Senate
15 May 1962

24th Parliament · 1st Session

  1. Senate
  2. 24th Parliament
  3. 1962

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

page 1329

QUESTION

TRANS-AUSTRALIA AIRLINES

Senator DITTMER:
QUEENSLAND

– I ask a question of the Minister for Civil Aviation. Are employees of Trans-Australia Airlines, who are due for long service leave, receiving it? If in any case the granting of long service leave to employees is being deferred, will this have an adverse effect on employees who will become eligible for long service leave in the future? Is it possible to advise employees who will become entitled to long service leave in the near future - say within the next two years - of the approximate dates upon which they will be granted leave?

Senator PALTRIDGE:
Minister for Civil Aviation · WESTERN AUSTRALIA · LP

– I am not aware of any delay in the granting of long service leave due to employees of TransAustralia Airlines. As far as I know long service leave is being dealt with in the normal way. No distortions of the situation have been brought to my notice. As the honorable senator has raised this matter, I will have inquiries made to ascertain whether there has been any case of long service leave having been deferred. If there have been such cases, I will ascertain the reasons for the deferment and forward to the honorable senator information concerning them and on other allied matters that may be of interest to him.

page 1329

QUESTION

SEARCH FOR OIL

Senator MAHER:
QUEENSLAND

– I ask the Minister for National Development: Has he read the statement made last week by Sir Kenneth Coles, chairman of Australian Oil and Gas Corporation Limited and reported in the Brisbane “Sunday Mail” on 13th May, that the Moonie oil field “ at this stage was unproven and probably does not contain sufficient reserves to make production an economic proposition “ ? Obviously, Sir Kenneth does not know how much oil lies underground in the zone covered by his company’s lease. Can the Minister account for the motives of the company’s chairman in making such hay-wire statements about the area where his own company and asso- ciated companies, in the tremendous results already achieved - three first-class producing wells with very bright prospects for further successes - have provided the answer to his peculiarly defeatist speech? Is the Minister aware that following Sir Kenneth’s illadvised and depressing statement the price of Australian Oil and Gas shares dropped from 78s. to 69s. on the Brisbane Stock Exchange, causing grave losses to shareholders? Is the Minister aware that Sir Kenneth also made the doleful remark that “ oil stocks were fraught with risk and were by no means a sound investment “ ? Is that not a strange and unbusinesslike utterance from ‘one who solicited public support for his company when its prospectus was first circulated prior to the discovery of any oil at all? Is not such a statement, by the chairman of a company that has enjoyed spectacular successes in the search for oil, extraordinary? Why does Sir Kenneth cry wolf when all the signs and indications suggest that his company has a real oil bonanza at Moonie? What effect will this chilly blast from the chairman of Australian Oil and Gas - a blast quite unwarranted on the facts of his company’s experience - have on public investment in numerous competitive oil exploratory companies presently seeking investment funds to pursue the search for oil in the various Australian States? Finally, does the Minister perceive in Sir Kenneth’s unfortunate and wholly unnecessary statements any subtle attempt to run contrary to the Commonwealth Government’s progressive policy of encouraging investment in a vigorous search for oil in all suitable areas throughout Australia?

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

– I reply by being very much on the side of Sir Kenneth Coles despite the black picture that Senator Maher has painted. I believe that Sir Kenneth has been one of the real pioneers in the search for oil in Australia. I have had a good deal to do with him as a result of the activities on the Moonie field. If ever there was an optimist in the task that he has undertaken, it is that gentlemen. I am also on his side because I myself get into somewhat the same position as he is in. One is always apprehensive in making any statement about oil because of its effect on the share market.

I have not been able to find a record of the statement that Sir Kenneth made.

I have been able to find only the articles that have been written in critical vein. I would not subscribe to that criticism. I believe it does injustice to some one who has really done very well by all of us in Australia, in the time and effort that he has put into this matter, in my view, from patriotic rather than commercial motives. As far as one can gather, he has said that we have to be optimists in the search for oil. I think everybody says amen to that. It is really a big task. He said that the Moonie find would supply only a small proportion of the total Australian consumption. That may well turn out to be true. But that does not decry in any way the importance of the Moonie field in terms of both the quantity of oil that is there and the great contribution that it has made to geological knowledge, enabling us to go on in the hope of finding the same oil deposits in similar geological circumstances elsewhere.

I am quite certain that Sir Kenneth Coles had no intention whatever of blowing any chilly blast on the search for oil. I am certain that what he was trying to do was to make a realistic approach to the matter. In one report that I read I noticed that he finished on the note that the great need was to have more holes drilled in Australia. That is most abundantly true. That is what we have to do. The great satisfaction to be derived from developments this year is the substantial increase in the number of drilling operations that is expected to take place in 1962, influenced very largely by the Moonie find and the Government’s subsidy arrangements. So, I say to Senator Maher: Please defer judgment before you think so harshly of Sir Kenneth Coles.

page 1330

QUESTION

RESERVE BANK OF AUSTRALIA

Senator KENNELLY:
VICTORIA

– I preface my question, which is directed to the Minister representing the Treasurer, by stating that I understand that recently the Reserve Bank of Australia invited Australian architects to submit drawings for a building that will house its branch office in Canberra. How many architects entered that competition? What are the names and addresses of the six prize-winners?

Senator PALTRIDGE:
LP

– The Deputy Leader of the Opposition was good enough to advise me that he intended to ask this question, and as a result I have been able to get the information for him. Over 130 entries were received from various architects throughout the Commonwealth in this competition. The first prize of £2,000 was won by Messrs. Howlett and Bailey, of Perth. Consolation prizes of £500 each were won by J. Dale Fisher and A. W. Ross of Camberwell, Victoria; Nicholas Paisley of Woollahra, New South Wales; Leslie M. Perrott and Partners of Melbourne, Victoria; Guy P. Pound of Elstern-wick, Victoria, and Summerhayes and Associates of Perth, Western Australia.

page 1330

QUESTION

CIVIL AVIATION

Senator BRANSON:
WESTERN AUSTRALIA

– Is the Minister for Civil Aviation aware that this morning quite a number of aircraft were kept circling the Canberra airport for periods of up to two hours, owing to the airport being closed because of fog? Could the Minister say how much it cost the two airline companies concerned to send aircraft back to Sydney’ and bring them to Canberra again? Could he estimate the cost involved in keeping seven aircraft aloft for periods of up to two hours and also the cost - not to mention the great inconvenience - caused by through passengers missing connecting flights? Does the Minister agree that the Parliament should not sit during the winter months of May, June and July, when these weather conditions are likely to exist? Does he know of any economic method which could be used to disperse fog at the Canberra airport, particularly on busy days?

Senator PALTRIDGE:
LP

– I must ask for some time in which to get the information required by the honorable senator about the cost of holding aircraft in the vicinity of the Canberra airport for as long as, in one case, two hours. The question of fog dispersal has engaged the attention of airport technicians for many years but no effective economic method has yet been found for overcoming this natural disability. I certainly cannot agree with the honorable senator that an occasional fog in Canberra constitutes a reason for suspending the sittings of the National Parliament during the months when fogs are likely to occur.

page 1331

QUESTION

SEARCH FOR OIL

Senator WOOD:
QUEENSLAND

– I should like to ask the Minister for National Development some questions relating to a statement made by Sir Kenneth Coles in connexion with the Moonie oil-field. Is it not a fact that in Queensland, when oil is discovered, the oil lease passes to the oil company which has been searching for oil? Under those circumstances, would it not be more fitting for statements relating to the Moonie oil-field to be made by the Union-Kern organization? Is it correct to say that some months ago an official of the Union-Kern organization made a statement in the United States of America to the effect that the Moonie oilfield was a commercial proposition? Does the Minister consider that it is an advantage to have Australian people investing in the search for oil? Does he not think that Sir Kenneth Coles’s statement will tend to discourage Australian investment in oil search rather than to encourage it? If Sir Kenneth Coles now thinks that the Moonie oil-field is not as good as we have been led to believe it is, why did he make a statement of a most enthusiastic character when the second discovery of oil was made at Moonie? Also, why did his company, the Australian Oil and Gas Corporation Limited, when issuing one share for every two shares held by shareholders, charge them a premium of 10s. for each 5s. share, making each share worth 15s.?

Senator SPOONER:
LP

– I wish that one of the honorable senators who have asked questions on this subject had given me a copy of the statement made by Sir Kenneth Coles. I have not been able to trace it. I cannot find it reported in any newspaper. All I can find are statements made by critics of what Sir Kenneth had to say. As I understand the matter, when oil is discovered, the State Minister concerned must determine whether or not the oil is in commercial quantities before any further step is taken. I know of no decision by the Queensland Minister for Mines to the effect that the oil-field at Moonie is a commercial field.

The honorable senator also asked about the reversion of ownership to the UnionKern County organization. If I understand the position correctly, the ownership has not reverted because the discovery has not yet been defined as a commercial find.

Sir Kenneth Coles has made a series of optimistic statements about the possibilities of the Moonie field, and that is why I suspend judgment entirely on the statement that he is said to have made until I see the terms of it for myself. I cannot help but think that in some way or other it has appeared in a garbled form.

Senator Wood:

asked whether I thought that Sir Kenneth Coles’s statement would discourage investment in oil search. The honorable senator may build on the foundation that that is the last thing Sir Kenneth Coles would do.

page 1331

QUESTION

PENSIONS

Senator BENN:
QUEENSLAND

– I direct a question to the Minister for National Development. As the Minister is aware, Australia has a long coastline which, in certain areas, is dotted with small settlements consisting of seaside homes and shacks belonging to persons who ordinarily reside in cities, towns and hamlets. In view of the fact that the value of a motor car and of a caravan used for mobile holiday accommodation is disregarded in the assessment of eligibility for age, invalid and widows’ pensions, will the Government favorably consider disregarding the value of an additional house owned by a pensioner and used for the exclusive purpose of providing holiday accommodation for himself and his wife?

Senator SPOONER:
LP

- Senator Benn has raised what is obviously a fairly big question of policy and one which requires a good deal of inquiry. In effect, his proposal is that a person entitled to social service benefits should be permitted to own a home and a holiday place. I cannot answer the question without giving it a good deal of consideration, because I do not know what is involved.

page 1331

QUESTION

CIVIL AVIATION

Senator LAUGHT:
SOUTH AUSTRALIA

– My question is addressed to the Minister for Civil Aviation. I refer him to an undertaking he gave when the Civil Aviation (Carriers’ Liability) Act 1959 was before the Senate, that he would seek State co-operation in extending the principles of that act to intra-state carriage. Has the Minister been successful in getting State co-operation? Have the beneficial principles of this act yet been extended to persons travelling by air from Adelaide to such places as Kangaroo Island, Mount Gambier, Renmark and Eyre Peninsula ports? If not, how are negotiations proceeding with regard to these South Australian travellers?

Senator PALTRIDGE:
LP

– During the recent debate on the Civil Aviation (Carriers’ Liability) Bill, I made reference to the fact that the States of Western Australia and Victoria had already passed legislation complementary to the Commonwealth legislation, to provide insurance for passengers by air to the extent that it was covered in the Commonwealth legislation. With regard to the position in South Australia, the honorable senator will recall that I said I had referred this matter to a meeting of the Australian Transport Advisory Council. At the meeting of the council in Hobart in February, 1961, the South Australian Minister for Transport, Mr. Jude, said that in view of the legal advice received by him that uniform rules relating to carrier’s liability could not be achieved by means of conditions in licences issued by the Commonwealth, the South Australian Premier, Sir Thomas Playford, agreed that the only way of dealing with the question was by straight enactment of the draft model bill which had been prepared by the Commonwealth Parliamentary Draftsman and circulated to the various State Ministers, and was under discussion at the time of that meeting in February of last year. Mr. Jude went on to say that the draft model bill had been referred to the Attorney-General for South Australia for examination, and he thought that if the details were satisfactory the bill would be supported by the Government. The council then adopted unanimously a resolution recommending that State Parliaments enact the draft bill prepared by the Commonwealth Parliamentary Draftsman. I have heard nothing from South Australia since that date. I have taken steps, however, to have the subject listed for discussion at the next meeting of the Australian Transport Advisory Council, which will take place next month.

page 1332

QUESTION

LIBERAL PARTY OF AUSTRALIA

Senator O’BYRNE:
TASMANIA

– Has the Minister representing the Prime Minister seen the special article in the “ Sydney Morning Herald” of Saturday last, 12th May, headed “Once Proud Party Now Crumbling into Decay “? Is it correct that membership of the Liberal Party in New South Wales has fallen from 50,000 in 1949 to 8,000 at the present time? Is that typical of what is happening throughout Australia? If so, does it not constitute a danger to democracy that a party with so little support in membership should be in charge of the National Parliament? Will the Minister state, for purposes of comparison, the Government’s estimate of the number of members in the Australian Communist Party in New South Wales at present? Does the Minister recognize the recent great decline in the Government’s membership in the Parliament as further evidence of the decay referred to in the article? Finally, has a liquidator of the Liberal Party in New South Wales yet been appointed?

Senator SPOONER:
LP

– I rather sense that Senator O’Byrne does not like the Liberal Party, but I hasten to give him an assurance that the Liberal Party will be here when both he and I have gone.

Senator Hendrickson:

– Will it change its name?

Senator SPOONER:

– We certainly will not change our majority. I did see the article. I read it with a good deal of interest. I have not attempted to verify the statements and figures that were contained in it. I do not accept any point of view that the party is - whatever the phrase is - crumbling into decay. 1 think that this is wishful thinking on the part of the Labour Party. We shall rise triumphant and go on to greater heights.

page 1332

QUESTION

DENTISTS

Senator VINCENT:
WESTERN AUSTRALIA

– My question, which is directed to the Minister for Health, relates to matters appertaining to the dental profession. By way of introduction, I mention the fact that the State Government of Western Australia, at a cost of many thousands of pounds, constructed and equipped a modern dental clinic in the town of Boulder. Is the Minister aware that this clinic, which operated for some time, has been closed because there is a great shortage of dentists in Western Australia? Does the Minister know that those responsible for the administration of the clinic were unable to recruit professional staff in any State of

Australia, and that they have been obliged to obtain the services of a dentist from what we would be pleased to call a backward state in Africa, and that they propose to bring that gentleman from Africa to Australia at great expense? In view of the fact that in recent years many hundreds of Australian dentists have left Australia, does the Minister agree that it is high time that some very extensive investigations were made concerning the situation which now exists here in relation to the dental profession?

Senator WADE:
Minister for Health · VICTORIA · CP

– I was not aware that the dental clinic to which Senator Vincent referred had been closed. I remind him that the Commonwealth has no jurisdiction whatever so far as the dental health of the community is concerned. I think it can be said that, in general, the States are doing very fine work with their dental clinics. The expansion of that work is dependent to a large extent upon the availability of dentists. It must be a matter of great concern to the State governments, and to all responsible Australians, that there is such a shortage of dentists. Senator Vincent asked me a question last week concerning this shortage, and I hope to have available for him this week information which will show some of the reasons for it. When he has that information, Senator Vincent may be prepared to look at this matter again and to make appropriate submissions to the State Government of Western Australia.

page 1333

QUESTION

CANBERRA AIRPORT

Senator BROWN:
QUEENSLAND

– I should like to ask the Minister for Civil Aviation one or two questions. From time to time, statements have been made to the effect that a new aerodrome is to be laid down near Canberra. Is there any truth in these statements? If so, where is the proposed aerodrome to be constructed? Has the work been started, and when will it be completed?

Senator PALTRIDGE:
LP

– I am aware that, as Senator Brown points out, statements have been made from time to time to the effect that an investigation is going on to see whether a better site can be found for an airport to serve the city of Canberra and the Australian Capital Territory generally. It is not really necessary for me to say that finding such a site in this mountainous terrain is not an easy task. One or two sites have been under investigation, and

I think one or two other sites are now being investigated to the extent that tests of wind directions and strength are taking place, but no decision has been made to establish an aerodrome on a new site. It is extremely doubtful, having regard to the information that has come to hand so far, whether it would be possible to find a site better than the existing one.

page 1333

QUESTION

PAPUA AND NEW GUINEA

Senator PALTRIDGE:
LP

– Senator Sir Walter Cooper indicated that he proposed to seek this information by way of a question without notice. Accordingly, I took the opportunity to confer with my colleague, the Minister for Territories, who provides the following answer: -

In the current financial year about £45,000 is being spent to inform the Australian public and countries overseas about the work being done by the Australian Government in Papua and New Guinea. Our publicity relates to such projects as that to which the honorable senator refers - which although important, it is but one development amongst many others - but we try to give a balanced picture of development in its many aspects.

To tell the story of advancements taking place we use films - both for general screening and for television use - exhibits, publications of various sorts, including a periodical, and other media.

Our films on Papua and New Guinea, notably “ New Guinea Patrol “ and the trilogy “ Social, Economic, and Political Development in Papua and New Guinea” have been screened widely in Australia and overseas in theatres and on television. The News and Information Bureau has estimated that many million people have seen “New Guinea Patrol”. The film “Political Development in Papua and New Guinea “ was screened last year before the Trusteeship Council of the United Nations, and evoked warm praise for its honesty of presentation. The “Sydney Morning Herald “ to-day reports that this film was awarded first prize in the open section of the Australian Film Institute.

Major exhibits on Papua and New Guinea are shown yearly in every Australian capital city. They have proved to be a most effective medium to inform the Australian public of advancement in the Territory. They are staffed by officers of the Administration, including native staff, and invariably produce additional favorable publicity through the press, radio and television. In addition, exhibits are mounted at various trade fairs, and, in co-operation with the Department of Trade, at overseas fairs such as the Tokyo and Osaka trade fairs.

Publications issued under my authority include a pictorial folder on Papua and New Guinea - of which some 40,000 have been produced and distributed - publications for special occasions such as “ Progress of a People “, dealing with the elections in Papua and New Guinea - 80,000 copies distributed - statements on policy developments - distributed on a select distribution list of about 20,000 - and leaflets distributed at shows in hundreds of thousands. The journal “ Australian Territories” produced every two months, has a circulation at present of 17,500.

The Government is anxious to inform the public, both in Australia and overseas, of what it is doing in Papua and New Guinea, and every effort will be made to step up our information activities. We shall continue to produce films and television material, mount exhibits, and produce publications, and to use these as effectively as possible. We have a story to tell; we shall tell it as fully and as well as our resources will allow.

page 1334

QUESTION

NATIONAL DISASTERS FUND

Senator TANGNEY:
WESTERN AUSTRALIA

– I preface a question to the Minister representing the Treasurer by stating that although I have raised the matter of the establishment of a national disasters fund on previous occasions 1 am hoping that by this time the Minister will have considered it in the light of recent developments, and perhaps will be able to view the suggestion favorably. In view of the flood damage in New South Wales during the last week-end and the damage earlier this year in Victoria by bush fires, causing many settlers to suffer great property losses, will the Minister consider establishing a national disasters fund along the lines of a similar fund that has functioned successfully in New Zealand and which has been a great factor in alleviating distress similar to that caused from time to time in all Australian States by floods, fires and cyclones?

Senator PALTRIDGE:
LP

– 1 am conscious of the fact that Senator Tangney has raised this matter on other occasions. I am afraid that on this occasion I cannot add to the information that she has been given in the past. Shortly after the honorable senator last raised this matter, information was prepared by the Treasurer and forwarded to her by letter. The Treasurer pointed out that the scheme in operation in New Zealand is one that could not have application to Australia. The New Zealand scheme is directed particularly to losses brought about by earthquake. For that reason, and because the insurance cover may be localized to those areas affected by earthquake, the scheme is practical in New Zealand. As has been pointed out, Australia cannot set up a scheme to cover the length and breadth of the land and all the risks, ranging from flood through to fire, that one may meet in the various parts of the country.

page 1334

QUESTION

RICE

Senator ANDERSON:
NEW SOUTH WALES

– My question is directed to the Minister in charge of the Commonwealth Scientific and Industrial Research Organization. I understand that the Minister was in Darwin at the weekend and that he visited the Humpty Doo rice project. What is the current position relating to the production of rice at Humpty Doo? What were the basic reasons for the previous failures successfully to grow rice at Humpty Doo? What part is the C.S.I. R.O. now playing in the production of rice at Humpty Doo? What are the prospects for the future successful growing of rice in the area?

Senator GORTON:
Minister for the Navy · VICTORIA · LP

– The present position at Humpty Doo is that the company that took up land there and began the project of growing rice commercially - Territory Rice Limited - has, I understand, gone into liquidation. But four local farmers are leasing from the Northern Territory Administration a good part of the land that formerly belonged to Territory Rice Limited. They have planted this year about 1,000 acres. They should be harvesting the rice within the next week or ten days. When they have done that, and not before, they will be able to tell how much of their, rice is of first quality, how much they will receive for it and whether their venture will be a commercial success this year. Those farmers are determined to persevere with the growing of rice. Next year they will probably plant a smaller acreage so that they may look after the crop a little better than they were able to look after this year’s planting. A smaller acreage will enable them to apply the techniques that have been evolved by C.S.I. R.O. scientists. Above all, they will use seed that has been bred by C.S.I. R.O. research scientists, samples of which have been sent to London where the rice has been assessed as of premium quality, worth about £15 a ton more than the base price. The original failures at Humpty Doo were due to a number of circumstances but could perhaps best be ascribed to lack of experience. The C.S.I.R.O. at present has a station in the area and has just established a laboratory, which is concerned primarily, although not entirely, with the problems of rice-growing in the area. The problems with which the C.S.I.R.O. is concerned include breeding types of rice suitable for growing in the area, examining the results obtained by the use of artificial fertilizers, including the types and quantities used, undertaking entomological research into rice pests, examining disease caused by different methods of watering, and a multitude of other scientific matters all of which are receiving attention. Another matter that is being examined is the growing of a suitable legume in the area in order to fix in the soil nitrogen from the air. As well as fixing nitrogen in the rice fields, a suitable legume will provide feed for cattle. The station should not be regarded as concerned purely with rice. It is concerned with agricultural research on the coastal plains. That research will embrace maize, sorghum and allied crops - in fact, I would hope, general agriculture on the plains. The scientists and the farmers working in the area are convinced that rice will be grown in the Northern Territory and will contribute greatly to the closer settlement and prosperity of the area.

page 1335

QUESTION

SAFETY BELTS

Senator CANT:
WESTERN AUSTRALIA

– I direct a question to the Minister representing the Minister for Trade. Is the honorable senator aware that a duty of 27i per cent, is imposed on safety belts imported into Australia for use in motor vehicles? Is that duty imposed to protect any Australian industry? If so, can Australian manufacturers of safety belts supply all the demands of the motoring public in this country? If not, will the Minister consider reducing the import duty and thus assist the campaign to reduce the road toll?

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

– There is a wellestablished Australian industry manufacturing safety belts for motor vehicles. After holding an inquiry the Tariff Board recommended a tariff to protect this industry. I have no information to suggest that the local industry is unable to supply all of Australia’s requirements.

page 1335

QUESTION

HOUSING

Senator BUTTFIELD:
SOUTH AUSTRALIA

– My question, which I direct to the Minister for National Development, relates to the Commonwealth and State Housing Agreement. Is the Minister aware of a suggestion that a majority of States are not taking up the entire amount of money made available to them by the Commonwealth for housing under the Commonwealth and State Housing Agreement? If there is any truth in such a suggestion, will the Minister inform the Senate which States are not taking up their full quota and by how much the demand falls short of the supply of money available? Is this an attempt by certain States to defeat the requirements of the agreement whereby 30 per cent, of money received by a State must be made available to building societies, either permanent or terminating, in that State? If the attempt succeeds will it deprive private enterprise of its fair share of the taxpayers’ money for building purposes? Are some States, instead of taking their full share under the housing agreement, claiming money in other ways from the Australian Loan Council and using it for public works which the State governments, but not the people, may prefer?

Senator SPOONER:
LP

– I have no knowledge of the circumstances to which Senator Buttfield has referred. The question falls into two parts. First, the honorable senator has asked whether the States are taking up loan moneys sufficient to cover their housing requirements. That is a matter for each individual State, the general pattern being that the Australian Loan Council decides the total amount of loan money that is to be made available. Then, according to the formula, that loan money is distributed among the States. It is left to each State to make its own decision as to how much of its total resources it will allocate to housing. The honorable senator asks secondly whether, the allocation having been decided, the States are drawing their full entitlements. I have no information that indicates they are not. As far as I am aware they are taking the full amount of money to which they are entitled.

page 1336

QUESTION

FERTILIZERS

Senator DITTMER:

– My question is directed to the Minister representing the Minister for Trade. In view of the importation of nitrogen phosphorous fertilizers, what is likely to be the future of the Australian manufacture of superphosphate, and what will be the future of the 25 factories established throughout Australia and the employees engaged in the industry?

Senator SPOONER:
LP

– I know of no change in the general circumstances with respect to this matter. The industry is the subject of. tariff decisions and a bounty has been payable-

Senator Dittmer:

– There is a bounty on sulphate of ammonia.

Senator SPOONER:

– Yes. There is a complete pattern of tariff and governmental decisions which, so far as I am aware, is working satisfactorily. I see no reason for believing that there will be any diminution of employment in the industry.

page 1336

QUESTION

IMMIGRATION

Senator KENDALL:
QUEENSLAND

– On 10th April, 1 asked the Minister representing the Minister for Immigration a question about the difference between nationality and citizenship. As there is a possibility of the Senate rising this week, will the Minister try to expedite an answer so that I shall receive it before the Senate rises?

Senator HENTY:
LP

– Yes, I will see whether I can obtain an answer to that question.

page 1336

QUESTION

REFUGEES FROM COMMUNIST CHINA

Senator McMANUS:
VICTORIA

– I direct a question to the Minister representing the Minister for External Affairs. Will the Minister for

External Affairs obtain from Australian representatives in Hong Kong a report on statements that, due to the inability of the island to cope with the flood of refugees from Communist China, thousands of these unfortunate people are being turned back to the prospect of death or imprisonment? If the statements are confirmed, will the Government, first, ask the United Nations to take immediate action to assist these people, and, secondly, give immediate consideration to ways and means by which Australia may help them?

Senator GORTON:
LP

– I will ask the Minister for External Affairs whether he can secure such a report. I will bring the rest of the honorable senator’s question to the notice of my colleague and ask him to reply direct to the honorable senator.

page 1336

QUESTION

IMPORTATION OF ELECTRICAL GOODS

Senator McKENNA:
TASMANIA

– My questions are directed to the Minister representing the Minister for Trade. Are many millions of pounds of government money being spent on imported electrical capital goods which can equally well be supplied by Australian industry? Is the Commonwealth Government the worst offender in this respect? Were electric motors of various sizes to the value of £2,500,000 imported into Australia last year, every one of which could have been produced by the Australian industry? Is the policy of preference for Australian products frequently honoured in the breach rather than in the observance by governments and semi-governmental authorities in their purchase of capital goods? Are the Commonwealth Government and its instrumentalities relieved from payment of customs duties on imported capital goods? Is it part of the policy of preference for Australian industry that purchasing officers of the Commonwealth and its instrumentalities are required, when comparing prices, to take into account the appropriate rate of tariff on goods for which tenders from abroad are received? Is this requirement generally disregarded by such purchasing officers? As statements attributed to Sir James Kirby, the chairman of the Manufacturing Industries Advisory Council to the Commonwealth Government, in his address on 30th April last to the Electrical Industry Convention at Katoomba, indicate his view that each of the foregoing questions should be answered in the affirmative, has the Minister investigated the allegations made by Sir James and will the Minister comment fully on the allegations and their obvious implications? Was the Minister for Supply present when Sir James Kirby delivered his address?

Senator SPOONER:
LP

– Obviously, I will have to ask Senator McKenna to put the questions on the notice-paper so that I may get an answer to each of them. Before doing that, I think I should answer some of them in general terms. I will start from the later questions and work back. I saw the newspaper report of Sir James Kirby’s address to the Electrical Industry Convention. I must say that my immediate reaction to it was this: He is an experienced industrialist and he has a long association with the electrical industry. If the conditions of which he complains exist, surely the proper thing for the industry to do would be to approach the Tariff Board immediately and seek a higher level of protection, leaving the board - as is always the case with tariff matters - to come to a decision on whether or not the application is justified.

We have the Tariff Board. Recently we enlarged it. We have also established organizations additional to the Tariff Board in the way of specal advisory authorities, so that applications can be dealt with expeditiously when an industry is being threatened by a flow of imports. The general reply to Sir James Kirby’s criticism is that he should make representations to the Tariff Board to see whether the board will decide that the industry is entitled to a higher level of protection than it now has.

I ask Senator McKenna to put his question about Commonwealth buying on the notice-paper. I am very clearly of the opinion that care is taken to ensure that Australian industry receives the benefit of government business wherever it is fair and reasonable that it should do so.

page 1337

QUESTION

COMMONWEALTH SERUM LABORATORIES

Senator McMANUS:

– I ask the Minister for Health a question. Have there been any retrenchments at the Commonwealth Serum Laboratories in Melbourne recently? If there have been, what is the extent of those retrenchments and what is the reason for them? Are further retrenchments contemplated? If so, why?

Senator WADE:
CP

– To the best of my knowledge, there have been no retrenchments at the Commonwealth Serum Laboratories in Melbourne recently; but I ask the honorable senator to put the question on the notice-paper. If he does so, I will give him an authoritative answer on the present position. f

page 1337

QUESTION

QUESTIONS

Senator HANNAN:
VICTORIA

– On 5th April I directed a question upon notice to the Minister representing the Minister for Defence. In view of the fact that this sessional period will end shortly, will the Minister ask his colleague whether an answer can be given before the end of this sessional period? My question relates to the possibility of the Army calling tenders in Soviet-occupied Germany.

Senator SPOONER:
LP

– All I can say to

Senator Hannan is that I will do my best to get an answer for him.

page 1337

QUESTION

NATIONAL DISASTERS FUND

Senator TANGNEY:

– My question, which is directed to the Minister representing the Treasurer, relates to the question I asked previously about the establishment of a national disasters fund. Is there any record of payments made over the last ten years by the Commonwealth Government, and State governments, and out of funds raised by public appeals, for the relief of distress caused by disasters? Does not the Minister consider that the fact that these disasters occur in widely spread areas is a reason why a national disasters fund should be set up?

Senator PALTRIDGE:
LP

– Probably figures would be available showing the contributions made for these purposes by the Commonwealth Government and the various State governments. I do not know whether information would be available in respect of sums raised by public subscription, but I shall ascertain whether such information is available. Dealing with the next part of the question, possibly I am at fault in that I did not make myself clear when I spoke last. There would be great difficulty in establishing a scheme of this kind in a country like Australia. Before an insurance scheme of any sort can be successful, you must have people who are willing to subscribe to it, so that money can be available to make payments to cover losses suffered. Some parts of Australia are particularly susceptible to floods, but many other parts of Australia do not suffer from floods. The same can be said of bushfires and other disasters. The war damage scheme - to which the honorable senator has referred in the past - was made possible because the type of damage envisaged was likely to occur in any locality. Examination has shown that it would be quite imposssible to devise a national disasters scheme which would meet the requirement of making good losses suffered in various areas, because people could not be found who would want to subscribe to such a scheme.

page 1338

QUESTION

IMMIGRATION

Senator KENNELLY:

asked the Minister representing the Minister for Immigration, upon notice -

  1. Is it a fact that the Minister now claims that the Government’s migration programme is based on the number of long-term and permanent arrivals coming to Australia and takes no account of the number of permanent departures?
  2. If so, when was this practice first instituted?
  3. Is it a fact that many people included in the figure for long-term and permanent arrivals are Australians who are returning after having been overseas for more than twelve months?
  4. If so, does it follow that the Government’s migration programme figure includes a substantial number of Australians returning home after an absence of twelve months or more abroad?
  5. If so, why is the Minister so determined to count returning Australians as migrants?
Senator HENTY:
LP

– The Minister for Immigration has supplied the following answers: - 1, 2 and 5. Since the commencement of postwar immigration in 1946, it has been the practice to base yearly programmes on the number of long-term and permanent arrivals, which include Australians returning after an absence of twelve months or more. 3 and 4. On 1st May, 1962, for the first time, the Commonwealth Statistician was able to publish figures showing separately the numbers of settlers, Australian residents, and oversea visitors, included in long-term and permanent movement. The figures for 1961 were -

The numbers of Australian-born persons included in Australian residents arriving and departing were 11,286 and 22,736, respectively.

page 1338

QUESTION

PEARLING

Senator CANT:

asked the Minister representing the Minister for Immigration, upon notice -

  1. Have a number of Asians been given, or are about to be given, permission to enter Australia to work in the pearling industry?
  2. Are these Asians to be admitted as indentured labour?
  3. Will they be permitted to work only in the pearling industry?
  4. Have the applications for their permission to enter Australia been made by pearling masters, and will these pearling masters become responsible for their employment, accommodation, behaviour and repatriation?
  5. What are to be the terms and conditions and rales of pay while the Asians are employed in the pearling industry during their period of indenture?
  6. Are any of these Asians being admitted at the request of pearling masters who have previously had assigned to them Asian indentured labour, many of whom are still in Australia under separate permit and for whom the pearling masters, who had them admitted, now have no responsibility? 7.Is it intended, that at the end of the period of indenture, permits will be issued to these Asians to remain in Australia, thus relieving the pearling masters of any responsibility towards them?
  7. If additional labour is required in the pearling industry, could not that labour have been drawn from the Asians already in Australia?
  8. How many Asians are being admitted for employment in the pearling industry on this occasion?
Senator HENTY:
LP

– The Minister for Immigration has supplied the following answers: -

  1. Yes.
  2. The Asians concerned enter into contracts of service with specific master pearlers. They are not indentured in any way to the Commonwealth Government.
  3. Yes.
  4. Yes.

  5. Before any Asian is considered for admission the applicant master pearler is required to:

    1. sign an undertaking agreeing to be bound by the following conditions -
    2. that no Australian, including aborigines, who has been an efficient worker will be displaced from the industry by the nominated Asian operative - and that satisfactory arrangements will be made in respect of any person displaced by the nominee,
    1. that the nominated Asian operative will be employed only as a diver, tender or engine driver, and will be paid not less than the basic or ruling wage for adult males,
    2. that he will be provided with suitable accommodation,
    3. that he will not be employed on duties other than those ordinarily connected with boats operated by the master pearler, either during the pearling season or the layup - and will undertake special work ashore (e.g. repairs) during the pearling season only with the authority of the Department of Immigration,
    4. that he will be transferred to another employer only with the consent of the Department of Immigration, and

    5. that the pearling season is to be regarded as terminating on the 31st January of each year, and if the nominated Asian operative is not reengaged for the following season by the 14th February, he will be repatriated;

    6. lodge an acceptable bond in the sum of £200 against the departure of the Asian operative when required; and
    7. lodge a full time maintenance guarantee in respect of the Asian operative relative to the time that the operative is in Australia.
  6. Yes. It can occur that Asians, who were admitted for employment in the pearling industry, subsequently are permitted to remain in Australia under other conditions, which relieve the employers by whom they were introduced of their responsibilities. This happens most generally with those who marry Australian citizens or those who have given service to the pearling industry extending over a period of 30 years.
  7. No.
  8. The present approval is for the admission of operatives as replacements for men who, under the terms of their initial admission, have been repatriated. Like any other employer, master pearlers are free to exercise their own choice in the matter of whom they select to work for them.
  9. Twenty-six, comprising sixteen Malays and ten Japanese.

page 1339

QUESTION

COMMONWEALTH EMPLOYEES’ COMPENSATION ACT

Senator COLE:
TASMANIA

asked the Minister representing the Treasurer, upon notice -

  1. Will the Treasurer have an exhaustive review made of the Commonwealth Employees’ Compensation Act to remove anomalies adverse to Commonwealth employees in comparison with employees under State compensation acts?
  2. Can an immediate revision be made of the whole of section 19 of the act to take from the hands of untrained men the authority of deciding whether or not a worker is entitled to compensation?
  3. In particular will the Treasurer revise the provisions of section 19 (4) with a view to preserving the rights of employees to challenge all or any of the findings of a medical board and to avert further miscarriages of justice such as that disclosed by the Eddleston case in the Department of Supply in Victoria?
Senator PALTRIDGE:
LP

– The Treasurer has supplied the following answers: -

  1. As the honorable senator knows, the Commonwealth Employees’ Compensation Act was reviewed and amended in late 1959, and it is, continuously, under review. There is, as acknowledged in the replies to questions on this subject last year, a number of differences between the legislation of the States and that of the Commonwealth. I am at present considering representations for some fundamental changes in the Commonwealth Employees’ Compensation Act represented by requests for deletion of the words “ by accident “ contained in sections 9, 12, and 17 a.
  2. The examinations required under section 19 of the act must be carried out by a duly qualified medical practitioner, a medical referee who must also be a duly qualified practitioner and appointed for the purpose by the Governor-General, or by a medical board consisting of two or more medical referees.
  3. The suggestion for amendment to section 19 (4.) will be considered. However, I think I should point out that the legislation of all States of the Commonwealth provides for medical questions to be referred to competent medical authorities and for the recognition of their certificates as conclusive evidence of the matters so certified, the purpose being, as His Honour the Chief Justice of the High Court said, “ to leave medical questions to the determination of medical men”.

page 1339

QUESTION

SOCIAL SERVICES

Senator McMANUS:

asked the Minister representing the Minister for Social Services, upon notice -

  1. Is it a fact that under the amended social services legislation which became effective from 1st March, 1962, and which provided increased payments for dependent children of recipients of unemployment and sickness benefits without corresponding increases for dependent children of invalid pensioners, a grave anomaly may arise when recipients of unemployment or sickness benefits are transferred on the advice of a Commonwealth medical referee to the invalid pension, as such a transfer will result in a reduction in the payments received for dependent children?
  2. If so, will the Government take the earliest possible action to rectify the anomaly?
Senator SPOONER:
LP

– The Minister for Social Services has furnished the following answer: -

  1. and 2. An unemployment benefit is designed to meet a temporary set of circumstances of short duration. An invalid pension is designed as a continuous payment for an incapacity of not less than 85 per cent, and is of a more permanent character.

page 1340

AUSTRALIAN CAPITAL TERRITORY COMMITTEE

The PRESIDENT:

– I have received letters from the Leader of the Government in the Senate (Senator Spooner) appointing Senators McCallum, Vincent and Wood, and from the Leader of the Opposition in the Senate (Senator McKenna) appointing Senators O’Byrne and Toohey, to be members of the Joint Committee on the Australian Capital Territory.

Senator SPOONER:
New South WalesVicePresident of the Executive Council and Minister for National Development · LP

– by leave - I should like to place on record - indeed, I have been asked by some of my colleagues to do so - our appreciation of the service that Senator McCallum has rendered as chairman of the Australian Capital Territory Committee. He has been chairman of the committee since it was appointed. He will not be with us after 30th June next. We shall have something to say about that at a later stage, perhaps, but at this time, when the committee is being re-appointed, may I say that it is evidence of the regard in which we hold him that honorable senators on our side unanimously thought that we should ask him to continue to serve as chairman until 30th June. In this respect, I think that I speak for both sides of the Parliament. Senator McCallum has made quite a notable contribution to Canberra’s development and also to the standing of the Senate.

Senator TANGNEY (Western Australia), by leave - I thank my leader for giving me the opportunity to express, on behalf of the Opposition, support for the remarks of the Leader of the Government in the Senate (Senator Spooner) regarding Senator McCallum. As a foundation member with Senator McCallum of the Australian Capital Territory Committee, I appreciate very much the work that he has done. I appreciate, also, the co-operation which led to the appointment of the committee, thus permitting it to do a great deal of good work for the development of the Australian Capital Territory. Senator McCallum first brought the idea that such a committee be appointed to the notice of the Senate some years ago. Because of his enthusiasm and his desire that only the best possible standards should be observed in the development of the national capital, he was able to have the committee appointed. During the years that it has been functioning, he has not spared himself. The committee will be the poorer when he leaves it. I personally am very sorry that he will not be able, as chairman of the committee, to see the fulfilment of the dreams that he has had for Canberra.

We on this side of the Senate agree with Senator Spooner that it is a very gracious tribute to Senator McCallum that his party colleagues should wish him to continue to hold the chairmanship of the committee for the next few weeks. Knowing Senator McCallum as I do, I am sure that in that period he will bring forward a sufficient number of ideas to keep the committee busy for quite a long time. When he retires from this Parliament he may be proud of the fact that, because of the high standards he has set for the development of Canberra as the capital city of the Commonwealth, he will always have a memorial in the annals of this country. The Opposition is pleased to join the Government in paying its tribute to Senator McCallum.

Senator McCALLUM:
New South Wales

– by leave - I thank the Leader of the Government in the Senate (Senator Spooner) and Senator Tangney for their kind remarks, and I also thank the Senate for again appointing me to membership of the Australian Capital Territory Committee. My work on the committee has been a very happy experience. The select committee, which preceded it, and the Australian Capital Territory Committee itself, received support from both sides of the House. When I began the move for the appointment of a select committee I had not only support from the Leader of the Government in the Senate and everybody else on my side of the chamber, but also the very warm support of the Leader of the Opposition in the Senate (Senator McKenna). On both sides, party political questions did not arise except in one instance when, unfortunately, the Labour platform imposed certain restrictions on the liberty of action of members of that party.

This committee has been of very great value. Those of us who served on the select committee intended that it should have wider functions than those given it by the Parliament, but within the limits which circumscribed us to some extent, I think we have performed very good work. We have watched carefully plans which suggested changes in the original conceptions of Griffin, and the later conceptions. We have worked harmoniously with the National Capital Development Commission. We have helped the commission and have received great help from it.

I should like to have a few more years longer in this place, but it may be that this work, like other work, will be done in a different way and perhaps in a better way by my successor. I am very glad that the committee is to continue to function. I shall do what I can within the next few weeks. After that, I hope that the committee will receive from both sides of the House the enthusiastic support that has characterized its work in the past.

page 1341

APPROPRIATION BILL (No. 2) 1961-62

Bill received from the House of Representatives.

Standing Orders suspended.

First Reading

Motion (by Senator Paltridge) proposed -

That the bill be now read a first time.

Debate (on motion by Senator McKenna) adjourned.

page 1341

APPROPRIATION (WORKS AND SERVICES) BILL (No. 2) 1961-62

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator Paltridge) read a first time.

Second Reading

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– I move -

That the bill be now read a second time.

The purpose of this bill is to obtain Parliamentary authority for additional expenditure in 1961-62 on certain items of capital works and services. Additional appropriations of £7,352,000 are sought. After allowing for savings in other appropriations and for the additional capital of £5,000,000 provided by special appropriation for the Development Bank, it is expected that total expenditure will exceed the Budget estimate by about £9,400,000. It is proposed to subscribe an additional amount of £1, 500,000 to the share capital of Qantas Empire Airways Limited. This amount, together with an original appropriation of £150,000 in this financial year, will increase Qantas’s share capital to £16,450,000. Several factors have combined to place Qantas in the position of needing further capital funds this financial year, the main one being that operational requirements on the Trans-Tasman service have made it necessary for Qantas to retain two Lockheed Electra aircraft which it had earlier intended to sell. The provision of additional funds is essential for Qantas to meet its contractual obligations and to maintain sufficient working capital for the proper conduct of its business. Qantas will also repay to the Commonwealth before the end of the current financial year, a temporary advance of £500,000 made during 1960-61.

An amount of £1,782,000 is included in the bill for a subscription to United Nations bonds. The United Nations General Assembly last December authorized the issue of bonds of up to 200,000,000 dollars because the United Nations was facing bankruptcy as a result of the unwillingness of some members, particularly the Communist countries, to pay their assessed contributions. The greater part of the deficit is due to non-payment of contributions to the United Nations Emergency Force in the Middle East and the United Nations Force in the Congo. The Government has decided to subscribe 4,000,000 dollars to the bond issue. This is 20 per cent. more than Australia’s share on the basis of the scale of assessments to the regular United Nations budget. The bonds bear interest at the rate of 2 per cent. and are to be repaid over a period of 25 years.

The amount of £830,100 under the Department of the Interior includes the purchase of Siddely Chambers in Sydney, £425,000, and £250,000 to meet accelerated progress in the construction of the first stage of the new Commonwealth Offices in Sydney. An amount of £86,250 is required under the Department of the Treasury for the acquisition of a site in Perth for the Taxation Branch, and under the Department of Shipping and Transport £85,000 is needed to meet payments on lighthouse supply vessels under construction.

Under Business Undertakings, £2,014,000 is sought for the PostmasterGeneral’s Department; £640,000 of this sum results from the Government’s decision to accelerate works; £374,000 relates to the replacement of the Canberra automatic telephone exchange, destroyed by fire; and £1,000,000 is being provided as an additional working advance for the Post Office Stores and Services Trust Account. An amount of £150,000 is included under Broadcasting and Television Services to meet accelerated progress on the provision of transmission facilities in the provincial centres.

Provision is made for an additional working advance of £200,000 to the Commonwealth Railways Plant and Stores Suspense Trust Account to finance increased holdings of 94 lb. rails which have been occasioned by increased deliveries from manufacturers.

For the Territories of the Commonwealth, £398,000 is sought to meet better progress than was expected on the approved works programme in the Northern Territory. A provision of £30,000 is included for loans for private dwelling construction or purchase in the Northern Territory and £87,000 is included to provide loans to ex-servicemen in agricultural enterprises in Papua and New Guinea.

I commend the bill to honorable senators.

Debate (on motion by Senator McKenna) adjourned.

page 1342

SUPPLY BILL 1962-63

Bill received from the House of Representatives.

Standing Orders suspended.

First Reading

Motion (by Senator Paltridge) proposed -

That the bill be now read a first time.

Debate (on motion by Senator McKenna) adjourned.

page 1342

SUPPLY (WORKS AND SERVICES) BILL 1962-63

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion of Senator Paltridge) read a first time.

Second Reading

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– I move -

That the bill be now read a second time.

The purpose of this bill is to appropriate £64,554,000 to carry on the necessary normal capital works and services of Government for the first five months of the financial year 1962-63. This will enable the Commonwealth works to be continued until the 1962-63 Budget has been considered by Parliament.

The bill will provide funds for Commonwealth works in progress at 30th June, 1962. In addition, it is the practice to programme the capital works and services in the major Commonwealth departments, including the Department of Works, the PostmasterGeneral’s Department and the Department of Civil Aviation. The appropriation will provide funds to ensure the orderly continuation of those programmes of work and to continue day-to-day purchases of plant and equipment.

Debate (on motion by Senator McKenna) adjourned.

page 1342

INCOME TAX AND SOCIAL SERVICES CONTRIBUTION ASSESSMENT BILL 1962

Second Reading

Debate resumed from 10th May (vide page 1328), on motion by Senator Paltridge -

That the bill be now read a second time.

Senator SCOTT:
Western Australia

– Prior to the adjournment of the Senate last Thursday night, I was endeavouring to show that the view of the Leader of the Opposition (Senator McKenna) that increased mechanization of secondary industries would create unemployment was incorrect. I gave my reasons for that contention. I mentioned that the Australian Labour Party in 1948-

Senator Kennelly:

– How long ago was that?

Senator SCOTT:

– It was the last full year that Labour was in office. It was a very long time ago. It will be remembered that I got the same interjection last Thursday night from the same person, and I gave the same answer. It is a long time ago, but a Labour Government gave depreciation allowances to certain sections of industry amounting, in one year, to 60 per cent. Earth-moving equipment used by farmers enjoyed the then initial depreciation allowance of 40 per cent., plus the ordinary depreciation allowance of 20 per cent, making a total in any one year of 60 per cent. Senator McKenna stated that in allowances spread over some years, this Government is giving more than a 100 per cent, concession - in all, 120 per cent. If we take an instance in which the goods are sold at the end of the first year, we see that the Labour Party, in its legislation, gave far more by way of depreciation allowances than this Government proposes to give.

To say that this allowance will create further unemployment is, in my opinion, completely wrong. Last Thursday, the “ Sydney Morning Herald “ published a feature article on page 2, which stated that Ikeda, the Prime Minister of Japan, was facing a crisis in the elections which are to be held in that country on about 1st July. Japan is in the midst of a programme designed to double its productivity during the next ten years, and it has decided to borrow large sums of money, amounting in all to many millions of dollars, from the International Monetary Fund and from private trading banks in the United States of America. This money will be used to reequip Japanese factories and to build new factories. If honorable senators read the article to which I have referred, they will find that Japan’s gross national productivity expanded by 18 per cent, in 1959, by 14 per cent, in 1960, and by 13 per cent, in 1961. Of course, this has brought about substantial inflation in Japan. As honorable senators know, when there is inflation, there is a degree of over-full employment, and the people who own industries barter for the labour that is available. The result in Japan is that in April of this year the basic wage rose by £4. It rose by £4 in one month.

Senator Wright:

– Do you say that the basic wage has risen by £4 in one month.

Senator SCOTT:

– I can only quote from the newspaper article.

Senator Wright:

– Are you sure it was £4 in one month?

Senator SCOTT:

– I had better read the article to make sure that I am right. The article stated -

In the spring labour offensive which erupted in a series of brief strikes and demonstrations during April, most Japanese union members managed to obtain monthly wage increases of about £4.

I took that to mean that there was an increase of £4, Australian currency, in the month of April. I am not saying that the wage is going up at the rate of £4 every month.

Senator Cant:

– Would it mean that the wage was being increased at the rate of £4 a month?

Senator SCOTT:

– I do not know whether it is £4 a month or £4 a week; I am simply quoting from the newspaper article. I believe that when the government of a country plans to increase that country’s gross national production, it must concern itself mainly with the industrial field. The increases in Japan’s gross national productivity have resulted from the development of its industrial productivity. An increase of industrial productivity must create extra employment. In this debate, we have the Leader of the Opposition, speaking for the Labour Party, trying to persuade the Senate that, by trying to increase Australia’s productivity and, therefore, its export income by granting this special allowance of 20 per cent., we will be doing something that will lead to unemployment.

I now propose to refer to other matters dealt with in the bill which, I believe, are of great significance to the economy of Australia. One of the other matters to which I should like to refer is that of tax clearances for persons wishing to leave Australia. In future, persons travelling overseas will not have to lodge a bond or meet their income tax commitments before they leave the country; they will be able to go and come as they wish.

Another matter with which the bill deals is the granting of tax deductions which, I believe, will attract capital to the Australian mining industry. I have studied at some length the taxation concessions which various other countries give to encourage their mining industries. I would say, prior to the implementation of this measure, that the taxation concessions granted by the Canadian Government for the encouragement of mining are probably a little better than those granted in Australia. However, under this Government’s proposals a mining company wishing to obtain capital for the development of a mine can elect to give its shareholders a 100 per cent, tax deduction on calls, applications and allotments. This will mean that people who are anxious to invest will certainly examine the mining industry as an avenue of investment. They will be able to claim as tax deductions 100 per cent, of the amounts that they subscribe to companies wishing to prospect for minerals or to new mining companies. It is necessary, of course, for people to be residents of Australia to obtain these concessions. A company which elects to obtain its finance by this method will not be entitled to the deductions to which it would otherwise be entitled in respect of capital expenditure on prospecting, development, plant and so on.

Senator Wright:

– Does the allowance to which you are referring apply to all forms of mining?

Senator SCOTT:

– The concession will apply to all forms of mining with the exception of gold, uranium and oil. The reason it will not apply to gold, uranium and oil is that they already enjoy a tax concession equal to or better than the one proposed in this bill. The tax concession for uranium mining is somewhat similar to the one at present being introduced. Money invested in a prospecting company is, in a sense, risk capital. Under this legislation a sharebroker can advertise that a taxation concession will be available on money invested in a company or any new company that is being formed to engage in prospecting. People who wish to buy shares in new ventures such as these are generally those who are paying rates of income tax in excess of 5s. in the £1, and in some instances up to 12s. in the £1. I believe that the bill will go a long way towards providing the risk capital that is so necessary for the future development of the mining industry in Australia.

The next provision in the legislation continues the depreciation allowance on certain types of farm improvements. A depreciation allowance of 20 per cent, a year for a period of five years is allowed on certain types of farm improvements such as fencing and housing for employees, and on farm equipment.

The fifth amendment is the proposal to allow as a deduction from assessable income gifts of £1 and upwards to the Australian National Committee for the Freedom from Hunger Campaign until 30th June, 1963. The committee hopes to raise a sum of approximately £1,000,000. The cost to the Treasury will be in the region of £250,000.

Those are the five items covered by the bill. They are all very necessary and some of them are designed to help the development of the economy of Australia. I am sure that two or three of the provisions will go a long way towards solving the unemployment problem that is facing Australia at present and has faced it over the last few months. I have much pleasure, therefore, Mr. President, in supporting the bill.

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– in reply - It is my intention at this stage to reply briefly to the comments of the Leader of the Opposition (Senator McKenna). It is necessary for me to do so only briefly because my colleague, Senator Scott, has replied very fully to what Senator McKenna said on Thursday last when putting forward the case of the Opposition for the rejection of one section of this legislation.

While not opposing the provision to do away with tax clearances now operating in relation to persons going abroad, Senator McKenna raised a query as to whether the Commissioner of Taxation would find it necessary to adopt any new procedure to cope with visiting entertainers - those people who come to Australia for a brief period, earn, in many cases, large sums of money and then depart. It will be a matter for the Commissioner of Taxation to make himself aware of these visitors and to see that the proper assessed tax is collected from them, but at this stage no special statutory provision is thought to be necessary. If experience shows that the commissioner considers it desirable that the statute should be altered in any way, then other amendments will be introduced. For the time being, it is considered the commissioner’s statutory powers are sufficient, even though it may be necessary, to some extent, to adjust, in the light of experience, administrative procedures that are taken in these matters.

The only part of the bill which is opposed by the Labour Party is that section which deals with the introduction of an investment allowance. I express my astonishment that the Labour Party should find it expedient to oppose this particular measure, which is introduced, as has been explained, to increase our exports actual and our export potential, and to create increasing employment opportunities. I suggest that those purposes are commendable. The Labour Party opposes the proposition, so far as I understand the argument put forward, on the basis that big firms will be the main beneficiaries. For what it was worth Senator McKenna quoted figures copiously to show what percentage of benefit would flow to many of the bigger firms within Australia. In examining the aspects of the national economy that deal with employment and with exports, I believe it will be found at first glance that one of the characteristics of the manufacturing economy of this country is that the big firms are the big employers, and, in the main, the big exporters. If the Opposition succeeded in throwing out this measure on the ground that big firms would be the beneficiaries, then very largely it would do away with the justification, as the Government saw it, for this benefit.

I do not think it is necessary for me to describe again the problems we face in relation to our exports in the ensuing year and the need to reduce costs of exports if we are to retain our trading place in the comity of nations. If this measure has the effect of reducing costs and as a result, of increasing our capacity to compete with our international rivals, and, at the same time, increase employment, then, on those grounds it is a good measure regardless of the fact that a large portion of the money will be paid to firms which are regarded as big firms in Australia. I recall in recent months the comments of the Opposition directed mainly at big firms which, under pressure of economic circumstances, found it necessary temporarily to lay men off, I well recall my own pleasure and the pleasure felt by all who sit on this side of the chamber when the tide turned and when those firms were able to re-engage labour in large numbers.

The next point made by the Leader of the Opposition was that there was something suspect about this measure inasmuch as no estimate had been made of what the legislation may cost the revenue. Senator McKenna went to some pains, as is characteristic of him, to produce an argument in which he came to the conclusion that this proposal would cost the revenue £12,000,000 or £13,000,000. I regret that when the honorable senator was speaking I was not able to refer him to an estimate that had been made by the Treasurer (Mr. Harold Holt) and presented in the Parliament in answer to a question as long ago as 27th March last. In that answer the Treasurer, far from trying to hide what this legislation would cost, indicated that the investment allowance, based on estimated levels of investment in the financial year 1961-62 - information much more recent than that available to Senator McKenna- would cost £17,500,000. We acknowledge a cost to revenue of £17,500,000, not as something from which we shrink or something about which we should be ashamed, but as something that will act as a stimulant to produce the result that we most require in the economy - to increase employment opportunities and, at the same time and most importantly, to increase our imports, actual and potential, and to reduce our export costs.

Senator Wright:

– There is no provision tying this proposal to manufacturing plants that produce goods for export only, is there?

Senator PALTRIDGE:

– Indeed there is not. Senator McKenna proceeded to say that if there was to be an allowance of this kind, the Opposition would not oppose it if it applied to those industries that provided the greatest amount of employment.

Senator McKenna:

– If it were graduated in relation to employment.

Senator PALTRIDGE:

– Yes. That was a strange argument. Earlier Senator McKenna had challenged this legislation on the ground of its complexity, yet here he would seek to make what is complex on his own estimation even more complex by introducing a graduated scale which would have reference to plant employing greater numbers of men. In reply to Senator Wright’s query whether this legislation has application to the production of export income only, I say that it has not for the very good reason, I suggest, that an attempt to apply this proposal only to export income would introduce complexities of the type that would be found to be administratively impossible. For that reason the allowance has a pretty general application over manufacturing activities.

I repeat that the bill’s purpose is commendable. Its purpose is to increase our exports and provide more employment. For that reason I suggest that it should receive in this Senate the same enthusiastic welcome and support that it has received outside this place, not only from industrialists, but also from many men who are working in industry to-day.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 6 agreed to.

Clause 7 (Special deduction for investment in manufacturing plant).

Senator McKENNA:
Leader of the Opposition · Tasmania

– This clause provides a special deduction for investment in manufacturing plant which honorable senators, throughout the debate on the second reading, referred to as the system of investment allowances. The Minister for Civil Aviation (Senator Paltridge) said that be was astonished because the Opposition saw fit to oppose clause 7. I confess my astonishment to find that the Minister is suffering from lack of memory. In fact, his memory has survived for a very limited period. On another occasion I indicated most plainly that the Opposition did not object to the amount involved in this measure - it turns out to be £17,500,000 - being applied for the benefit of industry by way of open and direct subsidy. The entire argument of the Opposition is as to the method chosen in clause 7 by which to give some relief to industry. My main argument against clause 7 was not that big firms would benefit under the clause. That was merely an argument ancillary to some seven other arguments, to only one or two of which the Minister has referred. I was fearful that we might be told that our opposition rested on an argument that big firms would benefit under this bill. My hope that the Minister would not accuse the Opposition of relying on that argument has been grievously disappointed.

Not only did I address some seven different arguments on seven different counts in another phase of the debate, but I actually summarized them particularly at the conclusion of my speech so that there would be no misrepresentation as to what our objections were. Let me repeat those arguments briefly. I made it plain that there was no quarrel about the need for aid to manufacturing industry - that there was no objection to the amount involved being provided directly for industry by way of subsidy. I said that the procedure outlined in the bill was wrong - that nobody would know which were the firms that got the amounts. That argument has not been answered. It is a grave objection to the method prescribed in clause 7. I pointed out that the effect of the approach adopted by the Government cannot be ascertained statistically, so far as the public is concerned, until a very long time has elapsed. We have only now received statistics from the Commissioner of Taxation covering the period 1958-59. The statistical information lags about two or three years behind the event. If this assistance were given by way of direct subsidy, the exact amount paid would be known annually, the firms that received it would be known and there would be public information on the disbursement of public moneys. Surely that is healthier and more efficient in determining the effect of what is done.

This method is completely unselective. As the bill stands at the moment, it makes the benefit available to all industries which, after 7th February, 1962, acquire new manufacturing plant in accordance with the terms of the bill. It is a blanket benefit. No discrimination is made between industries that need help and those that do not.

I referred in my second-reading speech to the question of curing unemployment. I addressed this argument to the Senate: If the manufacturing concerns of Australia did not avail themselves of this benefit in order to bring in methods of automation and plant that would eliminate labour, they would not be serving their own best interests and they would not be serving one of the objectives at which the Government aims, namely, the reduction of costs. On the bare common sense of the matter, I indicated that this benefit conferred upon industry not only might not help to cure unemployment but also might even create additional unemployment, and that that presented a potential problem which the Government did not seem to recognize. I have heard no answer to that argument.

I pointed out that, with a cut-off date of 7th February, the provision had no regard to the vast unused capacity of Australian industry at the present time and as determined not very long ago by the Australian Industries Development Association. That organization made a survey of manufacturing capacity in this country and ascertained that unused plant was valued at about £250,000,000. It made an assessment that that unused capacity was capable of absorbing 100,000 new employees. The Opposition based an objection to this provision on the fact that it operates certainly from 7th February but primarily in future It gives no stimulus to the using of already unused capacity. I have heard no answer to that type of argument.

I have claimed that it is an abuse of the income tax power to seek to achieve all these objectives through legislation of this type. I have heard no answer to that claim. 1 have indicated that it is against common sense to allow an amount in excess of the cost of the article involved to be written ofl through the Taxation Branch for depreciation purposes, even if part of it is called an investment allowance and the balance is called depreciation. I have quoted the example of an article costing £100 on which, by way of investment allowance under this legislation and depreciation, the taxpayer will be able to write off £120. He cannot do that in his books because there is not room to do it; but this legislation creates the fiction that he can write off more than the cost of the article.

Senator Wright:

– Over what period is that permitted?

Senator McKENNA:

– As I understand it, whatever the period is, that will be the position. Whether it is a three-year, fiveyear or ten-year period, the ordinary depreciation is written off over the life of the particular article; but in addition there is this 20 per cent, investment allowance.

Senator Wright:

– And that is how you arrive at your £120, is it?

Senator McKENNA:

– In the example that I quoted previously, I took an article costing £100. If the article had a life of ten years, the normal depreciation would be £10 a year on a fixed rate of depreciation. In the first year, a total of £30 would be written off - £20 by way of investment allowance and £10 by way of normal depreciation. Then £10 a year would be written off for another nine years. The total amount over that period would be £90. That sum added to the £30 written off in the first year makes a total of £120 written off through the Taxation Branch. I argued that that was against common sense.

Above all, I pressed the point that whilst the benefit was badly needed it should be applied in another way altogether, namely, by open and direct subsidy. I directed attention to the fact that the Commissioner of Taxation not only has no power to disclose any information about the affairs of individual taxpayers that comes into his possession from income returns but also is under a strict prohibition against doing so. Yet, surely we, as parliamentarians, have a duty to insist upon knowing to whom benefits are handed out in the Australian community. We are entitled to know that. We are entitled to see where the benefit has gone and whether the bestowal of the benefit has led to the taking up of the slack in employment which is still a major social evil in this country. We are also entitled to see whether this measure, when it has been in operation for a time, has caused more unemployment than it has cured. With the granting of the benefit in the way that it is being granted under this bill, all those elements will be wrapped in obscurity.

I conclude my remarks, Mr. Temporary Chairman, by saying that we did not base our main arguments on the fact that the greatest benefit would go to the greatest industry. That argument was used to place a statistical fact before the Parliament. It was merely an ancillary and interesting argument, but not so much a matter of objection as a matter of interest. Our opposition is completely misrepresented if it is suggested that that opposition is based upon that argument. It is based on all the other objections that I have now recapitulated very briefly.

The Minister for Civil Aviation has been critical of my suggestion on the ground that if this benefit were varied according to the degree of employment it caused the situation would be more complex. He claimed that we would support the subsidy if it was given in that way. We do not take up that position. We say, first, that the benefit should be given by open and direct subsidy. We were critical of the method chosen in this bill for the very reason that it had no direct relation to employment or unemployment. I did not advocate that this provision be amended in that way and that we would support it if it was so amended. My argument was that it would be better, it would be more rational, and incidentally, it would be more humane, too, to emphasize the need to take up the slack in employment in this country. But I did not say that we would vote for this provision if it were varied so that the benefit increased with the degree of further employment it caused. I did not take up that position.

We object to this provision primarily because of the method. I suppose that, since I am critical of the provision, the statement that the wrong method has been chosen is the highlight of the argument. I have teased out that argument in the various particular arguments that I have presented. I have been critical of the method in various ways. We oppose clause 7, Mr. Temporary Chairman; but we have no objection to any other provision of the bill.

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– I suppose one could argue for ever the point as to which method would be preferable. As a government, we believe that the method we are adopting is much preferable to the method of subsidization. Under this method, those firms which have the desire and the initiative to re-equip for the purpose of cheaper production will be granted an investment allowance which will enable them to claim deductions when assessing their incomes for tax purposes. Of course, I think it could be stated as a well known fact that the Labour Party, for its part, would prefer to adopt a subsidy system, in pursuance of its general approach to a problem of this kind.

Senator Wright:

– Who would?

Senator PALTRIDGE:

– The Labour Party. For our part, we prefer a system of taxation allowances for performance and initiative. During his speech in the secondreading debate, the Leader of the Opposition (Senator McKenna) said on two occasions that, within his experience, he had never known of a situation in which there was allowed, by way of a depreciation allowance, an amount which was greater than the* value of the asset itself. For the purpose of this argument, he persisted in regarding an investment allowance and a depreciation allowance as the same thing. It is true that this is the first time in Australia, as far as I know, that this method has been adopted.

Senator McKenna:

– That is not what I was talking about.

Senator PALTRIDGE:

– That is what the honorable senator said, because I carefully checked what he said. This system of granting an investment allowance or a comparable allowance is in use in the United Kingdom and in the United States of America, where experience has shown that it works extremely well and effectively.

Senator Wright:

– Could you tell us the period that it has been in force there?

Senator PALTRIDGE:

– I am sorry, but I have not that information. I understand that it has been in operation for long enough for its effectiveness to have been well tested. Frankly, we feel no sense of shame if, for the first time, we put into effect in Australia something which will have the beneficial effects that this provision is designed to have. It is not the first time that this Government has been first with something in Australia, and it will not be the last time.

Whilst the Opposition persists, for its part, with the view that it would prefer a subsidy system, we, for our part, will continue to prefer the system proposed. The Leader of the Opposition mentioned that it would not be known who were the particular recipients of this taxation benefit. Why should it be known?

Senator McKenna:

– Are you asking me now?

Senator PALTRIDGE:

– No. It is a rhetorical question, but no doubt you will answer it. Why should it be known? A taxation return, in conformity with longstanding practice in Australia, represents a confidence between the person or the firm submitting the return and the Commissioner of Taxation. Why should a firm be compelled to disclose, possibly to its opposition, what it has been doing and probably, because it discloses what it has been doing, disclose its intended plans? This is a taxation matter, and is to be treated as a matter of confidence between the commissioner and the taxpayer. The honorable senator criticized the fact that the measure had a cut-off date, fixed as 7th February.

Senator McKenna:

– I was not critical of that point, and I have never been.

Senator PALTRIDGE:

– You were critical for the reason that the selection of a cut-off date would, in your submission, have no effect on what you termed the unused capacity in Australia. Any arbitrary date - 7th February, 30th December or 30th June - might be subjected to the same criticism. The date of 7th February was chosen because on that date the Prime Minister announced this decision of the Government. I suggest, in those circumstances, that it is the proper date for this provision to become effective.

One of the last arguments put forward by the Leader of the Opposition, as I understood it, was that this system was opposed to the principles of income taxation. I do not think it is. The export development allowances operate in the same way, and there are other allowances operating in the same way. It may be that the Opposition does not like the income tax legislation being employed for this purpose, but who will deny - a recent statement by the Minister for Trade (Mr. McEwen) adequately bears out the contention - that the introduction of these allowances has been remarkably effective in Australia?

The last argument used by the Leader of the Opposition was that it was against common sense that on an asset valued at £100 it should be possible for taxation allowances totalling £120 to be obtained. My answer is that if that is against common sense, it is also against, not only the judgment of this Government, but also the judgments of the governments of the United Kingdom and the United States of America.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I wish to make three brief comments upon what the Minister for Civil Aviation (Senator Paltridge) has said. Never at any time when I have spoken in relation to this measure have I had in mind that something of this sort was not done in a few countries outside Australia. I think what the Minister is referring to is not so much an investment allowance plus full depreciation as the fact that in one or two countries in the world the taxation laws permit the taxpayer to write off depreciation, not on the cost but on the replacement cost of the article. That might be more, but it could be less. That is done in a few countries in the world. Other countries have rejected the proposal. I just wanted to indicate to the Minister that I was aware of that when I spoke on the bill.

The Minister asked what he claimed was a rhetorical question, but I treat it as a question directed to me. The question he put was: Why should it be known who gets the subsidy? The simple answer is: To ascertain whether the legislation has the effect that the Government claims it will have. One of the objectives of the measure is to cure unemployment and to promote further employment. How will the Government ever know whether or not this benefit has anything to do with employment unless it can look to the particular firms which have been given the benefit? I repeat that a benefit of this type should have been graduated according to its effect upon employment. That is one of our main objections to the measure. Who will get the bigger portion of the benefit? Certainly the public companies which publish their balance-sheets year by year - balancesheets which are commented upon by all the trade journals and which show that year by year there has been an addition to plant of so many thousands or hundreds of thousands of pounds, as the case may be - will benefit. That information is public property, but the public is never told of the employment position in the organizations. Their published statements do not show that.

Senator Wright:

– Many of them do.

Senator McKENNA:

– Not as a matter of course. My experience is that relatively few of them do. Surely, one of the tests of the wisdom of this measure is to see whether it has the result which the Government professes to be aiming at. The Minister should drop the claim that the Government’s measures are promoting employment if he denies to the public and the Parliament the opportunity to find out whether employment has in fact been promoted. The method which the Government has chosen denies such an opportunity both to the Parliament and to the public.

The honorable senator referred finally to export development allowances and stated that he thought the Labour Party would object to them. He is quite right. We would object. We think that the taxation legislation is altogether overworked for such purposes. We prefer the franker, more open method of direct subsidies, rather than the concealed type of method that is adopted by the Government.

Senator Henty:

– Even though a subsidy could attract a dumping duty in other countries?

Senator McKENNA:

– We will not for a moment deceive other countries. Do 1 gather that this device has been resorted to in order to deceive other countries?

Senator Henty:

– No. I did not say that.

Senator McKENNA:

– I am asking whether that is the implication.

Senator Henty:

– No. The honorable senator should stick to his own argument.

Senator McKENNA:

– To be frank, that is something which has been in my mind in relation to the method that the Government has adopted. It is a thought that I have not expressed, and I should not be surprised if such a thought were also in other people’s minds. There would be no chance to deceive other countries.

Senator Henty:

– Other countries use taxation subsidies.

Senator McKENNA:

– They use direct taxation to help their importers, and none of the exporters to those countries is deceived by it. Departments of Customs all over the world look at taxation concessions as well as direct subsidies.” They know the exact effect that those concessions have and make allowances accordingly. If the idea was to try to conceal the fact that, in truth, a subsidy was being given, then I should say that that was wishful thinking. I have more respect for the intelligence of the customs authorities of other countries than to think, that that kind of device would defeat them. Why not do the thing openly, first, for the reason that it would be safer, and secondly, because it would enable the Government to test the effect of the legislation?

Senator WRIGHT:
Tasmania

.- I invite the Minister to comment on two matters that I have in my mind. If assistance were appropriate in the form of a subsidy, would it not be in the nature of a bounty? If a subsidy of this kind were given, except on the recommendation of the Tariff Board, would it not be out of step with every such action taken in the last 30 years? If I am correct in thinking that it would be, my mind proceeds to consider the position of the berry fruitgrowers, a very small- section of the primary-producing community, who have wished unavailingly at the wishing well of the Tariff Board for a bounty. Will the Minister tell me what evidence there was that a stimulant of this kind was the appropriate one to improve the employment capacity of industry? If the figure of £250,000,000 in respect of unused plant has any basis in fact, what is the ground for the opinion that a stimulus of this kind will give the necessary encouragement to industry to increase employment?

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– Not surprisingly, Senator Wright has posed two questions which are very difficult to answer. I am not in a position to answer his first question fully. I regret that I do not know the precise answer, and I have not the relevant information available to me at the moment. The payment of a subsidy might well introduce an element of bounty which would run counter not only to practice but also to some aspects of the Constitution. With some hesitation and in some trepidation, I suggest that treatment of that kind, if it is related to an export industry, might also run counter to some of our obligations under the General Agreement on Tariffs and Trade. 1 make that suggestion without being definite in the matter.

To estimate unused plant, and the relationship of this new proposal to unused plant or unused capacity, would, I suggest, require a much closer examination of the matter than is afforded by answering a question at the committee stage. I think there is at present, and always will be, an unused manufacturing capacity. I believe it is fair to say that that capacity changes with changes in trade. Sometimes the changes are due to factors of a seasonal nature. The Tariff Board has pointed out that, despite its findings over a period of years about the danger of unused capacity in certain industries, those industries, incredible as it may seem, have proceeded to provide plant even in excess of the quantity of plant they had at the time that the report of the board was submitted. Those valuable reports promote the thought that while there undoubtedly is unused capacity, it resides in such corners of the economy that cannot have any real effect on the development of an export market for industries which are seeking markets in other parts of the world.

Let me refer to the brewing industry, as a specific example that recently came to my knowledge. Perhaps it is rather odd that the commodity concerned should be beer, because objection may be taken in some quarters, on grounds of principle, to the development of an export trade in beer. A market for Australian beer having been found in other parts of the world, steps were taken immediately by one of the brewing companies to exploit it. For that purpose, and entirely for that purpose I am informed, the company purchased and installed plant to cater for the new overseas market. That kind of thing may well be going on while, in other industries, there is unused capacity.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I am interested in the points raised by Senator Wright, because I felt under compulsion to address my mind to the very matters that he raised. If we look at the Constitution, we see that there is a power conferred on the Commonwealth by section 51 (3.).

Senator Wright:

– I hope it does not refer to a burden or a charge.

Senator McKENNA:

– This is power to make laws with respect to bounties on the production or export of goods, such bounties to be uniform throughout the Commonwealth. Senator Wright raised the point as to whether, if a direct subsidy were paid to those who installed new plant, it would amount to a bounty. I would have no hesitation in giving the opinion that it would not. The subsidy in that case would have no direct relation to the production .of goods. The bounty would have to be paid, I would claim, in respect of the goods produced. It would not be related to the means of production. I think that there is a complete distinction; so that subsidy would not fall under the limitation imposed.

Senator Wright:

– I did not have that constitutional provision in mind. I was thinking of bounty as a general means of assisting industry.

Senator McKENNA:

– I appreciate that distinction. The Minister raised the constitutional point. The honorable senator’s query, as I remember it, was directed to whether the kind of subsidy that the Opposition opposed would be a bounty traditionally provided only on the recommendation of the Tariff Board; so I thought that I was providing some kind of incidental answer to the honorable senator, as well as dealing with the constitutional point raised by the Minister.

There is an interesting constitutional question as to the manner in which the subsidy would be paid. I should like to spend one minute on that. The power of the Commonwealth is unquestionable over two aspects - the two greatest aspects - of our trade, interstate trade and overseas trade. There would not be the slightest doubt about having constitutional authority for the payment of subsidies to those who installed plant connected with either of those activities, interstate trade or overseas trade.

There remains a query regarding an activity that is purely intra-state, but when questing further, the solution of that problem is found to be easy. Section 96 of the Constitution provides that payments may be made to the States with or without conditions, with the Commonwealth acting as the administering authority, and the State acting merely as the paying authority, the distribution authority, drawing all cheques.

By that simple piece of machinery, without involving the State in detail at all, the power can be extended by the Commonwealth. I see no constitutional or practical difficulty in paying the subsidy.

I confess that I have given no consideration to the effect that this type of arrangement might have in relation to the General Agreement on Tariffs and Trade. I am interested to hear the Minister say that it might have some effect. I have not addressed my mind to it.

Question put -

That the clause stand as printed.

The committee divided. (The Temporary Chairman - Senator G. C. McKellar.)

AYES: 31

NOES: 20

Majority . . ..11

AYES

NOES

Question so resolved in the affirmative.

Clauses 8 to 12 agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 1352

PHTHALIC ANHYDRIDE

Tariff Board Report

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

– I lay on the table of the Senate a report by the Special Advisory Authority on phthalic anhydride.

page 1352

SALES TAX ASSESSMENT BILL (No. 1) 1962

Second Reading

Consideration resumed from 8th May (vide page 1180), on motion by Senator Paltridge -

That the bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 1352

PAY-ROLL TAX ASSESSMENT BILL 1962

Second Reading

Consideration resumed from 8th May (vide page 1181), on motion by Senator Paltridge -

That the bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 1352

WOOL TAX ASSESSMENT BILL (No. 2) 1962

Second Reading

Consideration resumed from 8th May (vide page 1181), on motion by Senator Paltridge-

That the bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 1352

TOBACCO CHARGES ASSESSMENT BILL 1962

Second Reading

Consideration resumed from 8th May (vide page 1181), on motion by Senator Paltridge -

That the bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 1353

STEVEDORING INDUSTRY CHARGE ASSESSMENT BILL 1962

Second Reading

Debate resumed from 8th May (vide page 1181), on motion by Senator Paltridge -

That the bill be now read a second time.

Senator WRIGHT:
Tasmania

.- I take advantage of the second-reading debate on this bill to make reference to a relatively small matter. One of the Tasmanian newspapers, dealing with the debate on the bill for the assessment of the stevedoring industry charge - honorable senators will recall that I voted against the bill but failed to gain any support and, therefore, there v/as no division on it - reported that my vote surprised my colleagues, making it appear that my vote had come as a complete surprise to them. The Minister in charge df the bill had been advised of my unequivocal opposition to it one month before the vote was taken. My party colleagues also knew of my attitude to the measure. It may be that the Tasmanian newspaper in question, which indulges in speculation, will descend to the realm of fact and place on record the information that I am now conveying to the House.

I still oppose the bill. I ask the Minister whether he is yet in possession of figures which will show that the imposition of a charge of 3s. 4d., in lieu of the previous charge of approximately 2s. 6d., will not add to the costs of the industry.

Question resolved in the affirmative

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 1353

EXCISE BILL 1962

Bill returned from the House of Representatives with amendments.

In committee (Consideration of House of Representatives’ amendments):

House of Representatives’ amendment No. 1-

That the following new clause be added to the bill:- “ 7. Refunds of excise duty made on or after the twenty-fifth day of July, One thousand nine hundred and sixty, and before the commencement of this Act in respect of-

tobacco that was returned to the factory in which it was manufactured and again subjected to processes of manufacture; or

cigarettes or cigars that were returned to the factory in which they were manufactured and the tobacco in which was used in the manufacture of other cigarettes or cigars, shall be deemed to have been lawfully made.”.

House of Representatives’ amendment No. 2-

At the end of the title, add the words “, and to Validate certain Refunds of Excise Duty”.

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

– I move -

That the amendments be agreed to.

The bill, as originally considered by honorable senators, was designed to clarify the legal position in respect of the future payment of refund of excise duty. However, there has been a query raised by the Auditor-General in respect of certain refunds paid in the past. These relate to tobacco products returned by manufacturers to their factory for re-processing, the recovered tobacco being again duty paid in the form of re-manufactured products.

As it is not considered that the existing excise regulations authorized such refunds, the provisions of the new clause - clause 7 - are necessary to validate those payments. The date included in the clause is the date on which the first of that type of refund was paid. In consequence of the new clause, the amendment to the title of the bill is necessary.

Sitting suspended from 5.47 to 8 p.m.

Senator KENNELLY:
Victoria

.- Prior to the suspension of the sitting I and some of my colleagues were anxious to know how much money was involved in the amendments. I understand that the Minister for Customs and Excise (Senator Henty) now has that information.

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

– I now have the information sought. A little less than £220,000 is involved. That amount would be collected when the re-manufactured tobacco was delivered out of bond.

Question resolved in the affirmative.

Resolution reported; report adopted.

page 1354

COAL LOADING WORKS AGREEMENT (QUEENSLAND) BILL 1962

Second Reading

Debate resumed from 8th May (vide page 1174), on motion by Senator Paltridge -

Thai the bill be now read a second time.

Senator BENN:
Queensland

.- The bill now before the Senate seeks to appropriate £200,000 from Consolidated Revenue for the purpose of lending the Gladstone Harbour Board £100,000 and in order to make available £100,000 on loan to the Queensland Government. The money is to be spent by the Gladstone Harbour Board in supplying improved coal loading facilities at the harbour in Gladstone. Successive boards have administered the affairs of this instrumentality in a progressive manner over the years. At present coal may be loaded at Gladstone at the rate of about 200 tons an hour, but it is felt that in the future that rate will not be sufficient. In order to cope with vessels of the type that are expected to call at the port in the future a loading rate of 500 tons an hour is estimated to be required.

With those few remarks it may be felt that I have told all that is to be told about this bill, but I know that the Senate will give me permission to say a little more. A sum of £100,000 is not granted to a harbour board without the board being required to do something in return. In the Gladstone area there are untold coal deposits. For a number of years it has been taken for granted that the Gladstone area contains deposits of the order of 200,000,000 tons. It was estimated that another 200,000,000 tons existed in the Blair Athol district. We actually boasted of the quantity of good coal that we had in Queensland. But in the hinterland to the west of Baralaba in the Dawson valley a large deposit, estimated to be of the order of 1,000,000,000 tons, has been discovered virtually on the surface of the ground. From my knowledge of the coal-mining industry I do not doubt the accuracy of that estimate. At Collinsville a deep mine has been worked for a number of years. Only a few miles away from Collinsville, at places like Scottville, coal is being extracted from open cuts. It is remarkable to think that at Collinsville coal is being mined thousands of feet below the surface, and only six miles away, at Scott ville, coal is being mined from an open cut. There are other important mining centres in Queensland, such as Kianga and Moura. I know that school children never hear of those places. They would not know where they are. Coal may be mined at Kianga by the open cut method. It is there that soft coking coal, which is so important to the steel industry, is mined. At Moura, perhaps 30 miles from Kianga, hard coking coal is mined. So in that area may be obtained all the requirements of the steel industry.

Of course, it is a long way from Moura and Kianga to Gladstone. I do not know how the coal is to be transported from Moura and Kianga to Gladstone. I do not know of any main road directly linking Gladstone with the places I have mentioned. For that matter, I do not know of a good main road from Gladstone to any coalfield west of Gladstone. I have heard that it is proposed to construct a railway at some time in the future between Gladstone and Kianga. I do not know whether the line is to be built by the Queensland Government of whether it will be built by the Thiess Peabody Coal Mining Company Limited. It has been rumoured that that company has been successful in interesting certain Japanese coal importers in the project. It may be that some Japanese capital will be forthcoming to pay for the railway between the coalfields and Gladstone. When a railway has been built coal will be delivered to Gladstone in unlimited quantities and will be loaded onto the ships quickly. The ships will not lose any time in the harbour. The shipping companies will not be required to pay high harbour dues. That sounds like very good business for somebody in the future.

This is the spectacle as the practical man in Queensland sees it to-day. The riches of the State are flowing out of it and nothing is coming in to take their place. He looks at the matter this way: The difficulty at the present time is to obtain employment for the whole of the Queensland work force. The number of children who will leave school at the end of this year and the years in the near future will increase considerably, and the difficulty of obtaining employment for them will increase proportionately. The bauxite from farther north, up near the tip of Cape York, will go to

New Zealand to be manufactured into aluminium. Some processing works at least should be established in Queensland. It has the natural resources. I can remember when, in my younger days, a big discovery of coal was made.

Senator Henty:

– But Queensland has no power to make the bauxite into aluminium.

Senator BENN:

– Queensland certainly has power; but I will concede to Senator Henty that we cannot generate power as cheaply as it can be generated in Tasmania with its hydro-electric schemes. However, Queensland has an unlimited supply of coal. This coal-field about which I am now speaking is estimated to have 1,000,000,000 tons of coal. It is difficult to appreciate the magnitude of such a quantity of coal. Yet nothing will be done with it, except that it will be exported.

I remember reading years ago some poems by C. J. Dennis. He wrote about The Glugs of Gosh. The Glugs were a group of people who were happy to sell their stones and rocks to people who visited them. The payment was in trinkets or something glittering - something to amuse them. This arrangement continued and The Glugs of Gosh traded all their stones and rocks to the people who called upon them. I say that the people of Queensland at present are like The Glugs of Gosh. They are trading their natural resources for money which will go quickly and leave them with nothing in place of their natural resources. Queensland wants something of greater economic value than what it will get out of this agreement. It will certainly provide a little employment for some people. The coal has to be won from the mines. The railway line, if it eventuates, will have to be constructed from Gladstone to the coal-field. Then there will be the loading, the unloading and so on. A place will be needed to stockpile the coal as it is brought into Gladstone. I appreciate all those things; but they will provide employment for only a few people, whereas, if we had some works in which the coal could be used to greater advantage, we would be well on the way to providing more employment for the people of Queensland.

I read in a newspaper to-day that only yesterday a ship brought to Newcastle some kind of new furnace required for the Broken Hill Proprietary Company Limited. This furnace, which is of the very latest design, will be used in the manufacture of steel. I believe it is known as the oxygen type of furnace. It will certainly boost the manufacture of steel in Newcastle or Port Kembla. That is all very well in its way. That company, of course, manufactures steel and processes it. That gives employment to thousands of people. But Queensland is denied that right. Senator Paltridge is looking at me. Is it not true that in Western Australia a plant costing about £10,000,000 will be built to convert bauxite into alumina? That is a start. Once that plant gets going, it will provide employment for Western Australians.

I see the picture this way: This coal will go to a country that buys the greatest quantity of greasy merino wool on the Australian market. The wool goes to Japan. There it is manufactured into textiles and sold to the countries of the world that require textiles, including Australia. We are sending our raw materials - not one, but several of them - out of the country. Our natural resources, our riches are flowing out of the country and nothing is coming in to replace them. That is the sad part of the picture.

I certainly do not believe m leaving our natural resources lying dormant. Man is entitled to bring all the natural resources that exist under control and use them to the greatest advantage. But I am still nationally minded; I do not think internationally - especially in these matters. Japan soon will be the greatest industrial power in the world. Within ten years or so it will eclipse the United States of America, which plays that leading role at present. This £200,000 with which we are now dealing is only a flea-bite. It is only worth a snap of the fingers in comparison with the 1,000,000,000 tons of coal in this field, including huge quantities of soft coking coal and hard coking coal.

We cannot oppose this bill, Mr. Acting Deputy President. It is a start. It will certainly do some good. Perhaps within a few years we will sell millions of tons of our coal to Japan, but that is taking only a short-term view of Australia’s potential. There will have to be a change in the future. We have seen the population of

Australia increase from 7,000,000 to the present figure of more than 10,000,000. Some honorable senators on the Government side have seen it increase from about 4,000,000 or 5,000,000 to the present figure. In view of the way our trade and industries are shaping, Australia will find it necessary to increase its population by 50 per cent, within the next six or seven years. Because of the loss of trade in certain of our markets, we will have to aim at a population of at least 20,000,000 in fifteen or twenty years’ time. With those few remarks, Mr. Acting Deputy President, I give the bill my support.

Senator MAHER:
Queensland

.- Mr. Acting Deputy President, to-night we are debating the Coal Loading Works Agreement (Queensland) Bill 1962. This measure, when enacted, will put the seal of parliamentary approval on the provision of an amount of up to £200,000 by the Commonwealth Government to assist the Gladstone Harbour Board in the construction of improved coal-loading facilities at that port in central Queensland. Gladstone is a very old town of historic interest. In the opinion of many people, because of its situation and good harbour facilities, it should have been chosen as the capital of Queensland. In the early days of Queensland development, there was a direct road from Rockhampton across the ranges to Roma. That road was used by bullock teams and horse teams to take merchandise from overseas ships, which came into the river port at Rockhampton, to Roma and the intermediate stations. Those wagons took wool and other produce back to the coast to be loaded into ships and taken overseas. The reason for using that route was that the distance was shorter from Gladstone and Rockhampton - those two towns are only 60 miles apart - to Roma than it is from Brisbane to Roma. In the early days they took the short cut.

Queenslanders will welcome the financial provision made in this bill for the important Gladstone harbour developmental work. It has been the fashion to say that, constitutionally, such works are the responsibility of the States. Of course, that is very true, but the present Commonwealth Government in more recent times has taken a broader and more liberal view by accepting a substantial share of the cost of public works which are still regarded as State responsibilities but which facilitate and promote export trade generally.

During the election campaign in November last, when I was up in central and northern Queensland, I pointed out that the principle in this respect enunciated by the Prime Minister was, in its ultimate effects, more important than the actual gift of £100,000 which the Commonwealth Government is making for improved harbour facilities at Gladstone. For the benefit of those who are not aware of it, let me say that the town of Gladstone is the port of shipment for the coal from the tremendous deposits in the Kianga and Moura coalfields, which run more or less parallel with the Dawson River for approximately 85 miles, commencing at Cracow, the site of the rich Golden Plateau gold-mines, and going right down to Kianga, Moura and Baralaba. In all this country, running away north to Collinsville, there are literally mountains of coal. Senator Benn, who has just spoken, said the opinion was generally held in days gone by that there was something of the order of 200,000,000 tons of coal in this vicinity. It is hard for any one to estimate the amount of coal there, but it is known that there is a tremendous amount in that particular area of central Queensland.

Last winter, I travelled through this region in a party led by Mr. Jeff Bate, M.P. I pay a tribute to the work of Mr. Bate in bringing senators and members of the House of Representatives into the lesser known parts of the north, not only Queensland but also the Northern Territory, so that they could see for themselves the basis of our great wealth in the northern areas of Australia. Most of the members of the parties led by Mr. Bate on the occasion to which I have referred and on earlier occasions were drawn from members of the food and agricultural committee, the mining committee and the national development committee of the Government parties. These men pay their own hotel expenses. They are members of Parliament who travel around the country to see what can be done to advance and develop their country, and they pay their own way out of their own pockets. Their expenses are not paid by the Commonwealth Treasury. They bring back very useful information in the shape of reports to their particular committees, and they confer with the Ministers in charge of the different phases of government. In acting on these committees, they give good service to this Parliament and to the people of Australia. Membership of these committees brings members of Parliament who reside in Tasmania, Western Australia and the southern States generally up into the north so that they can see for themselves the latent wealth which lies there and needs developing.

During this tour we inspected the Kianga open-cut mine, which produces soft coking coal of high quality. The Moura mine, thirteen miles distant to the north, produces hard coking coal, which is a prime requirement of the Australian iron and steel industry. There is a shortage of hard coking coal throughout the world, so we should be careful not to export an undue proportion of our supplies. I am not without hope that sooner or later iron and steel works will be established in Queensland, so one eye should be kept on our reserves of hard coking coal, which will be needed if that day comes.

Farther along the Dawson River is the Baralaba field, which has supplied good steaming coal for many years past. The Minister has stated that reserves of coal known to be available for open-cut mining run to the order of 60,000,000 to 120,000,000 tons. Rough estimates by competent mining people place the total reserves of coal in this area at 1,000,000,000 tons. Senator Benn, who has some acquaintance with the area, stated to-night that he believes the amount of coal is something of the order of 200,000,000 tons. Who can be sure? There is an enormous quantity of coal there to be won.

I take Senator Benn to task on his contention that we should not export too much of our coal to Japan or to other countries. When all is said and done, we cannot be dogs in the manger. We know that there are countries lacking in coal which want to buy it. We have enormous quantities of coal, so it is only right that we should trade our coal with Japan or with any other country in return for merchandise which they produce. It is only on the score of hard coking coal that I join with Senator Benn in his broad contention. If other countries want to buy our soft coking coal, let them have all they want. That promotes trade and goodwill between us and the countries that buy from us.

The quality of the coal, the variety of its uses, and these enormous reserves make the Dawson Valley area a source of great future wealth. The progressive and enterprising members of the firm of Thiess Brothers - Queensland men, by the way - who have carried through many major works throughout Australia in the post-war period, including important projects for the Snowy Mountains Hydro-Electric Authority, are the prime movers in the establishment of a large and developing coal trade with Japan. There is a big market for coal in Japan, and New South Wales caters strongly for this market. In the latest report of the Joint Coal Board it is stated -

During 1960-61 exports of New South Wales coal to the iron and steel industry of Japan grew rapidly.

Total overseas exports for New South Wales rose to 1,849,000 tons, equal to about 10 per cent of total production.

In the coal-mining projects in central Queensland, Thiess Brothers are acting in association with American interests, trading as Thiess Peabody Corporation Proprietary Limited. They hold firm orders for the export of 3,400,000 tons of coal over the next seven years, involving £14,000,000 of export income. There is an urgent need for the construction of a railroad connecting the coal-fields directly with the Port of Gladstone, and I have no doubt that plans are at present under consideration for such a project.

I was very disappointed the other night to hear Senator Ormonde’s lament that the development of open-cut mining in central Queensland could be, as he said, a death blow to deep, underground coal-mining in New South Wales. He appeared, from his tone, to be resentful of the Commonwealth Government’s financial assistance to the Gladstone Harbour Board, although his own State also has received Commonwealth assistance for similar purposes of a much larger amount. I remind Senator Ormonde that trade follows prices and quality in all commodities, not only coal.

The coal being produced in central Queensland by the open-cut method of mining is of excellent quality. If New South

Wales coal cannot be marketed at competitive prices, overseas orders necessarily will gravitate to the cheapest and the best market. Senator Ormonde would serve his country better if he stood out in the clear against the current campaign for a 35-hour week which, in practice, would mean a 30-hour week in the coal-mining industry. Sir Edward Warren, who left earlier this month to join the Australian trade mission that has gone to South America in search of orders for coal and other commodities, said that a 30-hour week would mean the end of Australian coal exporting prospects. Senator Ormonde should realize that the provision of modern methods of loading coal at Gladstone harbour and of producing coal in the central Queensland fields on a lower cost basis than is the case in New South Wales coal mines, should not be a worry to him at all. The coal is being produced in Australia, and we all are Australians. Not only the honorable senator, but all of us, will have a major worry if a substantial proportion of the men who mine coal lose their jobs because of higher costs of production due to the introduction of a shorter working week, such as is now advocated, and the consequential loss of trade because of uncompetitive prices for the coal we export. That is the grave danger.

The Commonwealth Government’s action in making available £200,000 for the provision of coal-loading facilities at the port of Gladstone is very gratifying to all the people of Queensland. The only point of criticism I have to make - and I am not pushing it - is that, with an export proposition of this magnitude, a £1 for £1 grant up to £200,000 would be more fitting. In other words, a grant of £200,000 in lieu of the proposal under the bill for a grant of £100,000 and a £100,000 loan to the Gladstone Harbour Board appeals to me as an appropriate contribution by the Commonwealth Government, working on the worthy principle that export trade should be encouraged. I say that, Sir, as a passing thought. I am most grateful for what the Commonwealth Government is providing tinder this bill.

Another good feature of the proposal is that repayments will not commence until December, 1963, when the harbour works »nd improvements are expected to be completed. With the assistance of the monetary resources being made available, the Gladstone Harbour Board plans to install a travelling gantry loader and conveyer which will enable 500 tons of coal per hour to be loaded on to a ship in the one fixed berthing position. Gladstone harbour is a very good harbour, but due to the size of the ships engaged in the coal trade, it needs to be dredged to a depth of 32 feet. This improvement, and some others, which will cost £50,000, is being carried out independently of the moneys to which this bill relates.

I wish, in conclusion, Sir, to compliment the chairman of the Gladstone Harbour Board, Mr. W. R. Golding, and his fellow members on their progressive decision to advance the interests of central Queensland so substantially by this contribution to the build-up of our coal export trade. I wish the port of Gladstone and its rich hinterland good fortune. I have pleasure in supporting the bill.

Senator DITTMER:
Queensland

– What a magnificent government and what a magnificent gesture! The Gladstone harbour is the second best natural harbour in Australia. It is second only to Sydney harbour. It lies in a struggling district which, over the years, has attempted to meet the demands for coal, both during the war and after it. When Victorian industry was languishing, it was the Gladstone Harbour Board which saw fit to spend money from its own resources. Irrespective of the value of the Callide coal to Queensland, it is a great coal deposit. The quality of the coal is not necessarily of the high British thermal unit value or calorific value of the New South Wales or West Moreton coal, but nevertheless, it is of great value. Because the Menzies Government feared that it might lose seats in Queensland during the recent general election, a fear that was realized when it in fact lost eight seats in that State, it announced that assistance was to be given to help meet the cost of improvements to coal-loading facilities at Gladstone. The Government made that announcement before the election, just as it announced that £5,000,000 was to be provided for beef roads, and, on the last night of the parliamentary session, that £20,000,000 was to be made available by way of loan to recondition the Mr Isa-Townsville-Collinsville railway. Now, the Government is to make available to the Gladstone Harbour Board £100,000 by way of grant and £100,000 by way of loan. This assistance is to be provided for work in respect of which the Gladstone Harbour Board is spending £50,000 to deepen the channel from 28 feet to 32 feet so that the harbour may be used by ships of up to 15,000 tons. The works are to cost a total of £405,000.

When the Government sought the goodwill of the electors of New South Wales., a State which has been fortunate enough to have successive Labour governments for the last 21 years, it was prepared to spend £3,000,000 on the reconditioning of the facilities at Port Kembla and Newcastle, and a further £2,650,000 was to be made available, almost on a £1 for £1 basis. The sum of £1,650,000 was to be made available by way of loan and £1,000,000 as a grant from the Joint Coal Board, of which the Commonwealth Government is a constituent part. But for a harbour in Queensland which is situated in probably one of the best areas of the nation, an area which is seeking development and settlement, the Commonwealth Government is to make a miserable grant of £100,000 and an equally miserable loan of £100,000. Queensland is a State which rests in no small measure on a bed of coal and shale. We hope that it also rests on a bed of oil. Does not the Government think that something more is called for? Should we not see a grander gesture from the Government, particularly when we realize that the Leader of the Government in the Senate (Senator Spooner) is the Minister for National Development? Is this not a case in which something more than a token approach is warranted?

I heard what Senator Maher, a great Queenslander, had to say to-night. He is a particular friend of mine, although I do not approve of his political views. He said that after all, these things are State responsibilities and we should not take too much notice of the amount being granted; instead, we should take notice of the approach adopted by successive Menzies Governments. He did not use the term “ successive Menzies Governments “ ; he said “ the Government “, but we know to which government he was referring. Let him go to Gladstone and ask the people there which they would prefer: The approach that the Government is making, or a more generous gesture in the form of pounds, shillings and pence. Any one in the district - in fact, any one north of the Queensland border - would say that the cash approach is to be preferred. The best part of Senator Maher’s speech was his concluding comments. He said that perhaps the Government should have made a grant of the £200,000. That was the part of his speech that I approved. Of course, I appreciated his comments regarding the construction of the road to Roma, and about the district between Rockhampton and Gladstone. That was interesting in its way. We must realize, however, that the mineral potentialities of Queensland have been all too clearly revealed.

When we recall the history of Australia for a period of over 100 years, we realize that for a long time we were merely exporters of raw material. What was done to the other States, this Government is doing to Queensland. In collaboration - I almost said “ conspiracy “, but that term might be considered offensive and unparliamentary - with the Nicklin Government of Queensland, this Government is making of Queensland an exporter of raw materials. This coal, consisting of hard and soft coking varieties, is in seams ranging from twelve feet to twenty feet, with an overburden ranging from 50 feet to 75 feet. The relationship, of overburden to thickness of seam is roughly in the proportion of five to one, and we must remember that overseas people are prepared to take off overburden in the proportion of twenty to one. Here is a coal of high calorific value and of special intrinsic worth to particular industries, but we are exporting it.

I heard Senator Maher say that the export of 3,400,000 tons of coal would earn £14,000,000 in export income. No one yet knows where the money proposed to be made available by this bill will go, unless it be the Minister for National Development (Senator Spooner), or the Queensland Minister for Mines, Development and Main Roads, Mr. Evans, so beloved of the Liberal Party because of his political efforts prior to 9th December last on behalf of Mr. Pearce, the former member for Capricornia. Nobody knows how much of this money will go to the Peabody coal company of the United States, how much will go overseas for the purchase of earth-moving equipment, or bow much will go for coal cutting machines. That is a story yet to be told. How many people will be employed as a result of the expenditure of this money? My friend and associate, Senator Ormonde, has taken an interest not only in the coal industry but also in those whose livelihood is involved. Quite justifiably, I think, he did not register a protest about the proposal. He just pointed out what it would mean to the coal-mining people of New South Wales. I do not refer to Sir Edward Warren. He would not be worried at all. He would be concerned, I will admit, if not a ton of coal was produced, but I do not think that he would buy one suit less a year and, if he smoked cigars, I do not think that he would smoke one cigar less a week.

It was important that Senator Ormonde should refer to the livelihood of the people who are dependent on coal. I understand that to-day the average production a manshift in New South Wales is five tons. Under the open-cut system that will be used on this field - it is justified; I am not quarrelling with that, but merely defending the point of view espoused and put forward by Senator Ormonde - production will probably be in the vicinity of 25 tons a man-shift. It will probably be from 20 tons to 30 tons and will increase further with greater mechanization. But comparatively few persons will be employed and the raw materials of a great State will be exhausted. The State has a natural endowment and the people who live in the State are entitled to that and to share it with their fellow Australians.

What will happen to the port of Gladstone? There will be an increase in the facilities for storage of coal. First, the storage capacity will be doubled. Probably, it will be trebled. The loading facilities, which are almost automatic, will be doubled. Machines will be used not only to fill the ships but also to trim the coal within the ships.

Senator Kendall:

– They are doing that already.

Senator DITTMER:

– I am not quarrelling with that. I am telling the story. If the honorable senator wants to make a contribution on this subject, and he happens to know as much as I do about it, I shall be grateful. If he knows more than I do, I shall be much more appreciative. That is the story of this particular endowment. Going farther north and west, we find that 120 miles west of Rockhampton the Utah Construction Company, also an overseas company, is now controlling a big coal deposit which it believes, I understand, will be the equal of the Kianga-Moura deposit. At Blair Athol we have probably one of the most magnificent faces of coal in the world - up to 100 feet thick and with a minimum of overburden. It is not being exploited. Mr. Foote, the managing director of Powell Duffryn, a firm that was engaged some years ago by a Queensland Labour government to make a complete survey of Queensland’s coal resources, said that it was probably the most magnificent face of coal in the world. In Queensland we have an outstanding man in the Chief Government Geologist, Mr. Denman, who has spent a lot of time investigating the State’s coal resources.

Just what will this proposal mean to the country? Perhaps it will not mean very much at all. It is useless and more than useless - it is misleading the people - to say how much these coal exports will earn. Senator Maher mentioned goodwill. I am all for creating goodwill, but let a little goodwill come to my people too. It will not be a one-way traffic, as far as I am concerned. Some one asked a question in relation to an economic price for power. It is not unknown for power to be subsidized in other parts of the world. We have had experience here. I do not think that the Federal Government is so much to be blamed as is the Queensland Government, but the Commonwealth might have stepped in to preserve the natural resources of the continent for its people. This Government has a responsibility to the Commonwealth. As Senator Maher said, it has taken a beneficent interest in its proteges, the States. Perhaps it might have consulted with the Nicklin Government.

Let us recall the bauxite deposits at Weipa. Prospecting already has revealed the existence of 600,000,000 tons of bauxite, with a 49 per cent, content. It is known to be one of the richest deposits of bauxite in the world, although the whole of the laterite beds has not yet been prospected. What will happen? The Commonwealth Aluminium Corporation will export a lot of this to Japan, either as bauxite or as alumina, and the remainder will be shipped to New Zealand, with the result that there will be in Australia no aluminium industry based on this magnificent deposit. We were told that power was the problem, but what do we find in Western Australia? Western Mining Corporation and its associate groups have bauxite deposits there. They are talking of concentrating the alumina at Kwinana and then refining in Victoria, but these deposits are not as good as those at Weipa and in adjacent areas.

Senator Paltridge:

– Ha!

Senator DITTMER:

– I am talking now about the tremendous tonnage.

Senator Paltridge:

– Yes, and values.

Senator DITTMER:
QUEENSLAND · ALP

– We have to consider a number of matters conjointly, as the Minister knows, perhaps, better than I do. One of these deposits tests at 55 per cent. and the other at 49 per cent. We must consider questions of tonnage, costs of mining, facility and cheapness of transport, ease of shipping and cost of power. If we want the whole story, we must consider availability of labour. In any event, the Minister may, if he so desires, rise and follow me in this debate.

I am thinking in terms of the State. In this particular coal-field it is estimated, although admittedly not proved, that there are two billion tons of coal. A large part of Queensland is resting on a bed of coal and shale. I think that probably a conservative estimate was made by Senator Benn when he said that there were two billion tons of coal in Queensland, even though he was challenged. This Government talks in terms of hundreds of thousands of pounds in relation to a State asset that is worth billions of pounds. The harbour of Gladstone serves not only the coal industry. Even the conservative, inefficient Nicklin Government is providing a power house at Callide, the first stage of which is to cost £8,000,000. It is now damming the water. In central Queensland there is some of the best country in Australia for the production of beef cattle. I do not say that the future of the beef industry is assured, but, after all, we must be prepared to gamble on something. Already Queensland has proved that it can produce beef cattle. At present, it is producing more than 50 per cent. of the beef cattle in Australia, and various meatworks are situated along the coast. On Anzac Day, when I was at Rockhampton, I was speaking to the general manager of the Lakes Creek meatworks. This gentleman has been the general manager since 1938. He formerly worked for Angliss’s, and is recognized as an outstanding authority so far as meat is concerned. In this area, there are approximately 1,000,000 head of beef cattle. I asked whether he thought it could carry from 3,000,000 to 4,000,000 head, and he said it could carry 5,000,000 head, and the beasts would be better, if the area were properly developed. I have pleaded with the Government along those lines on many occasions.

Let me pay a tribute here. As honorable senators know, I have always been generous in paying tributes in this House. I pay a tribute to the Minister for National Development for the way in which he has carried on the magnificent Labour idea of the inauguration of the Snowy Mountains scheme. He has never hesitated to make large sums of money available for this important project. In one year, £27,000,000 was provided, and so far the total expenditure has been £182,000,000. Knowing the Minister’s capacity, I say that he should not limit his vision to the Snowy Mountains scheme. He should devote some of his time to other important problems. He has the capacity to see the potentialities of other areas. Incidentally, the people of northern Australia are sick and tired of hearing the word “potentialities”. They would like to see potentialities converted to realities. As Senator Courtice says, the Government proposes to make Queensland what the other States were 40, 50 and 60 years ago - an exporter of raw materials. In many respects, Queensland is still regarded by the Government as the outback. That was the view of the Government parties even during the war. We all remember the story of the Brisbane line, but I will not go into that now. As every one knows, I am not one who brings up things to the Government’s discredit.

I believe that the Minister for National Development has shown that he has an acute mind. He has the capacity to tackle big problems and to find solutions, as he has proved during the years in relation to the requirements of the Snowy Mountains scheme. Surely, now that that scheme is well on its way - now that the scheme as visualized is being brought to reality - the Minister should” look somewhere else. I suggest that he should look at Queensland and right across the north of Australia. I do not say that the whole of the north is a place which could flow with milk and honey. I know that, under existing scientific conditions, one-third of the land appears to be useless and that another onethird is only of medium grade, but onethird of it is very good country. We owe it to the people of this nation, and, indeed, to the people of the world, to exploit our natural endowments.

Unfortunately, however, because of a conservative approach, inept actions and characteristic inefficiency there is no future for the north of Australia while a Menzies Government holds office. Perhaps that is not quite fair. I want to be fair to the Prime Minister. He knows very little about the area. However, it is the joint responsibility of all Cabinet Ministers to do their utmost to develop the resources of these areas. The back-benchers do not matter much, and I do not condemn them. They have no real responsibility and no real voice in these matters, but I do make an appeal to the Minister. He has seen something in this part of Australia on which he can advance some money, even though the motive may be improper. The motive is the attainment of electoral successes, and, in my eyes, that is an improper motive. I am not imputing to the Minister personal dishonesty. I would not think he would be guilty of that, but I think the motive was improper when it was announced that £100,000 would be made available by grant and £100,000 by loan for this harbour work. It may have been simply coincidental or accidental that many things happened in relation to Queensland just prior to the election. For instance, it was decided to make a loan available for the Mount Isa to Collinsville railway - concerning which, incidentally, I propose to ask a question of the Minister either to-morrow or Thursday and to raise the matter of what I believe is the Government’s shortsightedness. It appears that at least Senator Maher has some small measure of responsibility, because he said that the loan of £100,000 should disappear and that a grant of £200,000 should be made. I have no quarrel with the loans for the reconditioning of the harbours at Port Kembla and Newcastle in New South Wales, but I do quarrel with the parsimonious attitude which has been adopted in connexion with my own State.

Here are large deposits of coal. Here are real possibilities for future employment. Here are the things that make a nation grow - bauxite, alumina and hard and soft coking coal - but we are sending them out of the country. Prospecting in the Con.stange Range area has shown the possibility of the existence of commercial iron-ore deposits, and the Mount Perry district is a well-known mineralized zone which for years produced copper. However, never do we hear the Government saying, “ We will face Queensland’s problems in a big way and establish secondary industries”. For too long Australia has depended on primary production. We should be grateful to the primary producers of the country, because we are largely dependent upon them for our overseas earnings. However, employment and living standards are really dependent on secondary industries. Each year, ten of thousands of children leave school,- seeking employment, and the population of the country is increasing. If we are to preserve our way of life, we must develop the country’s secondary industries. We should condemn the Government for being an exporter of raw materials and an importer of manufactured goods and capital. It is selling our heritage to overseas interests.

Senator SPOONER:
New South WalesVicePresident of the Executive Council, and Minister for National Development · LP

– A couple of weeks ago, when I had the pleasure of visiting Rockhampton and opening the oil terminal at Point Alma, I publicly advised the people of Queensland that nothing succeeds like success. Many big things are happening in Queensland to-day, and the more publicity that is given to them the better it will be. The more those developments are recognized, the greater will be the amount of capital attracted to Queensland and the greater will be the development there. I decried then, as I do now, those Queenslanders who do nothing else but decry what is happening in their own State - who constantly criticize all the developments that are taking place there. I would name Senator Dittmer as the arch-priest or high priest of that cult. I have never heard him make a speech in this Senate in praise of Queensland. I have heard him, time after time, talk critically of the things-

Senator Dittmer:

– I rise to order. I do not mind whether I contradict that incorrect statement now, or whether I wait until the Minister has finished speaking.

The ACTING DEPUTY PRESIDENT (Senator McKellar). - What is the point of order?

Senator Dittmer:

– The statement made by the Minister is incorrect. If you so rule, Sir, I will contradict him after he has finished speaking.

The ACTING DEPUTY PRESIDENT. - Order! I ask the Minister for National Development to continue.

Senator SPOONER:

– I have no recollection of ever hearing Senator Dittmer make a speech in this Senate about Queensland without criticizing what is happening in that State. We heard him to-night. One of the greatest developments occurring in Australia is at Mount Isa. As a good Queenslander, instead of pointing out how much is happening in Mount Isa, Senator Dittmer seized the opportunity to make a pettifogging attack on the Commonwealth Government.

On this occasion I do not like to look into the crystal ball, and I cannot foretell the result of this development in Gladstone. Instead of talking in terms of the possibilities of this development, and what might be the position in the future, the honorable senator seized the occasion to criticize the Government and to throw mud on the proposal generally. What the Commonwealth Government has done on this occasion is to grant in full what the Queensland Government requested. You cannot do more than give the whole of that for which you are asked. That is what the Commonwealth Government has done on this occasion.

Let us have a look at developments in Queensland generally. Think of the development that has taken place from the bauxite deposits at Weipa down to the tin deposits at Cairns and then west to Constance Range. Think of the beef roads, then of the enormous development that is occurring on the oil-fields. I would say that Queensland is sharing in the progress and development of Australia to perhaps a greater extent than any other State in the Commonwealth, yet a Queensland1 senator utters no word of appreciation or praise for that great move forward in his own State! In all his words and actions he attempts to put the brake on the progress of Queensland and hold back the State.

Senator Dittmer says that the proposition under consideration is bad because it involves the selling of coal. I do not know the extent of the coal resources of Queensland, nor do I think any geologist or any one else does. Queensland has one of the richest coal seams in the Commonwealth of Australia, but it is no use having natural resources unless you can develop them. Senator Dittmer may criticize, but I remember the time when the Commonwealth Government found many thousands of pounds to construct a road from Callide to Gladstone in order to develop the Callide coal deposits. I remember the many hours I put in trying to find ways and means of getting the Blair Athol deposits developed. Here we have the culmination of the work of men of vision. Thiess Brothers has done a great national service in developing this coal deposit, and I hope that it makes reasonable profits out of the transaction. The company has opened this big coal deposit as a result of its negotiations to sell coal overseas, and now this effort is being made by the Commonwealth Government, the State Government and the Gladstone Harbour Board to provide modern port facilities at Gladstone. I hope that the day is not far distant when we add to these facilities a new railway line from Gladstone direct to the coal deposits. Once any mineral deposit is well developed and the mineral is well marketed you are immediately on the way to further development.

No far from these deposits is the Cracow area where iron ore deposits are being explored by one of our largest mining companies. We have to prove the size of this deposit and whether it is of good quality. Side by side with this iron ore deposit there is first and second class coking coal. The while thing is still a vision, but the development of the deposits was only a vision a few years ago, before the company negotiated its overseas contracts. We have the possibility of using these coal deposits in conjunction with the iron ore deposits. It should not be necessary for me - some one from New South Wales - to talk of these things after a Queensland senator has spoken. The Queensland senator should have been the one to tell the Senate of the glories of Queensland instead of cirticizing and knocking the development of that State. That is the net result of what he has done.

There are great possibilities in this area. I went up there for a few days to have a look around - not that a Minister can form an opinion or arrive at a conclusion in a few days, but he can get the feel of what is going on.I found not only developments on the Kianga field. The Bureau of Agricultural Economics is carrying out a survey of farming in the brigalow area. The Division of Soils of the Commonwealth Scientific and Industrial Research Organization recently completed a three-year programme of investigation in this area. The Division of Land Research of the C.S.I.R.O. quite recently surveyed a land acquisition programme. My own department is preparing a mapping programme for the whole of the Rockhampton-Gladstone area, and in conjunction with Queensland government departments is preparing maps of resources of the area as a foundation to the provision of the basic information for future development. The Bureau of Mineral Resources is also carrying out a surveying and mapping programme.I hope I am pardoned in these circumstances whenI tell the Senate of this work that is going on. We on this side of the chamber are able to tell of this great area of Australia that is being developed whereas a Labour senator has not a good word to say for his own State. Those are the facts of the matter. I support the bill, and I decry the opposition to it.

Question resolved in the affirmative.

Bill read a second time.

In committee:

The bill.

Senator ORMONDE:
New South Wales

– I desire to direct a question to the Leader of the Government in the Senate (Senator Spooner) in reference to some remarks made by Senator Maher. Recently I addressed a meeting of miners and I said that an uncontrolled open cut development programme in the Gladstone area could possibly be dangerous to the New South Wales miners. A properly developed open cut programme, particularly in a field of good coking coal, can produce 30 tons per man per day. This could be a very serious threat to the underground industry in New South Wales, where the output is about four tons per man per day. In the past this Government has had to protect the underground coal-mining industry. Senator Spooner and his colleagues have given very strong support to the underground coalmining industry in New South Wales by discontinuing open-cut mining. Open cuts were ancillary to underground mines. Open cuts were used only in time of emergency. But the open cuts in the Moura and Kianga areas will yield millions of tons of coal.

The TEMPORARY CHAIRMAN (Senator Anderson:
NEW SOUTH WALES

– Order! I suggest that the honorable senator link his remarks in some way to a clause of the bill. If he wishes to speak in general terms he may have an opportunity to do so on the motion for the third reading.

Senator ORMONDE:

– I know that the Minister for National Development has high hopes for the coal fields near Gladstone. He has referred to the steel industry. But does he visualize any danger to the New South Wales coal industry from a quicklydeveloped open-cut coal industry in Queensland? The open cuts will not employ a great deal of labour. I can imagine how Thiess Bros. will develop those open cuts. Not a hand will touch the coal from the time it leaves the mine until it is loaded on the ship. I would like to see some protection afforded to the New South Wales coal industry.

Senator SPOONER:
New South WalesVicePresidentof the Executive Council and Minister for National Development · LP

– Competition between Queensland coal and New South Wales coal will be for the export trade only. I do not think coal could be brought into New South Wales from Queensland to compete with New South Wales coal. Fortunately the export trade will be an expanding one. In a few years time if we are prepared to deliver the goods we could be selling to Japan twice as much coal as we are nowselling to that country. There are some limitations on the amount of coking coal that may be exported from New South Wales. I believe that there is room for the Queensland fields to operate as well as the New South Wales fields.

Bill agreed to.

Bill reported without amendment; report adopted.

Third Reading

Motion (by Senator Paltridge) proposed -

That the bill be now read a third time.

Senator DITTMER:
Queensland

– I suppose the two poorest types of penitent boys are those who do something because they have been punished and those who do something through fear. I was very interested in Senator Spooner’s remarks - not his misleading tirade against me - recounting all the things that have happened in Queensland. We know of the proposal to establish a research station not far from Townsville. The proposal was made because Government supporters feared for their political survival. They were justified in that fear. Look what happened to the former honorable member for Herbert! It was only two or three months ago that a survey was undertaken of the agricultural potentialities of the Fitzroy Basin. It was only shortly before the last election that the Government announced that it would contribute towards the cost of reconstructing the railway from Mr Isa to Townsville, that it would grant £100,000 towards improving coal-loading facilities at Gladstone, and that it would provide £5,000,000 for the construction of beef roads in Queensland. All those announcements were made because the Government feared for its survival. Having experienced on 9th December, 1961, the wrath of the Queensland people, the Government has determined to do something.

It has been alleged that I have minimized the importance of Mr Isa. How often have I told the story of Mr Isa? Mr Isa is one of the really great mineral deposits in the world. For how long did I plead with an unsympathetic Government to assist Queensland to build the railway from Townsville to Mr Isa? The Government should take a realistic view of that line. It will be of tremendous importance not only to the mining industry at Mr Isa but also to pastoral industries in the district, which will use 52 per cent, of the freight facilities provided by the line. The Mr Isa mining industry will use only 48 per cent, of the line’s freight facilities but is prepared to meet 58 per cent, of the cost of amortization. It was prepared even to establish a sinking fund to meet contingencies such as geological disasters and strikes. Don’t talk to me about Mr Isa! Government supporters should ask themselves whether they have been negligent in this matter.

Senator Scott:

– Are there any coal ports at Mr Isa?

Senator DITTMER:

– I am answering criticism. When Senator Spooner was talking about Mr Isa there were no coal ports there. I was decent enough not to talk about the trip that Senator Maher eulogized - the trip made through Queensland by members of the Government parties. However, let me say now that honorable senators will be interested in the extraordinary praise that was extended to members of a party that I took there. The comments made about that party were very favorable compared with the comments made about the other party. As I have said, I took members of my party through northern Australia but I did not want to mention that matter in this debate. Honorable senators opposite should leave me alone, because sometimes when you become irritated you cannot control yourself.

Senator Spooner alleged that I had criticized Queensland. He said that I did not want to see coal sold overseas. He accused me of continually knocking Queensland. All I can say is that Senator Spooner must be tired. He no longer views these matters in their correct perspective. I have the greatest respect for ageing people but sometimes a person’s mentality deteriorates as he grows older. I hope that is not happening to the Leader of the Government. I hope that he is just playing politics, which is what he invariably does. He said that he could not visualize coal being imported into New South Wales from Queensland. May I tell him that the people controlling this enterprise hope that ultimately they will be able to compete commercially on the’ west coast of the United States of America by supplying coal from this and adjacent areas. I am not saying anything against the value of New South Wales coals. I know their intrinsic qualities. I know their extraordinary heating capacity - up to 14,000 British thermal units - and their real value in the production of power according to the programme visualized and carried out by successive Labour Governments in New South Wales.

I took this opportunity to say that, irrespective of what Senator Spooner said or thinks, in no speech that I have made in this chamber on this occasion or any other, or in the Queensland Legislative Assembly, have I decried my State or my nation. A government that has been entrusted with the responsibility of controlling the treasury bench for more than twelve years should have done a much better job than this Government has done and should have realized the value of the resources with which nature has endowed the country so generously. The Government should have done a real job for the people. The Government should not have to admit, as it has to admit to-day, that more than 98,000 people are unemployed and it cannot provide work for them. That figure does not take into account the people who are engaged in only part-time occupations.

Members of the Government should remember that, irrespective of who may be elected to this Parliament and however brilliant their intellectsmay be and however bored Senator Spooner may appear to be, and irrespective of what the Government tells us, the Australian people are demanding the independence to which they are entitled and the standard of living to which the assets of this country entitle them. Unless this Government answers the call of the Australian people, it will not survive the next election, whether it be soon or at the end of the term of three years.

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– in reply - In rising to close this thirdreading debate, I just say that, despite the obvious frustration and manifest annoyance of Senator Dittmer from Queensland at the action of the Government, taken in collaboration with the Queensland Government, to provide further money for that grand State, this Government is determined to push ahead with plans to develop

Queensland, to assist in the development of its agricultural resources, to assist in the reconstruction of the Townsville-Mount Isa railway line, to assist the Gladstone Harbour Board and to do all the other things in which the Government continually has shown an interest.

If Senator Dittmer’s interest in this matter is to be displayed purely and simply by seeing what political capital he can make out of it, I take this opportunity to tell him that the interest of the Commonwealth Government runs much deeper than that and in the future will continue to run as it has in the past.

Question resolvedin the affirmative.

Bill read a third time.

page 1366

RAYON YARN BOUNTY BILL 1962

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator Henry) read a first time.

Second Reading

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

– I move -

That the bill be now read a second time.

The purpose of this bill is to amend the Rayon Yarn Bounty Act 1954-1959 so as to extend the operation of the bounty on sales of continuous filament acetate rayon yarn up to 30th June, 1965, and to increase the rate of bounty to 9d. per lb. of yarn. Following a recommendation on the Tariff Board, the original act authorized payments of bounty on rayon yarn sold for delivery in Australia in the three years from 1st November, 1954, to 31st October, 1957. The rate of bounty was prescribed as 6d. per lb. of yarn with a maximum amount payable in any one year of £100,000. A profit limitation of 10 per cent. per annum was also provided on the capital employed in the production and sale of rayon yarn. Following further reports by the Tariff Board, the act was amended successively in 1956 and 1959 to continue payment of the bounty up to 30th June, 1962.

Courtaulds (Australia) Limited has been the only applicant for rayon bounty. The company manufactures yarn at Tomago in New South Wales from cellulose acetate flake produced by Colonial Sugar Refineries Chemicals Proprietary Limited. In the seven and a half years since rayon yarn bounty payments commenced in 1954, Courtaulds have received bounty totalling £455,873. The flake produced by Colonial Sugar Refineries Chemicals Proprietary Limited is also bountiable. The bounty is at the rate of 7d. per lb. and covers flake produced in Australia and sold up to 30th June, 1964, for use in the manufacture in Australia of acetate rayon yarn.

The Tariff Board, in submitting its report on continuous man-made fibre yarns, recommends payment of the bounty for a further three years and an increase in the rate of bounty from 6d. to 9d. per lb. The Tariff Board also recommends an increase in the maximum amount of bounty payable per annum from £100,000 to £130,000 and omission of the 10 per cent. limitation on profit from the act. It does not recommend any change in the other conditions of the bounty.

The board considers that Courtaulds’ production is efficient and that bounty assistance should be continued. It believes that the bounty rate should be increased because returns to the company have been unreasonably low and because enhanced market prospects now justify recognition of more of the company’s instilled capacity as contributing to overhead charges regarded as reasonable for the purposes of assessing the appropriate level of government assistance.

Although the Tariff Board suggested that a profit limitation in the legislation is unnecessary, the Government has decided that, in accordance with the usual custom, the existing profit limitation should be retained. The Government has accepted the remaining recommendations of the Tariff Board and the bill now before the Senate gives effect to these recommendations. The industry will be examined again by the Tariff Board before the expiration of the extended bounty period. I commend the bill to honorable senators.

Debate (on motion by Senator O’Byrne) adjourned.

page 1367

STATES GRANTS (UNIVERSITIES) BILL 1962

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator Spooner) read a first time.

Second Reading

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

.- I move-

That the bill be now read a second time.

Honorable senators will recall that a few days ago I tabled, for the information of the Senate, the report of the committee on teaching costs of medical hospitals. The bill before the Senate puts into effect the recommendations of the committee as they relate to capital expenditure at teaching hospitals and also puts into effect the recommendations on university salaries of the Australian Universities Commission whose report on this question has already been tabled.

The salaries question can be disposed of in a few words. Honorable senators will realize that, before the Commonwealth Government can establish the levels of assistance for recurrent expenditure to universities, it must take a figure for professorial salaries as a point of reference. In the principal act, this point of reference was £4,000 per annum. Acting on the recommendation of the Salaries Committee of the Australian Universities Commission, the Government has agreed to take the figure £4,250 per annum for this purpose. I should stress that this does not imply any intention on the part of the Commonwealth Government to fix professorial or, indeed, any other university salaries. It is a figure which is taken in order that the schedules to the act may be prepared and the level of Commonwealth assistance calculated. The first amendment, therefore, is an amendment changing the figure £4,000 per annum under section 6 (1) of the principal act to read £4,250.

Because at the time the principal act was put into effect the whole salary structure of the universities was in a state of flux and there were different rules in different states, a provision was inserted section 6 (2) to enable the Minister by instrument under his hand to vary the schedules if salary movements appeared to him to warrant this change. We have decided, and I am sure honorable senators will agree, that it is better to make alterations to the principal act by a formal amending bill so that in the future there will not be any administrative decision on this matter but a statutory one.

The second amendment proposed is a new and important activity of the Commonwealth Government. Impressed by the need to maintain the standards of instruction in our teaching hospitals, the Commonwealth Government asked the Universities Commission to inquire into the teaching costs of medical hospitals. The commission established a powerful committee to examine and report upon this problem. The committee’s recommendations fall into two parts. One of these refers to the recurrent expenditure incurred in teaching hospitals and the other deals with the capital side. I emphasize that the purpose of the Commonwealth Government in entering this field relates to the teaching functions of a hospital and not to general hospitalization which is clearly a matter for the States.

On the capital side, it is comparatively easy to sort out capital expenditure which relates to the teaching functions and capital expenditure which is related’ to the hospital’s other functions.. On the recurrent side, there are difficulties in distinguishing and assessing the costs entirely due to a hospital’s teaching activities and in the time at its disposal since receiving the committee’s report, the Government has been unable to reach firm conclusions on their recommendations as they relate to the recurrent expenditure. There are some aspects which need further study and resolution. The bill before the House puts into effect the committee’s recommendations on capital expenditure. These were seen by the Government as being most urgent and these developments will be begun immediately.

We will seek to make arrangements with regard to teaching hospitals in the same manner as we have assisted the States in the development of the capital programme for general university development, that is, we will meet the States on a £1 for £1 basis to the limits shown in the schedules which are part of the amending bill.

If honorable senators wish to see the nature of the activity which this bill will authorize, I commend to them the schedules which list clearly all the projects which, it is hoped, will be undertaken as a result of

Commonwealth assistance. The remaining amendments are largely of a machinery nature, which, as I mentioned earlier, follow broadly the same lines as we have adopted successfully in dealing with the capital expenditure of universities.

I might add in conclusion that it is the Government’s intention to continue its examination of the recurrent aspects of teaching hospitals and we would hope to take action on them as soon as it is practicable.

Debate (on motion by Senator Tangney) adjourned.

page 1368

DAIRYING INDUSTRY BILL 1962

Second Reading

Debate resumed from 10th May (vide page 1312), on motion by Senator Wade -

That the bill be now read a second time.

Senator KENNELLY:
Victoria

.- There are four bills on the notice-paper dealing with the dairying industry, and I ask for permission for them to be debated together. I understand that the Minister for Health (Senator Wade), who is in charge of the bills, is in agreement with that proposition.

Senator Wade:

– That is so.

The ACTING DEPUTY PRESIDENT (Senator McKellar). - Is it the wish of the Senate that the four bills be debated together? There being no objection, that course will be followed.

Senator KENNELLY:

– There is no industry in this country which causes more grave concern, both politically and generally, than the dairying industry. In days gone by, it was always referred to as the Cinderella of the primary industries. There has been more sweated labour in this industry, I suppose, than in any other industry. I refer in particular to the way in which the wives and children of the owners of dairy farms were obliged to work. Were it not for the sweated labour of wives and children, and of others working for the farmers, the dairying industry would not have survived. I have vague recollections of my tender years, around about 1916 and 1917, when I was paid £1 a week for working practically round the clock, cutting a bran bag to keep me warm at night. As 1 have said, this industry could not have survived in Australia were it not for sweated labour. Successive governments which controlled the affairs of the nation and the States were not prepared to do anything to organize the industry and to place it on such a footing that those engaged in it could make a reasonable living out of it and have standards of living that compared favorably with those of people engaged in other primary and secondary industries.

Let me examine the history, size and scope of the industry. According to the very valuable report of the Dairy Industry Committee of Enquiry, there are between 40,000 and 45,000 dairy farms in Australia capable of supporting a family, and the majority of them are carried on with but little outside assistance. The introduction of machines has helped tremendously in overcoming the labour problems of the industry, but it still cannot be regarded as a 40-hour week industry. It is still a seven-day a week industry.

One is concerned because the Government is doing so little to assist this industry. Unfortunately, in four or five years time it may have to face grave problems arising from the operation of the European Common Market. According to the report of the committee of inquiry, there are 3,400,000 dairy cows on the farms that I have mentioned. As I have said, most of those farms are worked by the owners, but in Victoria there are many that are worked on a share-farming basis. The contract between the owner and the share-farmer may take various forms. The nature of the terms depends, to a large extent, on the share-farmer. Very often it is a matter of the owner offering certain terms and of the share-farmer deciding whether or not to accept them.

In addition to the actual work of the dairy industry, there is associated with it the processing of milk in which thousands of people are employed. If I remember correctly, the report states that between 180,000 and 200,000 people are directly dependent on the dairy industry. It is, of course, of great value from a national viewpoint. In 1958-59, the net value of the dairy industry to the nation was £146,000,000. The value of the pastoral industry was £443,000,000, of the agricultural industries, £326,000,000, and of the mining and quarrying industries, £119,000,000. The total value of primary production was £1,132,000,000, and of factory production, £1,841,000,000, making a total of £2,973,000,000. The value of the production of the dairying industry represented about 5 per cent, of the total.

It is interesting to note, as the report points out, the volume of production of the dairying industry during the five years from 1954-55 to 1958-59. The industry produced 1,344,000,000 gallons of whole milk, 191,800 tons of butter and 41,600 tons of cheese. Of the total milk production of 1,639,000,000 gallons, 900,000,000 was used to produce butter, 93,000,000 gallons to produce cheese, and 76,000,000 gallons to produce condensed milk products, while 300,000,000 gallons was sold as liquid milk. The report states that 216,000,000 gallons of the quantity sold as liquid milk was used for normal drinking purposes and the remainder to make ice cream and in other processes. During the five years I have mentioned, 70,400 tons of butter was exported, 16,000 tons of cheese and 54,000 tons of processed milk products. The total value of such exports in the three years to 1958-59 was £24,500,000 for butter, £14,500,000 for cheese and £27,600,000 for processed milk products.

It amazes me to learn that in 1960-61 we imported processed cheese, cheese pastes and cheese spreads to the value of £886,681. On Sunday last I was watching a television programme in my home at about 12 noon, when there is a very good session. I saw an advertisement for Swiss “ Tiger “ cheese. The advertisement followed a football programme, and having had something to do, over a long period of years, with a football team known as the “ Tigers “, I pricked up my ears when the advertisement for “ Tiger “ cheese appeared. I suppose there is no industry in this country that is causing us more worry to-day than is the dairy industry. Yet, we are asked to buy and to eat Swiss cheese. As a matter of interest, I ascertained the amount of cheese we imported in 1961. I do not say for a moment, of course, that all the cheese we imported came from Switzerland. In that year, we spent £87,443 on the importation of processed cheese, cheese pastes and cheese spreads, and £153,567 on cheese other than processed cheese. Of that amount, cheddar cheese and epicure cheddar accounted for £44,995, Edam and Gruyere for £28,609, and various other cheeses for £161,306. Cheese was also imported from various other countries to a total value of £205,761.

The value of imports of cheese and other dairy products in 1959-60 was £485,900, which should indicate to supporters of the Government, and particularly of the Australian Country Party who were interested in removing import restrictions, that the removal of the restrictions hurt not only people in the metropolitan areas, but also people in rural areas, because it led to an increase of more than 50 per cent, in imports of dairy products. Having taken some time to study the McCarthy committee report, I think it is a document of which much more will be heard. A great deal more will be heard of this report by Sir Mortimer McCarthy, who was knighted for his valuable services. The Government has agreed with certain parts of it, with which the Labour Party does not agree. That does not mean that both sides will not have to have a look at it in five or six years, if the European Common Market affects us in the way that we are, with some justification, inclined to think it will.

The bill provides for the payment of a bounty of £13,500,000 during the currency of a period of five years from July 1962 to June 1967. This is not the first time that bounties have had to be paid to this industry. They were initiated in 1942 as an emergency measure to maintain the industry at a desired level. In 1946 the then Government appointed the Joint Dairy Industry Advisory Committee to advise on costs. Following the report of that body, Mr. Chifley, who was then Prime Minister, announced that the Government would guarantee to dairy farmers their ascertained costs of production, but it was believed at that time that an amount equal to Hd. per lb. could have been met by the sidelines in which dairy farmers, as a rule, engaged such as the raising of pigs and the production of eggs, although since then the egg industry has become a large industry in some States. It is an industry in which the producers should get together in order to organize marketing on a national basis.

Production costs in the dairy industry were stated by that inquiry to be then 2s. 2id. per lb. The government of the day guaranteed the farmer 2s. per lb. for the five years’ period that ended in June, 1952. Apart from a development in Queensland, where some marketing arrangements were instituted, I think in November, 1932, this was the first real attempt to give something to the dairy industry of the nation. I well remember the glowing tributes of Mr. Howie, who was one of the leaders of the Victorian dairy farmers and who came from the great dairying district of Colac. He gave high praise because some organization had been achieved and some monetary benefit would accrue. Another man, Mr. Gibson, if I remember rightly, spoke in similar terms. I think that the honorable member for Lalor (Mr. Pollard) mentioned these two gentlemen in his speech on this bill in another place. I knew Mr. Howie and that is the reason why I mentioned his name first. Mr. Pollard said that both of these men agreed that a new era for the dairy industry had begun.

The guarantee was given on condition that surplus funds from realizations of exports should be paid into a fund to meet demands when returns were below the guaranteed priec. The fund had credits in 1948-49 and 1949-50, and the guaranteed prices were based on the assumption that domestic consumption would be sold at the approximate cost of production and that the bounty would be used to underwrite losses on exports over a sustained period.

The next step followed rejection of the prices control referendum in 1948. Some State governments refused to increase butter prices in accordance with rises in the cost of living. The Commonwealth, under the agreement that was to finish in 1952, became liable to heavy bounty payments, £15,000,000 in 1950-61 and £17,800,000 in 1951-52. In 1952 the Government originated a new five-year stabilization plan that was to be determined on a guaranteed return to producers, based on cost of efficient production, and applied to domestic consumption of butter and cheese, plus 20 per cent. The Commonwealth, under this agreement^ was to determine the ex-factory price of butter and a new body, known as the Dairy Industry Investigation Committee, was set up in 1953 to advise the Government on a guaranteed price to producers, considering, first, cost of efficient production and, secondly, other factors which might affect the market. It is interesting to note that by this agreement the Government departed from the principle of- guaranteeing the whole cost of production to dairy farmers. The measure actually led to decreasing returns to producers at a time when costs were rising. The following figures are taken from the report of the Dairy Industry Committee of Enquiry: -

The most interesting feature of those figures “is that, possibly owing to inflation, which has been uncontrolled by this Government .until very recently - I hope the Government will try to keep it in check in future - in every year, with the exception of one, the actual return to the dairy farmer was less than in the preceding year. The only year in which the return exceeded that of the preceding year was 1956-57, when the increase was only 0.4d. per lb. What does this bill actually guarantee to the dairy farmers? It guarantees them 40d. per lb., and no more. Under this bill, the dairy farmers cannot get less than 40d. per lb. The figures that I have quoted clearly show that the Government has moved completely away from the cost of production return formula. It seems that the dairy farmers will take anything that the Government offers. Some of my friends on the opposite side of the chamber may have felt at times that I have been rather caustic in my comments concerning Country Party representation in the Senate. I am sure that Country Party members realize that they have a duty to perform, but I see that duty in a different light. I base my judgment only on performance.

All -that can be said concerning this bill is that no dairy farmer will produce milk that goes into butter which is either consumed here or exported, without being certain that he will receive 40d. per lb. on a commercial butter basis. It is true that the dairy farmers could receive a higher price, but the price cannot drop below that level. However, the return is nowhere near the cost of production to-day. The men who work in factories are entitled to certain standards, and so are the dairy farmers. Can any one say that a return of 40d. per lb. is an adequate return to those who have put their money and their toil into the dairying industry?

It may be interesting to examine the per capita consumption of butter. It is a remarkable fact that butter consumption per head to-day “ls only a little higher than when rationing ceased in 1948-49.

The relevant figures are as follows: -

Between 1948-49 and 1950-51, the consumption per head increased by 6.6 lb. Since then, there has been a gradual decline. In the years following 1955-61 the consumption figures were as follows: -

The preliminary estimate for the year 1960-61 is 25 lb.

Senator Hannaford:

– Is not that due to some extent to the greater availability of margarine and other fats?

Senator KENNELLY:

– T do not think it is. Possibly margarine has played a very small part, but the principal cause has been that the Government has allowed the cost of production to run haywire. The Government claimed that the people wanted to get rid of controls. Of course, the people were subjected to controls from 1941 until after the war, when the High Court ruled that the Commonwealth could not operate prices control under the defence power. We are a funny people; we do not like controls. The present Government parties, with the aid of their friends, the press, opposed the referendum on prices control. We did not hear then the caustic comments by the “ Sydney Morning Herald “ that we have heard in recent months. The press supported our friends opposite in their cry, “Away with all controls”. The States took the peg off land prices, with the result that to-day decent dairy country costs in the vicinity of £100 an acre, cows cost from £60 to £70 each, and the price of farm machinery has gone haywire. Is it any wonder that production costs in this industry are so high to-day?

I do not deny that the availability of margarine has played some part in bringing about the decline in butter consumption, but it has not been such a prominent factor as the increased cost of production of butter. We could ask Senator Hannaford, who comes from one of the country areas of South Australia, how much money he would want his son to have in order to be given a fair chance on a dairy farm under present-day conditions. The honorable senator knows as well as I do, and perhaps even better, because of his experience in rural areas, that a man going on to a dairy farm would be gambling to a great extent if he did not have from £17,000 to £22,000. How many acres, and how many cows would he need if he had a milk contract with the Milk Board of Victoria under which he had to supply a certain number of gallons both winter and summer? If a certain gallonage has to be produced year in and year out the farmer needs twice the number of cows that he would need if he did not have this contract. He must always have a certain number of cows in and a certain number out. That is a reason for the fall in consumption. Do you think the people in Melbourne or in any other State prefer to eat margarine rather than butter?

Senator Kendall:

– They cannot tell the difference.

Senator KENNELLY:

– If Senator Kendall thinks that Queenslanders cannot tell the difference, I know that I can.

Senator Kendall:

– You cannot tell the difference when it is spread on bread.

Senator KENNELLY:

– Each of us has not the same taste. Of course, people prefer to eat butter. I have explained why costs are so high. I do not want the dairy- farmer to be sweated. I think he is entitled to his standard of living just the same as the waterside workers are entitled to their standard. They will look after themselves.

Senator Hannaford:

– Too right they will!

Senator KENNELLY:

– Yes, they will, and we will help them. The figures I read prior to mentioning the amount of butter that is consumed show why there has been a decline in the returns of dairy farmers. Increasing prices have led to higher cost of production.

Senator Lillico:

– How would you control the costs?

Senator KENNELLY:

– We told you how to control them. We asked you to retain economic controls. Just consider the price of land. Who would know more about that than Senator Lillico? How does the price of land compare now with what it was in the days when land prices were pegged? Senator Lillico knows the answer better than I do. I remember in my youth - it may be a few years ago - that an excellent cow could be bought for £12.

Senator Wright:

– When?

Senator KENNELLY:

– Thirty or 40 years ago.

Senator Wright:

– What was the basic wage then?

Senator KENNELLY:

– It might have been £3 4s. It is four times that sum to-day. Try to buy a cow that will give you the quantity of milk you desire. I doubt whether you will buy one in Victoria for under £70.

Senator Hannaford:

– That is a bit high.

Senator KENNELLY:

– No, it is not. Twelve months ago I was at the Dandenong sales. I do not remember just why I was there.

Senator Ormonde:

– Was it election time?

Senator KENNELLY:

– No, there was no election. Experience has taught me that you do not win friends at sales if you start to talk to them. I remember now why I was there. I took a friend from the sister dominion, who, of course, was very interested in dairying, to Dandenong to what has become one of the very important dairy cattle saleyards. If I remember correctly a very fine jersey was auctioned for £70.

Senator Gorton:

– A pedigreed animal?

Senator KENNELLY:

– I doubt it.

Senator Gorton:

– You do not know?

Senator KENNELLY:

– I am not in a court now. It is the perogative of a lawyer to put words into one’s mouth in a court, but not here.

Senator Wright:

– That is the very thing that a farmer would ask you.

Senator KENNELLY:

– All I know is that I watched the auctioneer knock it down for £70, £71 or £72. He said it was a very nice jersey, and it looked a nice jersey. He did not say whether it was pedigreed or not, and I never asked the cow! There you have the lot.

Senator Hannaford:

– Did he not tell you whether it was sound in all quarters?

Senator KENNELLY:

– I was not selling it. I was watching it and I thought it was a very nice animal. The auctioneer did speak about its age, but I will not go into that as the hour is getting late.

Senator Gorton:

– You thought it was a fair cow!

Senator KENNELLY:

– She was not a fair cow; I believe that she was a good cow.

I have said that one of the reasons for the decline in the returns of the dairy farmers is the declining price for our exports. I lay the fault unequivocally at the door of governments, both State and Federal, which have discontinued all economic control. Possibly some of these controls were irksome to a number of people, but the control of land sales was vital when we had to sell butter on a market in competition with Denmark, which is so near the London market, whereas Australia is so far away.

Secondly, one wonders what will happen in the future in view of the European Common Market negotiations. Apart from dried fruits, and possibly wines, butter will be hit as hard as, if not harder than, any other primary industry if Britain joins the Common Market. However,I am pleased to say that the Leader of the British Labour Party, Mr. Gaitskell, in a television interview, gave me a glimmer of hope for our primary industries. While every political party in Britain favoured Britain’s entry into the Common Market at one time, it seems now that in both the main political parties there are sections that are not so sure that it is the best thing for Britain, taking into consideration the tremendous impact it will have on the Commonwealth as a whole.

Senator Wright:

– A very important section too, I should think.

Senator KENNELLY:

– Of course the view of the Labour Party, even if it is out of office, is most important.

Senator Wright:

– You said there was a section in both parties. They are very important sections.

Senator KENNELLY:

– I would think of only one. You would not expect me to think of both of them, although I mentioned both. I sincerely hope that if Britain is to join the Common Market the Government will be able to find markets elsewhere for this industry. We may have a better chance of selling dried milk and other milk products in the East than of selling butter.

To-day I received certain figures from the Victorian Milk Board. The board has 5,600 suppliers. Last year the board received 174,500 gallons of milk a day. In March this year it received an average of 180,740 gallons a day. I know that milk comes to Melbourne from Trafalgar and Warragul. Whole milk travels to Melbourne a distance of up to 190 miles. The dairy farmer receives 3s. 7d. a gallon for his milk, out of which he pays an average of 4¼d. for cartage, leaving him a net return of 3s. 2¾d. a gallon. Any dairy farmer with a contract to supply the milk board has a chance of doing fairly well. The farmer who has owned land for a number of years is in a better position than the farmer who has recently bought his land. The man who is really confronted with difficulties is the man who produces milk for the butter factories. I understand that it takes 2¼ to 2½ gallons of milk to make one pound of butter fat. I know that in some cases you can make one pound of butter fat with less than 2¼ gallons of milk. Under these circumstances the most that the farmer would get for his milk would be 2s. 6d. a gallon. But the man whosends his milk to the milk board receives 3s. 2¾d. a gallon.

Senator Mattner:

– For all of his milk?

Senator KENNELLY:

– For all that he supplies under contract.

Senator Wright:

– Liquid milk!

Senator KENNELLY:

– Whole milk as it is called.

Senator Wright:

– The Dairy Industry Committee of Enquiry reports the figure to be 40.5d.

Senator KENNELLY:

– What did I say? 3s. 2)d.

Senator Wright:

– Near enough!

Senator KENNELLY:

– I obtained my figures only to-day.

Three other bills associated with the dairying industry are before the Senate. One is the Dairy Produce Export Charge Bill. That bill increases the charges imposed on butter and cheese exported from Australia. In the case of butter the charge is increased from id. a pound to id. a pound. The charges pay the administrative expenses of the Commonwealth Dairy Produce Board. The present charges were fixed in 1924. It cannot be denied that the board’s expenses have increased since that date. These charges are an indication of the dairying industry’s willingness to dip into its own pockets in order to help itself.

Another associated bill is the Processed Milk Products Bounty Bill. Australian exporters of processed milk products claim to be operating at a competitive disadvantage with overseas processors, who are heavily subsidized. In particular, they point to the Netherlands as being their main competitor. Last year the export earnings of the industry amounted to about £8,000,000. The Government proposes to provide for the payment of a bounty not exceeding £350,000 on exports of processed milk products in 1962-63. We do not oppose this bill but, having in mind the profits made by the Nestlé company of Warrnambool, which is a subsidiary of the parent company in the Netherlands, and the Gippsland and Northern Co-operative Company Limited, of which Senator Wade would have some knowledge, I hope that before this bounty was determined their books were given very close scrutiny. I do not mind helping anybody but I hate to be taken for a ride. I cannot imagine that the Nestle organization, which has a tremendous factory at Warrnambool, needs assistance to keep going.

Senator Mattner:

– Do you think they are” on the milky way?

Senator KENNELLY:

– I think something may be going on between the Australian company and the parent company in the Netherlands. However, as I have already said we do not oppose the bill.

The fourth associated measure is consequential upon the Dairy Produce Export Charge Bill, and we have no objection to it.

Senator LILLICO:
Tasmania

– I support the legislation. I am glad that the Government has seen fit to bring down these four bills, particularly the bill that proposes to continue the subsidy of £13,500,000 to the dairying industry. I was very interested in Senator Kennelly’s remarks about costs of production in the dairying industry. It is true that many, if not all, industries in Australia are afflicted by spiralling costs. Senator Kennelly quoted figures to show that the price received by the dairy-farmer for his products lagged behind-

Debate interrupted.

page 1374

ADJOURNMENT

The ACTING DEPUTY PRESIDENT (Senator Tangney). - Order! In conformity with the sessional order relating to the adjournment of the Senate I formally put the question -

That the Senate do now adjourn.

Question resolved in the negative.

page 1374

DAIRYING INDUSTRY BILL 1962

Second Reading

Debate resumed.

Senator LILLICO:

– I was saying, Madam Acting Deputy President, that Senator Kennelly dealt with figures that indicated the cost of production and prices received over the past few years. When people speak about the cost of production, I always listen in the hope that sooner or later somebody who discusses this question will point to the remedy.

Senator Kennelly:

– We cannot now because the Government opened the stable door and the horse ran fast.

Senator LILLICO:

– I have little faith in the remedy advocated in season and out of season by the Australian Labour Party, namely, the imposition of prices control, land control, or whatever other control it may like to apply. The way the Opposition runs for shelter seems to me to be almost weird. When anything is said about increases in costs, members of the Opposition shelter behind the fetish of prices control.

I was a farmer during the time prices control was operated by a Commonwealth government before the referendum was held. The Australian people refused to vest that power in the Commonwealth Parliament for all time. After the referendum was held, despite the fact that the High Court of Australia had never ruled that the Commonwealth Parliament did not have power to operate prices control for a further period, the Chifley Government said to the people, “ If you will not give us this power for all time, we will not operate prices control at all “.

During the time that prices control was operated by the Commonwealth Government, it had little or no effect on the prices producers had to pay for their requirements, lt is perfectly obvious that prices control cannot have any effect because it is trying to deal with something that has already been created. The costs have been created and the article has been brought to the point at which it can be disposed of. If we attempt to implement prices control at that point, we are simply indexing the cost structure and autographing price rises. Prices control cannot possibly have any effect on the basic cause of all our cost-of-production problems. We have to look for another remedy for those problems which are the affliction of primary production.

I am glad that the Government has introduced this measure. When 1 look back to the depression in 1929 and 1930, I can call to mind many occasions on which I heard primary producers say, “The only few shillings that I have seen have been the little bit of money that I have made from the cows “. For as long as I can remember, in many parts of the Commonwealth the dairy industry has been the great stand-by of primary producers. I think of the north-west coast of Tasmania with which I am familiar, the north-east coast of that State and other parts of Australia. I tell the Senate that if anything adverse were to happen to the dairy industry the repercussions would be felt throughout the length and breadth of this country.

The report of the Dairy Industry Committee of Enquiry has been discussed in the press, at farmers’ meetings and in many other places. With much justification, that report says that a violent social upheaval would follow any important reduction in the size and status of the dairy industry. No truer words were ever spoken. If anything adverse were to happen to the dairy industry, because the holdings in the farming areas with which I am familiar are so small, there is not enough scope for beef production and the potato industry is so uncertain that nobody could depend on it to carry a farm. The potato industry has been ruined largely by the freight charges between Tasmania and the mainland. That freight problem has been aggravated by the attitude of the waterside workers to their occupation. I repeat that if anything adverse were to happen to the dairy industry the repercussions would be felt very severely not only by the farmers but also by the business people in the country towns and everywhere else. So, the Government dare not let this industry go down.

I have noticed that, in some leading articles in the press in Sydney, Melbourne and my State of Tasmania, the Government has been criticized adversely because it did not adopt all the recommendations of the committee, which was set up about two years ago. This is a valuable report. It contains a wealth of information. It deals with almost every facet of the dairy industry. It is almost a text-book on the industry. However, in one important fundamental it is based entirely upon a wrong premise. The premise which, in my opinion, is wrong makes all the difference to the attitude that this Government, the committee, or any one who reads the report should take to the dairy industry.

Under the heading “The Effect of the Tariff”, several paragraphs are devoted to that subject. The committee works out to its own satisfaction that the protection, subsidy and everything else received by the dairy industry far exceed the difficulty caused to the industry by the protective tariff. The committee devotes two paragraphs to that matter. Paragraph $44 reads -

Using the Twenty-fifth Annual Report of the Equalization Committee as a base, Professors

Downing and Karmel estimated that the protection the industry receives by way of excess home price and bounty was 54.7 per cent, of total receipts for the year 1956-57 and 47.7 per cent, the next year. It was the opinion of the professors and economists generally that the degree of protection presently enjoyed by the industry-

That is by the dairy industry - is far in excess of what would be needed to compensate it for the existence of tariff and import restrictions.

The report continues -

The high level of excess cost of the industry to the nation, represented by the level of domestic prices and the measure of direct assistance-

I quote that passage merely to refer to the words “ the high level of excess cost of the industry”. In other parts of the report there is reference to the excessive cost of butter in Australia. A few years ago I made it my business to find out just how much the basic wage had increased since 1939 and just how much the ex-factory cost of butter had increased since that date. Only three months ago I checked those figures again and I worked it out in this way: The basic wage had increased by more than 370 per cent, since 1939, but the ex-factory .price of butter had increased by only 306 per cent.

Senator O’Byrne:

– It is not all labour that is involved; the cow has a bit to do with the production of butter. The cow does not get wages.

Senator LILLICO:

– Instead of comparing the cost to the producer with the tariff he has to pay on his requirements, surely it would be better to compare the increase in the price of butter over the years with the increase in the basic wage. I do not know of a better yardstick. This report states that the price of butter in Australia is unduly high because of the benefit that accrues to the producer as a result of the subsidy scheme and everything else. The committee says that it is not talking only of the bedrock position of the price of butter. My retort is that the price of that commodity has not increased commensurately with the prices of most other commodities. I suggest that the matter should be looked at in another way. I read only the other day of it being put this way: In 1927 the nominal weekly wage would buy 50 lb. of butter; in 1953, it would buy 60 lb. of butter; to-day it will buy 74 lb. of butter.

Before I conclude I would like to refer to the evidence which was tendered to the committee by Professors Downing and Karmel. In the preliminary to the evidence they made a most important qualification. They said, in effect: “ We have examined the question from a purely economic point of view with no attention being given to social, political and cultural aspects. The committee has had ample advice, and will have views of its own on these wider matters.” Of course, that is a most important qualification. The professors said at the outset that they examined the position purely and simply from an economic point of view with no regard to any other factors, social or otherwise. In my opinion, in their evidence they reached a most extraordinary conclusion. If you examine every industry in the Commonwealth as a straight-out economic proposition and qualify your examination as they have qualified theirs by saying that you have not paid any attention to social, political and cultural aspects, you would reach the most extraordinary conclusions also. If you gave effect then to your conclusions from that examination you would cause a most tremendous upheaval in the economic life of the Commonwealth. I do not think there is any doubt about that.

Professors Downing and Karmel went on to reach the conclusion that the tariff protection afforded the industry should be substantially reduced, that the subsidy should be gradually taken away, and that the restrictions should be taken off the production of margarine. If I wanted to damn effectively the dairy industry, those are things I would do to bring it about.

Whether or not the report of the committee is put into operation, it is good to see that it has at least been moderate in its views on subsidies, tariff protection and margarine production in this country. As I said before, this is a good report and contains a great deal of valuable information. If we were to turn the same searchlight on to wheat production, we would arrive at the conclusion that there are marginal lands producing wheat uneconomically, in just the same way as this committee arrived at the conclusion that there are borderline dairy farms producing butter uneconomically. If honorable senators refer to the Tariff Board reports on secondary industries they will find that the board is at a loss to understand why costs in some industries are so much greater than the costs in others. In one report I read, the board made the statement that costs in some establishments were twice as great as they were in others. Because of that fact it was difficult to arrive at what should be an effective tariff. Therefore, I have an open mind in regard to the rights of those people who are conducting dairy farms on marginal lands. If that economic test were applied to other industries in the Commonwealth, the most amazing conclusions would be reached and some extraordinary action would have to be taken.

I am glad that the Government has introduced this measure. I repeat that it is urgently necessary to maintain the status of the dairy industry. I am one of those who believe that the Government, though it may strive as hard as it can to rectify the economic position, may be losing sight of one factor. The response to the Government’s measures to improve the economy may not be as quick as it should be because the primary producers of this country have not the cash to enable them to go into the towns and spend. I believe that is a big factor. If honorable senators go into business establishments in most towns they will be told that when the farmers are having a reasonably good time, things are much better and brighter for the business people. The farmers are not enjoying good conditoins at present. So many of them say, “ The only few bob I have comes from what I make out of the cows “. It is the duty of the Commonwealth Government to see that the industry is maintained at a reasonable level, because the dairy farmers cannot at present turn to anything else. I have been a farmer all my life, and I say that you cannot economically produce fat Iambs on small properties for a return of £2 10s. or £3 a head. The Commonwealth generally, and the dairy farmers in particular, would suffer the gravest economic disability if the dairy industry were to be reduced in status.

Senator McKELLAR:
New South Wales

– I have much pleasure in supporting this bill, which seeks to provide a measure of stability for the dairy industry. As we know, the bill provides for the payment, for an additional five years, of the dairy industry subsidy of £13,500,000 a year. Criticism of the measure has come from various quarters. In this respect, I exempt the Opposition. I am very glad indeed that it is supporting the bill. In reply to some of the criticism that has been made, I point out that the president of the Australian Primary Producers Union, Mr. H. A. Stone, has stated that the action by the Government is taking means that the dairyfarmers will receive practically all that they have asked for. Surely that is sufficient evidence that, on the whole, the dairyfarmers are satisfied. I do not think, of course, that a primary producer would be completely satisfied with anything that a government did for him. I say that as a primary producer myself.

Some of the criticism that has been made has arisen because, it is said, the Government has not adopted the recommendations of the Dairy Industry Committee of Enquiry. Such criticism has been voiced on several occasions to-night. We must remember, however, that when the committee began to take evidence, the European Common Market did not loom so largely as it does to-day. The dairy industry could suffer adversely from Great Britain’s entry into the Common Market arrangements, and it is obvious, therefore, that the assistance which we propose to give to the industry must be stated clearly. It would be calamitous if this industry, in which some 30,000 farmers are engaged, were to go out of existence.

According to figures I have seen, more than 100,000 persons are actually employed in the dairy industry in Australia, and in addition, 11,000 are employed in factories associated with the industry. I do not propose to weary the Senate with a lot of figures; I merely say that the figures show that the total earnings of the people associated with the dairy industry amount to approximately £200,000,000 a year. For a country such as Australia, that is a large amount, although it might not be so in the United States of America. Because of the size of the industry and its importance to Australia, we must see that it is sustained.

Conditions in the dairy industry are comparatively good to-day. There are now milking machines, which remove some of the drudgery from the work of the industry, but we must remember that the dairy farmer works for seven days a week, 52 weeks of the year, year in and year out. In- areas where the farms respond to pasture improvement and the rainfall is satisfactory, the farmers have been able to build up their farms and put them on a sound basis. In such areas the returns are quite satisfactory, but there are hundreds of dairy farms in New South Wales and Queensland from which it is doubtful whether the farmers would earn the basic wage. The small return that they earn comes from working for perhaps twelve to fourteen hours a day for seven days a week. Not only does the farmer work; in some cases his wife, his grandmother and his children also work on the farm. I was very perturbed some four or five years ago when a certain trade union suggested that the dairy farmers should agitate for a 40-hour week. I thought at the time that that was one of the silliest pieces of advice I had ever heard, and I am still of that opinion. The suggestion was made: “ Do not worry about your costs. You can pass them on.” One of the troubles of the industry to-day is that costs have been rising.

Senator Kennelly:

– Was not there an award for this industry which was agreed to between the two parties concerned?

Senator McKELLAR:

– There may have been, but I do not propose to discuss the matter further at this stage.

In New South Wales there is a certain area which is known as the milk zone. The dairy farmers within that zone are able to sell their milk for prices that are remunerative compared with those received by less fortunate producers outside the zone. There seems to be a continual tug-of-war between those inside the zone and those outside it. The farmers outside the zone want to get in, and the farmers inside it want to keep them out. The struggle has been going on for some time. The people inside the zone say to those outside it, “You have larger areas and can run pigs and poultry”. I think it was Senator Kennelly who mentioned earlier to-night that the return from pigs and poultry to-day is very low indeed, and I believe that that is so. During the last two or three months, the price of pigs has been reduced by about a half. I speak of the returns to the primary producer. Unfortunately, when we go to buy pig meats in the butchers’ shops we find that there has been very little reduction in the price. The poultry farmers are in a parlous position.

It is not so easy to turn to the production of pigs and poultry. As Senator Lillico said, dairy farmers cannot turn to fat lamb production, because their holdings are not large enough. A couple of years ago a New South Wales Minister took the extraordinary course of advocating that dairy farmers should go in for vealers. He should have known better than to think that vealers could be obtained from the dairy industry. Some holdings may be large enough to run a few vealers, but in the main it would be out of the question because holdings are too small. Although I have advocated many times that dairymen would be wise to get out of the dairy industry if they possibly could, I have acknowledged the difficulty of their doing so. These people have sunk all of their available capital in properties. If they left, they probably would not have enough finance to enable them to start somewhere else. Would they walk off the property and get jobs in the city, adding to the congestion of the swollen metropolitan areas and negativing the decentralization that this country needs to-day? The problem is not nearly so easy as some of the so-called advisers would have us believe.

Let us examine the position of the ordinary dairymen, the value of whose properties may vary greatly. They may be worth £5,000 or £10,000. The dairyfarmers have some machinery. Those planting fodder for the cattle have a tractor, or some other farming machinery. Even a fairly small dairy farm needs capital of between £10,000 and £15,000. These people sink that amount of capital. They then assume the financial responsibility and the worry and care of the farms. They work seven days a week for 52 weeks in the year and receive a return far lower than that of the milk distributors in the cities, who may have made an outlay of £3,000 or £4,000 on the purchase of a milk run and £400 or £500 on a truck, to receive a net return of about £40 or £50 a week. That is the position all along the line. People are making good profits and good livings from the produce of the primary producer, who gets the thin edge of the wedge. One of the great advances of the past few years - I speak particularly of New South Wales - has been the gradual elimination of tuberculosis in dairy herds. Governments have done a very. good job in this regard. It has been reflected in the health of humans. I am glad that this good work is continuing, as it is of the utmost importance to us all.

I am being brief because I am of the opinion that when measures are not opposed by the Opposition there is no point in repeating figures that have already been given over and over again. Senator Kennelly suggested that there should be orderly marketing in the egg industry. The industry has an egg board and it believes that it has orderly marketing. He referred to subsidies and benefits that the dairy industry could receive as a result of the Labour Party’s policy. It is very easy for an honorable senator to suggest these things when he sits in Opposition but not nearly so easy to implement them when one is in government.

I am very glad to see the bill. I give it my blessing and I hope that dairymen will get a far better return in the next five years than they have had in the past.

Senator WRIGHT:
Tasmania

– Observing no effort by honorable senators on the other side of the chamber to churn the butter, on an occasion when the Senate is considering four bills in relation to such an important industry as the dairy industry, 1 should like to offer a few observations. I believe that the dairy industry is very important to Australia. It produces about £80,000,000 worth of butter and about £10,000,000 worth of cheese. The export income from butter alone is about £25,000,000. By the measure under consideration the Government proposes to renew for five years a subsidy of £13,500,000 per annum for the support of the butter and cheese section of the industry. That would call for little comment if it were not for the fact that the renewal takes place in opposition to recommendations of the report of the Dairy Industry Committee of Enquiry.

That report has been referred to to-night as a most detailed and purposeful analysis of the industry, which was very thought provoking. For my part, I believe that the disquiet that was arising from the longdelayed announcement of the Government’s decision has been relieved by the statement that it will renew the subsidy. I should have thought that if ever there was a time when it was inopportune and impolitic to withdraw a subsidy from our Australian industry it was precisely at the date on which the committee’s report was released.

The circumstances that have overtaken the industry since that date make it imperative, I think, to reject the recommendations of the committee and renew this subsidy. The subsidy has been part of Australian Government economics for a long time. It is the result of an early attempt to assist the industry at a time when politics were purposeful and trie economics of the country had not become so complex as to vex us all. As with the sugar industry, wherein a real attempt has been made to recompense the exporting section for the cost of local protection, so it is with the butter industry. First, the industry worked out its own salvation and then the Government came to its support, within the ambit of its limited constitutional powers. The subsidy has worked its way into the economics of the industry and, in my view, it would have been a calamity of the first order if the dairy industry had been subjected to the revolutionary changes that the committee recommended.

I do not disparage those recommendations for themselves, because if the economy were more stable and the future of exports over a period of ten years could be controlled by us with greater effect than is possible, the recommendations, intrinsically, would have a great deal of merit. But, at the time they were announced, their adoption would have been a calamity.

The circumstances that have developed since that report have been mentioned. The outstanding one is the decision of the United Kingdom to negotiate for entry to the European Common Market. On my reading of the figures of European butter production, if the United Kingdom is able to obtain, as a condition of her entry, any particular concession for Australian butter, the European countries within that market will have more butter than they can possibly consume. It will be a poor lookout for any market for Australian butter, with or without the European tariff that would have to be surmounted.

The position has also been aggravated by the announcement of the United Kingdom of restrictions on butter imports. The restrictions came into operation last October, and were renewed in April for twelve months. Australia’s quota for the ensuing twelve months is limited to 62,000 tons. I am aware that the restrictions have caused actual prices to harden, but the exports that Australia would normally land in London are severely curtailed.

Senator Vincent:

– By what amount?

Senator WRIGHT:

– It would amount to about that quota. I do not have the exact figures for the last few years. It is a severe limitation which I estimate at about 50 per cent.

Senator Wade:

– It is a very slight reduction.

Senator WRIGHT:

– I will be obliged if the Minister will correct me in that respect.

I should now like to direct attention to some of the recommendations of the McCarthy committee as follows: -

  1. That the Commonwealth and the States in their spheres of responsibility and authority coordinate their efforts to place the dairy industry in a position of security and stability.
  2. That a period of ten years be set for a programme of rehabilitation.

The committee also recommended that the Commonwealth should provide financial assistance during the next ten years at an annual rate commencing with £13,500,000 in 1960-61, that it should maintain that figure until 1963-64 inclusive, that it should reduce the amount to £13,000,000 in the following year, to £12,500,000 in 1965-66, and to £9,500,000 in 1966-67, and that the amount should taper off to £2,000,000 in 1969-70. The committee further recommended -

  1. That the form of assistance gradually move from bounty on production and be replaced by -

    1. The stimulationand intensification of nation-wide projects that will be of direct benefit to the industry; (these projects are principally research, expansion of extension services, artificial breeding and herd recording);
    2. direct assistance principally in the form of loans, to enable farmers to increase the productivity of their holdings;
    3. direct assistance, principally in the forms of loans, to enable farmers without the potential to reach a satisfactory level of production, to leave the industry.

The committee recommended that the farms which should be eligible for financial assistance to enable them to increase productivity should be those that are essentially dairy farms which have the potential to produce from all sources an income equivalent to 8,000 lb. of butterfat per annum. The committee further recommended that farms eligible for financial assistance to leave the industry should be those that are essentially dairy farms without the potential to produce from all sources the income equivalent of 8,000 lb. of butterfat per annum. The committee recommended that a farm be not considered a dairy farm unless during the last three years, at least two-thirds of its income has been derived from dairying.

The committee proceeded to instance the ordinary type of farm improvements such as clearing of land, pasture improvement, fodder conservation, improvement of quality of stock and such like as the types of work for which financial assistance should be provided. Theoretically, that is on a yery revolutionary basis of development to harden the sinews of the dairy industry. I am wondering what difference there is between the dairy industry and the general land development that should be going on with the assistance of the. Government. I believe that through the agency of the Government, development will be greatly helped by the recent measures announced by the Government to assist the ordinary trading banks to give long-term loans - they are not long enough - for the encouragement of primary and other exporting industries.

My last comment concerning this large subsidy for one industry is that whatever criticism it has attracted that criticism pales into insignificance against the proposal that was disclosed this afternoon when it was revealed that we are now to give income tax relief to the extent of £17,500,000 a year to those persons who provide new plant in the manufacturing industries. I should like it to be recorded that my contentment with the renewal of the butter subsidy has almost turned sour since I learned of the proposal that the manufacturing industries should be given an income tax subsidy of £17,500,000 a year.

Senator Anderson:

– Surely, you cannot relate the two in terms of money!

Senator WRIGHT:

– In the metropolitan areas where these manufacturers operate, money speaks all languages. My view is that compared with the justification for subsidizing the manufacturing industries to the extent proposed, the need for maintaining the subsidy to the dairy industry is more important. The great primary industries are dependent upon export markets. Such factors must be taken into account because we are considering the national economy in relation to a trading world. The solvency of Australia depends upon its external trade. I believe that the subsidy payable to manufacturing industry has very little to do with that. It is directed more to heartening the manufacturing industries for the purposes of further encouraging an expansion in employment. We shall watch that subsidy very closely.

The other aspect of this legislation concerns the relationship between the butter side and the liquid milk side of the industry. Passing reference has been made to that matter by Senator Kennelly and by my colleague, Senator Lillico. I wish to refer to the passage in which the McCarthy committee’s report took notice of the liquid milk section of the industry. This was at pages 58 and 59 of the report. The committee pointed out the great disadvantage under which butter producers are operating compared with the producers of liquid milk. The committee showed that liquid milk producers in New South Wales received 51.75d. per gallon and in Victoria 40.56d. per gallon. The farmer who produced milk for cheeses and butter received 26.46d. per gallon, giving the liquid milk producer an advantage of between 14d. and 25d. per gallon.

The McCarthy report referred to all the arguments that the liquid milk producers put forward to justify their greater price such as that they had to produce regular quantities in both favourable and unfavourable seasons; but the committee was not convinced. I think that a little more penetrating inquiry into this matter would show that those who are fortunate enough to have access to the price fixation arrangements in respect of metropolitan milk supplies have the advantage of an artificial basis which has been built up for the sale of liquid milk. I suggest that to some extent the producers share the benefits of this method of distribution through the retailers. As the metropolitan milk producers acquire quite a proportion of the milk rounds of the retailers they use the various vendors’ names to corner the market. Thus there is a closely knit control of that section of the industry which, I believe, is out of all proportion to that enjoyed by the less protected section of the industry - the producer of butter for the export market.

Senator Kennelly:

– Of course, the producer of liquid milk has higher costs. He has to produce the same number of gallons of milk throughout the year.

Senator WRIGHT:

– I am aware of that. But the McCarthy committee evidently was not convinced that this argument provided sound reasons for the price differentiation.

Another point to which I just want to refer briefly is that section of the industry which produces processed milk. We have been told that the exports of that commodity are now worth £8,000,000; and the Government is proposing to pay a bounty or a subsidy in respect of them. I hope that the Minister for Health (Senator Wade) will correct me if I am wrong in saying that the milk processing industry has had no screening from the Tariff Board and that there is no limitation on the production of recipients of the bounty or subsidy.

I acknowledge the great courtesy which the Minister for Primary Industry (Mr. Adermann) accorded me by supplying certain figures which show that some exporters of processed milk have suffered losses in exporting their product. But I wish to express anxiety about the idea of giving to traders of this sort a subsidy without some scrutiny by a body such as the Tariff Board, or without imposing some limitation to ensure that the subsidy is actually needed in the case of each recipient. I wish to say nothing more than that, Mr. President. I have the impression that consideration of this proposal has been rather hurried. I hope that it will be closely watched to ensure that the benefit goes to the producer in the industry and not to the intermediary. Despite some losses on exports of processed milk I retain the conviction that some processors are enjoying an exceptionally excessive market in the metropolitan liquid milk organizations. I think that you cannot separate completely the export section from the metropolitan liquid milk section. I do not want to see the subsidy being used to improve the position of one section already disproportionately rich. I think of some of the metropolitan milk undertakings. I support the measure.

Senator WADE:
Minister for Health · Victoria · CP

.- in reply- The lateness of the hour and the generous measure of support that has been forthcoming from both sides of the Senate for this measure require of me only a passing reference to one or two matters raised in the debate. A good deal has been said, and rightly so, of the excellence of the report of the McCarthy committee. The Government has been commended for its action in departing from that section of the report which recommended a progressive reduction of the subsidy paid to the industry over a number of years. Most speakers have rightly contended that such a proposal at this time in our economy could have disastrous effects not only on the dairy industry but also on our economy generally. All speakers, I believe, have applauded the Government’s action in relation to the subsidy.

A good deal has been said about the rehabilitation section of the report on the industry. It is true that this is a most illuminating document about milk. I want to make this point in passing: The Government realized the value of the document and placed its thinking before the Australian Agricultural Council at its last meeting. The members of that council have agreed to examine the report, to take it back to their governments, and to report at the next meeting of the council their thinking on the matters that have been raised. If it is of any cheer to my Western Australian friends, I should like them to know that the Agricultural Council is particularly attracted to a scheme which is being developed in the most south-western portion of Western Australia. I believe that that scheme has been given a great deal of consideration which augurs well for that industry. The States, too, have a big responsibility in this matter of rehabilitation. They are responsible for land settlement and primary production and they have big responsibilities to face in considering the rehabilitation of the industry.

Senator Kennelly was somewhat concerned about what he described as excessive imports of cheese and allied commodities. I would say, by way of illustration, that, in the main, there are special varieties which have been brought into this country. But it is interesting to record that the local manufacturers are rapidly overtaking this demand and, in the foreseeable future, many of these varieties will be produced within this country. Senator Wright referred to the restrictions placed on the importation of butter into the United Kingdom and asked for information concerning the percentage of reduction in the quota. As he rightly said, the quota was fixed at 62,000 tons. That figure was based on the average importation from Australia over the last seven years and, in actual fact, represents a very slight reduction on our exports to the United Kingdom for the preceding year.

Senator Wright:

asked also whether the processed milk industry had submitted a case to the Tariff Board. The answer is, “ No “. Nor are there any profit reservations in the legislation dealing with that industry, but the Government is satisfied from its own observations and inquiries that unless the milk processors are encouraged to develop and expand their export markets, they will turn their attention to other more profitable lines. For that reason the Government has brought in a measure dealing with the industry, believing that an industry that exports products worth £8,000,000 is worthy of encouragement. The position will be reviewed in the light of experience with the legislation.

For the reasons I have stated, Mr. President, I commend the bill to the Senate and hope that it will have a speedy passage.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 1382

PROCESSED MILK PRODUCTS BOUNTY BILL 1962

Second Reading

Consideration resumed from 10th May (vide page 1313), on motion by Senator Wade-

That the bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 1383

DAIRY PRODUCE EXPORT CHARGE BILL 1962

Second Reading

Consideration resumed from 10th May (vide page 1314), on motion by Senator

Wade-

That the bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time, and passed through itsremaining stages without requests or debate.

page 1383

DAIRY PRODUCE EXPORT CONTROL BILL 1962

Second Reading

Consideration resumed from 10th May (vide page 1314), on motion by Senator Wade-

That the bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

Senate adjourned at 11.36 p.m.

Cite as: Australia, Senate, Debates, 15 May 1962, viewed 22 October 2017, <http://historichansard.net/senate/1962/19620515_senate_24_s21/>.

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