir Auster McMullin) took the chair at 3 p.m., and read prayers.
– I should like to ask the Leader of the Government in the Senate a few questions. Is it not a fact that the present monopolistic enterprise and capitalistic Government is in a spot of bother with its economic system? ls this due, in part, to the imbalance between the spending on consumption goods and the amount of finance required for capital production? ls it a fact that the Government is loath to increase taxation? Is it also a fact that the Government would like to draw money from the public without undue disturbance of the public’s equanimity or any undue reduction of its bank balances? Is the Minister aware that in England, up to the end of June, 1959, £225,000,000 had been invested in premium savings bonds, the interest on which sum was paid back to certain lucky bond buyers in the form of prizes? Will the Government consider the establishment of such a system here, so channelling Australia’s gambling activities in a direction that will bring grist to the Government’s mill and at the same time leaving the gamblers, or investors, in full possession of their capital?
– Senator Brown has a habit of getting himself confused, getting me confused and getting the rest of the Senate confused. I start by making the point that this is a Liberal Government and that we are very proud of it. We have been re-elected at election after election, and we shall continue to be re-elected in the future. As Senator Brown knows, a statement on the Government’s financial proposals will be made at 8 o’clock to-night in the Senate as well as in the other place. I am sure that the people of Australia will be interested, satisfied and pleased to know that our thoughts upon the economic position go a little deeper than the consideration of a lottery.
– Has the attention of the Minister for Civil Aviation been directed to a recent statement by Mr. J. T. Pyle, the Deputy Administrator of the United States Federal Aviation Agency, on the suitability of Tullamarine as a site for a jet airport for Melbourne? In view of the time that has elapsed since this site was acquired, and the urgent need in Victoria for this airport, will the Minister inform the Senate of the progress that has been made? Has any target date been set for the completion of construction?
– Yes, Mr. President, I have had the opportunity to see the statement attributed to Mr. J. T. Pyle. I have also had the opportunity to have a very pleasant discussion with Mr. Pyle on a number of civil aviation matters. I am delighted, as is Senator Wedgwood, to know that Mr. Pyle thinks that the site for the Tullamarine airport is a very good one indeed. The acquisition is proceeding. It is being carried out by the Department of the Interior. No target date for construction has been fixed. A number of civil aviation policy matters are connected with the construction of airfields in Australia. As soon as the Government is in a position to make an announcement in this connexion, it will do so.
– I wish to ask a supplementary question. Can the Minister for Civil Aviation say whether the Government has any thoughts about the building of the proposed new airport in Canberra?
– That question is not supplementary to the original question.
– I wish to address four questions to the Leader of the Government in the Senate. Has the Tariff Board submitted its report on the copper industry? Has the report been considered by the Government? If it has, has any decision been reached? When can the Senate expect to learn of the decision?
– The Tariff Board’s report on the copper mining industry has been received and it has been considered by the Government. The Minister for
Trade will make an announcement at the time which he considers appropriate, and will table the relevant report.
– My question without notice is addressed to the Minister representing the Minister for Immigration. It relates to a recent statement to the effect that approximately one-half of the new Australians in Australia, numbering about 200,000 people, who are eligible for naturalization have not in fact taken action to become naturalized. Can the Minister state whether there is any particular reason or whether there are any particular reasons for this very serious situation? If he cannot state any reason for this situation, will he take steps to have a careful survey made among new Australians in order to ascertain the reason or reasons why more naturalization ceremonies are not taking place?
– The Minister for Immigration has conducted a survey of this matter. In fact, the department continually has this matter under observation. Very shortly a bill will come before the Senate designed to simplify the procedures for naturalization. The department is making every possible effort to gain the confidence of those immigrants who have not yet taken the step of becoming Australian citizens. If any honorable senator has any suggestions that may be helpful to the department I feel sure that the Minister will be delighted to receive them.
asked the Minister for Customs and Excise, upon notice -
– 1 now furnish the following answers to the honorable senator’s questions: - 1 and 2. These matters have not been specifically brought to the notice of my department, but I have no reason to doubt the correctness of the statement by Mr. Cuthbert.
asked the Minister representing the Postmaster-General, upon notice -
– The PostmasterGeneral has supplied the following information: -
asked the Minister representing the Minister for Trade, upon notice -
– The Minister for Trade has now provided me with the following answers: -
asked the Minister representing the Minister for Trade, upon notice -
On what basis will space be allocated to the Stales on the export promotion shipwhich is shortly to be sent abroad?
– The Minister for Trade has supplied the following answer: -
I take it Senator Pearson is referringto the mission and display which the “ Straat Banka “ will carry to Singapore, Malaya, India and Ceylon during April and May next year. This venture is being organized by the Australian Chambers of Commerce Export Council in association with the Australian Manufacturers Export Council and enjoys the full support of the Department of Trade. The on-board mission will comprise 38 members drawn from industry and commerce in all States of Australia. Exhibition space will be allocated by the organizers to each State according to interest shown and trade prospects for specific products and services in the countries to be visited. The organizers have appointed a promotionalofficer for the venture in each Stateand each is actively working to ensure that traders and industrialists avail themselves of the opportunity to secure effective representation for the State from which they operate. The “ Straat Banka “ will depart from Australian shores as a national mission, an exhibition which is truly representative of all States according to their interests.
asked the Minister representing the Minister for the Army, upon notice -
– The Minister for the Army has supplied the following answers: -
asked the Minister representing the Prime Minister, upon notice -
– The Prime Minister has furnished the following reply: -
The number of staff employed under the Public Service Act was -
The number of persons employed by Commonwealth government departments, other than those under the Public Service Act, and statutory authorities was as follows: -
Total .. .. 46,310
30th June, 1960-
Total .. 59,794
asked the Minister representing the Prime Minister, upon notice -
Has the Commonwealth Government decided to brief counsel to oppose the claim about to be made by the Australian Council of Trade Unions for an increase in the base rate?
– The reply to the honorable senator’s question is as follows: -
As no such claim has yet been lodged with the Conciliation and Arbitration Commission, the Government has not considered the matter.
– I lay on the table the following paper: - Australian Universities Commission Act - First Report of the Australian Universities Commisison on Australian Universities, for period 1958-1963.
I ask for leave to make a statement on this subject.
– The report I have tabled is the first report of the Australian Universities Commission established by the Australian Universities Commission Aot of 1959. It reviews university development following the report of the Murray committee and goes on to report and make recommendations regarding university development in the triennium 1961 to 1963. The Prime Minister (Mr. Menzies) undertook to give as much time as possible to study this report before legislation giving effect to its recommendations was introduced.
The Government has examined the report and has decided to accept the commission’s recommendations generally, subject to certain considerations to which I shall refer shortly. Legislation has been prepared and it is hoped that it will be possible to introduce a bill to give effect to the commission’s proposals very shortly in the present session of the Parliament. Of course, legislation on the commission’s proposals and the report of the commission are inseparably linked and I suggest, therefore, that the discussion of the report could best take place in conjunction with the debate on the bill.
The report of the Universities Commission has been sent to each State Premier. In accepting the commission’s proposals generally the Commonwealth Government is, of course, well aware that the primary responsibility for their universities rests with the States. It is entirely a matter for each State to decide to what extent it proposes to support its universities financially along the lines recommended by the commission. The commission is in no sense a coercive body. Its report is in effect advice on university development to governments and universities from an impartial and competent body.
The Australian National University is the special and direct concern of the Commonwealth Government. As such, it will not, of course, be dealt with in the States Grants (Universities) Bill, which the Prime Minister will introduce. However, honorable senators should know that the Government has approved in principle recommendations of the Australian Universities Commission as they relate to the Australian National University, subject to further detailed examination. In particular, the Government has approved that arrangements for a new building for the Chemistry School should proceed. As I mentioned earlier, honorable senators will have every opportunity to debate this report of the Universities Commission when the legislation stemming from it is before this chamber, However, so that this important report will become part of the Parliamentary record, I move -
That the paper be printed.
– The Opposition recognizes that this is a very important report. However, in the light of the fact that legislation is to be introduced during the current session, as I understood, the Leader of the Government in the Senate (Senator Spooner) to say, the Opposition will not seek a debate on this motion. Consideration of the report will be very much to the fore in the contemplation of the legislation that is designed to give effect to the recommendations. Therefore, I repeat, the Opposition does not seek an opportunity to debate the matter at this stage.
Question resolved in the affirmative.
Report of the Public Accounts Committee.
– On behalf of the Public Accounts Committee, I present the following report: - Fifty-first Report - Expenditure from Advance to the Treasurer for the financial year 1959-60 and Treasury Minutes of the Forty-first and Forty-sixth Reports, together with summaries of those reports. and move -
That the paper be printed.
This report is in three parts. Part III. records the Treasury minutes on the committee’s forty-first and forty-sixth reports, and Part II. refers to a relatively minor amendment to the table of trust fund investments in the finance statement. The main section of this fifty-first report is Part I., which summarizes the results of our examination of the expenditure from the Advance to the Treasurer for the financial year 1959-60.
Of the many items of interest commented on in the report, two are of particular significance. The first relates to the failure, in certain specific instances, to achieve satisfactory progress with projects admitted to the civil and defence works programmes. The failure was due to administrative deficiencies which we would not expect to be repeated in the future in view of the assurances given during the course of our investigations. The second is that, in this report, the committee has had to refer again to the present form of the Estimates and Appropriation Acts. In a number of cases we found that these had presented problems which the departments concerned had not dealt with as effectively as they could have, with the result that obscurities and misleading information had been presented to the Parliament.
Question resolved in the affirmative.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Spooner) read a first time.
. I move -
That the bill be now read a second time.
The purpose of this bill is to authorize the rarsing of loan moneys totalling £37,200,000 for financial assistance to the States for housing. In accordance with the requests of the States, and approval of the Australian Loan Council, the amount of £37,200,000 will be allocated as follows: -
New South Wales . . 13,000,000 Victoria 10,300,000 Queensland 3,100,000 South Australia 5,800,000 Western Australia . . 3,000,000 Tasmania . . . . . . 2,000,000
The provision of this amount in 1960-61, for which approval is now being sought, represents an increase of £1,120,000 over the amount advanced to the States in 1959-60. Advances to the States will be made in accordance with conditions laid down in the Housing Agreement Act 1956, for which 1960- 61 will be the last year of operation. In accordance with the agreement authorized by that act, the amount of £37,200,000 to be advanced to the States rn 1960-61 will be used for two separate purposes.
It is expected that £26,030,000 will be used by the States for their own housing programmes. The remaining £11,170,000 will be allocated to the Home Builders’ Account set up rn the various States for distribution, to building societies and other approved lending institutions for the erection or purchase of homes for private ownership. In 1959- 60 the sums provided for these two purposes were £25,246,000 and £10,834,000 respectively.
In accordance with provisions of the agreement the minimum that could be made available by each State to building societies and other approved institutions in 1960- 61 is 30 per cent, of the Loan Council allocation. The minimum percentage was 20 per cent, for 1956-57 and 1957-58, but it was increased to 30 per cent for the remaining three years of the agreement. The terms of the housing agreement require that an amount specified by the Commonwealth, but not exceeding in any year 5 per cent, of the moneys made available for State housing programmes, be set aside in each State for the erection of dwellings for allotment to serving members of the defence forces. The Commonwealth makes supplementary advances of an equal amount, for the same purpose. These supplementary advances are met from the respective votes of the service departments and are additional, therefore, to the loan moneys to be raised in pursuance of this bill.
The estimated amount to be set aside by the States for the housing of serving members of the forces in 1960-61 is £1,012,000 as compared with £1,061,848 set aside in 1959-60. Supplementary advances being made by the Commonwealth from revenue funds to match these allocations by the
States, result in a substantial increase rn the number of bouses erected by the State housing authorities.
In 1959-60 State housing authorities commenced 9,181 dwellings with funds made available under the housing agreement; in the same year 9,353 dwellings were completed. These figures include dwellings built for serving members of the forces. The number of houses provided for the services as part of the 1959-60 programme was 560, and 304 houses are still to be made available by the States from programmes approved for the first four years of the agreement. Arrangements are in hand for a further 573 dwellings to be provided in the current financial year.
During 1959-60, 304 institutions received funds from the Home Builders’ Account. In that year a total of 3,140 new houses were commenced and a total of 4,463 houses were completed or purchased; the latter represents 32 per cent, of the total number of dwellings financed from agreement moneys during the year. It is expected that some 240 institutions will be drawing funds from the Home Builders’ Account in 1960-61.
A feature of the 1956 housing agreement has been the development of building societies to participate in the funds coming available from the Home Builders’ Account.
The flow of money under the Home Builders’ Account has been directly responsible for the formation of 1 85 new cooperative terminating building societies in New South Wales. In Victoria, the scheme has provided finance for almost 100 new housing societies, thus strengthening the already well developed movement in that State. The action of the Government in providing that portion of the agreement funds should be diverted to building societies has also led to the establishment of 34 new societies in Queensland, 27 in Western Australia and twelve in Tasmania.
The housing agreement was so framed that in States where the building society movement was not developed on a sufficiently large scale to absorb all the moneys, other approved institutions should be allocated funds from the Home Builders’ Account. Amongst the institutions which have received funds are the State Bank of South Australia, the Rural and Industries Bank in Western Australia, and the Agricultural Bank in Tasmania.
Surplus moneys are accumulating in the Home Builders’ Account and becoming available for immediate re-lending. The reason for (his accumulation is that repayments received from the building societies and other institutions are more than sufficient to meet repayments on the loans made by the Commonwealth Government. In the first four years of this scheme, that is, 30th June, 1960, more than £2,300,000 had become available for relending in this way.
In 1959-60 the Commonwealth’s direct financial contribution to housing was, as in the immediately preceding years, £80,000,000. The major components of this were war service homes, £35,000,000 and the housing agreement, £37,000,000. The total financial contributions for the current year 1960-61 will be approximately the same as for 1959-60. In 1959-60 the estimated total investment in new housing was £288,000,000 compared with £264,000,000 in 1958-59, representing an increase of9 per cent.
The high level of investment in new housing in the last financial year is reflected in the figures for housing completions in that year, when 90,021 houses and flats were completed. This figure is an all-time high and represented an increase of 7 per cent. over the completions figure of 84,158 attained during the financial year 1958-59. During the quarter ended 30th September, 1960, the estimated number of dwellings commenced in Australia was 25,472. This level also is a record. This is the last year of the 1956 housing agreement, and a good time to assess the success of this measure. The Government is satisfied that the agreement has allowed it to do the things which it set out to do. Commonwealth finance has greatly assisted in reducing the backlog of requirements for dwellings and the housing problem in Australia as a whole is well on the way to solution. The assistance provided under the agreement for building societies has considerably fostered the growth and development of these bodies which now play a considerable part in allowing Australians to acquire their own homes.
The Loan (Housing) Bill is necessary to allow the provision of the finance for the final year of the agreement. I commend the bill to honorable senators.
Debate (on motion by Senator O’Byrne) adjourned.
Bill received from the House of Represenatives.
Standing Orders suspended.
Bill (on motion by Senator Henry) read a first time.
– I move -
That the bill be now read a second time.
The purpose of this bill is to approve a supplemental agreement to the Sugar Agreement 1956-61 between the Commonwealth and Queensland Governments. The supplemental agreement amends the original agreement in three aspects. These are -
Until well into the present year the wholesale price of sugar had remained unchanged since May, 1956, despite increased wages, freights and other production costs. The sugar industry was able to offset many of these increased costs by its increased efficiency, particularly in respect of its yield of sugar per acre. Substantial savings were also effected by the introduction of bulk handling of sugar at mills, wharfs and refineries. However, the industry was unable to continue to absorb rising costs and earlier this year made a submission to the Commonwealth Government and the Queensland Government for a variation of the sugar agreement by an increase in the wholesale price at which sugar is made available in State capital cities and at Launceston in Tasmania and at Darwin in the Northern Territory by the equivalent of Id. per lb. in the retail price.
After a thorough investigation by officers of the Department of Primary Industry into the cost of production figures submitted by the industry, the Government decided to concur in the increased price requested. By agreement with the Queensland State Government the wholesale price of 1A grade sugar was accordingly increased from £81 2s. a ton to £90 5s. 2d. a ton and IXD grade, that is, manufacturers’ grade, from £80 to £88 a ton, with effect from 16th May, 1960. I may explain to honorable senators that wholesalers receive a 2i per cent, discount on the price of 1A sugar and, while the retail price is not actually controlled by legislation, it is generally recognized that the retailers’ margin is 13 j per cent, on the wholesale price. The addition of this percentage to the amended wholesale price results in a new retail price of Hd. per lb. in State capitals for refined sugar.
On the question of rebates, I may explain that the agreement provides that the sugar industry shall provide a fund from which a rebate shall be paid on sugar used in processing fruit products. The payment of the rebate is subject to certain conditions, the principal of which is that processors shall pay not less than prescribed minimum prices for fresh fruit. The rate of rebate provided in the original agreement was £2 4s. a ton, which rate had operated since January, 1933, when the wholesale price of sugar was £32 10s. 9d. a ton (equivalent to 4d. per lb. retail). Fruit-growers and processors requested that this rate should be substantially increased in view of the many increases in the sugar price since 1933. The Government, with the concurrence of the Queensland Government, decided that the rate should be increased to £5 a ton and that the question of any further amendment to the rate should be referred to a committee of inquiry, to which I shall refer later. The increased rate of rebate necessitated an increased payment by the sugar industry to the Fruit Industry Sugar Concession Committee, which administers the fund from which the rebate is met. The increase is at the rate of £144,000 per annum, and has been provided for in the supplemental agreement.
Australian export industries have not been adversely affected, so far as their sugar cost is concerned, by the increase in the Australian sugar price, as the agreement provides that the sugar industry shall pay an export rebate on the sugar content of goods exported. The rate of rebate is determined monthly by the Export Sugar Committee and, briefly, may be said to be the excess of the Australian sugar price over the estimated price at which the cheapest available foreign sugar can be landed in Australia, duty free. The rate of rebate therefore rises automatically when the Australian sugar price is increased. The agreement, however, provides that an exporter may elect to take an option for a period up to twelve months at the rate of rebate determined for any month, the idea being to enable exporters to know in advance the net cost of sugar used in goods to be exported. Those exporters who had elected to accept rates of rebate determined before the price rise would have received a lower rate of rebate than they would otherwise have received. Clause 3 of the supplemental agreement empowers the Export Sugar Committee to adjust the rebate rates of option holders and I understand that this has been done.
The Government has announced its intention to appoint a sugar inquiry committee to inquire into the sugar and fruit industries and their relationship and to report to the Government before the current agreement expires on 31st August, 1961. It is proposed that the committee will hold public hearings and interested parties will have an opportunity of expressing their views to the committee.
Sugar agreements between the two governments along the lines of the present agreement have been supported by all political parties over a long period of years. I am certain these agreements have done much to establish and stabilize the very efficient Australian sugar industry, and at the same time have protected the interests of the domestic consumers and manufacturing industries using sugar. The Australian market has always been assured of ample supplies of sugar at reasonable and stable prices.
I commend the bill to honorable senators.
Debate (on motion by Senator Courtice) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Henty) read a first time.
– I move -
That the bill be now read a second time.
Honorable senators will be no doubt aware that the Constitution vests in the Commonwealth the power to legislate in matters relating to weights and measures. Attention was drawn to this in the report of the Commonwealth Royal Commission on the Constitution in 1930. Evidence given to the Commission suggested that the Commonwealth should legislate to provide for a uniform system of weights and measures in Australia. It had been pointed out that each State had established independent standards of measurement under State weights and measures acts but that these acts were not uniform.
At the conference of State Premiers held in 1936 it was agreed that if the Commonwealth Government enacted legislation covering the establishment and maintenance of Commonwealth standards of measurement, the States would co-operate in regard to the adoption of these standards throughout Australia. This matter was again considered at a conference of Commonwealth and State Ministers held in 1939.
Honorable senators will recall that the Commonwealth first legislated in the field of weights and measures in 1948 with the passing of the Weights and Measures (National Standards) Act. This act makes provision for standards of measurement of various physical quantities and for these to be the legal standards for Australia. At the time the act was introduced it was pointed out that the Commonwealth had already provided for the various standards of measurement required. The Commonwealth Scientific and Industrial Research Organization National Standards Laboratory established in 1939 is equipped to maintain the Commonwealth standards of measurement of the various physical quantities. The 1948 act gave legal sanction to these standards.
When the legislation was introduced it was pointed out that in exercising its powers under the Constitution the Commonwealth did not wish to take over control of the administration of weights and measures throughout Australian but hoped that the administration would be carried out through the existing State organizations. The act therefore provided for the Commonwealth standards of measurement to be the ultimate reference standards, throughout Australia and for the existing State standards to be calibrated against those of the Commonwealth, and thus be given legal validity and made uniform. The normal functioning of the State weights and measures instrumentalities would not be disturbed.
The words “ weights and measures “, although thought of normally as referring to those weights and measures used in commercial transactions, apply to standards of measurements of all physical quantities used in commerce, industry and science; for example, mass, length, time, interval, volume, area, pressure, density, electrical current and power, temperature, &c.
The 1948 act made provision for standards of these physical quantities, and in drafting the act consideration was given to weights and measures legislation existing in other countries and advice obtained from scientists and technologists concerned with these matters. The act provided for a National Standards Commission of five experts to advise on the regulations arising from the act.
In drafting these regulations the commission became aware that the problem of introducing Commonwealth standards of measurement, which were to supersede the State standards without interfering with the normal functioning of the State instrumentalities, was much more complex than had originally been envisaged.
From the National Standards Commission’s discussions with Commonwealth and State legal and technical authorities, it has become clear that several amendments must be made to the 1948 act if legal difficulties are to be avoided. The commission has recommended that a number of amendments should also be made in order to clarify the intention of several sections of the 1948 act and to avoid problems that have arisen during the framing of the regulations. The Parliamentary Draftsman has advised that rather than amend the 1948 act a fresh act should be introduced, incorporating the suggested amendments. The present bill is to serve this purpose. It is intended that regulations to give effect to the provisions of the act will be made after this legislation has been passed.
I now submit the bill for the consideration of honorable senators.
Debate (on motion by Senator McKenna) adjourned.
Debate resumed from 19th October (vide page 1138), on motion by Senator Paltridge -
That the bill be now read a second time.
– The measure now before the Senate is, as has been indicated, the appropriation for works and services for the current financial year. The bill, taken in conjunction with the Supply Bill that provided the necessary funds for continuing capital works until the end of this month, covers an expenditure of £139,921,000- almost £140,000,000. It is very significant that two items alone make for more than half that total of £140,000,000. An amount of £35,000,000 is sought in connexion with war service homes and an amount of more than £42,000,000 is sought for works to be done on behalf of the Postmaster-General’s
Department. Those two amounts total more than £77,000,000 - more than half the total envisaged by the bill in the appropriation.
It is interesting to note that both the amounts to which I have referred, having regard to the purposes of their expenditure, are of a highly reproductive nature. Not only are they highly reproductive, but also they are immediately reproductive when the works are concluded. The moment that war services homes are built their fortunate owners are involved in repayments. Those repayments extend over a period that is a good deal shorter than the period of 53 years contemplated for the amortization of Commonwealth loans. The Post Office, with its telephonic, telegraphic and other facilities, is revenue earning and makes a very good profit. So on the face of things, far more than half of the total amount sought under this bill is a good investment for the nation, with a return in the one case of high revenue and in the other case a repayment of principal and interest.
The two amounts that I have mentioned, taken in conjunction with only four others that I shall mention, cover practically the whole of the amount to be appropriated. In the Australian Capital Territory this year £12,800,000 is to be spent. The sum of £7,500,000 is to be spent on civil aviation; £18,500,000 on development of the Snowy Mountains scheme; and £4,700,000 on rail standardization. Those four items, taken in conjunction with the items relating to war service homes and the PostmasterGenerals’ Department, total about £120,500,000. That amount comprises the great bulk of the amount to be appropriated. The remaining £19,500,000 covers all other items. On any kind of a survey of the works proposed it would be difficult to point to any one and claim that it was unnecessary. All of them are works that speed the development of the Commonwealth in some form or other, and it may be that in some directions they do not keep pace with what is required. By and large, there is a general acknowledgment that the works are desirable and are necessary.
The aspect to which I wish to direct attention for a moment is the fact that all of these capital works, most of which are reproductive and will endure for centuries, are to be paid for out of taxation and other revenues of this year alone. Thai fact highlights the complete failure of the Australian loan market under the present Government. The amount of £140,000,000 that is to be provided out of revenue this year for the purpose of these enduring capital works is not the full measure of the deficiency in the Australian loan market, because as the Senate knows, apart from Commonwealth capital works, the loan market fails by £80,000,000 to provide the amount required for even the State capital works. In the current year the States require £230,000,000. The loan market is estimated to yield £150,000,000. The loan market deficiency of £80,000,000, when added to the £140,000,000 to be appropriated by this bill, makes a very colossal total of £220,000,000. By any standards that indicates a very gross failure of the Australian loan market. The situation is indicative of the fact that in Australia we have had raging inflation throughout this Government’s tenure of office since 1949. Probably that factor more than any other has operated to the detriment of the Australian loan market.
– The Government is responsible for it.
– Undoubtedly the Government is responsible for the inflation. Undoubtedly it is responsible for the failure of the loan market. The Government has taken measures fromtime to time to deal with the situation, but they have been always too late, always too tentative and always inconclusive. It has never made a firm approach to the problem.
– It has nearly always acted in a panicky fashion.
– Yes, and sporadically. We could use a lot more adjectives if Standing Orders would permit.
– The electors will not believe you.
– The honorable senator will have an opportunity to explain something about this gap in the loan market and to indicate to the Senate what action the Government proposes to take to cure this obviously grave deficiency. I realize that this matter is not within the sole competence or control of the Commonwealth Government. I realize that the Australian
Loan Council determines the amounts that are to be raised and the conditions under which they are raised. But 1 do not think anybody will deny that in view of the present constitution of the Loan Council, the Commonwealth Government has a dominating influence, not only by reason of its votes m the Loan Council but above all by reason of the fact that it is the executive member of the Loan Council and has enormous power in implementing decisions of that body. I have not noted any imaginative action taken by this Government during its term of office to endeavour to bridge the colossal gap rn our loan raisings. I have been challenged from time to time to name, on behalf of the Opposition, action that could be taken. I have met that challenge and I have made a number of suggestions. I have heard a Government supporter even urge that the Government should take a bold and imaginative step. I think it behoves this Government to assure the nation that it recognizes the enormous gap that exists. It should tell the people that it does see the problem and. seeing it, it is not only considering solutions of the problem, but is taking active measures to endeavour to remedy the position.
– What was the bold and imaginative step?
– Senator Wright made a suggestion. I made two suggestions, less bold than Senator Wright’s, but quite imaginative and quite realistic. They have never been rejected or repulsed by the Government. In short, the Government is completely barren of ideas for dealing with this great problem.
– Are you referring to interest-bearing bonds for that portion of capital works? Is that the bold and imaginative suggestion?
– I think Senator Wright’s suggestion involved some compulsory appropriation and the issue of longterm interest-bearing bonds.
– Do you support that suggestion?
– That was Senator Wright’s suggestion. I am not concerned to deal with it, although I have not yet heard the Government deal with it, nor have I heard the Government deal with the two suggestions that made when 1 was challenged. I do not propose to say any more about them until such time as the Government has an opportunity to deal with them. 1 do not suggest that what Senator Wright put forward or what I put forward represents all the measures that could be taken, but, in the absence of evidence to the contrary, I am prepared to believe that the Commonwealth Government is completely barren of ideas as to what to do. I do not doubt, looking at the equanimity with which the Government presents a bill of this kind covering an amount of this magnitude year after year, that it faces the position with complete complacency, quite regardless of the unfair burden that is cast on the taxpayers of the current year. 1 have dealt with that subject at very great length and documented it so often from this place that I do not propose to go over the course again to-day.
I note that circulated with the papers is a document entitled “ Civil Works Programme 1960-61 “. It gives details of the Commonwealth works that are being undertaken, but it is not comprehensive. It does not cover all the works. That fact will provoke, when we reach the committee stage, a few questions in relation to particular amounts. Whilst 1 am taking the Government to task on the subject of capital works and services, I think I should say that it is about time that the Government put its accounts on a proper accounting basis and separated the items required for the maintenance of the country in the ordinary sense - the ordinary annual expenditure - from the items relating to capital works and services that will endure for very many years. It would be not only proper but honest to separate items relating to capital works and services and the method of financing them from the other items that are presented in the Budget. The present procedure is a very bad accounting practice that has hardened by constant use into what one might almost call accepted practice. It is certainly accepted on the part of the Government. I think it would be proper from an accounting viewpoint - and it would be more honest - to present to the people the true position in relation to capital works. The Government should indicate the source from which the works are financed and divide them into two categories.
The works that we are considering at present do not comprise all the capital works of the Commonwealth. If one goes through the Budget papers one finds many items of a capital nature scattered amongst the various departments. I refer to permanent defence works, which are not included in the £140,000,000 provided in this bill. Again, amounts advanced to the States for capital purposes - one example is the capital expenditure on the campaign to eradicate tuberculosis - are not included in this bill. The appropriation of £140,000,000 which we are now considering does not by any means cover the whole of the capital works undertaken out of revenue by the Government in this financial year.
Mr. Acting President, the size of the amount involved and the nature of the works dealt with deserved some notice by the Opposition during the passage of the measure, but I do not on this occasion propose to open the matter up any further. The Opposition does not oppose the bill. At the committee stage I shall ask a few questions in the hope that I shall elicit some information that I lack at the moment.
– I wish to say a few words about ex-members of the Australian Army Medical Women’s Service and their application to be accepted as eligible for war war service homes loans. I submit that there is discrimination under the War Service Homes Act at present. The act provides that, to become eligible for a war service home, a person must be an Australian soldier. In section 4. of the act, an Australian soldier is defined as a person who -
I submit that the women to whom I am referring were members of the Australian Imperial Forces. They enlisted in the A.I.F. and they were given SX numbers in the same way as men who enlisted in the A.I.F. were given SX numbers. The A.I.F. men, whether they went outside of Australia or not, are eligible for war service homes, but the women are not eligible unless they went outside Australia.
Of the 4,130 women who enlisted in the A.I.F., 823 were appointed to the Middle East and 200 went to the islands. Many of the 4,000 women have married returned soldiers and are not asking, under their own right, to be regarded as eligible for war service homes. 1 submit, therefore, that very few of these women would be concerned in this matter. I am not asking the Minister to increase the scope of the eligibility provision in order to include them. I submit that they should be regarded as eligible under the terms of the act as it stands and I ask the Minister to reconsider the decision to treat them as ineligible.
Since 1951 these women have made many submissions to the Minister, but they have been unsuccessful on each occasion. The returned servicemen’s league has also applied on their behalf. I have spoken to officials of the returned servicemen’s league who have told me that they consider that these women should be treated as being eligible for war service homes and that it should not be necessary to increase the scope of the act to enable that to be done. However, the replies received when applications have been made have always been very evasive and, I think, confusing. I shall read a portion of a typical reply. I have many letters which have been received from the department or from the Minister, but 1 shall read only this one sample. It is as follows: -
In the consideration of this question it is necessary to keep in mind the original purpose of the War Service Homes Act. This was to help an ex-service man who had enlisted specifically for active service overseas to obtain a home on concessional terms. The primary consideration of the enlistment was overseas active service and this constituted the material difference between members of the A.I.F. and members of the Militia and Women’s Auxiliary Services, i think that such a reply confuses the issue. The women who are asking to be included amongst those who are eligible for War service homes under the provisions of the act Were not members of the militia, nor were they members of the Women’s Auxiliary Services. They were members of the A.I.F., and as such they should be included.
I am prepared to admit that paragraph (b) of section 4, which refers to nursing services, probably does exclude them, because I think it refers to returned sisters. Nevertheless, returned sisters would have worked in the same wards, under the same conditions and would have been subject to the same terms of enlistment as the relatively few women on whose behalf I am speaking. Yet one group is eligible under the act and the other is not. As I have already pointed out, the men who served under the same terms of enlistment qualify for a war service home, but these women do not.
I urge the Minister to have another look at the act. I ask him whether he agrees that acceptance of the submission in this case would not involve enlarging the number of categories of eligible persons, but would merely be s matter of interpreting the act to cover these relatively few people, who enlisted under exactly the same terms as people who are eligible. It was not the fault of these women that they were not sent outside Australia. They enlisted with every intention of going outside Australia but when the A.I.F. was returned from the Middle East, many of them remained in Australia. Some of those on whose behalf I am speaking were stationed in the Darwin area. They aTe entitled to wear returned service badges, but they are excluded from the provisions of the act. I ask the Minister to have another look at the act in order to see whether these women can be classified as eligible for war service homes.
Question resolved in the affirmative.
Bill read a second time.
Clauses 1 and 2 agreed to.
That consideration of clauses 3 and 4 and the First Schedule be postponed until after consideration of the Second Schedule.
– I should like your guidance, Mr. Temporary Chairman, on a matter of procedure. Part 1 of the Second Schedule deals with Departments and Services - Other than Business Undertakings and Territories of the Commonwealth; Part 2 deals with Business Undertakings; and
Part 3 deals with Territories of the Commonwealth. If it suits the convenience of the committee, I shall be prepared to deal with each of those three main headings as separate entities. I wish to make a few comments about them and to ask some questions relating to the departments.
– There being no objection that procedure will be followed.
Part 1. - Departments and Services - Other than Business Undertakings and Territories of the Commonwealth.
Proposed Vote, £76,632,000.
– I wish to refer to item 01 - “ Buildings, works, fittings and furniture, £21,000”, under Division No. 835 in relation to the proposed vote for the Parliament. 1 should like to be informed, without any detail at all, of the nature of the proposed works covered by this item. There is nothing in the “ Civil Works Programme J 960-61 “ which throws any light upon the matter. As I have said, I am not seeking details, but I should like to know whether this provision relates to capital works.
I next direct the attention to item 01 - “ Australian High Commissioner in United Kingdom - Buildings, equipment and furniture for Australia House and official residences, £72,000 “, under Division No. 836 relating to the Prime Minister’s Department. I note that last year, £60,870 was appropriated for these purposes, of which £54,444 was expended. This year we are to spend £72,000 in this connexion. I may be pardoned perhaps for having thought that Australia House in the United Kingdom was well established. I therefore ask the Minister: When will this expenditure end? Is there any major work that is being dealt with in stages, or will the proposed expenditure this year bring to an end a certain plan? There are no particulars in relation to this proposed expenditure in the “ Civil Works Programme 1960-61 “ that has been circulated. The normal practice is to detail in this programme individual matters in excess of £20,000. As I have said, no details are shown in relation to this proposed expenditure of £72,000.
Again, still dealing with the Prime Minister’s Department, I refer to item 01 - “ Buildings, works, fittings and furniture, £85,000 “, under Division No. 840. From the information provided on page 9 of the “ Civil Works Programme 1960-61 “ it appears that £29,000 of that amount will be expended on fire precautions in the National Library. Will the Minister inform me whether there has been a lack of these precautions, or whether an entirely new model fire prevention system is to be installed? Can he give me any general information on the subject?
I notice that under Division No. 841 relating to the Department of External Affairs, dealing with our overseas representation, under item 05 - India - the vote last year was £29,600. Projected expenditure on this item this year is £59,300. Will the Minister inform me what is envisaged by this proposed expenditure?
I refer now to item 13 - “ Union of Soviet Socialist Republics. £32,500 “, under the same division. Last year, £28,300 was voted for this item, of which £28,039 was expended. This year further expenditure of £32,500 is envisaged. I should like to be supplied with the same type of information that I have sought in relation to the other items. To what is this expenditure directed, and when will we come to the end of it? I thought that our legation staff in the Union of Soviet Socialist Republics was not so strong at the present time. I should also like to be informed of the purpose of the proposed vote of £27,400 for item 15. United State of America.
I pass now to Division No. 860, under which it is proposed to vote £2,494,000 to the Department of the Interior. Some details of this proposed expenditure are given on page 12 of the “ Civil Works Programme 1960-61 “. This leads me to comment upon the fact that Commonwealth offices have been completed or are under construction in four of the capital cities. The expenditure authorized for stage 1 of the erection of Commonwealth offices in Sydney is £3,031,000. The erection of stage 1 of the Commonwealth offices in Melbourne is obviously nearing completion as the balance remaining at 30th June, 1960, for expenditure was only £18,009. In Queensland, the work of building Commonwealth offices is proceeding, and in Perth, apparently the erection of Commonwealth offices is nearing completion. I invite the Minister to tell me when something will be done to provide similar facilities in the other two capital cities, Hobart and Adelaide. I think that the time is long overdue for the Commonwealth to make a contribution to the architecture and the facilities of those two capital cities. Commonwealth offices are badly wanted in both of them and I think that the Government is belated in moving in that matter, having regard to the heavy expenditures on the provision of Commonwealth offices in other capital cities. As I have said, stage 1 of the erection of Commonwealth offices in Melbourne is nearing completion. I should like the Minister to inform me when it is contemplated that the other stages will be proceeded with.
I turn now to Division No. 861 relating to the Department of Works. Some details of the proposed expenditure of £407,000 are given on page 14 of the “ Civil Works Programme 1960-61 “. I notice, also, that details are given on that page in relation to Papua and New Guinea. The estimated amount required for the erection of four houses in Port Moresby is £24,500, and £23,000 is being allotted for stage 1 of the provision of accommodation for native labour at Rabaul. I should like the Minister to inform me why these matters are not in the hands of the local Administration. Secondly, why are these amounts not appropriated under the heading “Territories”? These items seem to be matters of domestic importance to the local Administration. It seems to me that a wrong impression might go abroad concerning our expenditure in the Territories if in Part 3 - Territories of the Commonwealth - we do not see the whole of the Commonwealth’s capital expenditure in relation to Papua and New Guinea. A similar position exists in relation to another item with which I shall deal presently.
I refer now to the proposed vote for the Department of Civil Aviation Division No. 866, and I am looking particularly at items 03 and 04. Item 03 refers to “Qantas Empire Airways Limited - Provision of additional share capital, £400,000”, and item 04 to “Australian National Airlines Commission - Additional capital, £1,100,000 “. Again, the document “ Civil Works Programme 1960-61 “ that has been circulated does not give details of the proposed expenditure. 1 gather from a statement that appears in an annexure to the Treasurer’s Budget speech that the £400,000 for Qantas Empire Airways Limited relates to the provision of ground facilities and the purchase and modification of aircraft. The sum of about £1,000,000 is required for those purposes - £200,000 for ground facilities and £800,000 for the purchase and modification of aircraft - and the reason that only £400,000 is to be appropriated is that the balance of £600,000 is to be paid by Trans-Australia Airlines for assets taken over from Qantas in New Guinea.
Can the Minister state the nature of the assets taken over from Qantas by T.A.A. and also whether any change is contemplated in the type of aircraft that we have known Qantas to operate? Does modification of aircraft include modification of Electra aircraft? Are we involved in any expenditure in respect of those aircraft? 1 gather also from the annexure to the Budget speech, that of the sum of £1,100,000 that is to be appropriated to provide additional capital for the Australian National Airlines Commission, £600,000 will be paid over to Qantas and the remaining £500,000 will be used for the purchase of aircraft and general equipment. If it is correct that the purchase of aircraft is contemplated, will the Minister say the type of aircraft that it rs intended to purchase?
Still dealing with the Department of Civil Aviation, I refer the Minister to page 18 of the “Civil Works Programme 1960- 61 “, where it is indicated that certain extensive works arc to bc undertaken at Port Moresby and Rabaul. One item relates to the erection of an operations control tower building at Port Moresby, the estimated amount required being £110,000. Again, I ask the Minister why that appropriation is not shown in Part 3, under the heading “ Territories of the Commonwealth “. Would it not be better, from the viewpoint of Australia giving an indication to the world of the extent of its expenditure in New Guinea, to have all items of capital works affecting that Territory grouped together?
I should like now to refer to page 9.
– I think you have done enough damage already.
– 1 do not mind stopping. I certainly have asked a lot of questions, but I thought it better to put as many questions as possible at the one time, instead of having Ministers continually rising to answer them. However, I have not many more questions to ask about the division to which I have been referring.
– 1 support Senator McKenna’s remarks regarding expenditure on capital works in Adelaide. I wish to enlarge on that matter, and perhaps the Minister can deal with the substance of my remarks at the same time that he is replying to those of Senator McKenna. I am grateful to the honorable senator for directing the attention of the Government to the situation in Adelaide. I think that perhaps the Government is not aware-
Order! With what division is the honorable senator dealing?
– 1 am dealing with Division No. 860, which relates to the provison of Commonwealth offices and other buildings outside the Australian Capital Territory, and I am referring particularly to Commonwealth buildings in Adelaide. So far as I can see, apart from the General Post Office, Commonwealth offices are practically non-existent in that city. Adelaide is in a rather unfortunate position in this respect, in common, I understand, with Hobart. We have directed attention to this position year after year. That has been done not only by honorable senators on this side of the chamber but also by honorable senators opposite.
It is extremely difficult for people who have business to transact with Commonwealth departments to ascertain where the departmental offices are situated in Adelaide. In the short time at my disposal, 1 have listed a few of the offices and their location. The Commonwealth has offices in the Da Costa building, a new building in Grenfell-street, which has been erected by private enterprise. It is a very fine building, and the Commonwealth pays substantial rents for accommodation occupied in it by certain Government departments including, I think, the Department of Immigration. Portion pf the Common.wealth parliamentary offices h located in the C.M.L. building, which is on the corner of Rundle and King William streets, while the remaining portion is located in the Bank of New South Wales Chambers, on North-terrace. That means that people who want to interview a member of the Commonwealth Parliament or a Minister must first ascertain the building to which they should go. The offices are quite good, but I think it is wrong that they should be located in two buildings. It is difficult and inconvenient for the public to make contact with members and Ministers.
The office of the Department of the Interior is located on North-terrace, although I do not know the exact location. That is a very important department, which members of the public frequently wish to contact. The office of the Department of Labour and National Service is situated in Currie-street, several streets away, in the Richards building. The Department of Social Services - a very important department - is located in Gawler-place. It will be patent to everybody that inconvenience and efficiency must result from this wide dispersal of Commonwealth public offices. I think it is high time that the Commonwealth took the matter in hand.
I believe that two suitable sites are available in Adelaide for the erection of Commonwealth offices. I am not sure that the Commonwealth is not already in possession of these sites, which are well-placed from the point of view of convenience. They could be easily acquired if not already owned by the Commonwealth. The erection of a suitable Commonwealth building in the city of Adelaide, to facilitate the transaction of Commonwealth business and to improve the handling of public affairs, is long overdue. No one can convince me that the wide dispersal of Commonwealth offices in Adelaide leads to efficiency in the transaction of Commonwealth business. I reiterate, as I have reiterated in past years, that Adelaide urgently needs suitable Commonwealth offices.
– Why Adelaide, any more than any other city?
– I am not suggesting that the need is greater than that of any other city, but I invite the honorable senator to consider the work that is to’ be done in other States. As Senator McKenna has said, Adelaide and Hobart are being excluded. There is a very fine Commonwealth building in Brisbane. All Queensland members of the Commonwealth Parliament have accommodation in that building. In that city there is a certain degree of centralization of Commonwealth activities, whereas in Adelaide there is no such centralization. It is time we had a serious look at this matter.
– One has to travel 17 miles to visit every office.
– As Senator O’Flaherty says, one has to do a lot of walking or be transported a considerable distance to go from one place to the other. For the sake of the unfortunate public of South Australia and in order to improve the efficiency of the Commonwealth Public Service, the Government should take some steps to provide a big building to house the Commonwealth offices.
Years ago the Commonwealth missed an opportunity to do this. The old Commonwealth Bank building stood on an excellent site in King William-street. That building was improved to a degree, but when it is compared with the magnificent Commonwealth Bank buildings that are to be seen in other cities it is really a shanty. As I said a moment ago, the Government missed the opportunity to erect a fine new building on that site. I repeat that the Government must look at this matter of providing in Adelaide a public building to house practically all the Commonwealth offices in that city.
– I shall answer Senator McKenna’s inquiries as best I can. As the honorable senator knows, information about every item which appears in the schedule is available, but there are always two difficulties present. First, one has to find the relevant information and. secondly, good though the notes are, every question that arises cannot be anticipated.
The honorable senator referred to the proposed appropriation of £21,000 for work on Parliament House. Last year the sum of £21,000, was appropriated, but only £12,939 was spent. The proposed appropriation for this year is designed to covet, first, expenditure totalling £2,600 on incomplete works. In other words, a sum of £2,600 has yet to be paid for works in progress. Provision is made also for a new programme to cost £19,200. That sum will cover minor works and the supply of fittings and furniture. Remembering the size of the building, the number of rooms there are, and the work that has to be done in the normal course of providing new fittings and furniture, I hope that that will be an adequate reply.
Senator McKenna referred also to Division No. 840 under which we are asked to appropriate the sum of £85,000 to the Prime Minister’s Department in respect of works under the control of the Department of Works. Last year the sum of £67,000 was appropriated. Of that sum, £48,144 was spent. The proposed vote for this year includes, first, a sum of £7,201 for works that were commenced but not finished in the last financial year. It is estimated that the programme of new works to be commenced this year will cost £100,450. Of course, it is not contemplated that all that work will be completed during the year. The main items in that amount of £100,450 are a sum of £29,700 for shelving for the National Library buildings at Bunnerong in New South Wales, Brighton in Victoria, Perry Park in Queensland, Brompton in South Australia, and Canberra, and a sum of £29,000 for fire precautions at the National Library building in Canberra.
– That was the item in which I was interested.
– I have not the detailed information available. The departmental officers are trying to obtain it for me over the telephone.
– Were you referring to the annexe at Scott’s Crossing?
– I could not say. I shall deal now with Division No. 836, item 01, Australian High Commissioner in the United Kingdom - Buildings, equipment and furniture for Australia House and official residences. Some fifteen items of expenditure are included in the proposed appropriation of £72.000. The major one is a sum of £15,000 for a residence for a senior officer of the Department of External Affairs. The following items also are included - £11,600 for the setting up of an office in Birmingham for the Department of Immigration; £10,650 for the conversion of coal-fired boilers to automatic control £10,658 for alteration in office lay-out at Australia House to provide more space; and £2,500 for office furniture. I shall not go through all the smaller items, but they include the provision of £1,128 for sanitary incinerators; £4,388 for alteration to the display windows in the Strand; £4,465 for furniture for official residences; and £2,096 for a mural for the mezzanine. So in the total proposed vote of £72,000 only four items will cost more than £10,000.
I turn now to the proposed appropriation for the Department of External Affairs. Senator McKenna raised queries in relation to proposed expenditure in India, Russia and the United States of America. With regard to India, last year’s appropriation was £29,600, of which £25,161 was spent. The estimated expenditure for this year is £59,300. The major item of expenditure is a sum of £38,000 for the final payment for the official residence now under construction. Furniture for the new residence will cost £5,200; site development and water supply works will cost £3,000; the supply and erection of an electric substation in the High Commissioner’s compound will cost £5,000; £5,000 will be expended as a part payment for the construction of a new chancery; £900 will be required for the replacement of a motor vehicle; and other minor works on the chancery and staff residences will cost £2,185. Obviously, we are building a new home and chancery for the High Commissioner.
Of the estimated expenditure of £32,500 in Russia, £2,000 will be required for an additional motor vehicle and £30,500 for other new works including the provision of furniture, equipment, fittings, etc., for the new chancery, official residence and four staff houses. Packaging and freight costs from London are included. The notation at the bottom of the information before me reads - lt was necessary to purchase all furniture and equipment, fittings etc. in London.
– Did I understand you to say that we are building a new chancery? I should like to know whether this amount represents the final payment or whether the work will take some time.
– I shall have to find out. The note is not self-explanatory. May I ask what the question was in regard to the expenditure in the United States of America?
– The proposed expenniture this year is £27,400. Nothing was expended last year. What new development has occurred or is occurring?
– In Washington, there are preliminary expenses in connexion with investigations into the possible acquisition of a new chancery, amounting to £5,000. There are other minor new works, including furniture and equipment for the chancery and official residence, amounting to £4,037. An amount of £2,000 is provided in relation to the mission to the United Nations at New York. For the Consulate-General, New York, an amount of £13,740 is provided, made up as follows: - Instalment on purchase price for official residence, £1,540; cost of rearrangement of partitioning and other work involved in re-organizing present and additional office space, £5,000; refurnishing cost consequent upon re-organization of existing offices, £6,800; other minor works, £400. In respect of San Francisco, an amount of £1,380 is provided for replacement of a motor vehicle and £843 for other minor works.
– Would you mind referring again to the first item? Is there a sum of £5,000 for preliminary work in locating the site?
– It is for preliminary expenses in connexion with the investigation into the possible acquisition of a new chancery.
– How much?
– It is £5,000.
– That sounds a bit high.
– There must be some other explanation. I shall come back to that.
– For the benefit of the committee, perhaps I should state that we are dealing with the Second Schedule, Part I., which covers an amount of £76,632,000.
.- 1 should like to get some idea of the total amount paid in rent throughout Australia, and in each State, by the Department of the Interior. If the Minister has not the figures available now, I should be delighted to receive them later. I am very worried about the amount of rent being paid by this Government. I have a great respect for the Public Service and I admit that, without it, government could not proceed as we want it to proceed, but it is quite human for persons to want to gather around themselves large staffs, housed in palatial offices. I would not mind this, if they were spending their own money, but they are spending the nation’s money.
The work being done by the Commonwealth in providing accommodation for its staffs in Melbourne is excellent, but it rs fantastic that a garage was not put underneath the big new Commonwealth office. When it was being planned, perhaps the people concerned were thinking of the horse and buggy days, but this is the age of the motor car. I remember mentioning this to my good friend, the Minister for Customs and Excise (Senator Henty), when he was chairman of the Public Works Committee. This great building is located at a very important street junction in the heart of Melbourne and it houses the Department of Social Services and a number of other departments. For some unknown reason, provision was not made underneath for a garage or a parking area. The officers responsible have put members of Parliament from all parties in the position of being unable to explain the reason. This sort of thing should not be done in modern times. In Victoria, where there is a registered motor vehicle to every three and onehalf persons, parking is very important. We should make certain that the same practice is not followed on the next occasion that the Commonwealth erects a high building. The Commonwealth is not skimped for money, as is the average home-builder.
I suppose I have never before seen palatial buildings being erected in the numbers in which they have been erected in recent years, within the golden mile in the heart of Melbourne. We are not short of money but the rent that we are paying not only in Victoria but throughout the Commonwealth is colossal. We have a site available in Melbourne. I hope that we shall push on with the construction of Commonwealth offices. I am sure that if the amount paid in rent were capitalized, it would meet the cost.
I am delighted that the Minister for Civil Aviation (Senator Paltridge) is here, because I want to mention a small matter that is most annoying. I do not blame him for it. Only yesterday, a friend of mine, who is a prominent architect in Melbourne, complained bitterly that after he had driven his wife to Essendon airport to board an aircraft he was asked for a parking fee. It was not the amount of money involved that concerned him, but the principle that is at stake. It is most annoying when you take some one out there - perhaps you may be staying only five minutes or ten minutes - to have a man rushing up to you to collect a parking fee. Airline companies require passengers to be at the airport at least ten minutes before departure times. Knowing the station in life of my architect friend, I am sure that it was not the 2s. that worried him. I had a similar experience after having driven out to meet another senator.
– I remind the honorable senator that we are dealing with expenditure on capital works and services. He must link his remarks with this subject. In the proposed vote for the Department of Civil Aviation there is no provision for parking.
– There is an item which refers to sites and buildings. I do not want to argue with you, of course; I have great respect for the Chair. I merely want to mention this matter now rather than perhaps at half-past ten o’clock when we all will be a bit tired and will want to go home. I want to keep within bounds, as I always try to do. I should like to get the figures of rents paid by the Commonwealth, for which T have asked. I do not want them now. I should like to get a list of the rents paid and the buildings in respect of which they are paid, and also how much a foot the rents represent. I do not want to put a question on the notice-paper in order to get that information. Sooner or later we will have an opportunity to talk about it.
– I desire to direct attention to the figure of £76,632,000, which is the amount that is expected to be spent on works and services under Part I. of the bill. In particular, I desire to direct attention to the vast amount of building that is included in the detailed Estimates. I pass quickly over Division No. 860, item 01 - Commonwealth offices and other buildings outside the Australian Capital Territory, under the control of the Department of Works - tor which the appropriation is £2,075,000. A far larger amount of £35,000,000 is appropriated in Division No. 934 for expenditure under the War Service Homes Act. An appropriation of £18,500,000 is made in Division No. 935 for expenditure under the Snowy Mountains Hydro-electric Power Act.
Consequently, it is obvious that at the present time in Australia a vast amount of building activity is proceeding under the direction of Commonwealth Ministers. I invite the attention of the Minister for Civil Aviation (Senator Paltridge), who is at the table, to the fact that in my opinion not enough Australian-grown timber - particularly softwood timber - is being used in building construction work in Australia, particularly in government building construction work. I am rather amazed by some figures, which the Department of Trade was good enough to supply to me to-day, showing the imports of softwood timber into Australia. The value of undressed softwood timber imported in 1955- 56 was £14,000,000. In the next year the figure dropped to £13,000,000, and in the next year to £12,000,000, or about £3,000,000 a quarter. However, in the quarter from July to September this year the figure was £7,600,000, which is well in excess of twice the normal amount per quarter. Tn the comparable quarter last year the value of such imports was £3,500,000. This softwood timber comes from the United States of America, Canada and New Zealand.
I desire to direct the attention of the committee to the fact that at the present time Australia is producing some excellent softwood timber. It is only in compara tively recent years that this softwood timber has become known. I point out that in the specifications of Commonwealth and State building departments the old-time specification for overseas timber, and Baltic timber in particular, is laid down. 1 make a plea to the Minister at the table to cause all the specifications of the departments which require building work to be done to be examined - whether it be the Department of Civil Aviation, the Department of National Development, or the Department which is charged with the responsibility of building homes for ex-servicemen - in order to ensure that, where possible, the specifications laid down include locally-grown timber. 1 have explained the alarming rise - I call it really alarming - in overseas funds used in just one quarter of a year, when £7,600,000 was paid for timber similar to that which can be and is being produced in Australia at present. I refer particularly to the timber which is generally known as radiata pine. It should be known that radiata pine is a native tree of California. It was brought to South Australia experimentally in 1886. Since then it has spread. In the State I represent there are vast forests of both government and privately-owned radiata pine. Let me just give the committee the extent of these forests. An average of 12,000 acres of new forests is being planted every year.
Order! I have to remind you, senator, that you must relate these remarks to some of the capital expenditure in the divisions before the committee. We cannot have a general debate on the quality of timber. If you can relate the subject to a particular building under discussion, I will be able to allow you to continue.
– Then, I will conclude my remarks on radiata pine. I am discussing the use of locally-grown timber in respect of the vast amount of money that we are asked to vote. I submit that I have shown that large quantities of softwood timber are being imported into Australia at the present time. While observing your ruling, Sir, I invite the attention of the committee to the fact that thanks to the forests that have been planted and developed over the years, Australia has a large supply of softwood timber which can be made available for building construction. I compliment the Government on the way it is exploring the possibilities of using such timber in connexion with construction works and services. Only last Monday I heard from an Australian Broadcasting Commission station an item that the PostmasterGeneral’s Department is examining the possibility of using softwood timber for telegraph posts.
– What about white ants?
– The Commonwealth Scientific and Industrial Research Organization has been most assiduous in its experiments on the use of softwood timber so that it will not be attacked by the rot or insects which would normally attack it. I ask the Government to ensure that in calling for tenders there is no prohibition against the use of locally-grown timber. I understand that in the past there has been such a prohibition in tenders for war service homes and in other directions.
– I speak to Division No. 860. I find myself a little at variance with some of the earlier speakers in regard to Commonwealth buildings being erected outside the Australian Capital Territory. I refer particularly to Sydney. There we have in the course of construction two very large buildings which in my view are not urgently required and will not be productive. I admit that they will be wanted in the years that lie ahead - there is no question of that - but I believe that in view of the present state of the economy those buildings should not be erected at this juncture. Their erection is causing very strong competition in the building ‘trade. According to Senator Kennelly a similar situation has arisen in Melbourne. The erection of these large buildings has added to the cost not only of other public buildings under construction but also of houses. The greatest difficulty is being experienced in New South Wales in getting fairly large builders to tender for the construction of the smaller type of building. We heard recently that about £11,000,000 is being spent on the importation of steel for building purposes. A building of the type being erected in Sydney requires huge quantities of steel.
I realize that contracts may have been entered into for the construction of the building, but wherever possible I think that expenditure on buildings such as that should be slowed down rather than speeded up. There is no need for the building to be erected within the space of a few years. It would be a different matter if this building was urgently required. A few weeks ago we were told that buildings worth £37,000,000 were either in the course of construction or about to be constructed in Sydney alone. This is a matter that the Government should view seriously and where possible it should slow down its rate of construction. If it did so there would be a considerable saving to our economy.
– I wish to refer to Division No. 856, Department of the Interior - Commonwealth offices and other buildings - acquisition of sites and buildings. The total expenditure sought to be approved for the Department of the Interior in respect of acquisition of sites, construction of buildings and other matters is £2,494,000. Page 12 of the “Civil Works Programme 1960- 61 “ gives details of works in progress on behalf of the Department of the Interior. The list of works shows the amount of money authorized for expenditure on each work and the amount expended at 30th June, 1960. For the erection of Commonwealth offices in Sydney the sum of £3,031,000 was authorized. Some of that amount has been spent, but the balance remaining at 30th June, I960, for further expenditure was £3,013,409. I should like the Minister for Civil Aviation (Senator Paltridge), who is handling this bill, to note that more than £3,000,000 still remains to be spent on Commonwealth offices in Sydney, despite the fact that the expenditure of that money was authorized some time ago. In relation to Melbourne the sum of £1,799,200 was authorized for expenditure on the erection of Commonwealth offices. Most of that amount has been expended, but £18,009 still remains to be expended. The sum of £1,930,000 was authorized for expenditure on the erection of Commonwealth offices in Brisbane and at 30th June, 1960, an amount of £1,322,949 still remained unexpended. The bill seeks to appropriate a further £2,494,000 for, among other things, the erection of Commonwealth offices, but the document “’ Civil Works Programme 1960-61 “ discloses that the estimated expenditure of the Department of the Interior on Commonwealth offices and other buildings outside the Australian Capital Territory is £2,075,000. There is a difference of more than £400,000 between those two last-mentioned figures. I should like the Minister to explain that difference.
I should like to know why some of the money that remains unexpended cannot be spent in Adelaide. If the amount that remains unexpended on Commonwealth offices in New South Wales, Victoria and Queensland were made available for expenditure in Adelaide we could get some decent offices there. At present, as I pointed out by way of interjection when Senator Hannaford was speaking, if you wanted to visit all the Commonwealth offices in Adelaide you would have to cover 17 miles. You could not do it in a day. Recently the Taxation Branch moved from the South Australian Railways building on Northterrace. That was a central spot and well suited for a taxation office. The branch has moved into a new building that was built by Advertiser Newspapers Limited, which is controlled by the Melbourne “ Herald “. I trust that the Minister will correct me if I am wrong, but my information is that the Taxation Branch has acquired very little more floor space than it had in the old building - less than an extra 500 square feet - but is paying five times as much in rental. Its new office is not nearly as convenient as the old office. When the branch was situated in the Railways building a person could park his car on the bottom side of ihe building and go up to the taxation office. But there is no chance of obtaining parking space within half a mile or three-quarters of a mile of the “ Advertiser “ building between 9 a.m. and 5.15 p.m. or 5.30 p.m.
– We have parking meters in Adelaide. You can park satisfactorily in most cases.
– I am suggesting that the money that was authorized for expenditure by the Department of the Interior and which remains unexpended could provide a decent office building on one of the Government’s blocks of land in Adelaide. I understand that the Govern ment owned a block of land in Curriestreet but exchanged it for a block further down the street. 1 think parking space was available near that block. In any event, parking areas could be provided underneath any building that was erected. The Government sold a block of land which would have been eminently suitable for Commonwealth offices. Commonwealth departments should be housed in Commonwealth buildings in Adelaide. They should not be moved from place to place and forced to pay high rentals. The taxpayer should not be inconvenienced if he wishes to interview a taxation officer.
My other query is in relation to Division No. 921, Department of Immigration. I refer the Minister to Item 02, “Commonwealth Hostels Limited - Equipment, buildings, works, furniture and fittings, £155,000 “. When we were considering the estimates associated with the Appropriation Bill, I pointed out that an amount of £950,000 was being appropriated from revenue for Commonwealth Hostels Limited. Under this bill, dealing with works and services, we are appropriating £155,000 for Commonwealth Hostels Limited, for equipment, buildings, works, furniture and fittings. The amount appropriated and spent last year for this purpose was £160,000. Then under Division No. 923 there is an item relating to hostels for the accommodation of migrants. Apparently no appropriation is being made this year under that heading, but last year an amount of £1,000 was appropriated. Under Division No. 925 is item 02, “ Reception, training and holding centres for accommodation of migrants, £192,000 “. Item 02 under Division No. 921 and item 02 under Division No. 925 together amount to £347,000, out of a total expenditure of £371,000 for the Department of Immigration. I should like to know whether the amount of £192,000 under Division No. 925 covers the same purposes as the amount provided for in item 02 in Division No. 921.
– One item has to do with a holding centre and the other with hostels.
– The money to be appropriated under item 02 in Division 925 will be spent on hostels controlled by Commonwealth Hostels Limited.
– I think you will find that it will. I want to know why there is this duplication. Further, I should like to know why statements are not furnished to the Senate from time to time showing clearly how this money is expended.
– The Leader of the Opposition (Senator McKenna) referred to the capital provision for Qantas Empire Airways Limited and Trans-Australia Airlines, particularly to that portion of the provision which is to be applied to the transfer of the ownership of assets from Qantas to T.A.A. He asked about the type of assets that are being taken over. There are DC3 and Otter aircraft and general spares. Then there are engines and propellors, which are accounted foi separately. Buildings and property make up a large item. It may not have occurred to the Leader of the Opposition that in addition to the usual buildings associated with an airline business, in New Guinea there are many houses which have been erected for employees. Other items are motor vehicles, workshops, ground equipment, household and office furniture. The estimated provision of £600,000 may have to be varied to some slight extent. Agreement has been reached between the two operators that an amount of £700,000 will cover the transfer of the assets, but other matters, not directly associated with the transfer but connected with it, are, I understand, receiving attention. What the final figure will be, I do not know. When the additional estimates come before us at the end of the year we will have the opportunity to see how the matter washes up, but I believe that the final figure will not be far removed from the original estimate of £600,000.
– I asked also whetheit was contemplated that new types of aircraft would be acquired by Qantas.
– Qantas does not contemplate purchasing any new types of aircraft. The honorable senator will recall that Qantas has recently arranged tor a conversion programme and for the purchase of three further Boeing aircraft. In addition to those aircraft, the fleet comprises
Electras and some Constellations. There is no present intention to acquire other types of aircraft. The intention is to standardize on the aircraft which the company now possesses and which are performing very satisfactorily.
The Leader of the Opposition referred to expenditure at Moresby and Rabaul and asked why that expenditure was not shown under the Department of Territories. I think the short answer is that it is an expenditure by the Department of Civil Aviation. Admittedly it is an expenditure within the Territory, but it is the responsibility of the Department of Civil Aviation to provide these services and facilities in the Territory, as in Australia. However, I catch the point of the honorable senator’s query.
– Other departments work in the Territory. They are shown, with their separate interests, all the way through. In the case of expenditure on civil aviation, however, that is not done, and Australia is shown in a worse light than that in which it should be shown.
– I catch the point. I am. not equipped at the moment to give any answer other than the one I have given, but the Leader of the Opposition has raised an interesting point and I shall be pleased to consider it.
Senator Kennelly raised the question of charging for parking at airports. I am afraid that I can not be of much comfort to him. It is now almost a universal practice to charge for parking at airports The practice has two purposes. It enables adequate and proper control of traffic tn take place, but I say quite unblushingly that the main purpose is to raise revenue. The justification for that is the huge expenditure which governments necessarily have to incur in the provision of modern airport facilities.
– I should like to reply to a few inquiries. The Government is not building a new chancery in Moscow. It has leased a place, and the amount set out in the bill will be spent on remodelling those premises. It is anticipated that the remodelling will be completed this year.
We have three separate offices in Washington, one for the Service staffs, one for the trade staff and one for the Embassy proper. The lease of one of these offices will expire during the next three years. We are making an investigation to find out what will be the best long-term policy to adopt for housing all our staffs in one building. The amount mentioned is the estimated cost of the investigation, which will involve finding a site, preparing sketch plans and doing all the preliminary work necessary from the point of view of the three large establishments concerned.
With regard to the fire protection service, the position is that at present a very valuable collection of books is housed in a temporary building that has only a thermal fire-alarm system. The installation contemplated is a fine-mist sprinkler system, which would be adequate.
– Again referring to Division No. 934, item 01 - “ For expenditure under the War Service Homes Act (for payment to the credit of the War Service Homes Trust Account), £35,000,000 “. I should like the Minister for National Development (Senator Spooner) to inform me why women who enlisted in the Australian Army Medical Women’s Service are discriminated against in relation to war service homes. Why is the treatment that is accorded to them in this connexion different from that given to men who enlisted in the Australian Imperial Force?
– I know that Senator Buttfield is taking a good deal of interest in this particular matter. In addition to corresponding with her on it, I have had a number of discussions with the honorable senator. The line of demarcation between eligibility for war services homes varies from classification to classification. I am sorry to say that, although I have examined this matter closely in the past, offhand I am unable to supply the honorable senator with an adequate answer. However, I gave her an assurance that I will again go into the matter and talk it over with the Director of War Service Homes in order to see what is the equitable thing to do.
[5.27]. - I am now in a position to supply Senator Kennelly with an answer to the question he asked about rents. The total amount of rent paid by all departments, including the defence departments and the Postmaster - General’s Department, in 1959- 60 was £1,854,500. It is estimated that the amount that will be payable in 1960- 61 is £2,064,300. The figures in relation to each State are not readily available; they would have to be extracted from the records. The rates payable per square foot vary very considerable as between the States, according to where the relevant building is located, and the area, and whether the rented accommodation is on the ground floor or an upper floor, and things of that kind.
.- I thank the Minister for Repatriation (Senator Sir Walter Cooper) for the information that he has readily supplied to me. However, I would appreciate a detailed answer to the question I asked. I know that to provide it will entail some research, and I shall be quite happy if I receive the information within a reasonable period of time.
– An answer has not yet been supplied to the question that was raised by Senator Hannaford and me concerning the provision of new Commonwealth offices in Adelaide and Hobart. As to Hobart, I know that a site was chosen many years ago, but nothing further has been done about the matter. I should like to be informed what is in contemplation in this connexion.
I direct attention to the fact that in Division No. 865, which refers to items for the Department of Works that are under the control of the Department of Territories, four items are not shown. I think it puts Australia in a bad light or, at least, in a worse light than we need be put in, when we ‘hide away very substantial appropriations for the Territories under other departments, in other items, so that the amounts are not shown as expenditure on the Territories.
I should like to refer now to item 02 - “ Commonwealth Serum Laboratories - Purchase and installation of equipment. £250,000 “, under Division No. 881. Time was when the serum laboratories operated upon their own trust funds. The laboratories were given a very small trust fund - 1 think the amount was about £60,000 - and for many decades they operated on that fund. From their revenues, the laboratories built the very fine buildings they now occupy at Royal Park and elsewhere. It is now a mammoth undertaking. Having regard to the large amount of projected expenditure on the purchase and installation of equipment and the fact that the serum laboratories have been placed on a yearly budget similarly to the departments - they do not now operate their own trust fund - I should like to be informed what happens to their profits. Are all receipts by the laboratories paid into Consolidated Revenue now that the trust fund has been abolished? Is there any information available to show that the expenditure contemplated will yield an adequate return? 1 have no doubt that the laboratories are doing very well, but I have not seen any figures that show how well they are faring.
I come now to Division No. 925 relating to items for the Department of Immigration which are under the control of the Department of Works. I refer particularly to item 02 - “ Reception, training and holding centres for accommodation of migrants, £192,000 “. Recently, an honorable senator pointed out that Tasmania receives only a very low proportion of the available migration flow, and he asked whether a holding centre for migrants could be established in Tasmania to function not only as a holding centre in name but also in fact by enabling the retention in Tasmania of more migrants than are staying there at the present time. I thought that the suggestion had merit. 1 should like to know whether the Government has considered the suggestion and whether it is likely to be adopted.
My last question concerning Part I. of the Second Schedule relates to item 03 - “Development of phytotron, £100,000” under Division No. 941 relating to the Commonwealth Scientific and Industrial Research Organization. Out of ignorance and sheer curiosity, I ask the Minister to tell me what this means.
Senator Dame ANNABELLE RANKIN (Queensland) [5.33]. - I refer to item 02 - “ Wacol Mental Hospital, Queensland - - Alterations and extensions to Repatriation
Block, £1,000”. I note that last year £7,000 was voted for this purpose, of which £2,282 was expended. I am interested to know what alterations and extensions have been made to the repatriation block, and whether the work has been completed.
– I should like to say a few words in relation to government-owned houses in Canberra. Some time ago I heard a rumour to the effect that houses built by the Commonwealth in Canberra were not provided with garages. I could not believe that such a practice was being perpetuated, and I placed a question on the notice-paper in order to ascertain the facts. It seems that the only excuse offered is that the Labour Government did not provide garages with Commonwealth-built houses in 1948-49. The explanation, as everyone knows, is that building materials were in extremely short supply in the immediate post-war period. In this modern age, a motor car is a part of everyday life, despite rumours in the newspapers to the effect that the Government may make it more difficult in the near future for the average person to purchase a motor car. In places such as Canberra, where public transport is not as it might be and the suburbs are so far apart that it is not possible to walk from one to another, a motor car is almost essential.
Order! Before the honorable senator came into the chamber I had been insisting on honorable senators linking their remarks with a particular item in the bill. This is not a general debate, and I ask the honorable senator to link his remarks with the bill.
– I am referring to Division No. 838, which relates to the acquisition of sites and buildings. I think that the most recent new motor registration number that I saw in Canberra recently was in the 36,000’s, which indicates that the number of cars in Canberra in relation to the population is perhaps greater than that of any other part of the Commonwealth.
The time has come for the Department of the Interior to provide garages when it builds homes in Canberra. After all, the Government expends huge sums of money during the year, and it seems a small matter to increase the cost of government houses by 5 per cent, or 10 per cent, to cover the cost of a garage or carport. Public servants who are being brought to Canberra from other cities are entitled to the type of accommodation that they enjoyed in the cities from which they came. Unless garages are provided with houses in Canberra, many public servants will not be treated as fairly as they should be.
– In reply to the question asked by Senator McKenna, I point out that the Commonwealth Serum Laboratories, over a period of years, have been reimbursed in this way for the purchase of equipment. The trust account is still being used. The proposed appropriation referred to in the bill relates only to the purchase of equipment. At the moment, I am not able to indicate the state of the trust account, but I hope to be able to do so before discussion of the proposed vote is concluded.
The phytotron consists of a series of cabinets in which plants are grown in conditions which simulate those of the climate of the area from which they come, the same degree of humidity, the same amount of sunlight, and so on, being provided. The equipment is very valuable in the evolution of new kinds of plants. The department is engaged on development of the phytotron at the present time. The design work has reached an advanced stage and construction of the cabinets will proceed during 1960-61.
Senator Cole referred recently to the establishment of a migrant holding centre in Tasmania. I noted the matter at the time and said that I would refer it to the Minister for his consideration. I have noted Senator McKenna’s interest in the matter, and now that we have two barrels, so to speak, I shall again bring it to the notice of the Minister.
– I refer to Division No. 881, item 01 of which relates to the purchase of laboratory equipment, the proposed vote being £60,000. I understand that the Commonwealth Serum Laboratories investigates tropical diseases, but I should like to know whether it also investigates the effect on health of faulty diet and lack of food. I have before me a cutting from the “ Sydney Morning Herald “, which refers to health surveys of aboriginal life. It is stated that aboriginal children are victims of bad diet and lack of hygiene, and that hundreds of aboriginal children throughout New South Wales are suffering from malnutrition and worms. It is stated, also, that they are being kept alive more by the efforts of the Aborigines Welfare Board officials and private citizens than by those of their own parents. Thousands of vitamin pills and anti-worm tablets are distributed to them regularly. I should like to know whether the Commonwealth Serum Laboratories investigates the suffering caused by malnutrition and faulty diet.
– I now inform Senator McKenna that the last year for which information concerning the trust account is available is 1958-59, when the net surplus was £212,007. As the honorable senator suggested, profits from sales are paid into the trust account.
– I refer to Division No. 891, Department of Trade. I wonder whether the Minister could unscramble some of the information that is given with regard to buildings, works, equipment and furniture. Item 01 relates to a proposed vote of £17,000 for buildings, works, equipment and furniture at Hong Kong. Expenditure last year was £4,310, while the appropriation was £8,200. I should like to know whether that item relates to the purchase of land in Hong Kong, because I believe that land is bought there by the square foot, not by the running foot.
– The building concerned was destroyed by a typhoon.
– Item 02 relates to buildings, works, equipment and furniture in Ghana, the proposed vote for which is £19,400. The first two items have individual amounts, but the third item refers to “ other overseas establishments “ and the proposed vote is £25,600. Surely the department knows how much is to be expended in respect of each of the places listed! I cannot understand why the amounts for Hong Kong and Ghana have been shown separately and those for other overseas establishments grouped together. I should like some detailed information in this respect.
– In answer to Senator Brown’s question, I point out that item 01 of Division No. 881 relates to the provision of capital items of equipment for the Biological Standards Laboratory and the Institute of Anatomy.
Proposed vote agreed to.
Sitting suspended from 5.45 to 8 p.m.
– by leave - According to its practice, the Government has recently made a further review of the Australian economy in its various aspects. Our economy is never static. It has become very diversified. It is affected by seasonal swings, fluctuations in export prices and the level of external demand. Our population is small compared with that of other great trading nations, but we rank amongst the first ten in the world in volume and value of goods marketed overseas and imported. Our external trade is a larger proportion of our total trade than is the case in most other countries. Our policy objectives of national expansion, immigration and full employment, while consistently maintained, subject the economy to varying strains. It should not be surprising that from time to time changes in methods become desirable. But in any such changes of tactics made necessary by changing circumstances, we have steadily held to these broad goals.
From our latest study of the overall situation we have decided upon certain corrective measures. Amongst these are some on which decisions, in principle, were taken at the time of our Budget discussions, but on which it was then felt that further study was needed before they could be applied. Most of the measures which I shall now announce will be given immediate, or almost immediate, effect. Some will involve legislation; others will not. But they all belong to a general plan of action and are closely related to one another. I therefore propose to explain them together.
In February of this yeah it will be recalled, we announced four measures directed to check excessive buoyancy already evident at that time. We intervened in the basic wage case to counsel the commission in the public interest against granting a further general wage increase at that juncture. We removed the great majority of restrictions on imports. We decided to work towards a balanced budget in 1960-61 and we stated our support for the policy of the Reserve Bank in trying to reduce excessive monetary liquidity in our economic system.
Then, when we came to the Budget aftethe middle of the year, we followed through on the third of these objectives by providing in our Budget for a cash surplus in 1960-61. To make this possible, we kepi additional expenditure down well below the level of 1959-60, and we made substantial increases in taxation.
The main facts of our present situation are, of course, well known; the more difficult task is to assess how trends will unfold during the remainder of 1960-61 and beyond. Considering our external position, imports are still high, exports are somewhat lower than last year, and capital inflow appears to continue at much the same rate as for some time past. In recent months our overseas reserves have been falling quite rapidly and although, on the ordinary pattern of events the greater part of the fall will occur in the current six months, it will probably continue through the rest of the financial year, even if at a slower rate. As has been explained elsewhere, we are well placed to stand such a fall as seems likely in 1960-61, because we still hold more than £400,000,000 in gold and foreign exchange of our own and have, behind this, drawing rights with the International Monetary Fund totalling more than £200,000,000.
Nevertheless, we have to conserve these overseas reserves which are so vital to the functioning of our economy because we cannot be sure what external conditions will be in times ahead. Placed as we are, we can never afford to be extravagant with imports. The Government removed import controls because it held that our economy would benefit from being able to obtain supplies abroad from the widest an,d best sources. It has always been our view that tariff action, carefully framed to foster only sound industries, is far preferable to the arbitrary protection which import licensing gives. Moreover, import restrictions had always been resented by the community and we had undertaken to get rid of them as soon as we possibly could. Having got rid of them, the Government firmly intends, as the Treasurer (Mr. Harold Holt) said in the Budget speech, to keep out of them; and we believe that, given reasonable success in trading abroad and in attracting overseas investment, we should be able to do so.
We expected that there would be some rise in imports, if only because people would promptly buy overseas goods they had not been able to buy in the years of restriction. But we believed also that some restraint would be needed to prevent the exuberance that normally follows the removal of restrictions from leading us into unnecessary difficulties. We sought this through what we hoped would be a careful regulation of bank credit, and later through a balanced budget and other measures. Even with such measures at work we expected that there would be an early phase of fairly heavy importing, but that soon thereafter the rate of inflow would begin to fall. So far it has continued at a fairly high level and there is one principal reason for this. It is, that we have in progress a very strong boom in spending - spending on consumer goods, on motor vehicles, for example, where record sales have been taking place, on building in its various forms, and on other branches of investment. Meanwhile, there has been a great increase in supplies of goods produced locally. But this has not been enough to meet all demands, and, of course, the effort to produce locally has increased the call on overseas supplies of materials, components and equipment. It has done more than this. It has led to quantities of steel, and probably of other materials, which would normally have been exported, being diverted to local use. It is thus working against our exernal position in two ways. It is increasing the import bill and it is also reducing our potential earnings from exports.
Plainly enough, to safeguard our overseas funds position, we must reduce the exces sive internal demands which are the main reason why imports continue to run high. That is the external aspect of the matter.
But to reduce excess spending is something we would have to do in any case. It is now creating serious shortages of labour, especially in New South Wales and Victoria. At the end of October there were registered 22,737 unfilled vacancies in New South Wales and 16,820 in Victoria. In each State this was about twice the number of persons registered for placement - 11,637 in New South Wales and 7,534 in Victoria. These shortages are both hampering production and helping to force costs and prices up. Excess spending is also destroying any possibility of building resistance to the cost and price movement, and it is providing scope for much speculative activity in land and building and, until quite recently, in stocks and shares
Spending has of course been strongly on the rise for a considerable time past and the Government has, at successive stages, taken action to restrain it. I recalled these measures earlier and they have been explained from time to time to the Parliament. That they have had some effect of the desired kind is undoubted; probably they have had a very considerable effect. We may ask, for example, how much worse our supply position would now be had we not obtained more imports. Moreover there have been, in addition to our own measures, developments like the fall in wool prices which, within certain areas of the economy, are having some deflationary consequences. But it is also evident that these various measures and forces have not so far been fully effective or - perhaps more accurately - they have not been effective enough in all the necessary directions.
Some say that the Government should have taken more drastic action that it has done. I find it a little odd to hear an Australian Government blamed for not being tough enough in its economic measures. After all, we have to do more than try to balance overall supply and demand in the economy; we have also to ensure, if we can, that growth keeps on at a sufficient rate. It is only little more than a year ago that many people were expressing anxiety about the problem of absorbing new labour from migration and from young people leaving school. So far as this year has gone, that has proved not to be a serious problem at all. Yet, under other circumstances, it could be; and if growth is to proceed the problem will continue to be there. Our general preference has been for taking action by stages - firm action but not violent action - with the aim, as we said earlier in the year, of bringing steady but increasing pressure on the situation until it is brought into balance and the cost and price movement is stopped. Then, at the appropriate time, the restraints can be slackened off.
At the present time it can be said that demand is much too high; but that is true only in an aggregate sense. It is not true of all sectors of the economy or of all people. Undoubtedly, some people are spending much more than usual but others are not. Similarly, the demands that industry is making on resources are not universally too great. Some industries are running along quite normally or, if they have expanded, it has not been more than commensurate with the general rate of growth. The excess demand for resources is most evident, and over-expansion has been most pronounced, in certain sectors.
Building is an obvious case. Preliminary statistics just released show that, in the September quarter, houses and flats were being started at a rate above 100,000 a year. This is 16 per cent, higher than a year earlier. Building of offices, hotels, shops, factories, hospitals and the like has risen by an even greater percentage and, on all indications, the rise goes on. Much of this building is no doubt essential to the normal expansion of industry and trade, but there is also an element which is speculative, and apparently proceeds from a view that boom conditions will continue indefinitely. A recent official survey of a large sample of businesses indicates that they were expecting to increase their spending on new buildings and structures in the six months to December, 1960 by 38 per cent, compared with actual expenditure in the previous six months.
The motor industry is another conspicuous example. Registrations of new vehicles have lately reached a rate of 330,000 a year which is far above the highest point achieved in the 1954-55 boom. There are other industries which have expanded fast, but building and the motor industry stand out. I do not question the vital place which both industries have in our affairs. But we must take account not only at intrinsic worth but also of questions of degree in our current circumstances. Taken together these two industries represent a big volume of activity in themselves and, because they set up demands on many other industries, the boom in them has spread its effects far and wide.
The measures now in force - the Budget in particular - will no doubt continue to exert a restraint on demand, perhaps an increasing restraint. There is however no reason to expect that they will have any greater effect on the booming industries than on any other. We have come to think, therefore, that the current measures ought to be reinforced in certain ways.
First, we consider that the overall liquidity of the whole economy, which has been very high for a long time and is still high, must be reduced. Not only has money been very plentiful, but it has been turning over more rapidly than in former times, and both tendencies must be checked. However, in doing this we must try to concentrate what is done on the activities we want to restrain and to safeguard those others, especially export production, which must be encouraged to expand. Secondly, we think we should try to diminish the excessive flow of funds, generally through the so-called “ fringe “ institutions, to hire purchase and other sorts of consumer credit, to land and real estate activity and to speculative activity generally. Thirdly, we propose to use such direct measures as we have at hand to steady down activity in the building and motor vehicle industries.
From the beginning of this year we have sought, by one means and another, to reduce the liquidity of the monetary system. We had that in mind when we lifted import controls; it was also one object of our Budget, in which we provided for a cash surplus and imposed additional taxation. But whatever effect those steps have had so far has been largely offset by the great increase in bank lending which has since occurred. Frankly, we did not reckon on this. We were given to understand last February that there would be, at the most, only a moderate increase in bank advances during the months ahead, and that was in fact the aim of Reserve Bank policy.
Its failure to be translated into effective action is now - and has been for some time past - a matter of great concern. What really is the position? For months past the Government and the Reserve Bank have desired to see the growth of bank advances slowed down to more acceptable levels. The Reserve Bank has issued requests to this effect, and through the statutory reserve deposit mechanism has kept a tight hold on the liquid reserves of the trading banks. But the techniques used have failed to bring about the desired result. In the event, bank advances outstanding have increased by no less than £150,000,000 during the current calendar year alone. It was not until August last that the trading banks made any substantial reduction in the very high rate at which they had been granting new overdraft limits or adding to existing limits. This had gone on at a time when the holdings of liquid assets were falling and nothwithstanding the requests of the Reserve Bank to moderate the pace of new lending.
It is appreciated that some new commitments must be entered into in the ordinary course of conducting the country’s business. Equally, some advances are being currently repaid. There is a turnover in bank advances which is not only inevitable but positively helpful in assisting the economy to adapt itself to the ever-changing pattern of industry and commerce. It is only when the rate of new lending commitments unduly exceeds the reductions normally occurring that the growth in outstanding advances becomes a matter for concern.
I find it rather strange to contrast these figures with the rising chorus of voices that proclaim a credit squeeze - not only a credit squeeze, but a drastic one. Some people, indeed, have been refused bank accommodation they thought would be easily forthcoming. Some, no doubt, have in fact been squeezed. But some people got not only the £150,000,000 by which the aggregate of advances increased - they got in addition the further amount by which other people were reduced. They have been soaking up credit as a dry sponge soaks up water. The immediate aim is to secure a quick cessation of the growth in advances actually outstanding.
Our prime object, plainly, must be to halt the rise in new bank advances and to bring down the total outstanding in the coming months. With this purpose in view, the Reserve Bank has followed its earlier requests for a reduction in the rate of new lending approvals with a request to the trading banks for a substantial reduction in the total of outstanding advances between now and the end of next March. In the June quarter, it is usual for a tightening of monetary conditions to occur, mainly because this is the period in which large tax payments are made and also for reasons associated with the seasonal swing in the balance of payments. This year, the tightening is likely to be considerably sharper than usual, partly because tax payments will be larger but also because it is probable that overseas reserves will still be falling to some extent. If the banks are to support their customers during that period it is all the more important that they should in the meantime have redressed their own positions to the greatest possible extent.
There are those who tell us that this outpouring of bank credit cannot be stopped; at the very least, that dire consequences will befall us if it is. Well, the simple answer is that it can be stopped, and that serious consequences will follow if it is not stopped. So it must be stopped.
I now address myself to the means by which it will be stopped. It will, of course, be the Reserve Bank through whose agency the process will be directed. But the Government in this matter will be standing behind the Reserve Bank and lending it support and encouragement.
The Government will stand squarely behind the existing initiative of the Reserve Bank in maintaining pressure on the liquidity of the trading banks until the desired results are secured. By this I do not mean that the statutory reserve deposit ratio or the Reserve Bank’s credit policy will be directed by the Government or that it will not be changed from time to time, upwards or downwards. But the Reserve Bank will manage it, as heretofore, with the carefully calculated object of ensuring that the right pressures are maintained at the right times to secure the right results. Similarly, the Reserve Bank will continue to give guidance and, if necessary, direction on the quantity of bank credit that should be made available from time to time.
Importantly, too, it will give much more specific guidance on the classes of borrowers whose needs are to be judged less important, and the classes of borrowers, especially certain classes of ex-port producers, whose activities may reasonably call for extra accommodation. In other words, the object will be to see than bank credit is not excessive in total, and that it is not diverted from those who can make good use of it to others whose activities in current circumstances are making undue demands on the country’s resources.
There would be no sense at all in reducing bank support for the primary industries producing for export because we want to see them, if anything, expand their output. On the other hand, there are the best of reasons for reducing the bank finance available for the building-up and holding of stocks of imported goods and, indeed, of stocks of any kind of goods.
Equally, there are the strongest reasons for curtailing bank finance for land and share speculation, for consumer credit in any form and for purely financial dealings. The aim must be, in other words, to concentrate the heaviest weight of restriction on those less essential activities which have been adding to the spending boom. At the same time, we wish to protect and give a proper degree of support to essential production, and especially to rural production for export. A selective policy will therefore be required and will be maintained until the objectives of policy have been met.
These are the main lines of the policy it is intended to follow on bank credit during the coming months. Within a few days, the Reserve Bank will, in pursuance of its powers under the Banking Act, issue more detailed instructions to the trading banks.
The Treasurer proposes also to approve certain recommendations put to him by the Reserve Bank Board on the subject of bank rates of interest. First, as to the rates paid by the trading banks on fixed deposits and certain classes of current accounts: Neither the Reserve Bank nor the Government has any wish to compel the banks to pay specified rates on their deposits, but it is known that they have themselves wished to raise the rates currently offered to depositors as an inducement to them to leave their funds with the banks rather than to succumb to the enticement of putting their free resources into one of the many forms of investment outside or on the fringe of the banking system proper. This, we believe, would be a very helpful move in current circumstances.
I have spoken earlier about the rate of turnover of money and the relation of this to the operations of the so-called fringe institutions or financial intermediaries. These can be taken to include, broadly, all the organizations, new and old, which are engaged in the business of raising money from the public to finance consumer credit, share and land dealing, promotion and construction of more or less speculative kinds. There is a great problem of how to regulate the activities of these bodies and it is not made any the easier for us by the limitations upon our constitutional powers in this field. I should perhaps observe that in the United Kingdom, the United States of America and other countries in which a similar problem exists, but which possess wider constitutional powers, it does not appear that any satisfactory system of control has yet been worked out either.
What concerns us more particularly here, however, is the connexion that exists between the growth and activities of these bodies and the supply of money in the conventional sense of trading and savings bank deposits and notes and coin. There can be little doubt that an over-abundant supply of money favours them because when people have more money at their disposal, they are likely to draw upon their bank deposits and invest in the notes, debentures or deposits of the organizations which offer relatively high rates of interest. When the money is spent by these institutions the people who receive it deposit it again in the banking system.
If the flow of funds to these bodies is to be reduced, it appears necessary that the rates of interest offered by the banks on deposits should be increased. We recognize that any increase in deposit rates must be substantial if it is to have a worth-while effect. The Treasurer is, accordingly, giving his approval to a new set of arrangements about maximum rates of interest on fixed deposits which the Reserve Bank will propose to the trading banks. In the first place, the Reserve Bank will request the trading banks not to accept fixed deposits for a longer term than twelve months, but they will be authorized to pay up to 4i per cent, for that term. Deposits lodged for three to six months may in future be accepted at rates not exceeding 4 per cent.
The trading banks will also be authorized to increase their maximum overdraft rates on most classes of loans, but not on all and not by the same amount in all cases. No bank loan may be made at present at a higher rate than 6 per cent. In future the maximum rate to be charged will be 7 per cent. Over all its loans any bank at present may not charge rates which will average out at more than 5i per cent. This permitted average will now rise to 6 per cent. Again, however, it is necessary to ensure that the permitted rise in interest rates is applied selectively, so that its impact will fall mainly on those activities we want to abate. The Reserve Bank will therefore request that, as a general rule, the banks should continue to provide preferential rates below the average for export producers in the rural and mining industries. It will also suggest to the trading banks that they should charge She higher rates permitted to them on finance for such things as imported stocks or speculative or financial dealings.
So far as possible it is the aim of the Reserve Bank, and indeed of the Government, that there should be as little interference as possible in the traditional relation between banker and client. We have no detailed information about the affairs of individual bank customers, nor do we want it - and we want no judgments by the Reserve Bank on the credit-worthiness of particular individuals. Some people, no doubt, will fail to get an advance, or will be asked by their banker to reduce an existing advance, for reasons which have no relation to national credit policy. But we see no ground based on national credit policy for an overall attack on current loans to primary industry, loans which have been made for housing, and the many smaller overdrafts which have not been unduly or unreasonably increased in the last year or so. This would be attacking the problem at the wrong end. But there are those who have heavily increased their borrowing limits, or who have called heavily on notional limits established in the past, and who in the process have contributed to those developments we are now seeking to check. These are the avenues where we will expect the main attention to be given.
In these new circumstances it is obvious that there will need to be some rise in the rates payable on savings bank deposits. This matter will be taken up at once by the Reserve Bank with the private savings banks, the State savings banks and the Commonwealth Banking Corporation.
There are, however, two sides to the business of competing for money. It can, no doubt, be a useful step to offer higher bank deposit rates as a means of persuading people to leave their money on deposit rather than to invest it with the fringe institutions. But the effect of this could obviously be nullified if the fringe institutions were to raise their borrowing rates by an equal or a greater amount. Up till now they appear to have found it relatively easy to do this and one fact which has assisted them is their ability to deduct the full amount of interest they pay as a business cost in arriving at their taxable income. The value of this to such borrowers is very substantial indeed. With the general rate of company tax at 8s. in the £1 the net cost to a company of a 5 per cent, loan is only 3 per cent, and an 8 per cent, loan only 4.8 per cent.
The position so created has been a matter of concern to the Government for a good while past. It figured prominently in our Budget discussions in July, when we concluded that something should be done about it, and much time and effort has since been expended in examining the matter in all its aspects. There can be no doubt that the competition of some of these borrowers offering relatively high rates has reduced the amount of subscriptions to Commonwealth and semi-governmental loans raised to provide money for basic development and community facilities. The Government thus loses in two ways. Because of the tax concessions, it loses tax revenue on the interest paid by competing borrowers and it loses loan money which might otherwise have come to it. Ultimately, the burden falls on the general taxpayer. But competition with Commonwealth loans is not the only nor perhaps even the most important aspect that concerns us. Industry suffers as well, because the unbridled competition of some borrowers taking advantage of the taxation privilege, and being able to charge the public inordinately high rates when they lend the money again, has tended to drive up interest rates generally.
It is of course a long-established taxation practice to allow deduction of interest as a business expense in determining taxable income. But while this may be sound in principle, it has now been carried to such extreme lengths, and has led to such burdens on public authorities and on the general taxpayer, that it cannot be allowed to persist longer without some modification.
Regulation of this matter is, of course, somewhat difficult, because the needs and circumstances of borrowers differ so widely. Although a great deal of thought has been given to it, we would not claim that we have yet been able to evolve a fully satisfactory scheme. We do, however, feel that action of some kind ought not to be further delayed and we therefore intend to bring down, by way of an interim measure which will hold the position, certain proposals for the immediate amendment of the Income Tax Assessment Act. Full details will be given in the second-reading speech on the bill which the Treasurer will introduce.
The principal features will, however, be these -
I wish most strongly to emphasize that we regard this scheme, as I have said, as a holding operation, to remain in force only until such time as a more comprehensive and detailed scheme is fully developed in the light of experience and wider information. I ought perhaps to say, however, that in evolving a permanent scheme our aim will be to reduce as far as possible the advantage which deductibility of interests provides for companies which seek to borrow excessive amounts of money at excessive rates of interest. It should most definitely not be concluded that the permanent scheme will bear any close similarity to the interim scheme I have just announced. Along with the general problem of deductibility of interest, we have also given attention to the current practice of issuing interest-bearing notes which become convertible after a period into shares of the company concerned. While it is claimed, probably with some truth, that this method of finance is particularly suitable for some companies at an early stage of their development, it is quite plain that the practice is now widely regarded as a means of obtaining the advantage of interest deductibility on the return of what is in essence share capital for the companies involved.
The Government has therefore decided to amend the income tax law to provide that interest on convertible notes issued in the future shall not be deductible for income tax purposes by companies which may issue such notes in future. It will thus, in most respects, be treated on the same basis as dividends. I should make it clear, however, that the legislation will not affect companies in respect of notes already issued. The Treasurer will give further details in his second reading speech on the amending legislation.
The several forms of action I have outlined - the tightening of bank credit on a much more selective basis, the raising of interest rates on bank deposits and the associated raising of the maximum limits on bank lending rates, partial nondeductibility of interest on borrowings by companies, and disallowance of interest on convertible notes as a deductible item - are, as a group, aimed at bringing about a reduction in the excessive liquidity of the economy, and at reducing the flow of finance, largely through the fringe institutions, to the areas of activity which have done most to foster the boom and keep it going. If these measures lead to some reduction in consumer credit in speculative building and real estate operations and in the building up of excessive stocks - in itself a speculative type of operation- - they will be generally helpful.
Besides these, we have decided to increase the rate of sales tax on motor cars and and station wagons from 30 per cent, to 40 per cent. The existing 16-2/3 per cent, rate of sales tax on motor cycles, motor scooters and similar vehicles will be increased to 25 per cent. We are doing this first to cut back the rate of buying of these vehicles, which has become higher than the current condition of our economy can reasonably be expected to support. Industrially, the performance of the motor industry in Australia has been impressive and the Government fully recognizes the great contribution it has made to our development. But we have also to recognize that there are limits to the resources we can afford for the production of items such as motor cars as against other requirements of our growing economy. Apart from its great call on local resources of labour and of materials such as steel, the industry is responsible for a very large total of imports: and with the steep rise in motor vehicle output, imports for the motor industry as wel’ as of petroleum products, have also risen steeply. Taking petroleum products and other items clearly attributable to the motor industry and motor transportation, imports in the September quarter this year were running at an annual rate of £200,000,000 compared with a rate of £152,000,000 in the September quarter of 1959. I am, of course, well aware that the present rate ot sales tax on cars and station wagons is regarded as relatively high. The Government would not now be proposing this increase were it not convinced that some lowering of activity in this field is necessary in the general interest. It holds itself ready to review the sales tax rate when it feels the situation of the industry and the state of the economy looked at together appear to warrant some adjustment.
These, then are the measures we propose for immediate application. Another matter we had under consideration at the time of our Budget discussion, and on which study has continued, has a rather longer-term significance. It concerns the tendency, evident over a number of years now, for life insurance companies and superannuation and provident funds to depart from their traditional practice of investing a large proportion of their funds in the securities of public authorities, and to apply an increasing and now very large proportion of such funds to commercial and industrial investments. Let me quote some relevant figures.
Whereas life companies held 50 per cent, of their assets in Commonwealth and semigovernmental securities in 1939, and 68 per cent, in 1949, the proportion had fallen to 37 per cent, in 1959. Putting the matter another way, the life companies increased their assets by £562,000,000 in the ten years between 1949 and 1959. They applied £481,000,000 of this increase to investments other than public authority securities, £77,000,000 to semi-governmental securities, and only £4,000,000 to Commonwealth securities. The trend has become more pronounced in the more recent years.
The life companies increased their assets by about £90,000,000 in 1959, but only £8,000,000 of this was applied to Commonwealth and semi-governmental securities. We only have details for some months of 1960, but trends similar to 1959 are already apparent. The lite companies, as a group, have not so far added to their net holdings of Commonwealth securities at all this year.
The Government cannot ignore the fact that life companies derive a great part of their funds from the savings of the community at large, lt seems quite reasonable that, as with savings banks, a reasonable proportion of the funds so collected should be channelled back through public authorities to finance the provision of community services. To the extent that public authorities do not share in such community savings, they are forced to keep taxation on the community higher than it would otherwise need to be.
The Government has also to consider that the life companies, as custodians of a large part of community savings, and as providers of personal insurance in various forms, have acquired a certain institutional status which is recognized, for example, in the various taxation concessions they enjoy. Moreover, the amount of funds coming to the life companies has undoubtedly been increased very considerably by the increased tax concessions the Commonwealth has allowed to taxpayers generally for life insurance premiums, contributions to superannuation and provident funds and the like.. This concession is, in fact, costing the Commonwealth approximately £35,000,000 each year under present arrangements.
Unlike the savings banks, life companies are, for all practical purposes, at present free to allocate their investible funds as they wish. Though the Government would have preferred to keep the life companies free of any greater degree of control, it can no longer do so in the public interest in the light of the policies which some of the companies have followed, and are still following. In fairness to the general taxpayer the Government finds itself compelled to take action to check the drift.. We are not unmindful that many of the life companies have been and still are large holders of Commonwealth and other public authority securities. We are also well aware of the valuable support they give to housing and to social institutions such as churches, hospitals and schools. We have no doubt either that, so far as these companies have invested in other fields, their invesments are sound from a financial stand-point.
We cannot, however, shut our eyes to the trends that have been going on and we cannot, unfortunately, see any sign that these trends would, if left to themselves, come to an end. We have, therefore, reached the conclusion that a point must be set beyond which the process cannot be taken further, and that is the object of the action we now firmly intend to propose to Parliament.
The Government has, accordingly, decided to introduce measures to establish a minimum level of 30 per cent, for the ratio of public authority securities to the overall investments of life companies. In deciding the minimum figure to be established, the Government has taken into account that the average proportion was 37 per cent, in 1959 and, although it will be somewhat less in 1960, the companies conducting by far the greater part of present life insurance business are still above the level of 30 pet cent.
At the same time, we realize that the establishment of a minimum, ratio could impose difficulties on companies which have undertaken forward commitments of one kind or another for lending to their clients. Accordingly, we propose that the date by which the minimum rates shall be reached will be placed some time ahead, so as to give companies an interval in which to make necessary re-arrangements of their business. Legislation will be introduced early next year which will in effect require life insurance companies to hold not less than 30 per cent, of their assets in Commonwealth and semi-governmental securities by a specified date. The legislation will also provide that, of this amount of 30 per cent., not less than two-thirds is to be invested in Commonwealth securities. Most of the major companies had ratios of more than 30 per cent, in 1959, and should have little, difficulty in complying with these provisions by making appropriate adjustments to their current and future investment programmes.
Several companies, however, have ratios considerably less than 30 per cent. Some of these companies could encounter difficulties in re-arranging their assets by the specified date, and we will therefore propose arrangements for such companies to consult with the Insurance Commissioner with a view to reaching suitable arrangements for the Treasurer’s approval.
There are many details of the new arrangements yet to be completed, such as questions revolving about definitions and valuations of assets; but the Government expects that the life companies will immediately take steps to re-arrange their investment programmes to reduce as far as possible the problems which some of them may have to face when the proposed legislation becomes law.
The Government has also had under examination the rapid growth of superannuation and provident funds over recent years. As with the life companies, these funds also benefit greatly from the tax concessions allowed to contributors and, in addition, the income of the funds themselves is non-taxable under section 23 (ja) of the Income Tax Assessment Act. Some superannuation and provident funds hold sizeable amounts of public authority securities and their support for Commonwealth loans has been of considerable assistance to the Government. But many of them either hold no public authority securities at all or very much less than the ratio we will be laying down for life insurance companies. We therefore propose to introduce legislation early next year which will require these funds to hold a minimum of 30 per cent. of their assets in the form of public authority securities, including at least 20 per cent. in Commonwealth securities. There will again be cases where difficulties could be involved in complying with this provision by the date which we propose to specify, and there will be scope for trustees of funds with low ratios of public authority securities to negotiate for a somewhat longer period during which they will be required to bring their ratio up to the minimum 30 per cent.
This, then, is the substance of our proposals. Although in some respects they break new ground, we do not regard them as being in any sense a departure from previous policy. It is no lip-service we pay to the aim of stable growth. If we believed that expansion could be assured and reasonable stability achieved with measures less than these, we should be happy to do less. If we thought that more was required we should be proposing more. As it is, on our present knowledge, we. judge these to be no less and no more than necessary to make stability real in terms of costs and prices, and to achieve internal balance between demand and supply and external balance between overseas receipts and expenditures. The test will lie with events - events which, as we fully recognize, will be strongly influenced by forces beyond our control, like overseas markets, by the actions of other authorities and, perhaps more than anything else, by the reactions of the Australian community. But we acknowledge our responsibility to give a lead and do whatever should be done and can be done in our own province. If, later on, other situations arise, requiring other forms of action, we will take them just as soon as the need is clear.
Meanwhile there is much that we and others can do towards strengthening our basic situation. I would put first and foremost the reduction of costs, especially of costs which impinge on export industry. There is a multitude of directions in which this can be sought. I would rate high, too, the techniques of design and merchandizing by which both old and new lines of exports could be brought to command attention abroad. I am willing to believe that there are not a few major projects to be found which, with skill and enterprise, could provide access to new sources of large-scale exports. We have some such projects under active examination at the present time. It is possibilities such as these, together with a knowledge of how we have weathered difficulties in the past, which sustain my confidence that our external problem, formidable though it often seems, will yield to the same sort of imaginative efforts as those which produced the great growth in our export potential during the post-war years.
I lay on the table the following paper -
Economic Measures - Ministerial Statement, and move -
That the paper be printed.
Debate (on motion by Senator McKenna) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by SenatorHenty) read a first time.
– I move -
That the bill be now read a second time.
Mr. President, the bill now before honorable senators proposes amendments of the schedule to the Customs Tariff 1933-1960. In the main, the tariff changes are based on recommendations made by the Tariff Board in some 22 reports, which I have already tabled in this chamber. Honorable senators will remember that for many years it has been the custom for the Parliament to consider a separate bill to give effect to each tariff change according to its date of operation. This necessarily resulted on most occasions in several tariff bills being presented to the Senate.
I am glad to say that, by setting out the various tariff changes in schedule form it will now be possible to have one bill do the work previously done by several bills. On this occasion one customs tariff bill takes the place of four separate bills. Honorable senators will readily appreciate the consequential economy in complying with the formalities of the Senate, and at the same time simplifying debate. These procedures are perforce limited to amendments to one act only. Thus amendments to preferential tariffs are still kept separate.
The First Schedule to the Customs Tariff Bill sets out the amendments which are to operate from 20th May, last. They arise from the Government’s consideration of the reports of the Tariff Board on -
Products of copper and other metals;
Transformers and induction coils;
Alternating current induction type motors;
Radio and television equipment;
Portable electric hand tools and nibbling machines:
Piezo-electric crystal blanks;
Oil and spirit heating lamps and parts;
Textiles of man-made fibres;
Optical lenses and other optical elements, magnifying glasses, telescopic sights for weapons, image projectors and slide viewers;
Colours and dyes and paint boxes; and
The important change made to the duties on copper semi-manufactures is the inclusion of provision for additional duty to be levied when the price of copper falls below £275 per ton. This brings the semi-manufactures into the same category as unwrought copper. The opportunity has been taken to redraft the tariff structure for non-ferrous base metals.
As from . 2 1st October, aluminium foils, on the Tariff Board’s recommendation, become dutiable at protective rates of 15 per cent. British preferential tariff and 22½ per cent. most-favoured-nation tariff. By-law concessions are granted to certain grades and qualities of aluminium foil for special purposes.
The level of protection on static transformers has been reviewed and protective duties will now cover a wider range of locally manufactured transformers than has previously been the case. Protection is extended particularly in the range from 66,000 volts to 220,000 volts.
A new tariff item is being introduced to give protection to the embroidery industry. The rates of duly proposed by the Tariff Board are 10 per cent. British preferential tariff and 17½ per cent. mostfavourednation tariff.
The protective duties on alternating current induction type motors have been extended to motors in the higher horsepower ranges, principally from 150 horsepower to 550 horse-power. The manufacture of these larger motors in Australia has begun since the industry was last reviewed by the Tariff Board. The other changes to electric motors and generators are designed to simplify the tariff structure so that importers can have a clearer appreciation of where their goods are classified.
There has been a comprehensive revision of the tariff items dealing with the products of the radio and television industry which, as honorable senators well know, has expanded greatly in recent years. Protection has been extended to a wide range of electronic equipment including radar, transmitters, radio navigational aid apparatus and television. The tariff structure has been drafted to take cognizance of the vast technological changes which have occurred since the radio industry was last reviewed in 1935. The basic level of protection for this industry has been determined at 27½ per cent. British preferential tariff and 45 per cent. otherwise.
On the recommendation of the Tariff Board there has been a revision of the tariff on footwear. The most important changes are for increased protection on thong sandals and on rubber or plastic soled footwear with leather uppers.
The duties on portable electric hand tools, other than electric drills, are not being greatly changed. However, the rates of duty on quarter-inch electric drills are being increased from 12½ per cent. British preferential tariff and 25 per cent. mostfavourednation tariff to the same level as those applying to most other portable electric hand tools - that is to say, to 20 per cent. British preferential tariff and 32½ per cent. most-favoured-nation tariff.
Following the recent Tariff Board inquiry, the rates of duty on pressure operated oil or spirit heating lamps are being increased by7½ per cent., while the rates on other oil or spirit heating lamps are being reduced by 2½ per cent.
The duties on woven man-made fibre fabrics are being increased by up to1s. per square yard. They will now be 2s. 6d. per square yard British preferential tariff and 2s. 8½d. per square yard mostfavourednation tariff. In addition, the range of goods covered by the protective tariff item has been extended to include fabrics containing 20 per cent. or more of man-made fibres. Previously, the protective duties have applied only to fabrics containing more than 50 per cent. of man-made fibres.
The Tariff Board has recommended that no increase in duty be made on optical lenses, but has recommended that protective duties be imposed on telescopic sights for weapons. The new duties on telescopic sights are 27½ per cent. British preferential tariff and 45 per cent. otherwise.
Protection is being increased by 10 per cent. in the British preferential tariff and by 7½ per cent. in the intermediate tariff on certain organic colours, namely toluidine red, para red, lithol red, rubine toner, lake red C. Hansa yellow is added to this protected group of colours. Concurrently, a reduction of 5 per cent. is proposed on chrome colours. All these colours now become dutiable at 25 per cent. British preferential tariff and37½ per cent. mostfavourednation tariff. Protection is granted for the first time on cheaper lines of water colours in tubes. However, the dearer colours and water colours in cakes and pans remain in the non-protected field.
Duties of 10 per cent. British preferential tariff and17½ per cent. mostfavourednation tariff are being imposed on power hacksaw blades. These goods have pre viously been admitted at concessional rates under customs by-law.
The amendments proposed by the second schedule to the bill are associated with the 1960-61 Budget and relate to certain radio valves and cinematograph film. Excise duty of 2s. 9d. each is proposed to be removed from Australian-made radio valves and an equivalent reduction is proposed under the customs tariff in respect of imported valves which, if made in Australia, would have been subject to excise duty. Concurrently, these goods become subject to sales tax. The duties applying to the cinematograph films have been increased by1d. per lineal foot, but primage duty of 10 per cent. ad valorem is concurrently removed. The net result is that the amount of revenue collected remains for practical purposes unaltered. However, the removal of ad valorem duties simplifies the collection of duties.
The third schedule to the bill relates to customs duties that have been in operation since 9th September, 1960, and arise principally from recommendations of the Tariff Board on -
Sensitized photographic papers and transfer media;
Laboratory and scientific glassware; and
The tariff structure on firearms has been revised. The important changes provide for protective duties of 15 per cent. British preferential tariff and 25 per cent. other wise on . 22 calibre single-barrelled rim-fire rifles. Duties are reduced on other firearms to free British preferential tariff and7½ per cent. ad valorem otherwise. However, these rates only apply provided that the goods bear an approved proof mark. The penalty duty for the importation of unproofed firearms is raised from £5 each to £30 each and this increase will restore the safety incidence of this duty.
Tariff protection is now being accorded to photographic papers and transfer media of the image transfer types. The papers affected are those types used in the photocopying of documents.
Following a review of the local industry by the Tariff Board, protective duties are being imposed on laboratory and scientific glassware. The new rates will be 20 per cent, under the British preferential tariff and 30 per cent, under the intermediate and general tariffs. However, goods which are not being manufactured locally are being admitted under customs by-law at nonprotective rates of duty.
Concerning certain thiocarbamyl chemicals, protective duties of 12i per cent. British preferential tariff and 30 per cent, otherwise are now proposed, following recommendations by the Tariff Board. There are also some drafting changes which are designed to facilitate the preparation of statistical data in respect of imports. In no case is the level of duties disturbed or the incidence of the tariff changed in any way.
The tariff alterations in the fourth schedule, have been in operation since 21st October last and are based on recommendations by the Tariff Board in its reports on -
Lightning arresters; Cathode ray tubes;
Electrical testing and measuring instruments; and
Clocks and watches and movements therefor.
On the recommendation of the Tariff Board, protective duties of 10 per cent British preferential tariff and 20 per cent, otherwise are being provided for valve type lightning arresters which are rated at 5,000 amperes and are suitable for the protection of electricity supply systems operating at pressures between 6 kilovolts and 33 kilovolts. However, the Tariff Board pointed out that lightning arresters in the 22-33 kilovolt range were not yet obtainable from Australian sources and these are being admitted under by-law free of duty under the British preferential tariff and at lb per cent, ad valorem otherwise, pending commercial production of these lines which will take place, shortly.
The protective duties on cathode ray tubes are being reduced. Picture tubes as used in television receivers now become subject to duties of £6 each under the British preferential tariff and £6 each plus 12i per cent, ad valorem otherwise. The £6 is not a protective duty, as it is matched by an equivalent excise duty of £6 each charged on Australian-made tubes. Tariff protection is therefore limited to 12b per cent, against imports from mostfavourednation countries. The rates for other cathode ray tubes, such as radar display tubes, are free British preferential tariff, and 7i per cent, when coming from a most favoured nation. No tariff protection is accorded to these goods, which are not subject to excise duty.
The duties on glass envelopes for cathode ray tubes are also being varied. The Tariff Board has found that protection at the rate of 25 per cent, ad valorem against imports from most-favoured-nation countries only is necessary for the next three years. Thereafter, the level of protection is to be reduced to 15 per cent. In regard to electron guns for cathode ray tubes, tariff protection on these goods is provided at the same level as that applicable to complete tubes of which they form a part.
The Tariff Board has recommended protective duties of 21b per cent, ad valorem, British preferential tariff, and 45 per cent, most-favoured-nation tariff on electrical testing and measuring instruments. The goods covered by the Tariff Board’s inquiry concerned electrical testing meters, oscilloscopes, signal generators and signal modifiers of types used by persons engaged in the manufacture, repair or servicing of radio and television, and like equipment. The board found that the significant rate of protection was that recommended under the most-favoured-nation tariff, that is, 45 per cent. The British preferential tariff rat.-s have been fixed in accordance with Australia’s international commitments, that is to say, 32i per cent, ad valorem for cathode ray oscilloscopes and oscillographs, 35 per cent, for other measuring instruments, and 21b per cent, for other test equipment.
Also included in the fourth schedule are tariff changes arising from a report by the Tariff Board on clocks and pocket watches. The opportunity has been taken to redraft the whole of the existing tariff structure on these goods. The Government has adopted the board’s recommended duties on all clocks except electric clocks. Other changes now proposed maintain existing tariff rates but set out the provision in a more logical sequence which will simplify administrative procedures. T should perhaps also mention that primage dutv has been removed from all clocks and watches. I commend the bill to honorable senators.
Debate (on motion by Senator McKenna) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Henry) read a first time.
– I move -
That the bill be now read a second time.
The two amendments proposed by this bill are drafting changes consequent on the alteration now being made to customs tariff in respect of footwear and radio and television equipment. No variation in the tariff treatment now being accorded to goods manufactured in Canada is involved. I commend the bill to honorable senators.
Debate (on motion by Senator McKenna) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Henty) read a first time.
– I move -
That the bill be now read a second time.
The bill now before the Senate sets out the preferential rates of duty to be accorded to goods the produce or manufacture of Canada. This action follows the revision of the Australia-Canada Trade Agreement which, as honorable senators may recall, was concluded earlier this year.
Although the new agreement does not call for any actual alteration in the rates of duty on Canadian goods, it is proposed to take advantage of the opportunity to consolidate all the provisions in one preference tariff and to repeal the two existing acts which show our commitments to Canada. These are the Customs Tariff (Canadian Preference) 1931 and the Customs Tariff (Canadian Preference) 1934-1960. I commend the bill to honorable senators.
Debate (on motion by Senator McKenna) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Henry) read a first time.
– I move -
That the bill be now read a second time.
The amendments proposed by the first and second schedules to this bill are complementary to those in Customs Tariff Bill (No. 3) 1960, which honorable senators already have been asked to consider. The changes proposed by the third schedule formally state certain new commitments to New Zealand. There is no variation in existing rates of duty on the goods. 1 commend the bill to honorable senators.
Debate (on motion by Senator McKenna) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Henty), read a first time.
– I move -
That the bill be now read a second time.
The amendment now proposed is a drafting change consequent on the renumbering from 140 (a) to 137 (a) (3) of the item in the schedule to the customs tariff relating to unwrought copper. I commend the bill to honorable senators.
Debate (on motion by Senator McKenna) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Henry) read a first time.
– I move -
That the bill be now read a second time.
The Excise Tariff Bill (No. 2)1960 arises out of the 1960-61 Budget and gives effect to the Government’s decisionto alter the incidence of taxation on radio valves. Excise duty of 2s. 9d. each is being removed from Australian-made radio valves and, concurrently, thevalues are being made subject to sales tax.
Manufacturers of wireless valves have formerly been required to pay excise duty on their products at the time the valves are delivered from the factory. When the valves were used in the manufacture of electronic equipment, sales tax was levied on the valueoftheequipment less the cost of the valves and this necessitated dissection of the selling cost for sales tax purposes. The proposed action will have no appreciable effect on revenue but it will enable excise controls to be removed from radio valves.
I commend the bill to honorable senators.
Debate (on motion by Senator McKenna) adjourned.
In committee: Consideration resumed (vide page 1545).
Part 2- Business Undertakings.
Proposed Vote, £44,862,000.
.-I refer to Divisions Nos. 963 and 964 under the heading “ Broadcasting and Television Services”. Apparently the proposed appropriations for these divisions cover the Territory of Papua and New Guinea as well as the mainland of Australia. When I was in the Territory recently I was quite interested in observing the interest with which the residentsfollowed the Australian Broadcasting Commission’s news service,whichwasfollowedbytheirown service. Itis rather unfortunate that this newsserviceisthechiefmediumoftrans- mitting news from the mainland. I should liketoexpressthehopethatthenewsservice will he extended. I understand that in Rabaul only approximately 27 newspapers are received from the mainland. So additional news broadcasts would be of great benefit, not only to Australia, but also to the Territory.
Only last week the. Government announced its proposals in regard to the third stage of the development of television services, There were expressions of satisfaction and also expressions of dissatisfaction. When phase three is completed, 79 percent.ofthepopulationinNewSouth Wales will be receiving programmes, 88 percent.inVictoria,73percent. in South Australia, 61 per cent, in Queensland, 63 per cent. in Western Australia, 89per cent. in Tasmania, 93 per cent. in the Australian Capital Territory, giving an average, of 78 per cent.fortheCommonwealth.Wehave had a. lot of criticism about Western Australia and South Australia not getting a fair deal. In view of those percentages, it seems that the argument does not. carry as muchweightas those advancing it. would likeus to believe. It is quite obvious that in thenextstageweshallseean even greater expansion. I appeal to the critics to acquire a sense of patience. It will not be very long before nearly all Australians will be able to receive television programmes.
.-I refer to the proposed appropriation for the PostmasterGeneral’s Department, and particularly to Division No. 955 and Division No. 960. This department will absorb £42,093,000 of the amount that is to he appropriated under this measure. Under Division No. 955, telephone exchange services will account for £27,030,000, and trunk line services for £8,500,000. Those figures indicate the enormousdevelopmentthatistaking place in the department and the speed with which the department is pushingon with the expansionof services. Those signs areall to the good.
I have a question in relation to Division No. 960. I refer the Minister to the details of that item appearing on page 31of the Civil Works Programme1960-61”. AmongsttheworksinprogresstheMinister will find only one project in Tasmania, namely the erection of a post office at
Glenorchy, which is to cost £21,000. The total cost of works in progress is to be £8,849,897, of which £21,000 is a most insignificant proportion. I refer the Minister now to the particulars of proposed new works appearing on page 33. Although very large sums are to be appropriated for expenditure in other States, only three new works are proposed in Tasmania. They will cost £284,000 out of a total of £4.084,750. Again, the percentage is very adverse from Tasmania’s viewpoint. I ask the Minister to say whether he considers those proportions are right and whether Tasmania’s allocation of these vast funds is determined upon population or upon needs. Despite the activity of the department in Tasmania, there are many facilities that could be improved. I record my disappointment that such an exceedingly small proportion of the vast sums allocated to the programme is available to Tasmania.
I refer the Minister to Division No. 970, and in particular to items 04 and 05. They are dealt with at pages 35 and 36 of the “ Civil Works Programme 1960-61 “. I refer the Minister particularly to the cost of erecting television transmitting stations for the Australian Broadcasting Commission. The Sydney station will cost £67,200; the Brisbane station, £58,000; the Adelaide station, £59,170; the Perth station, £57,012; and the Hobart station, £139,472. These figures seem to be out of proportion. I should like the Minister to comment upon that rather startling variation. The answer will probably be that the Hobart station is built on the top of Mount Wellington, where there are peculiar constructional difficulties, and where snow, wind and the rigours of the elements all play a part. Has the Minister any information to justify the startling increase in the cost of providing a transmitting station at Hobart, in comparison with the cost in other capitals?
^T9.26]. - No Postmaster-General is to be >%* ‘“1 his task of allocating funds, in % *he great progress that has been overcoming arrears in the Jthe tide seems to flow orovided this «gr - it rs ^>&~<pro- vided this year - there is expected to be a demand for 190,000 services this year. In those circumstances, the tide has to ebb and flow. On the face of it, it does appear that in a works programme costing £8,800,000 only £21,000 is earmarked for Tasmania. Those figures relate to works in progress. But out of an amount of £4,000,000 for proposed new works, an amount of £281,000 rs to be expended in Tasmania. This appears to be a reasonable proportion, remembering not only that Tasmania has a small population but also that the rate of growth in other parts of Australia, requiring new services, is more rapid than is the rate of growth in Tasmania.
In relation to the comparative costs of television transmitting stations, circumstances vary from State to State, but an adequate and proper service has to be provided. Such a service is being provided in Tasmania. If it is an expensive site and if it an expensive station, as in this particular case, it is still work that is needed and it is a task that has to be done.
Proposed vote agreed to. Part 3 - Territories of the Commonwealth.
Proposed Vote, 115,427.000.
.- I refer to Division No. 985- National Capital Development Commission. Can the Minister for Repatriation (Senator Sir Walter Cooper) give me the name of the firm of architects responsible for the monstrosity that has been erected near the American War Memorial, and which I understand is commonly referred to as the Pentagon? I have yet to hear of any one who has not condemned it on architectural grounds. While I do not profess to be an authority on these matters, it seems to me to be just a horrible conglomeration of boxlike buildings. When one thinks of the money that has been spent in trying to make this capital city one which is worthy of Australia, I think the building is a disgrace to the people associated with its design.
The second item to which I wish to refer is Division No. 991, item 01, Advance to Administration for loans to ex-servicemen in agricultural enterprises. This item relates to Papua and New Guinea. I feel that this grant of £700,000 is a very worthy one indeed. Those of us who sometimes feel that the pioneering spirit is dead in
Australia have only to go to this Territory and see the men who, accompanied by their wives, are prepared to put up with all kinds of hardship in endeavouring to pioneer coffee and other plantations. The efforts of those people speedily reassures us that the Australian pioneering spirit is not dead at all. I am very pleased indeed to see that this sum of money has been set aside for this purpose.
[9.32]. - I understand that the name of the firm of architects for which Senator McKellar asked is Buchan, Laird & Buchan, of Melbourne.
In regard to Division No. 991 - “ Advance to Administration for loans to ex-servicemen in agricultural enterprises, £700,000” - I. understand that this is a grant for a credit scheme for ex-servicemen settlers in Papua and New Guinea commenced on 6th November, 1958. The scheme was introduced so that exservicemen who took up residence in the Territory after the Second World War might receive some of the settlement benefits available to ex-servicemen resident on the mainland. The scheme enables credit to be made available to ex-servicemen settlers who are already occupying agricultural land holdings in the Territory or who obtain holdings through the normal method of application for land advertised as available for leasing. Eligible ex-servicemen are those who served in the Second World War and since discharge have resided in Papua and New Guinea for at least five years prior to, but not necessarily immediately prior to, the commencement of the scheme. Exservicemen with service in Korea and Malaya, who have certain residential qualifications in Papua and New Guinea, are also eligible.
The maximum amount of loan granted under the scheme will not exceed £25,000. Loans may be made to qualified eligible ex-servicemen for the purpose of providing working capital, paying off or effecting improvements, acquiring stock, plant and equipment, and discharging any mortgage, charge, bill of sale or other encumbrance on the property. The borrower must reside on and undertake the full management of his property. Advances totalling £627,000 were made to the Administration by the Commonwealth in 1958-59 and 1959-60. To June, 1960, 63 applications had been approved, representing a total commitment of £1,295,295. It is expected that further commitments to be incurred in 1960-61 will amount to £1,590.000.
Proposed vote agreed to.
Second Schedule agreed to.
Postponed clauses 3 and 4 agreed to.
Postponed First Schedule agreed to.
Title agreed to.
Bill reported without amendment.
Motion (by Senator Paltridge) proposed -
That the report from the committee be adopted.
.- Before this motion is put, I formally move -
That the bill be recommitted for the purpose of reconsidering the Second Schedule. Division No. 860. Department of the Interior.
I take this course to enable further consideration of Division No. 860, Department of the Interior, at page 7 of the second schedule. The reason is that in committee a number of honorable senators asked questions under this division in relation to the establishment of Commonwealth offices at Hobart and Adelaide. The Minister for Repatriation (Senator Sir Walter Cooper), who represents the Minister for the Interior, was not in the chamber to hear the speeches in which those questions were asked. As none of us has received an answer, I thought, Mr. Deputy President, that you might stretch the rules a little bit to enable the Minister to say something in answer to questions now, after which, with the indulgence of the Senate, I would be prepared to withdraw my motion.
The DEPUTY PRESIDENT (Senator the Hon. A. D. Reid). - Could not an answer be given at the third-reading stage?
– It undoubtedly could. I proposed that course to the Minister, but I thought he would be prepared to deal with the matter at this stage. If the Minister would prefer to deal with it at the third reading stage, I will withdraw my motion.
– I have been unable to get any details apart from those given in the “ Civil Works Programme 1960-61 “. So far as I know, if the works are not included in that programme, they are not at the moment being undertaken.
– Nothing is being done. I want to know when something will be done. Will the Minister undertake to supply me with an answer in the near future?
– Yes, 1 will confer with my colleague and supply Senator McKenna with the information that he seeks.
– That will satisfy me. In the circumstances, I ask for leave to withdraw my motion.
Motion - by leave - withdrawn.
Question resolved in the affirmative.
Bill read a third time.
Debate resumed from 25th October (vide page 1245), on motion by Senator Paltridge -
That the bill be now read a second time.
– The measure before the Senate is designed to amend the Sales Tax (Exemptions and Classifications) Act 1935-1959. As was stated by the Minister for Civil Aviation (Senator Paltridge) in his second-reading speech, the bill provides for exemptions, reductions and increases of sales tax on certain items. The statement that was placed before the Senate to-night on behalf of the Treasurer (Mr. Harold Holt) would seem to make this bill a little out-of-date because very important alterations in sales tax rates will be made as a result of that statement.
The main purpose of this bill is to give concessions in respect of sales tax to persons suffering disabilities in one or both legs sufficiently severe to preclude them from using normal public transport. Those persons will now be able to obtain a motor vehicle without paying sales tax. That is a worth-while concession to disabled persons and meets with the full approval of the Opposition. The concession will cost the Government £265,000 in a full year and £210,000 in the remainder of the current financial year. That loss of revenue is offset by the increased revenue that will be derived from the increase in the rate of sales tax on electric shavers from 12½ per cent. to 25 per cent. As a result of this increase the Government will benefit by £290,000 in a full year and £230,000 in the remainder of the current financial year What has happened is that the person who uses an electric shaver is being called upon to bear the burden of making motor vehicles available to disabled persons free of sales tax. The trend towards the use of electric shavers is growing. Electric shavers are important to people living in cities and other places where electric power is available. Fashions have changed. At one time men wore beards. Then came the era of the blade razor, which was followed by the era of the safety razor. Now men enjoy the speed and comfort of electric shaving. The Government has been guilty of discrimination in singling out for higher imposts the users of electric shavers. Any man worthy of the name has to shave most of his face, and if he uses the most modern type of shaving appliance he, and those who do likewise, are called upon to provide the Government with an extra £290,000 a year.
The bill also exempts from sales tax tanks for bulk-milk tankers. As this is a matter of considerable importance to the dairying industry we on the Opposition side do not object to this concession. Clause 5 of the bill states -
The First Schedule to the Principal Act is amended -
by adding at the end of item 7 the following sub-item: - “(11) Tanks for bulk-milk tankers for use by producers, manufacturers or distributors of milk or other dairy produce exclusively for the collection of milk from farms, including pumping equipment and other fittings for those tanks, but not including any road vehicle, chassis or undercarriage to which any such tank is, or is to be, fitted, or parts for any such vehicle, chassis or undercarriage.”
We get into an awful muddle when we operate our economic system on the basis of robbing Peter to pay Paul. When our economic system develops a festering sore we put a little piece of sticking plaster over the fester, and when it breaks out in another place we merely apply a little more sticking plaster. We do nothing about the basic troubles that beset our economic system. A glaring contradiction is to be found in this measure in that while the tank that is fitted to a vehicle exclusively used for the transport of milk or other dairy products is to be free of sales tax, the prime mover on which the tank is dependent for transport is subject to sales tax. That is an example of the sort of contradiction that arises when legislation of this kind is dealt with in piecemeal fashion.
I hope that primary producers will benefit from the provision that extends exemption to goods that are imported from Christmas Island. The main import into this country from Christmas Island is phosphate rock, and I hope that the manufacturers of superphosphate will be able to pass on to primary producers the benefit that they derive from this exemption. We have recently received a report on the dairying industry and we realize the very criticial situation that faces, not only the Government in having to deal with the problems of that industry, but also many people who have their life savings invested in dairy farms and in farming generally. Anything that can be done to increase the carrying capacity of farms and decrease running costs must be an advantage to primary industry. The exemption from sales tax of phosphate rock from Christmas Island will be very beneficial if honesty prevails and the concession is passed on to the consumer.
Under this legislation a reduction from 25 per cent, to 1 2-J- per cent, is to be made in the rate of the sales tax on silverplated ware, pewter ware and cut-glass ware. This reduction is rather difficult to understand. The bill refers to -
Plate made wholly or principally of platinum, gold, silver or other precious metal and plated ware plated with platinum, gold or other precious metal (other than silver), including articles of rolled gold and gold filled articles.
It seems anomalous that such a decrease is made in respect of these articles when other very important articles, essential in the home, will still attract a high rate of sales tax. It would have been more equitable to reduce the rate of the sales tax on essential items.
I .have not been able to obtain a report of the Commissioner of Taxation more recent than the Thirty-eighth Report, dated 1st June, 1959, In that report the Com-, missioner explains that originally a flat rate of tax was imposed, the legislation introduced in 1930 providing for a single tax rate, with a limited number of exemptions, but the tax has developed since then to a multiple-rate tax with a large spread of exemptions. Separate acts are regarded as necessary in order to comply with section 55 of the Constitution, which provides, inter alia, that laws imposing taxation, except laws imposing duties of customs or of excise, shall deal with one subject of taxation only. Over the years there have been nine different assessment acts covering subjects of taxation. Until 2 1st November, 1940, there was only one rate of tax, which applied to all goods not specifically exempted, but after November, 1940, because of the need for increased revenue for war purposes, three different rates of tax were introduced - a general rate of 10 per cent, and two other rates of 5 per cent, and 15 per cent.
In 1941 the general rate was 10 per cent, and the other rates , were 5 per cent, and 15 per cent. In 1942 the general rate was increased to 121 per cent, and the rate specified in the third schedule to 25 per cent. A reduction was made during the period from 1946 to 1949 and a further reduction was made in 1950, when the general rate was brought down to 8J per cent. That rate continued until September, 1951, when the general rate was increased to 12i per cent., at which level it has remained since that time.
The sales tax has become a very important factor in the cost structure of this country. The exemptions cover a very wide range of basic articles, such as agricultural machinery and implements, mining machinery and equipment, irrigation, water supply, drainage and sewerage equipment, fishing and pearling machinery and equipment, and a host of other important articles, including building materials and miscellaneous items such as hand tools and so on. Under the second schedule a tax of 25 per cent, has been imposed since 15th March, 1956, on luxury goods such as jewellery, plated ware, cut-glass ware and fancy goods, but also on such things as fountain pens.
I do not think that a fountain pen is a luxury. It is an absolute necessity in every man’s equipment. A man working in an office needs to carry a fountain pen for his convenience. At one time, when the old type of pen was readily available in an office and the ink well was kept filled, it was perhaps unusual to have a fountain pen, but in these days a fountain pen is essential in offices and other places of business. The same remark applies to watches, clocks and articles such as that. They are not luxuries any more. They are important items in any establishment.
I pass now to the increase in the tax on electric razors. One of the explanations given by the Minister for this increase was that because safety razor blades were taxed at the rate of 25 per cent., the sellers of electric razors were at an advantage, because those, razors attracted a tax of only 12± per cent. For that reason the Government decided to raise the sales tax on electric razors.
– Why did not it reduce, the tax on safety razor blades?
– Instead of reducing the tax on safety razor blades to 12jper cent., the Government decided to increase the tax on electric razors to 25 per cent. I think the Treasurer used rather a specious argument when he said that we need to have equality between men and women. He said that if sales tax at the rate of 25 per cent, was to be imposed on womens’ cosmetics and other toilet requisites, a similar rate of sales tax should be applied to mens’ razors. It would be cheaper for men to grow beards as they did in other days.
– And have a beard trim instead of a shave.
– That is so. After all, sales tax of 25 per cent, is a very big impost on such an essential item as a shaver.
– What amount of revenue will the increased sales tax produce?
– It will bring in £290,000 in a full year, and £230,000 during the remainder of this financial year. This will offset the cost to revenue of exempting from sales tax motor vehicles used by certain classes of disabled persons who are unable to use public transport.
– Not necessarily paraplegics, but persons who have lost the use of one or both legs to such an extent that they are unable to use public transport for the purpose of travelling to and from gainful employment. I think this is a very fair provision for these people. If they have rehabilitated themselves to a stage at which they can engage in gainful employment, every possible concession should be given to them. I agree with the Government’s action concerning these people.
We have an inflationary problem on our hands. Under the immigration programme, we are bringing hundreds of thousands of families to this country. Furthermore, the increased birth-rate some years ago is now manifesting itself in increased adult population figures. Yet we find that goods such as furniture, crockery, glassware and cutlery which are required by young couples establishing their homes are subject to sales tax at the rate of 8i per cent. By the measure now before us, we are reducing the rate of sales tax on silver-plated ware, pewter and cut-glass ware from 25 per cent, to 12* per cent. I do not happen to have many such goods in my home, but the Government may have a good reason for making this concession, but I contend that as concessions are being granted in respect of these articles, sales tax concessions also should be granted in respect of furniture, crockery, cut-glass ware and cutlery, which are basic in the homes of newly-married people.
– A reduction of sales tax on those goods would make wages go further in these inflationary times.
– I agree with the honorable senator’s comment.
It is evident that the Government regards refrigerators, washing machines, sewing machines and other electrical appliances as luxuries. I do not think that they are any longer luxuries. These goods are of the utmost importance not only to maintain the peace and good conduct of a home but also to lessen drudgery. Furthermore, by using these appliances women are able to go out to work to earn money needed for hire-purchase payments because frequently their husbands are unable to earn sufficient money to meet these payments. Yet the very things for which women go out to work to get money to make hire-purchase payments for - items such as refrigerators, washing machines and furniture - are subject to high rates of sales tax. I think that originally the Government thought that people who could afford to buy household goods that were then considered luxuries, could afford to pay more tax. I notice that kitchen utensils, brooms, fruit bottling outfits, floor coverings, blinds, mattresses, pillows and cushions are subject to sales tax at the rate of 81 per cent.
– Yet the rate of sales tax imposed on plate made wholly or principally of platinum, gold, silver or other precious metal and plated ware plated with platinum, gold or other precious metal other than silver, including articles of rolled gold and gold filled articles is being reduced!
– That is the point I am making. I cannot understand how the economy of this particular industry warrants a reduction of sales tax on the goods that Senator Kennelly has mentioned from 25 per cent, to 12i per cent. Although there must have been some compelling reason for this reduction, I cannot find any reference tj it in the Minister’s second-reading speech.
– The Minister said that the silver-plating industry had been passing through an extremely difficult period.
– Yes. We know that various items used by the automobile industry, fireside equipment and household knick-knacks are electro-plated. But after all, all that glitters is not gold and I believe that many household goods are more important than these electro-plated goods. This comment applies also to pewter-ware. An honorable member in another place, when speaking to this bill, referred to the dull glow of pewter compared with the brightness of electro-plated drinking containers, which are in the luxury class. I contend that, instead of reducing the rate of sales tax on silver-plated ware, pewter and cut-glass ware, the Government should have reduced the rate of sales tax on furniture, ‘refrigerators, and other items included in the fourth schedule.
Sales tax at the rate of 16$ per cent, is applied to motor cycles, motor scooters and similar vehicles as well as to parts and accessories other than tyres and tubes.
– The rate of sales tax on motor scooters is to be increased to 25 per cent.
– And that on station wagons is to be increased from 30 per cent, to 40 per cent.
– Yes, when used primarily for the transport of persons. At one time, these vehicles were used almost exclusively for station work. I believe that the incidence of sales tax on the whole of the cost structure should be carefully examined, because the effect on industry of sales tax at the rate of 161 per cent.-
– The existing 161 per cent, rate of sales tax on motor cycles, motor scooters and similar vehicles will be increased to 25 per cent.
– That strengthens my argument. I had prepared my speech on the basis that there had been no change, and apparently I am out of date by nearly two hours. It seems that the rate has been increased from 16s per cent, to 25 per cent.
– But that is not provided for in the bill that we are discussing.
– No. I believe that when concessions are being made, at a time when the economy is very delicately poised, assistance in the form of exemptions and reductions of sales tax should be given with a view to arresting the movement of costs, because costs are the prime factor in the inflationary spiral. While the measures that are being taken to close the gate or to stop the holes in the reservoir, so to speak, are long overdue, an increase of the rate of sales tax, such as from 161 per cent, to 25 per cent., is carried on and adds to the ultimate cost of products.
We in Tasmania have a particular bone of contention in respect of sales tax. As honorable senators are aware, the people in Victoria and most other States are charged sales tax on the retail prices of commodities. In Tasmania, where there is not sufficient population to produce all the goods that the people need, many goods have to be transported from Victoria. The cost of freight is added to the price of the goods, and sales tax is computed on the cost which includes the amount of the freight. Therefore, the people of Tasmania are at a disadvantage in comparison with the people of other States. I contend, Mr. President, that this is a matter that should bc dealt with before sales tax concessions are given in respect of such commodities as pewter and cut glass. 1 suppose that there are people who stand to lose all if something is not done to improve the economy of the pewter and glassware industries, although I must say that I do not know of any organization producing cutglassware in Australia that is down to its last penny. However, I am prepared to give the pewter and cut-glassware industries the benefit of the doubt and agree that they probably need concessions.
Sales tax to-day is levied on £1,000,000,000 worth of the £3,000,000,000 worth of articles that are sold in Australia each year. The fact that sales tax is payable on a third of all articles that are sold must have a very strong influence on the cost structure. During the period since 1948-49, the percentage of sales tax collected by the Commissioner of Taxation has risen from 11.2 per cent, to 16.1 per cent, of the total amount of taxation. In 1948-49, in round figures, collections from sales tax amounted to £39,000,000, but in the year before last they amounted to £137,000,000, which means that the amount increased by £98,000,000 during that time. The total increases each year as the total volume of sales increases. In the same period, the ratio of income tax to total tax collections fell. Income tax, of course, is the fairest form of tax, but sales tax bears unjustly in many cases. For instance, the person who smokes tobacco, drinks spirits or has some other pleasure or vice must contribute a greater amount to the national revenue than does another person who may live in the same home, drive along the same roads and share the same transport, but who does not smoke or drink. Sales tax is an indirect and unfair method of taxation. The person who leads the life of a hermit enjoys the same protection from the defence forces and all the other facilities that are being provided by .the people in the community who are paying indirect taxes In my opinion, a tax that does not apply to the whole community on the basis of capacity to pay is an unjust tax.
Indirect taxation is an unseen and subtle form of taxation. In the report of the Commissioner of Taxation there appears quite a long list of people who had inadvertently, or with malice aforethought, failed to send in sales tax returns. They were very severely punished. The obligation on some members of the community to collect sales tax imposes on them quite an onerous responsibility. As we know, these days credit is given not just for 30 days, but often for 60 days or 90 days. A trader who does not submit sales tax returns promptly will most likely receive a sharplyworded letter saying, “ If you do not send in your returns we will have to take the necessary proceedings “.
As I have said, responsibility to collect sales tax imposes on traders quite a heavy responsibility. It is a thankless task and takes up quite a lot of their time. It is much fairer to tax according to the capacity of people to pay, such as by imposing income tax, which is open and above board. With income tax, people know what they are obliged to pay because their liability for tax is assessed according to their income.
The introduction of such a measure as this gives honorable senators an opportunity to discuss the very important matter of sales tax exemptions and classifications. But this legislation will hardly have come into operation when, in view of the statement that was made earlier to-night, further amending legislation will be introduced. The Opposition does not oppose the measure, but it takes advantage of this opportunity to direct attention to the need for a review of the sales tax legislation with a view to granting concessions in relation to furniture, floor coverings and other household items.
– lt is with some queries in my mind that I rise to address myself to this measure. I indicate at this stage, however, that I support the bill in toto. I believe that the imposition of sales tax is a fair way of taxing people. But having said that, I propose to repeat what I have said for the last seven years about the collection of sales tax. I shall remain a critic of the Government until the situation to which I am about to refer is cleaned up.
I believe that both the Government and the Taxation Branch could not care less about the way in which the collection of sales tax affects private enterprise. I am a private enterprise man, even though I have worked for wages all my life. A government that has been in office for ten or eleven years should pay heed to the needs and the rights of private enterprise. Regulations governing the imposition of sales tax and the fixing of categories are imposing a great cost on private enterprise. I know of one firm - I shall not name it, or the State in which it is situated - which has to meet a cost of more than £2,000 a year to collect sales tax for the Government.
We have in Australia amazingly efficient business consultant firms. If the Cabinet and the Public Service cannot devise a better system of collection, they should call in a firm of business consultants with a view to reducing the cost of private enterprise. The benefit of such a saving would be felt throughout the whole economy. If at any time in the history of Australia there has been a need to achieve efficiency and to reduce costs, now is the time. Australia is the most prosperous and happy country in the world, and we have great prospects for the future. This Government, the Commonwealth Public Service and even Senator O’Byrne, if he had the nous to listen and did not try to interject, should put their heads together and endeavour to find ways and means of reducing costs. Costs can be reduced only by efficient management and by adopting methods of taxation which will not place an added burden on privateenterprise firms which have to collect the money.
Under the Standing Orders, I am not at liberty now to refer to the pay-roll tax, which is the most uneconomic form of taxation we have ever thought of. The Government should decide to adopt two or three categories of sales tax instead of the number of categories at present in operation. As I said earlier, I believe that sales tax is a fair means of taxation; but it should be administered with common sense and businesslike efficiency.
Now I come to my great point of criticism. On 8th August last, some days before the presentation of the Budget, I suggested in a letter addressed to the Treasurer (Mr. Harold Holt) that tanks used for carrying bulk milk from farms to the processors or distributors should be exempt from sales tax. Naturally, the Treasurer could not reply to my letter, because a treasurer could not tell senators or other people in advance what he intended to say in his Budget speech. But on 17th August the Treasurer, when delivering his Budget speech, said -
The dairying industry will be assisted by a proposed exemption of tanks which form part of bulk milk tankers used in transporting bulk milk from farms.
Being very pleased, I immediately and gallantly sent this message to the people for whom I had made representations: “ See Treasurer’s speech regarding bulk tankers “. The people concerned applied for exemption from sales tax. I point out that they were purchasing a tanker which was being built in Newcastle. But they were told that under the act they were not entitled to exemption. So I took up the matter with a number of our leading statesmen and members of the Cabinet. The ruling still is that the firm concerned is not entitled to an exemption. I propose to take up the time of the Senate in discussing this matter, because I believe that the Government and the Taxation Branch should wake up to the need for a proper interpretation of the relevant provision in the bill. A dairy farmer who buys a tanker in which to transport his milk is entitled to exemption from sales tax. Moreover, a bulk ‘tanker bought by a firm in a capital city - in the case I have in mind, the City of Hobart - is exempt from sales tax. But, if another person carries the milk from the farms - in the case in question, farms owned by soldier settlers - to the city for distribution, according to the interpretation placed on the amending legislation by departmental officers he is not entitled to an exemption from sales tax.
The PRESIDENT (Senator the Hon. Sir Alister McMullin). - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -
That the Senate do now adjourn.
Question resolved in the affirmative.
Senate adjourned at 10.30 p.m.
Cite as: Australia, Senate, Debates, 15 November 1960, viewed 22 October 2017, <http://historichansard.net/senate/1960/19601115_senate_23_s18/>.