Senate
15 October 1963

24th Parliament · 1st Session



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

page 1095

QUESTION

HOSPITAL AND MEDICAL BENEFITS FUNDS

Senator MCCLELLAND:
NEW SOUTH WALES

– Has the Minister for Health seen large advertisements in newspapers circulating throughout New South Wales, which have been inserted by the Hospitals Contribution Fund of New South Wales and the Medical Benefits Fund of Australia Limited, urging members of the public to join their respective benefit schemes? Has the Minister any idea of the amount of money that has been spent by these organizations in canvassing for members? Is the cost of the advertisements to be defrayed from funds paid by the present subscribers? Does the Minister think that such money could be better used by the funds in the interests of their members by providing higher rebates for medical and hospital attention?

Senator WADE:
Minister for Health · VICTORIA · CP

– 1 have seen the advertisements referred to by the honorable senator. I am not in a position to state the amount of money that has been spent, because I understand that television time also has been used for such advertisements. I cannot state the cost of the time that has been bought on television or of the space that has been taken in newspapers by advertisements inserted by the organizations, but I should think my department has information in this respect. An honorable senator who sits behind me reminds me that there is a limit to the administrative expenses of all benefit funds of this kind. That limit has been imposed by the Government and is rigidly enforced. To the present, the administrative expenses of the two funds to which the honorable senator has referred compare perhaps more than favorably with those of some other funds. In the past, such expenses have been quite in keeping with government policy. The honorable senator has suggested that the money spent on advertising might be better spent in providing additional benefits for the contributors to the funds.. 1 1 should think that the .amount of money being spent in. this respect would not be sufficient to enable any significant addition to be made to benefits for contributors.

page 1095

QUESTION

SHIPPING

Senator WRIGHT:
TASMANIA

– I direct a question to the Leader of the Government in the Senate. It relates to the publicity that has been given to the application by R. W. Miller and Company Proprietary Limited to bring second-hand tankers to Australia. Can the Minister say whether a decision has been reached in this matter? If so, can he state the policy objective behind the decision and the source of the authority being exercised to refuse the importation of tankers?

Senator Sir WILLIAM SPOONER:

– An application was received from R. W. Miller and Company Proprietary Limited to import one second-hand tanker, and it was approved. At the same time, an announcement was made that until such time as the Government had made known the complete policy, or had stated its views, no further permits would be granted. Since then there have been discussions with R. W. Miller and Company and with the oil companies. A press statement was made last night by my colleague, Mr. Opperman, setting out the views that were conveyed to R. W. Miller and Company and to the oil companies. The main point of that statement is that the Government’s objective over a period of time is to ensure that the carriage of petroleum on the coast of Australia shall be by Australian licensed vessels, built in Australian yards. Those who are interested have offered to let us have, within the next 30 days, their proposals to give effect to that policy. Until those proposals are received the present ban on the importation of second-hand vessels will be continued. The honorable senator asked by what authority that ban is imposed. I could not tell him, in specific terms, but the question was raised at the conference held yesterday. If, as a layman, I gave him an answer he would perhaps understand it. It is based on two provisions: The first is a provision of the Navigation Act under which Australians are to be employed on vessels plying on the Australian coast; the second is a provision of the Customs Act under which there is a prohibition on the importation of secondhand ships - this has been Government policy for a very long time.

page 1096

QUESTION

COMMONWEALTH DEVELOPMENT BANK

Senator COLE:
TASMANIA

– My question is addressed to the Minister representing the Treasurer. What proportion of money allocated by the Development Bank is spent in country areas?

Senator PALTRIDGE:
WESTERN AUSTRALIA · LP

– I cannot supply the information offhand, but I gave certain figures in respect of the bank’s activities when delivering my second-reading speech on the Commonwealth Banks Bill, which is now before the Senate. I will see what further information I can obtain for the honorable senator prior to the resumption of the debate, anticipating, as I do, that he wants the information for use in that debate.

page 1096

QUESTION

OIL

Senator LILLICO:
TASMANIA

– I direct a question to the Minister for National Development. Will the Minister please inform the Senate whether it is true that oil traces have been found in the Johnny Creek area west of Alice Springs?

Senator Sir WILLIAM SPOONER:

– The honorable senator is referring to the oil showing that was found by officers of the Bureau of Mineral Resources when they were carrying out their phosphate drilling programme. I hasten to say that that showing is not by any means to be classified as indicating a commercial deposit of oil, but it is a very interesting and important find. That find is on a tenement in which a number of companies have an interest. As a result of the discovery by the Bureau of Mineral Resources, one of those companies is planning, and will shortly put into operation, a programme for the drilling of about ten shallow holes to a depth of about 1 , 000 feet in order to evaluate more properly the significance of the discovery.

page 1096

QUESTION

UNIVERSITY COLLEGE

Senator BENN:
QUEENSLAND

– My question is addressed to the Minister for National Development, who is the Leader of the Government in the Senate. Will the Minister be Acting Prime Minister during some part of this year, or will he be attending to the administrative affairs of the Prime Minister’s Department for a period before 1st January, 1964? If he will be doing that, will he see that the matter of having a university college established on the Darling Downs as early as possible is given his earnest consideration?

Senator Sir WILLIAM SPOONER:

– The answer to the first part of the honorable member’s question is, “ No “. The answer to the second part of his question is that I shall table in the Senate, on behalf of the Prime Minister, in the not distant future, the report of the Australian Universities Commission which will deal with all matters relating to universities.

page 1096

QUESTION

DRUGS

Powerful New Anti-Cough Drug.

London, Saturday. - A new pain-killing drug, 10,000 times as strong as morphine, has been tested in Britain. The drug, developed by Doctor K. W. Bentley, was tested at the newly established Reckitt Biological Research Laboratories in Hull. It is being studied as a possible means of suppressing coughs. Doctors said a “non-productive” cough - one that does not clear the respiratory organs - could quickly exhaust weak patients especially old people whose sleep was often seriously interrupted. The laboratories hoped that Dr. Bentley ‘s discoveries would lead to a cure for chronic coughing disorders.

The PRESIDENT:

– Order! What is the honorable senator’s question?

Senator Sir WALTER COOPER:

– I ask the Minister whether this drug is being manufactured in Australia. If not, has the drug been imported and tried out in this country? Will the Minister also give to the Senate any information available regarding the results of tests that have taken place in the United Kingdom or Australia?

Senator WADE:
CP

– My department has no knowledge at all of thenew drug to which the honorable senator has referred; nor has it been able to obtain any information from the Australian representative of the firm. We shall pursue our inquiries and, if anything significant is learnt about this drug, I shall pass on the information to the honorable senator.

page 1096

QUESTION

EMPLOYMENT

Senator FITZGERALD:
NEW SOUTH WALES

– My question is addressed to the Minister representing the. Minister for. Labour and National Service. In viewof the figures released by the Minister showing a drop in the number of unemployed junior males over the past twelve months and a slight increase in the number of employed junior females during the same period - the overall figures being most pleasing to all Australians - is the Minister in a position to advise what jobs in both private and government employment will be available to the male and female school leavers, numbering between 70,000 and 75,000, who will leave school within the next two months?

Senator GORTON:
Minister for the Navy · VICTORIA · LP

– I think that the first comment I should make on the question is that it is extraordinary to talk about the drop in the number of registered unemployed as being a slight drop. It has been quite a dramatic drop, particularly over the last twelve months. The question is one that has been asked year after year in this Senate at about this time, before the school year finishes. I remember at least six occasions on which the question has been posed as to what will happen to all the people who will leave school at the end of the year. The’ simple fact is that they have been absorbed into employment owing to the growth and economic strength of the country as is evidenced at this present moment.

page 1097

QUESTION

EXPORT PAYMENTS INSURANCE CORPORATION

Senator BRANSON:
WESTERN AUSTRALIA

– Can the Minister representing the Minister for Trade inform me whether credit sales of wheat to red China are covered by insurance with the Export Payments Insurance Corporation? Because of Indonesia’s unstable economy and the fact that certain foreign credits to that country have been withdrawn, are all exports from Australia to Indonesia covered by insurance with the Export Payments Insurance Corporation? If the answer to these two questions is, “ No “, can the Minister inform the Senate why such insurance is not effective or possible?

Senator Sir WILLIAM SPOONER:

Although I have a very clear recollection of the position, in view of the importance of the question I think it would be better if it were put on the notice-paper. It would be unfortunate if my recollection were at fault and I were to give a wrong answer.

page 1097

QUESTION

SALES TAX

Senator RIDLEY:
SOUTH AUSTRALIA

– I ask the Minister representing the Treasurer whether it is true that sales tax is payable on motor vehicle safety belts when they are attached by the manufacturer whereas they are tax-free when purchased as an optional extra by the purchaser of the motor vehicle. If that is so, will he request the Treasurer to consider rectification of this anomaly?

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

– My recollection is that the sales tax on safety belts was abolished some time ago.

Senator Ridley:

– Not when attached to the vehicle by the manufacturer.

Senator PALTRIDGE:

– I repeat that my recollection is that sales tax on safety belts was abolished some time during the last year. If any other aspect of the matter emerges from the honorable senator’s question I shall look at it and let him know the result.

page 1097

QUESTION

IMMIGRATION

Senator MAHER:
QUEENSLAND

– I preface my question, which is addressed to the Minister representing the Minister for Immigration, by pointing out that Sir Eric Harrison, on his return to Australia this month, said that only 6 per cent, of British migrants to Australia were returning to Britain and that of that percentage nearly one-third applied to return to Australia. Does this mean that the 6 per cent, referred to by Sir Eric were in receipt of Commonwealth assisted passages from Britain to Australia? If so, when such migrants seek to return to this country does the Government again provide an assisted passage?

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

– The 6 per cent, relates to migrants who, within two years of having come out on assisted passages, have expressed a desire to return and have returned to Great Britain. Except in special cases, such migrants are required to refund the amount of money which was made available to them to come out here. If they refund the money on their return to England, they are eligible to make another application to come to Australia. If they do not refund the money they are not eligible to come out on an assisted passage for the second time. However, children of parents who have come out under the assisted passage scheme and have returned to England are eligible, when they become adults, to apply for assisted passages to Australia.

page 1098

QUESTION

DRUGS

Senator COHEN:
VICTORIA

– I refer to announcements by the Minister for Health within the past few days that the four drug companies which supply the broad spectrum antibiotic, erythromycin, have agreed to reduce the price of that drug by an average of 25 per cent., that the seven companies which supply a number of diuretic drugs have agreed to reduce their prices by from 10 per cent, to 161 per cent., and further that negotiations are in progress between the Commonwealth and the drug suppliers in regard to a number of other listed drugs. I ask the Minister: What other listed drugs are the subject of negotiations? Are there any listed drugs which the Government regards as being so overpriced that a reduction in prices should be sought from the drug companies concerned? Does not the action of these companies in agreeing to such substantial price reductions constitute the most damning admission that they have previously been grossly overcharging the Government and exploiting the sick for sordid gain and swollen profits? Is not the institution by the Government of a comprehensive and searching public inquiry into the pricing activities of these companies long overdue?

Senator WADE:
CP

– I do not think it is quite proper to suggest that these reductions are a damning admission - to use the honorable senator’s words - that the companies referred to have been exploiting the public. Before a new drug is brought on the market a great deal of money is spent on research, and that in itself inflates the price. As time goes by and research costs are written down and distribution activities are perfected, the companies can reduce the price of drugs.

The honorable senator asked for a list of drugs that are to be subject to investigation. I could not tell him that, because we have no list in the sense that we start at the top and proceed to the bottom in any concerted order. We are considering those drugs that are in the first instance costly and whose price in this country is higher than is generally accepted by world standards. For that reason I am not in a position to give the honorable senator a list of the drugs being examined. Were I in the position to do so I do not think it would be a good policy if I did. The department is pursuing a policy that will get results and will bring about savings to the taxpayers.

page 1098

QUESTION

SMUGGLING

Senator LAUGHT:
SOUTH AUSTRALIA

– Am I right in assuming that the Minister for Customs and Excise is deeply concerned at the introduction into Australia in large numbers of transistor radio sets in the mast of a ship, as a recent news item disclosed? If so, can the Minister indicate whether an additional effort is being made to defeat this particular method of smuggling? Is the measure of co-operation afforded to the department by overseas shipping companies and the State police entirely satisfactory?

Senator HENTY:
LP

– Many transistors coming into Australia illegally have been located and seized by the staff of the Department of Customs and Excise. As was announced in the press this morning, only this week a very large number was discovered in a ship from Asia. Apparently they were found in a hollow mast. Reading the report this morning I was reminded of the little penny chocolate machines we used to have. They had a slot in the bottom and when you removed one chocolate another took its place. It seems that the transistors were stacked in the mast and when one transistor was removed another took its place. Transistors and watches worth about £15,000 were found in the mast. The co-operation that the officers «f the department receive from port authorities and from the police is firstclass in all the ports in which they operate. The department is taking every possible step to foil any further attempts to smuggle transistors into Australia. I should like to pay a tribute to the particular officer who made this haul. Apparently for some time he had been worried about this ship, a sixth sense perhaps suggesting to him that there was something which he had not located. After eighteen months he found the answer and made this very fine haul of illegal imports.

page 1099

QUESTION

SHIPBUILDING

Senator McKENNA:
TASMANIA

– My question is directed to the Leader of the Government. Would it be within Government policy, as announced by the Minister in reply to a question asked by Senator Wright earlier to-day, if R. W. Miller and Company Proprietary Limited were to offer to build four or five tankers in Australian shipbuilding yards, to be registered in Australia and attract only the normal subsidy, to* be operated on our coast under Australian conditions and not involve the use of any foreign capital?

Senator Sir WILLIAM SPOONER:

Such a proposal would come within Government policy. If it were made I think the Government would consider it in conjunction with other proposals that might also be made. One of the objectives that we have in this exercise is to arrange, if we can, a shipbuilding programme, spread over a period, which will provide a steady or reasonable flow of work for Australian shipbuilding yards. We will wait for a proposal from R. W. Miller and Company Proprietary Limited and also for proposals that might come from any other source.

page 1099

QUESTION

HEALTH

Senator BISHOP:
SOUTH AUSTRALIA

– Recently I directed the attention of the Minister for Health to increased charges by doctors in South Australia and asked whether he intended to have some conferences on this matter. I now ask the Minister whether the improvements to the National Health Act under consideration by the Government, as stated by the Minister in to-day’s press release, cover this matter?

Senator WADE:
CP

– I cannot answer “ Yes “ or “ No “ to this question. I have stated on many occasions that the stabilizing of doctors’ fees is a matter upon which the doctors themselves must make a decision. I have referred, it is true, to contemplated improvements in the national health scheme over a period. There is, of course, some reference in the statement to anomalies in the present schedule of payments for medical benefits. We have before us at the present time, as the honorable senator probably knows, some recommendations from the Australian Medical Association in relation to those anomalies. We are examining them and I am hopeful that we can do something to eliminate the anomalies from the scheme.

page 1099

QUESTION

LOAN FUNDS

(Question No. 47.)

Senator ANDERSON:
NEW SOUTH WALES

asked the Minister representing the Treasurer, upon notice -

  1. Was the establishment of the term loan fund for the purpose of assisting primary and secondary industry development and also to finance exports?
  2. What was the total amount set aside for these purposes in the term loan fund at the time of its establishment?
  3. What additional sums have been allocated to meet demands placed upon the term loan fund?
  4. What is the total of the fund now?
  5. How many term loans have been made available from this fund for - (a) primary industry development; (b) secondary industry development; and (c) finance for export?
  6. What are the maximum and minimum rates of interest which have been charged on term loans from this fund for - (a) primary industry development; (b) secondary industry development; and (c) to finance exports?
  7. Is the Treasurer satisfied that the scheme is operating satisfactorily for question (6) (c)?
  8. Was the purpose of the scheme to make term loans available at rates of interest which would be lower than normal overdraft rates?
  9. Is the Treasurer satisfied that the operation of the term loan fund has made finance available to exporters at a rate of interest equally favourable to those available in major exporting countries where “ term loans “ and “ tied loans “ are offered?
Senator PALTRIDGE:
LP

– The Treasurer has supplied the following answers to the honorable senator’s questions: -

  1. Yes.
  2. An amount of approximately £57,000.000, equivalent to 3% of the major trading banks’ deposits, was transferred to the banks’ term loan fund accounts in April, 1962.
  3. The trading banks’ term loan fund accounts were increased by approximately £19,000,000, equivalent to 1% of the banks’ deposits, during the quarter ended 30th September, 1963.: .
  4. About £76,000,000. Of this amount, the trading banks had drawn about £31,000,000 from the fund by August, 1963, in reimbursement for outstanding loans to customers. Of the unexpended balance of about £45,000,000, approximately one-half is ear-marked for term loans already approved by banks though not yet drawn by customers. As repayments of loans are made, these amounts become available for re-lending in accordance with the revolving nature of the fund.
  5. The classification of trading bank advances within Australia published by the Commonwealth Statistician on 4th October, 1963 (Australian Banking Statistics: Monthly Bulletin No. 215, July, 1963) shows that at 10th July, 1963, the trading banks’ term loans outstanding amounted to £26,700,000. At that date, the major classes of borrowers were: rural industries - £10,900,000, and manufacturing industries - £9,600,000. Detailed statistics showing the number of term loans approved are not published, but the Reserve Bank has advised that the pattern so far has been for the number of term loans approved to be greatest for rural industries. Few requests have been made for finance from the term loan fund for post-shipment export finance. However, loans made to primary and secondary industry have, in some cases, undoubtedly made a useful contribution to export production.
  6. Banks are required to ensure that the general pattern of interest rates on term loans is consistent with the overall interest rate policy.’ All banks accord preferred interest rate treatment in general to rural and other borrowers for export production. The Reserve Bank has advised that rates of 51/2 to 6% per annum for rural and export loans and 6 to 61/2% per annum for other loans would not be unusual at present, rates above and below these ranges being quoted by banks where special circumstances apply. It is emphasized, however, that there is some scope for banks to determine rates in individual cases.
  7. As stated in answer to (5) above, few requests have been made for finance from the term loan funds specifically to finance exports. This is not regarded as indicating shortcomings in the term lending arrangements.
  8. No. The purpose of the scheme was to facilitate developemnt by the trading banks of some new forms of lending. A basic element is that these loans are on fixed terms and for longer periods than banks normally provide on overdraft. Fixed loans for developmental purposes are advantageous to borrowers but constitute a relatively illiquid asset of banks. For this reason interest rates charged on term loans tend to be higher than if the loan were made on an overdraft basis.
  9. It would be difficult to make an accurate comparison between the export financing facilities of one country and those of another country and also quite unrealistic to base any such comparison on interest rates alone. However, on such information as is available to the Reserve Bank, it would appear that rales on export finance from the term loan fund are broadly not out of line with rates, on similar, types of finance in major exporting countries.

page 1100

QUESTION

COMMONWEALTH OFFICES

(Question No. 76.)

Senator BISHOP:

asked the Minister representing the Prime Minister, upon notice -

  1. How many administration sections of Commonwealth departments are accommodated in privately owned offices in Adelaide?
  2. What is the approximate floor space rented by each department, the cost of same and the period of the leases?
  3. What is the total cost to the Commonwealth Government of accommodating administrative and office personnel in privately owned buildings in Adelaide?
  4. Will the Government give consideration to the construction of a Commonwealth central building to accommodate these administrative groups?
Senator Sir WILLIAM SPOONER:

-The Prime Minister has provided the following answers to the honorable senator’s questions: -

  1. At least twenty-seven sections of various departments. 2 and 3. -
  1. The Department of the Interior is making a survey of the present and future office accommodation requirements in the State capitals. Policy decisions on accommodation for Commonwealth departments will be taken in the light of the information obtained.

page 1101

QUESTION

COMMONWEALTH DEVELOPMENT BANK

(Question No. 81.)

Senator CAVANAGH:
SOUTH AUSTRALIA

asked the Minister representing the Treasurer, upon notice -

  1. What were the individual amounts advanced in the nine industrial loansof less than £2,000 made by the Commonwealth Development Bank during 1962?
  2. How many applications for industrial loans of less than £2,000 did the bank receive during 1962?
Senator PALTRIDGE:
LP

– The following answer has been supplied by the Treasurer: -

  1. It would not be appropriate to ask the Commonwealth Development Bank to provide information of this nature regarding individual loans.
  2. The statistics currently compiled by the Commonwealth Development Bank do not enable the bank to provide an answer to this question.

page 1101

QUESTION

NATURALIZATION

(Question No. 85.)

Senator McCLELLAND:

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

  1. How many persons were refused naturalization on security grounds during the financial year 1962-63?
  2. Are persons so rejected informed of the real reason for their inability to become naturalized?
  3. If not, why not?
  4. Have persons who are refused naturalization on security grounds the right of appeal to any judicial authority in Australia?
  5. If not, will the Government consider establishing a right of appeal?
Senator HENTY:
LP

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

  1. During the year ended 30th June, 1963, 36 applications for naturalization were either deferred or refused on security grounds.
  2. No.
  3. It is not the practice to inform applicants of the reasons for the rejection of their applications. However, persons whose applications have been deferred owing to their inability to satisfy, the language or residential requirements of the

Nationality and Citizenship Act, or because they do not have an adequate knowledge of the responsibilities and privileges of Australian citizenship are informed of the reasons for deferment and told they may revive their applications immediately they feel they can meet these requirements. The Minister for Immigration does not propose to vary this practice which has been observed by successive Ministers for many years.

  1. No. It is within the discretionary powers of the Minister for Immigration to grant or withhold naturalization. This power is conferred by the Nationality and Citizenship Act, which was assented to on 21st January, 1948 and came into force on 26th January, 1949. Care is taken to ensure that reports on which the Minister bases his decisions are objective, fair and accurate. All relevant factors are carefully considered by the Minister personally before any application is rejected.
  2. This question seeks a statement on government policy and it is not the practice to give such statements in answer to a parliamentary question.

page 1101

QUESTION

RADIO COMMUNICATIONS

(Question No. 86.)

Senator McCLELLAND:

asked the Minister representing the PostmasterGeneral, upon notice -

  1. Do residents in the Nowra-Huskisson area receive inferior radio reception to that enjoyed in other parts of New South Wales?
  2. If so, has any research been conductedby the department as to how the reception in the area can be improved?
  3. If not, will such research be undertaken as early as possible?
Senator WADE:
CP

– The PostmasterGeneral has now supplied the following answer: -

  1. I am informed by the Australian Broadcasting Control Board that the Nowra-Huskisson area receives a service from the two Sydney national stations and the Wollongong national and commercial stations. The service was improved by the increase in power of the Sydney national stations at the beginning of 1962. It is agreed, however, that reception in the area is subject to some fading and noise because of the distance from the stations concerned. 2 and 3. The board is continually investigating the possibility of improving the service in such areas. There are a number of other places where reception is similarly not entirely satisfactory. However, there are difficulties in connexion with improving reception in these cases, especially as there is an extreme shortage of frequency channels in the medium frequency band in which the broadcasting services operate. The need for improvement in the broadcasting service in the Nowra-Huskisson area will be kept in mind . in connexion with further investigations.

page 1102

QUESTION

TRADE WITH THE UNITED STATES

(Question No. 104.)

Senator HENDRICKSON:
through Senator O’Byrne

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

  1. Is it a fact that during the past five years imports from the United States of America into Australia have exceeded exports by approximately £70,000,000?
  2. Has the Commonwealth Government been advised by the United States authorities that a trade mission is about to descend upon Australia, the result of which, so United States authorities hope, will widen the gap and increase this excessively high trade balance?
  3. Is it a fact that a United States delegation has arrivedin Australia to have discussions with the Australian Meat Board so that the United States domestic market will be protected because the American beef market has reached saturation point?
  4. If so, what is the view of the Australian Government and will every effort be made to protect Australian producers?

Senator Sir WILLIAM SPOONER.The Minister for Trade has informedas as follows: -

  1. In the five years ending June, 1963, the value of Australian imports from the United States was £879,000,000. During the same period, exports to the United States were valued at £452,000,000. The average yearly excess of imports over exports was £85,400,000.
  2. No. I have seen a press report indicating that the United States Department of Commerce proposes to send a trade mission to Australia next year, but no official advice has been received from the United States authorities.
  3. Representatives of United States cattle producers are at present in Australia for beef industry talks with representatives of Australian and New Zealand meat producers. The Australian Meat Board as such will not participate in the talks although the Australian delegation to the talks will include meat producer representatives on the board, with Sir William Gunn as leader. The talks will be a follow up to a similar meeting of producer representatives of the three countries held in the United States last year, where it was decided that further meetings should be held to exchange views on mutual problems to ensure that the beef trade between the countries developed to the advantage of all concerned.
  4. The Australian Government is not associated with these discussions, which are essentially producer discussions. However, it is the view of this Government that such discussions can be of great value in giving producers a better understanding of each other’s problems with a view to rationalizing the trade to the benefit of all concerned. The honorable senator may rest assured that, as always, this Government stands ready to make every effort to protect Australian producers.

page 1102

QUESTION

TELEVISION

(Question No. 120.)

Senator BRANSON:

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

  1. By permitting the establishment of satellite television stations, have the Postmaster-General and the Australian Broadcasting Control Board thus recognized the fact that people living in isolated areas are just as entitled to television services as people in metropolitan areas?
  2. If so, will the Postmaster-General give further consideration to my requests over the last four years to permit the use of translator services for isolated areas without the penalty of being classed as second stations?
  3. What is the cost per mile of providing a suitable micro-wave link for satellite stations taking their programmes from a parent station?
Senator WADE:
CP

– The PostmasterGeneral has furnished the following replies: - 1.I assume that the honorable senator refers to the proposal to grant licences in respect of the central western slopes area of New South Wales and the southern downs area of Queensland for commercial television stations which willrelay the programmes of nearby stations. This is not an innovation. National stations operating in country areas relay the programmes of national stations in the capital cities and those to be established, including stations in Western Australia, will be similarly operated. This matter has probably been confused by various reports which described the proposed New South Wales and Queensland stations as “satellites”. They will, in fact, be normal television transmitters operating with power of 100 kw. although they will, in the main, relay the programmes of a station situated in an adjacent area. The honorable senator will appreciate from what I have said that the proposed stations in the central western slopes and southern downs areas do not in any way affect the present position with respect to the extension of television services in what he describes as isolated areas.

  1. As I have previously informed the honorable senator, I am investigating the question of amendments to the act to provide for the operation of translator services. It must not, however, be assumed from this that the use of translator stations provides the answer to the problem of serving the residents of remotely situated areas.
  2. The cost per mile of providing microwave links for relay stations is a very variable figure, depending on the nature of the intervening terrain, the degree of reliability desired in the link - for example, whether standby equipment is provided - and whether other communication and television services are provided over the same path with sharing of costs.

page 1103

QUESTION

TELEVISION

(Question No. . 128.)

Senator KENNELLY:
VICTORIA

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

  1. Has the Postmaster-General seen the extraordinary editorial in the Sydney “ Daily Telegraph “ of 25th September, 1963 which among other things is critical of - (a) the provision that television stations must transmit 45 per cent, of the programmes with Australian content; (b) the provision that two hours of programme matter distinctively Australian in content and character must be transmitted between 7.30 and 9.30 p.m. each week?
  2. Is the proprietor of the “ Daily Telegraph “ Sir Frank Packer?
  3. Is this the same man as the Mr. Frank Packer who applied for a commercial television licence in Sydney in 1955?
  4. Was an undertaking given as part of that application that a total of 50 per cent, of Australian programmes would be transmitted?
  5. Was it in part due to this undertaking that the grant of a licence to Mr. Frank Packer was recommended by the Australian Broadcasting Control Board, and approved by the Government?
  6. Has that licence enabled Sir Frank Packer to profit by many hundreds of thousands of pounds?
  7. Does the Postmaster-General consider that, in the light of Sir Frank’s original undertaking to provide 50 per cent. Australian programmes, his subsequent failure to honour that undertaking, and his present criticism of the Postmaster-General’s current modest requirement, the value of his assurances on this matter are about on a par with the political objectivity of the newspaper he controls?
Senator WADE:
CP

– The PostmasterGeneral has supplied the following answers: -

  1. I have read the article in question in the Sydney “ Daily Telegraph “ of 25th September, 1963.
  2. Yes.
  3. Yes.
  4. Consolidated Press Limited, on behalf of Television Corporation Limited the company formed to operate as licensee of TCN Sydney, in their application for the licence in 1955 proposed to provide programmes for 35 hours per week in the first year; for 40 to 42 hours per week in the second year and for 55 hours per week in the third year of operation. It was proposed that 50 per cent, of the programme material would be of Australian origin, or 271/2 hours per week in the third year.
  5. Programme proposals of the applicant companies were taken into account by the Australian Broadcasting Control Board in allocating the licences.
  6. The published financial reports of Television Corporation Limited, the company holding the licence of TCN Sydney, have indicated a profitable operation over a number of years.
  7. As indicated in the reply to part 4 of the honorable senator’s question the original undertaking of the applicant company was to provide 271/2 hours of Australian programmes during the third year of operation. The amount of Australian material telecast by TCN stood at 38 hours weekly in June, 1963.

page 1103

QUESTION

TUNA FISHING

(Question No. 133.)

Senator O’BYRNE:
TASMANIA

asked the Minister in Charge of the Commonwealth Scientific and Industrial Research Organization, upon notice - 1.. Is it a fact that a fleet of Japanese ships is fishing in waters off the southern coast of Tasmania and periodically calls at Hobart for provisions, medical attention, &c?

  1. If so, is there any liaison between the C.S I.R.O. and the fishermen to obtain information on these tuna grounds which are obviously productive?
  2. Are any lagging operations in progress in Tasmanian waters?
  3. Have any grounds been discovered to exist in Tasmanian waters by the C.S.I.R.O. similar to New South Wales, South Australian and Western Australian bluefin tuna grounds?
  4. What is the potential for tuna fishing in Tasmanian waters?
Senator GORTON:
LP

– The answers to the honorable senator’s questions are as follows: -

  1. Yes.
  2. No. C.S.I.R.O. is, however, in liaison with the Japanese Fisheries Agency. One of its officers spent a year in Japan in 1960-61 and another officer visited Japan in July, 1963, to further this liaison and to gather information. C.S.I.R.O. is also in correspondence with the Japanese Fisheries Agency and has contacts with that agency’s officer through Technical Committee 1 of the IndoPacific Fisheries Council and through the Food and Agricultural Organization’s Continuing Committee on Tuna. It also receives the agency’s publication on the result of Japanese fishing activities.
  3. No. However, the division’s tuna tagging operations off the coast of New South Wales, South Australia and Western Australia, are relevant since the tagged tuna are believed to be of the same stock as those found in Tasmanian waters. The possibility of finding means of conducting tagging operations in Tasmanian waters is at present under discussion with the Government of that State.
  4. No. But tuna are known to exist in Tasmanian waters.
  5. Until the tuna research programme is further advanced C.S.I.R.O. cannot answer this question.

page 1104

QUESTION

MALAYSIA

(Question No. 134.)

Senator COHEN:

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

In view of the intense interest of Parliament and people in the recent events taking place to Australia’s north, will the Government place before the Senate all relevant information concerning the constitution of Malaysia and the detailed arrangements made between the States which formed the Federation of Malaysia?

Senator GORTON:
LP

– The Acting Minister for External Affairs has furnished the following reply: -

All relevant information concerning the constitution of Malaysia and the detailed arrangements made between the States which form Malaysia are set out in British Government Command Paper 2094, July 1963, a copy of which is held in the Parliamentary -Library.

page 1104

QUESTION

INDUSTRIAL RESEARCH

(Question No. 138.)

Senator MURPHY:
NEW SOUTH WALES

asked the Minister in Charge of Commonwealth Scientific and Industrial Research Organization, upon notice -

  1. What research by other bodies or persons has been initiated by the C.S.I.R.O. during 1963?
  2. Which industrial research associations have been established during 1963 by the C.S.I.R.O. pursuant to the Science and Industry Research Act 1949-1959?
  3. Which industrial research associations established by the C.S.I.R.O. or its predecessors are now in existence?
  4. What is the approximate annual expenditure on research by each of the industrial research associations established by the C.S.I.R.O?
Senator GORTON:
LP

– The answers to the honorable senator’s questions are as follows: -

  1. C.S.I.R.O. has not initiated any research by other bodies or persons during 1963. Section 9 (1) (a) of the Science and Industry Research Act which lists one of the functions of C.S.I.R.O. as the initiating and carrying out of researches has been interpreted as meaning the initiation and carrying out of scientific research within the C.S.I.R.O., not the initiation of research by other bodies. C.S.I.R.O. does, however, encourage outside research and in the current financial year expects to provide grants totalling £102,900 to support university research programmes of direct interest to its own research programme.
  2. None.
  3. None. C.S.I.R.O. has never itself established research association. It has, however, played a leading part in encouraging the establishment of the Bread Research Institute the Wine Research Institute, and Coal Association (Research) Ltd.
  4. The C.S.I.R.O. has not established any research associations.

page 1104

MINISTERIAL ARRANGEMENTS

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

– by leave - I wish to inform the Senate that during the absence overseas on official business of the Minister for Defence (Mr. Townley), the Minister for Civil Aviation (Senator Paltridge) will act as Minister for Defence.

page 1104

QUESTION

DENTAL REGULATIONS AND MEDICAL PRACTITIONERS REGISTRATION REGULATIONS

Motion to Disallow Regulations

Senator WOOD:
Queensland

– I ask for leave to withdraw the motion standing in my name for the disallowance of regulations, because of a discussion between the Minister for Health (Senator Wade), the Director-General of Health and the Regulations and Ordinances Committee, which has resulted in the decision by the Minister to repeal the regulations concerned and to replace them with new regulations. As chairman of the committee I desire to express the committee’s apprecition for the co-operation of the Minister and the Director-General.

Motion - by leave - withdrawn.

page 1104

DISABLED PERSONS ACCOMMODATION BILL 1963

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

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

[3.55]. - I move -

That the bill be now read a second time.

The bill puts into effect the policy announced by the Treasurer (Mr. Harold Holt) in the

Budget speech on 13th August, 1963. The Treasurer said -

The Government will legislate to enable the Commonwealth to make subsidies, on a £2 for £1 basis, to churches and approved voluntary welfare organizations towards the provision of accommodation for disabled persons working in a sheltered workshop so that they may reside near their place of employment.

In modern times there has been a great change in the approach to the problems of mentally and physically handicapped persons. Whereas it was once felt that, apart from the possible payment of an invalid pension, little could be done to help these people, the attitude to-day is to make concerted efforts directed at restoring them wherever possible.

In recent years the Commonwealth Government has established rehabilitation centres in each State of Australia with the aim of speeding the recovery of disabled persons. Similar centres can be found at many of the large hospitals. As a result of the services provided at these centres by highly skilled and experienced staff, and the valuable, work of numerous voluntary welfare bodies, spectacular progress has been made in restoring disabled persons and fitting them for a better life. The value of encouraging severely handicapped people, unable to work in open industry, to occupy themselves to the full extent of their abilities in productive work under sheltered conditions, is becoming more widely recognized in Australia. This has been due in no small measure to the success achieved by the voluntary organizations in establishing and operating sheltered workshops where handicapped persons can be provided with useful productive employment.

I am sure all honorable senators will agree with me that a great deal of credit is due to those voluntary organizations which have for many years unselfishly devoted time and energy to the care and rehabilitation of the handicapped. Leading organizations which have had considerable experience in the operation of sheltered workshops have claimed that many disabled people who could be actively engaged in work under sheltered conditions are unable to do so because of lack of suitable residential accommodation convenient to the sheltered workshops. The difficulty and, in many cases, the impossibility, of severely handicapped people using public transport is a major obstacle for many persons.

As we all know, the voluntary bodies conducting sheltered workshops rely heavily on public support and, as very few of them are able to meet the cost of providing accommodation, they have sought Commonwealth assistance. Under this bill, the DirectorGeneral of Social Services, on behalf of the Commonwealth, may make grants to eligible organizations, on a £2 for £1 basis, towards the capital cost of accommodation for such persons. As sheltered workshops are conducted mainly for severely handicapped persons who are unable to engage in normal outside employment, the bill defines a person who may reside in subsidized accommodation as one who has attained sixteen years of age and is permanently incapacitated for work to the degree necessary to qualify for an invalid pension or who is permanently blind. This does not mean that the accommodation can be used only by invalid pensioners as many disabled persons may be ineligible for pension on means test or other grounds. The definition is intended only to indicate the extent of the disability before an applicant may qualify for admission to subsidized accommodation.

Organizations eligible for assistance under the act are churches, charitable and benevolent organizations, and exservicemen’s organizations that are nation wide. It is realized that there may be other bodies, different in pattern and type, but who wish to be associated with this work, and these may be approved by the GovernorGeneral. Eligible organizations also include the trust or trustees under a trust or corporation established by an eligible organization. If the Governor-General approves, a trustee or trustees under a trust established for charitable or benevolent purposes may be deemed to be an organization and may become eligible for a grant. This covers cases of individual persons or public companies which establish a charitable or benevolent trust, even though the individual or company may not itself qualify as an eligible organization.

To be eligible for assistance an organization must not be carried on for the purpose of profit or gain to its individual members, nor can it be under the effective control of Government . appointees. Persons appointed by a government may belong to the controlling body of an eligible organization but where these persons are in a position to exercise control it will have lost substantially its character as a voluntary body. This restriction preserves the aim of the legislation - Commonwealth assistance to voluntary bodies - and prevents its use for inter-governmental grants. On behalf of the Commonwealth, the DirectorGeneral may approve accommodation and make grants towards its capital cost if he is satisfied that the accommodation so provided is intended to be used permanently for the accommodation of disabled persons engaged, or likely to be engaged, in paid employment in a sheltered workshop. Prior to granting approval, the directorgeneral will examine the essential nature of the accommodation and its situation in relation to the sheltered workshop where the resident will be employed. He will also consider the purpose intended by the organization at the time approval is sought.

Provision has been made in the bill for a workshop, factory,’ or part thereof to be declared by the Minister as a sheltered workshop for the purpose of the legislation. To be declared a sheltered workshop the whole, or a substantial number of the employees, must be disabled persons as defined in the bill and . must receive payment for their work. It is not necessary that the disabled workers receive a normal wage but they must receive some payment, even though it be small or in the nature of an incentive allowance. Commonwealth subsidy may.be granted both in respect of buildings purchased or to be purchased, and erected or to be erected. However, only a building in course of erection on the date on which the Government’s proposal was first announced, 13 th August, 1963, or commenced or purchased after that date, or proposed to be commenced or purchased after the date of approval, may be approved.

Under the bill, the capital cost is defined as the cost of erecting the accommodation, including the land on which it is erected, together with the cost of necessary fixtures. Where an existing property is purchased, it means the cost of purchasing the property and making any necessary alterations or additions and installing necessary fixtures to make it suitable for the accom modation of disabled persons. Payment of a grant may be made only to a corporation or trustees in whom the approved accommodation is or is to be vested.

To ensure the proper use of a grant, and to safeguard public moneys, the bill provides that the director-general may impose terms and conditions in making a grant and require an organization to enter into an agreement regarding them. Such agreement could require an eligible organization to repay the grant if the accommodation ceased to be used to accommodate disabled persons engaged, or likely to be engaged, in paid employment in a sheltered workshop. Provision is made for the giving of security to carry out such an undertaking. The aim of the bill is to encourage philanthropic endeavour by providing government assistance to voluntary effort and for the subsidizing, on - a £2 for £1 basis, of funds actually raised by an eligible organization and used for the provision of approved accommodation. A. grant may not exceed two-thirds of the capital cost of the approved accommodation. In addition it may not exceed twice the moneys actually raised by an eligible organization from donations, appeals, public subscriptions or its own resources. This intention is expressed negatively in the bill, and the amount of the grant is limited to twice the moneys expended or available for expenditure which did not become available as a result of borrowing of those or other moneys, or moneys which were received from a Governmental source.

The intention to encourage the provision of approved accommodation could be defeated, and public moneys wasted, if projects were commenced before organizations were certain that funds were available to ensure completion. Provision is made, therefore, that the Director-General shall not make, or agree to make, a grant unless he is satisfied that the moneys expended and those presently available will be sufficient, when added to the grant, to meet the capital cost.

An eligible organization is not restricted in the source of the moneys it may use to meet the capital cost of a project. Thus it might raise £25,000 from public appeals, subscriptions and donations, it may receive £10,000 from a State government and it may raise £5,000 from borrowing. The £25,000 raised by appeals, subscriptions and donations would be the sum which would attract Commonwealth subsidy. The total sum available, however, to meet the capital costs of the accommodation would bc £90,000, of which £50,000 would be the amount granted by the Commonwealth.

Grants shall be payable out of moneys appropriated by Parliament. Although it is not possible to determine at this stage the amount likely to be sought by way of subsidies in 1963-64, grants will be made to all organizations that satisfy the requirements. An amount of £150,000 will be allocated for this purpose and this sum will be increased if necessary. There is the usual provision giving power to make regulations

Mr. President, this is a general outline of the bill, which I am sure will be recognized as a sincere and practical attempt to join with the voluntary organizations concerned in giving further assistance to many less fortunate people in our community Many expressions of approval and appreciation have already been received from various individuals and organizations concerned with the care and rehabilitation of handicapped persons. I am confident that honorable senators, too, will give their full support to the bill and that it will provide churches and charitable organizations with a much needed and well deserved measure of practical assistance. I commend the bill to the Senate.

Debate (on motion by Senator 0’Byrne’ adjourned.

page 1107

AIR ACCIDENTS (COMMONWEALTH LIABILITY) BILL 1963

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator PALTRIDGE (Western Australia - Minister for Civil Aviation [4.9]. - I move -

That the bill be now read a second time.

Since 1941 special provision has been made, as an act of grace, -for the dependants of a person who is killed or injured in an air accident while travelling as a passenger on Commonwealth business or at Commonwealth expense. With the passage of the Civil Aviation (Carriers’ Liability) Act 1959, the need for special cover ceased in respect of persons travelling on Commonwealth business by interstate airline but similar cover is not necessarily available in the case of other flights. For that reason the ex gratia scheme of cover administered by the Treasury has been continued in respect of persons travelling as passengers for the purposes of the Commonwealth or a Commonwealth authority on flights to which the provisions of the Civil Aviation (Carriers’ Liability) Act 1959-1962 do not apply-

Some time ago the Attorney-General’s Department expressed doubts about the validity of the existing ex gratia provision and suggested that statutory approval for payments to the dependants of air travellers was desirable. There have been cases, too, in which associations of Commonwealth employees and persons other than employees of the Commonwealth, such as members of trade missions, have expressed concern that the cover for persons travelling as passengers by air on Commonwealth business was not more clearly defined. After careful consideration the Government decided that the existing ex gratia scheme of air travel cover should be replaced by a legislative scheme, and that is the purpose of this bill.

There are, of course, certain administrative advantages in the greater elasticity of an ex gratia scheme and there have been many difficulties to be resolved in the course of preparing the bill. Apart from some rather intricate legal aspects which have been carefully examined by the AttorneyGeneral and his officers, consideration has been given to the views and interests of a number of other departments, particularly the Department of Civil Aviation, the service departments, the Public Service Board and the Department of External Affairs.

I now propose to outline the principles adopted by the Government for the legislation. All persons travelling as passengers by air in the service of, or for the purposes of, the Commonwealth and authorities of the Commonwealth will have a uniform cover against death or injury, whether they are Commonwealth employees or not, whether they are travelling in Australia or abroad and whether in commercial aircraft or in aircraft owned by the Commonwealth. The cover will be the equivalent of that applicable to interstate passengers under the Civil Aviation (Carriers’ Liability) Act 1959-1962, namely damages up to £7,500 for all accidents, whether due to negligence in the operation of the aircraft or not.

Careful consideration was given to the change which the bill will make in the liability of the Commonwealth as an operator of aircraft. At present the amount of the liability is unlimited but arises only where an accident can be shown to have been caused by the negligence of the Commonwealth or its servants or agents. It is unfortunately true of modern aircraft accidents that it is seldom possible to determine the cause conclusively. Bearing that in mind, it was decided that the liability of the Commonwealth under the bill should be aligned with that of a commercial airline operator, against whom it is not necessary to prove negligence, and that, with the extension of liability beyond cases of negligence, it would be reasonable to limit the amount in all cases to £7,500 per passenger, as in the case of the 1959 act. - This will also avoid a distinction between persons travelling as passengers on Commonwealth business according to whether they fly in a Commonwealth aircraft or by commercial airline.

I might add that the limitation of liability in relation to negligence will apply only to negligence in connexion with the actual operation or maintenance of the aircraft. The Commonwealth may also be subject to liability for negligence or breach of statutory duty in relation to certain other matters affecting the safety of its own aircraft, such as the provision of air navigation facilities, ah* traffic control services and aerodromes, just as it might be liable to ordinary passengers on privately operated aircraft. The liability of the Commonwealth in connexion with such matters will continue without limitation.

In the case of persons travelling in aircraft not operated by the Commonwealth or a Commonwealth authority, the. Common, wealth will provide cover to the extent that it is not available from other sources; that is to say, the Commonwealth will assume liability insofar as the rights, if any, existing against the operator of the aircraft or his servants or agents fall short of the rights that would exist had the flight been made by interstate airline. The deficiency in the rights against the operator of the aircraft could arise by reason of contracting out by the airline, the necessity to prove negligence, the existence of certain defences even under the international conventions or the existence of limits of liability below those fixed by the 1959 act in relation to interstate airline flights. For example,’ the limits under the original Warsaw Convention, which will still apply in relation to some flights, are only about half the limits for interstate flights. And, as the Commonwealth liability is intended only to supplement the liability of the carrier, provision is made in the bill to ensure that remedies against the carrier are pursued and that . the Commonwealth is not prejudiced by an unreasonable settlement out of court of the carrier’s liability.

The Government considers it fundamental, and consistent with the provisions of the Civil Aviation (Carriers’ Liability) Act, that the cover provided by the bill should be confined to those travelling as passengers and should not extend to members of the crew of the aircraft. However, some difficulties arose in determining where to draw the line between passengers and crew because there are some civil employees, members of the services and employees of others who, although not normally regarded as crew, are required to perform duties in flight, and thus cannot properly be regarded as passengers. To quote a few examples, there is the scientist engaged in rainmaking operations, air evacuation nurses in the services or the employee of a private contractor performing, for his employer, an airborne check of equipment supplied by the contractor to the Commonwealth. It has been decided that, as a matter of principle, all persons flying other than for the purpose of transport from place to place should be excluded from the provisions of the bill. If the duties of a person include flying, other than as a .passenger,, that should have been taken into account in fixing, -.the remuneration for the position. In the case of any Commonwealth employee whose remuneration has not been so fixed, consideration will bc given to the provision of an allowance for the purpose of insurance. Such an allowance is already being paid in a number of cases.

Provision is also made in the bill to exclude members of the service travelling as passengers by air on active service during war or when engaged in warlike operations such as the Korean and Malayan operations. In such cases the person involved in the accident, or his dependants, would be entitled to a repatriation pension and, presumably, other benefits provided under repatriation legislation.

Subject to those exclusions, the bill extends cover to all authorized passengers on Commonwealth operated aircraft. In other words, the Commonwealth, as an operator of aircraft, will accept liability similar to that relating to accidents to passengers on commercial interstate airlines both in respect of its own employees and others, for example, a sick person carried in a service aircraft on a mercy flight or an overseas visitor travelling by V.I.P. aircraft. The cover thus given to all passengers will be adequate also to cover the Commonwealth’s responsibilities, as an employer, to such of the passengers as are in the service of the Commonwealth. An employee’s rights under the Commonwealth Employees Compensation Act will remain but will not bc cumulative with his rights under the bill.

Again subject to the exclusions mentioned earlier, cover will be provided in respect of flights on aircraft not operated by the Commonwealth in the case of an employee who is travelling in the course of his employment, any person properly travelling at Commonwealth expense, whether on Commonwealth business or not, and any person travelling by air for the purposes of the Commonwealth. The second category would include, for example, members of Parliament and their wives and children and persons visiting Australia at the invitation and expense of the Commonwealth while the third category would cover a few cases such as a diplomatic head of mission or a member of Parliament on an overseas mission travelling free in an. aircraft provided by a foreign-Government, v . / 1 expect that most claims arising out of the legislation will be settled out of court but, in the event of dispute as to the amount of damages, within the limit of £7,500, the injured person, or his dependants, will have a right of action in the courts against the Commonwealth or the Commonwealth authority concerned. I commend the bill to honorable senators.

Debate (on motion by Senator Murphy) adjourned.

page 1109

BLOWERING WATER STORAGE WORKS AGREEMENT BILL 1963

Second Reading

Debate resumed from 9th October (vide page 1019), on motion by Senator Sir William Spooner -

That the bill be now read a second lime.

Senator WRIGHT:
Tasmania

.- I do not think that it can be taken as a compliment to the Senate that the resumed debate on this national project should attract the presence of only eight honorable senators in the chamber. It is not entirely a matter for pride to reflect upon the past debate on this measure, discontinuous and unco-ordinated as it has been.

Senator O’Byrne:

– Is the honorable senator directing attention to the state of the Senate?

The DEPUTY PRESIDENT (Senator McKellar - He is not doing so directly, but indirectly he is. Is it your wish, Senator Wright, to direct attention to the state of the Senate?

Senator WRIGHT:

– No. This bill deals with a national project which is worthy of the greatest attention. It is a project which should excite a very earnest debate on the provisions of this bill. If there is one development which is worthy of the postwar opportunities open to Australia it is the conception and execution of the national project which we call the Snowy Mountains hydro-electric scheme.

We are all familiar with the fact that as this scheme was being considered over its long and wearisome history, which culminated in a decision in 1949 to commence work, alternative emphasis was placed from time to time on the shape that the scheme should take: - whether its major objective should be the production of hydro-electric power or whether the production of hydroelectric power should be accompanied by the provision of irrigation. Finally, as we know, the really national purpose upon which the scheme was founded was irrigation for the purpose of increasing national production. The provision of hydroelectricity was combined with that purpose, not as the essential feature but as an important incidental feature.

The cost of the whole scheme, as a matter of economics, was considered entirely from the point of view of the recovery that could be made from the sale of electricity. I mention these matters because although the proposals in this bill deal with both aspects they deal primarily with the irrigation purposes of the scheme. I, along with others who have a responsibility in this matter, find it satisfactory to consider the economy of the scheme first of all as a partly constructed scheme up to the present time. It is very satisfactory indeed to recall that the International Bank for Reconstruction and Development scrutinized the scheme during the last two years and was satisfied with it to the extent that it recommended a loan of about 100,000,000 dollars to the Government to enable it to continue the scheme. I find it satisfactory also to reflect that the Auditor-General - every year from the inception of the scheme, with the possible exception of the first year or two of construction - has found it possible to pass the accounts of the Snowy Mountains Hydro-electric Authority without any adverse comment of any sort that I can recall. That is a remarkable achievement on the part of such a major construction project. The Auditor-General, in his report for the year ended 30th June, 1963, records an expenditure on this project totalling more than £219,000,000. It is a matter for great satisfaction that the expenditure on such a vast project in such difficult country has been controlled with such a degree of supervision that the accounting work and the custody of stores have in all respects met proper audit requirements. Considering the comprehensive nature of the scheme and the diversity of the activities undertaken, we should not let this opportunity pass without dwelling upon the achievement of those responsible for attaining that degree of accounting efficiency.

In the course of the debate, opportunity has been taken to review the progress of the scheme. I simply note in -passing that, as I understand it, hydro-electric power production had reached 660,000 kilowatts at 30th June, 1962. That compares with a production of 617,000 kilowatts by the Tasmanian hydro-electric scheme at that time. It is significant that the output of the Snowy scheme was from the Guthega, Tumut 1 and Tumut 2 power stations only. By 1969 the scheme will incorporate two new stations, Murray 1 and Murray 2, and the total hydroelectric power output will be 2,160,000 kilowatts. That is to say, it is expected that in the next six or seven years the output that was achieved by 30th June, 1962, will be trebled. All of those concerned with the direction and execution of this undertaking can take great credit for the achievement up to date and for the prospect of achieving such a greatly increased output.

The Auditor-General has noted in his report that income from the sale of electricity to the States at the actual net cost of production increased from £3,400,000 in 1961-62 to £7,100,000 in 1962-63. When one considers the income recovery from the power produced up to date and the income recovery that will accrue from the developments by 1969, it is clear that the work of the past fourteen years gives basis for real confidence to those who have an earnest interest in building the strength of this nation.

I find it very heartening to read in the annual report of the Snowy Mountains Hydro-electric Authority that not only have the economics of the scheme undergone the scrutiny of the International Bank for Reconstruction and Development and the authority itself, but also the scheme is producing electricity at costs that are competitive and sound by comparison with the costs of other power. This is quite apart from the benefits that accrue from the scheme through irrigation. As I understand it, the economics have been based solely upon sales of hydro-electric power, but the State irrigation authorities have estimated that the developmental benefits that will accrue from the scheme when completed will . amount to no less than £30,000,000 a .’year. ‘ ..As . the,.’ authority reminds us, indirect benefits will, undoubtedly flow from the establishment of thickly populated communities in the enriched irrigated valleys and adjoining areas. These new communities will give the nation added strength. The benefits that will accrue, first from the sale of electricity, secondly from the increase of £30,000,000 a year in value of agricultural production, and thirdly from the indirect community and national development, should stimulate the enthusiasm of even the most sluggish of us.

Against that background of progress and achievement, we have seen in this Parliament over the past few years some evidence of differences of opinion, dissension and political controversy1 over the particular project mentioned in this bill, namely, the construction of the Blowering dam. To put that matter in context, we must remind ourselves that clause 6 of the agreement between the Commonwealth and the States, which is appended to the Snowy Mountains Hydro-electric Power Act 1958 provides that -

The State of New South Wales shall for the purpose of regulating waters of the Tumut River and the waters diverted thereto from the Eucumbene, Tooma or Mumimbidgee catchments -

as soon as is practicable construct, or cause to be constructed, storage works on the Tumut River at Blowering . . .

The Blowering dam, as I understand it, was predominantly to be a control mechanism on this river, which will be artificially swollen by the works I have just mentioned. But of course it was always intended that in building the dam the authority, for the purpose of electricity production, should incorporate in the structure a station which would produce electricity.

The other feature about it was - and I hope to be corrected if I am wrong - that once the waters were artificially controlled from Tumut No. 2 station down to the site of the dam the people who have property on the river banks were subjected to unnatural behaviour of the water. This entailed damages and claims for liability which the Commonwealth Government accepted. After the completion of Tumut No. 2 station, there was an essentially practical administration problem presented by the failure to construct the next .vital .step in this integrated system of electricity pro duction and water control. I believe that the solution that has been found and expressed in the agreement attached to this bill betokens a businesslike, purposeful and practical approach to that problem. Had it been treated on a purely narrow political basis it could have led to wasteful controversy. But here is the best practical solution to the problem, and the scheme will be allowed to advance consistently with its purpose.

I have no doubt that the credit for this businesslike solution should be attributed to what I consider to be a most happy combination of those in charge of the undertaking. The Minister for National Development (Senator Sir William Spooner) has a comprehensive understanding of business and his thinking is big. He has the ability to achieve an accurate assessment of the costs and economics of projects of this dimension. The direction is ideal when the Minister’s ability is combined with the unique skill and genius of Sir Willian? Hudson, the administrator we have been privileged to have in charge of the Snowy Mountains Hydro-electric Authority since its inception. The ideal solution to which the bill gives expression is the joint product of that direction.

So we have a bill which gives expression to an agreement whereby the Commonwealth Government, instead of asking the New South Wales Government to discharge its obligations to build this dam - as the State Government undertook to do out of its ordinary allocation of loan funds- is giving special financial assistance to the State. This amounts to £11,000,000- half the estimated cost of the dam - and the money will be provided, of course, on terms of appropriate repayment.

When Senator Arnold made his speech on this bill I was sorry indeed to hear him allude adversely to the financial obligations undertaken by New South Wales in respect of the loan. His remarks were not on the level upon which Senator Arnold generally debates such matters. No fair mind could, bring itself to question or cavil at acceptance of the terms of this allocation. The New South Wales Government will be able to discharge its undoubted obligation to construct this dam, and will repay the loan on ordinary business terms.

The second point is that the authority itself has agreed to become the agent of the State for the purposes of the actualexecution of the work. That of itself is a great compliment to the authority. It has proved itself to be one of the most efficient construction authorities doing work of this character in the history of Australia. But it will be seen from the bill that New South Wales, in accepting the aid of the Snowy Mountains Hydro-electric Authority as its agent, has not only accepted the services of the authority but also accepted the risk, lt is made quite clear that when the authority acts in respect of the construction of the Blowering dam it shall be the agent of the State. All payments made by it shall be made on behalf of the State. The authority will ensure that the works are carried out effectually, but all the work shall be at the sole cost and risk of the State. This is a logical and proper conception. I agree with it and do not criticize it. This conception is carried to the extent that the State has expressly agreed to let the authority make the final decision in the acceptance of all tenders.

I will be corrected if I am wrong, but J believe that the reimbursement of expenditure to the authority by the State is guaranteed in accordance with the certificate of the Commonwealth AuditorGeneral. If a dispute arises as to whether or not actual expenditure has been incurred by the authority as the agent of the State, the Commonwealth Auditor-General’s certificate is to be the final instrument that will decide that issue. Not only are actual costs incurred by the authority guaranteed to be paid by the State - the principal reimbursing his agent - but a reasonable allowance is to be made also for overhead and general costs that are usually charged as overhead on construction jobs of this sort.

Then, to fulfil the general picture, it is provided that the dam shall be finished in six years. The State undertakes - I think it is within a specified time of completion - the obligation of establishing at least 75 large farms in the Coleambally district. This is a district with which I am not personally acquainted, but I would appreciate an opportunity of visiting it. Then it is provided that in an unspecified time after the completion of the dam the State will utilize the whole of the irrigation waters in the best practical manner. I hope that water will not be wasted in growing peaches that are later destroyed. Honorable senators will recall that during the debate last week it was stated that 6,000 tons of peaches were destroyed in a year. I hope we shall proceed with this developmental project, which has such remarkably good potential, in a practical way to ensure that it will be worthwhile and will bring prosperity to the settlers.

It is good to visualize the Tumut valley with two huge power stations already completed. However, water is pouring down the valley and going to waste. In order that such waste should not be permitted to continue, the commonsense, businesslike proposal that is embodied in the agreement we are discussing has been evolved. Miserable, back-biting, petty party politics has been eschewed in this reasonable and generous offer of special financial assistance to New South Wales to enable the dam to be constructed. The proposal has the three-fold purpose of controlling the waters between Tumut 2 and the Blowering dam, providing irrigation storage works, and enabling the Snowy Mountains Authority to construct a power station for the provision of electricity at an estimated cost of £7,000,000. Mr. President, I find that the bill is one of which we may be thoroughly proud. The construction of the dam will be a performance worthy of Australia.

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

[4.47]. - in reply - I begin by thanking the Senate for its support of the bill. I express my personal apology for being unable to be present in the chamber during the early stages of the debate. I was called away on Cabinet business. I am sorry I was not here because, as honorable senators may suspect, this is a matter in which I take a very deep interest. I had wanted to listen to the discussion. I am a little handicapped in winding up the debate because my colleague, Senator Wright, has covered many of the matters with which I had intended to deal. I congratulate him on the way in which he has summarized the position.

So far as the case presented by the Opposition is concerned, there is only one point that I want to discuss. Senator Arnold, when leading for the Opposition, did not mention that the construction of the dam really was the obligation of the New South Wales Government rather than that of the Commonwealth Government. He seemed to create the impression that New South Wales was not being well treated under the arrangements and that, indeed, there might be some dissatisfaction because New South Wales would have to find half of the funds. I shall reply to that suggestion because I think a reply is necessary. I should be very surprised indeed if that is the feeling of the New South Wales Government in the matter. The members of that government with whom I conducted the negotiations realized the great advantages of this bill from the point of view of New South Wales. I want to retain the atmosphere in which the negotiations were conducted.

This is a very big project indeed. The dam itself will cost £22,000,000. The powerhouse that is to be constructed alongside it will cost an additional £7,000,000. The Coleambally irrigation scheme will cost at least an additional £10,000,000, making a total of £39,000,000. This is a young country and £39,000,000 is a very great capital expenditure. I believe it is of the greatest importance to ensure that the expenditure is efficiently controlled and that the good feeling that exists between the two governments concerned, despite their philosophical differences, should be continued in order to ensure co-operation and the give-and-take that is inevitable in such circumstances. You do not spend £39,000,000, Mr. President, without running into problems. During the course of the work many matters will arise and it will be necessary for the two governments to be closely in contact. I believe that all concerned will act with a sense of responsibility.

As Senator Wright and other honorable senators have mentioned, this is an unusual arrangement. The Snowy Mountains Authority is a Commonwealth organization. Yet, in this undertaking it will be working solely for the Government of New South Wales. In the years ahead, the authority will be reporting to the Commonwealth Minister on matters that relate to Commonwealth activities and correspondingly, on matters that relate to State activities it will be- reporting to .the State Minister and taking directions from him.

Senator Kennelly:

– Does the Minister think that this may be rather a worrying position and liable to cause complications?

Senator Sir WILLIAM SPOONER:

– 1 believe it is not possible to spend £39,000,000 on a project without complications arising. In this instance we are speaking of a first-class organization, with specialist knowledge. Yes, of course there may be complications. That is why, at the beginning of my remarks, I said that in these arrangements there must be giveandtake, despite our political views, so that we may be able to sort things out and deal with the day-to-day problems.

Senator Dittmer:

– That is why we want a change of government in the federal sphere after 30th November.

Senator Sir WILLIAM SPOONER:

We can always rely on Senator Dittmer to muddy the water at some stage or other. I come now to the next point that I think should be made. The fact that in this big task we are using the Snowy Mountains Authority should not in any circumstances be regarded as derogation of the State officers and the State organization. A big instrumentality such as the Snowy Mountains Authority must be kept fully occupied and given a firm programme. It must have work to employ all the organization it has built up and the skills and experience it has acquired. During the next couple of years the work of the Snowy Mountains Authority will be right at its peak. In those years expenditure on the Snowy Mountains scheme will reach the highest levels. In that time we will see the completion of the. Murray 1 and Murray 2 programmes. This, of course, is the turning point in the scheme. With the completion of those programmes the whole of the Snowy waters will have been diverted, portion into the Mumimbidgee and portion into the Murray, and we will be delivering a great deal of the available power.

In the absence of the Blowering reservoir the water would not be fully utilized. That was something that could not be contemplated. Therefore, we had to work out, with the New South Wales Government, a scheme for the completion of the Blowering reservoir. What we did was to make room for this in the immediate financial programme by deferring some of the later works of the Snowy Mountains scheme. But you cannot destroy a big organization, or upend it, just because you are deferring some works. We had to work out a programme which gave the Snowy Mountains organization work to do in place of that which was deferred. It was for that reason that in the negotiations I said to the representatives from New South Wales that we could assist with the financing of the Blowering reservoir only if the State was prepared to use the Snowy Mountains organization in that work. That was not said in derogation of the State officers concerned but merely because unless we did this we would have to disband the Snowy Mountains organization, with all the expense and consequent loss of skills that would follow.

The deferment of the lower Tumut works is, in my opinion, of no consequence as they are not expected to come into operation until the early 1970’s. They have not yet been considered and have not yet been planned; they were not due for consideration for another four or five years. We do not know what the shape of things will be four or five years hence as the demand for power is changing. Officers of the Snowy Mountains Authority are now designing power houses quite different from those that they were designing a few years ago. Events may well show that the deferment of the lower Tumut power stations is a good thing because it is even now suggested that they may be converted into very large power stations operating for only 5 per cent, of their time.

Senator Kennelly:

-Will they not be able to help the States, as Senator Wright suggested?

Senator Sir WILLIAM SPOONER.Yes, but in Victoria and in New South Wales as well much larger thermal power stations are being built. With such stations it is a tremendous problem to deal with the peak of demand and the thinking is turning more and more to the Snowy Mountains scheme to provide that peak power. So it could well be that, in the final analysis, the deferment will be no disadvantage.

I said in my second-reading speech, and I repeat now, that the diversion of water to the Murrumbidgee for the Coleambally irrigation area is, in my judgment, the largest single developmental project available to-day in Australia. It is one which governments and the people should be able to go into with confidence because, behind this scheme, is the long experience of the Murrumbidgee irrigation area. This experience has equipped every one concerned to deal with whatever problems arise in the future.

Question resolved in the affirmative.

Bill read a second time.

In committee:

The bill.

Senator O’BYRNE:
Tasmania

.- I should like to address a question to the Minister for National Development. In. view of the fact that the Snowy Mountains Hydro-electric Authority will become an agent for the State of New South Wales in this very vast undertaking, what provision is being made to maintain continuity of work for the authority after it has completed its contract with New South Wales?

Senator Sir WILLIAM SPOONER (New South Wales - Vice-President of the Executive Council and Minister for National Development) [5.1]. - I believe that I dealt with this point in my second-reading speech. With the Blowering dam there is now a programme of works for the Snowy Mountains Authority which will extend until about 1974 - eleven years from now.

Senator ORMONDE:
New South Wales

– I wish to address a question to the Minister for National Development. Do I understand that now the Snowy Mountains project, as we have known it, is finished, the work in that area has ended?

Senator Sir William Spooner:

– No.

Bill agreed to.

Bill reported without amendment; report adopted.

Bill read a- third time.

page 1115

SNOWY MOUNTAINS HYDROELECTRIC AUTHORITY BILL 1963

Second Reading

Debate resumed from 25th September (vide page 817), on motion by Senator Sir William Spooner -

That the bill be now read a second time.

Senator McKENNA:
Leader of the Opposition · Tasmania

– This is a short bill with a single purpose - to extend the term of office of the Snowy Mountains Hydroelectric Authority for a further period of three years from April of next year. The Commissioner, Sir William Hudson, was appointed in August, 1949, by the Chifley Government for a period of seven years. His appointment was extended in 1956. Under that arrangement his time, normally, would have been up on 26th April, 1961. In 1960 the Opposition supported the Government’s proposal to extend Sir William’s term for a period of three years from -April, 1961, for reasons that were then given. We affirmed on that occasion that, so far as te Public Service generally is concerned, we considered that the retiring age should be fixed at 65, but that, having regard to the situation of the Snowy Mountains project, Sir William’s term ought to be extended. The reasons that actuated us then actuate us to-day in considering the bill which provides for a further three years’ term from April next year.

We recognize, however, that there is a distinction between a departmental head running a vast government department and a man in charge of what is after all, despite its magnitude, a single project. Sir William Hudson has brought to that project most extraordinary qualities of a personal kind. Under his leadership a very efficient technical and administrative staff has been built up and, with its aid, the work has been pushed ahead free from industrial troubles. In addition to that, Sir William, personally, has been very largely responsible for stimulating a nation-wide interest in the project over which he presides.

Now, as we learned from the Minister for National Development (Senator Sir William Spooner) in the course of the debate that we just concluded on the arrangements concerning the Blowering dam, the authority is to take over not only the construction of the Blowering < dam but also -its” design, ‘.and- is ‘to go.: ahead, itself, with the organization of another power house adjacent to the dam. The two projects, between them, will cost about £29,000,000- about £22,000,000 for the Blowering dam and about £7,000,000 for the power project which will be designed and constructed by the Snowy Mountains Hydro-electric Authority.

As the Minister indicated in closing the debate on the bill that we have just passed, the next two years will represent the highest peak of expenditure on the vast Snowy Mountains project. We of the Opposition recognize the value of having Sir William Hudson as the directing and co-ordinating force of this project. It has been quite noticeable throughout the whole period of construction, from the time of Sir William’s appointment in 1949, that he has provided and preserved the spirit of that undertaking. We recognize that the authority is entering upon quite vast expenditure on work in which highly critical decisions have to be made. We are happy to note that he is fit and well enough to continue. Not only do we thank him for the success that he has made of this great undertaking but we take this opportunity to pay a tribute to the staff that he has gathered round about him and to all those who have participated in the work which has been a magnificent display of co-operative and enthusiastic effort on the part of everybody connected with the project. The Opposition pays tribute to Sir William Hudson’s worth. We wish him good health and success in this great national undertaking in the future. I have very much pleasure in supporting the bill.

Senator WRIGHT:
Tasmania

.- I rise because I should not like this opportunity to pass without paying, briefly, a very enthusiastic tribute to the ability, professional and administrative, of Sir William Hudson. It is a great compliment to him that the Government sees fit to introduce a special bill to extend his term of office. I am sure it has the keen support of every member of the Senate. We owe him very much. I wish to add only two thoughts to that. The first concerns the satire of having to bring in a bill of this nature in a country in which we are so short of engineering capacity, scientific skill and business ability. Long since we should have had some reconsideration “ of a retiring age of 65 years which, although appropriate to 1943 or 1953, is not appropriate to 1963, having regard to the increasing health of the community and the sore need of the nation for engineers, scientists and other men of skill. The other matter I wish to mention is that Sir William undertook a world tour in recent years. I should like to learn from the Minister for National Development (Senator Sir William Spooner) that some arrangement is being made to have the information which Sir William no doubt collected on that occasion put on record for reading by parliamentarians so that Ave may know the results of overseas experience in the production of hydro-electric power. I should also like any information that he may have with respect to the possibility of hydro-electric power being superseded by nuclear power to be made available to members of the Parliament. I support the bill.

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

[5.10]. - in reply - I should think that it will give great satisfaction, indeed, to Sir William Hudson to find that this bill has the support of both sides of the Senate. For myself, having worked with him for so long, I believe that he well deserves that support. As to the point raised by Senator Wright, I have found that one of the problems is that Sir William Hudson works himself so hard that it has been difficult to get him to go overseas from time to time. On this occasion, he went mainly to read scientific papers. He was asked to attend a couple of engineering gatherings to deliver papers. That was the main part of his work abroad. I shall see whether there is any possibility of meeting the request that he provide some review of the other work that he did.

Question resolved in the affirmative.

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

page 1116

LOAN (HOUSING) BILL (No. 2) 1963

Second Reading

Debate resumed from 10th October (vide page .1069), on motion by Senator Sir William Spooner - . _

That- the bill bc now,- read a second, time. , ;

Upon which Senator Fitzgerald had moved by way of amendment -

Leave out all words after “ That “, insert: - “whilst not in any way opposing the passage of the bill, the Senate expresses the view that ‘he Government should give effect to the recommendation of the Conference of State Housing Ministers in Melbourne on the 19th March, 1963, that a committee of enquiry be established consisting of representatives of the Commonwealth Government and the State governments to enquire into the anticipated increased housing requirements arising during the next five years “.

Senator ANDERSON:
New South Wales

– As I said briefly, just before I secured the adjournment of this debate, I support the bill and oppose the proposed amendment. The amendment proposed by the Opposition is a complete contradiction in terms. In truth, it would have the effect of defeating the bill. Let there be no misunderstanding about that. The motion is -

That the bill be now read a second time.

The proposed amendment commences -

Leave out all words after “ That “, - the objective being to insert other words to which I shall refer in a moment. Clearly, if the proposed amendment were carried, we could not proceed to the committee stage of the bill or to the third-reading stage. Therefore, the effect of the proposed amendment would be to defeat the measure. When the Opposition moved an amendment which commenced with the words “ leave out all words after ‘ That ‘, insert: - ‘ whilst not in any way opposing the passage of the bill ‘ “ it was uttering mere mumbo-jumbo. It was talking arrant nonsense. The Opposition cannot honestly move that all words after “That” be deleted and then say that it is not opposing the bill, because that is precisely what it is doing. The words are a contradiction in terms. I would have had much more regard for the Opposition if it had spoken to the motion for the second reading of the measure, if it had then made its point in relation to the appointment of a committee of inquiry at some later stage, and left the matter at that. Having used a form of words which is designed to defeat the measure, Opposition senators must face up to the situation. The Opposition lacks the courage to oppose the measure, but it lias moved an amendment which, if it were agreed to, would definitely defeat the bill.

This bill is designed to authorize the borrowing of £49,850,000 for allocation to the States for housing. It will be part of a sum of approximately £272,000,000 which was agreed upon by the Australian Loan Council as being necessary for works and housing. It is significant that during the last three years the amount which has been allocated by the Loan Council for housing has progressively dropped. That indicates in no uncertain terms that the needs of the States for loan money for housing have been reduced. In 1961-62 the proportion of the total works allocation agreed upon for housing purposes was 20.4 per cent. In 1962-63 the proportion was reduced to 19.1 per cent., and in 1963-64 it will be 18.3 per cent. That is the perfect answer to the argument that the backlog of housing has not been attacked during the life of this Government. I repeat that the State Premiers, some of whom are not of the same political persuasion as this Government, have decided that, whereas in 1961-62 20.4 per cent, of the total sum allocated for works and housing should be applied to housing, in this financial year they will apply only 18.3 per cent, to that purpose.

The proposed provision of £49,850,000 for housing will be allocated to the States on a percentage basis. Of that sum - at this point I am struggling, because I have not my notes with me as yet - New South Wales will receive £16,500,000. Seventy per cent, of the allocation to New South Wales will be used by the State housing authority and 30 per cent, will be allocated to the home builders’ fund and will of course go to the co-operative building societies. That proportion of 30 per cent, will be lent by the Commonwealth at a rate of interest of 3i per cent. In fact, the Commonwealth will lend the whole of the money at that rate of interest. Then the States will add a procuration charge - I shall call it that for want of a better name - of 1 i per cent. So the money will be lent to the building society movement at a rate of interest of 3i per cent, plus li per cent. The building society movement will lend the money to the borrowers for an additional charge of one-quarter of 1 per cent, plus management fees, which will mean that the societies’ costs will be a little less than onehalf of i per cent;’ * *’ ’ ’ ’

I suggest that the charge made by the Commonwealth to the States needs to be examined. I think I should make the point at this stage that, although it is proposed that £49,850,000 shall be made available to the States, because of the operation of the revolving fund an additional sum of £2,500,000 will be made available for housing. The money that is lent by the building society movement is amortized over a period of from 29 to 31 years whereas the Commonwealth lends the money to the States for 53 years. So, because of the rate at which the money is repaid to the societies, the sum that is made available by the Commonwealth is used twice. Instead of that money coming back to the Commonwealth immediately and being paid into Consolidated Revenue, it goes into the revolving fund. Consequently, quite a substantial sum can be lent by the States to the building society movement. It is a historical fact that this year something like £2,500,000 additional money will be made available for housing consequent upon the system of the revolving fund.

Senator Ormonde:

– Is it the same in all States?

Senator ANDERSON:

– Yes. That is a principle written into the agreement.

Senator McClelland:

– Is it the same percentage in all States?

Senator ANDERSON:

– No. The question arises as to this amount that the States charge as what I call a procuration fee. Oddly enough, when the Commonwealth’s interest charge was 4 per cent. New South Wales added only lj per cent, by way of procuration fee. When the Commonwealth interest charge went down to 3i per cent, the State procuration fee went up to li per cent. The State procuration fee, therefore, went to more than one-third of the total interest charge. That is not a very high amount, because, if the States are putting the money back into the building fund, at least it has the effect of providing more homes for people who get loans through the building societies.

Senator Ormonde:

– Is that what has happened?

Senator ANDERSON:

– That is the point I am questioning. If, however, the money is being used for the ordinary housing projects of the State it will go into the 70 per cent, of the allocation which is spent by the State through ils housing instrumentality.

The third thing is that all this money is handled by the Rural Bank. The question 1 pose is: What percentage does the Rural Bank charge for acting as agent? The State is acting as the agent for the Commonwealth, the Rural Bank is acting as agent for the State, and finally the money goes to the building societies. I must confess that I had prepared some fairly extensive notes on this point and I am struggling a little as far as the details are concerned because I have not those notes before me. I do not want to misrepresent the position. I think it is fair to say that the building societies obtain the money from the State at 4$ per cent, whereas the State gets the money from the Commonwealth at 31 per cent. That is, the State acts as an agent and supplies the money to the building societies at 41 per cent. To get the complete picture we must remember that the building societies lend the money out at 5 per cent, plus a management fee, which brings the interest to approximately 5i per cent. The building societies lend the money on a 31-year term whereas the State instrumentality lends it on a 53-year term, and by way of the revolving fund additional sums of money can be made .available.

I repeat that previously, between February, 1961, and July, 1963, when the Commonwealth was charging the States 4 per cent, for the money the States were adding a loading of H per cent., and lending the money to the building societies at 54 per cent. Now that the Commonwealth rate is 3i per cent, the State has a loading of H per cent. There is a difference of i per cent, which I suggest is quite unnecessary.

Senator Vincent:

– Why does the State have to charge li per cent, for a service of that nature?

Senator ANDERSON:

– That is the question that 1 am postulating. The Rural Bank handles the business and makes a charge accordingly. From the bank’s point of view it is ideal business, because the bank gets a great advantage from the movement of the money through the bank and the ordinary business that it attracts.

Senator Ormonde:

– Who do you suggest should handle it?

Senator ANDERSON:

– I am suggesting that the States should handle it. As a matter of academic interest, 1 understand that in Victoria the State adds no loading at all. This is one aspect that has to be examined. I want to make it perfectly clear that it may well be that the extra money that accrues from the handling charge is going into the builders’ revolving fund, which in turn is providing additional loan. I do not know. The money may be going into the ordinary housing funds of the State - the 70 per cent, of the allocation. 1 should like the Minister to give some explanation of this aspect of the matter.

Senator Fitzgerald made it perfectly clear that he was speaking with some deliberation. He said -

As I am leading for the Opposition on this occasion, it is important from the point of view of my party that the information which I seek to give should be given precisely and accurately.

We can take it that Senator Fitzgerald was not speaking rhetorically as it was claimed that Senator Cant was speaking the other night, but was speaking, in fact, deliberately from a very carefully prepared series of notes on a major issue which related to his party. I now want to put the other aspect that he gave us as it appears on page 1067 of “ Hansard “. He went on to say - Of all States, New South Wales, which is the largest and oldest State in the Commonwealth, has the greatest housing problem. It has the greatest number of people awaiting homes and the greatest number of sub-standard homes.

That comes from the mouth of Senator Fitzgerald, and I think that we can take it as being correct. It is equally true, of course, that New South Wales has had a Labour government for more than twenty years. Whilst other States have made a real impact upon their housing problems, in the words of Senator Fitzgerald - in making a considered statement when leading for the Opposition - the condition of bousing is worse in New South Wales than it is in any other State, because New South Wales has the greatest number of substandard homes.

There are very good reasons for this poor impact upon the housing problem in New South Wales as compared with the impact

In other States. I think it is to be found in the political philosophy of the government of that State compared with the philosophies of the governments in other States. lt is equally true that to a great degree the trouble stems from the fact that New South Wales has maintained an archaic set of laws relating to property and landlords and tenants. These laws have had the effect of completely frightening off investment in housing and freezing the availability of homes for letting purposes. As a consequence, we find that too many properties arc being held by a few people who are not prepared to enter into the letting field because of the experience they have had in New South Wales.

These people have not been encouraged to invest in properties. Instead of investing in property they have put their money into land speculation. In New South Wales the price of land has become far too high and local government authorities and semigovernment authorities have had to bring down severe regulations in relation to the subdivision of land. This has tended to increase the cost of land. J think a classic example was the action of the Cumberland County Council - of which 1 was a member for twelve months a long time ago - in put; ing a blanket freeze on thousands and thousands of acres of land by declaring various areas to be not ready for subdivision. The land was classified either as green belt or open space recreation land. A classic example is to be found at North Ryde. Owners of property in that locality are not allowed to alter, renovate, renew, or even paint their premises without the permission of the authority. The land remains idle and then it is trickled out in dribs and drabs, a few hundred acres at a time, by the planning authority, although it is now almost out of business. The release of a few acres for subdivision in a land-hungry area can only produce a terrific demand for land. Thus, the planning procedures have a definite tendency towards inflation of values.

Further, the Metropolitan Water Sewerage and Drainage Board has, over the past few years, imposed all sorts of conditions upon -subdivision. It insisted upon the fulfilment of all sorts of conditions by subdividers in the Campbelltown-Minto area, with the result that costs were increased out of all proportion. This attitude permeates all local authorities. If a person subdivides tcn blocks, the council requires one block for a park. Having obtained the area, very often the council allows it to lie idle without development, and it becomes a place where naughty people throw rubbish. All these things have had an adverse effect on the price of land, making it higher than it should be, and making it more difficult for a home seeker with a small deposit to buy land.

Senator Ormonde:

– Is the price of land higher in New South Wales than, for example, in Victoria?

Senator ANDERSON:

– I gather that it is. It is very difficult to give a firm answer. I should think that in some metropolitan districts of Victoria similar conditions apply and the price of land is out of all proportion to its real value. I can speak only of New South Wales as I know it. One of the difficulties associated with home ownership and home building in New South Wales is the high price of land. I do not think that there is any doubt that the Government and some local authorities have contributed to that state of affairs, first by town planning procedures which were too arbitrary and were not geared to existing conditions, and secondly by restrictions imposed by local authorities, lt is true to say, as Senator Fitzgerald has said, that housing conditions in New South Wales are worse than those in other States.

Senator Ormonde:

– That is why we want more money.

Senator ANDERSON:

– New South Wales could have had more money if the State Premiers had sought more money for housing. Out of an amount of £272,000,000 allocated by the Loan Council for works and housing, the Premiers decided that they wanted only £49,800,000 for housing. This was only 18 per cent, of the total amount, whereas two years ago they allocated 21 per cent, of the total for this purpose. That makes the honorable senator’s proposition look rather odd. The New South Wales Government could have devoted more money to housing by spending less on the opera house. The State Government, on its own admission, will spend £12,500,000 on this undertaking.

Senator Ormonde:

– Not out of housing funds.

Senator ANDERSON:

– It could have used those funds for housing.

Senator Ormonde:

– I thought you were a man of culture.

Senator ANDERSON:

– I am a man of culture and I shall go to the opera, but if I, as Premier, had to decide at this period whether I would allocate £12,500,000, or perhaps £15,000,000, to an opera house or to housing, I would settle for housing.

Senator Ormonde:

– Construction of the opera house has been financed by lotteries.

Senator ANDERSON:

– That does not matter. The money goes from lotteries to Consolidated Revenue and from there to opera house construction. It could equally well go from Consolidated Revenue to housing. The honorable senator is on very bad ground there. He had better drift away from it.

Senator Wright:

– It is a bad policy to control rents while encouraging people to invest in lotteries.

Senator ANDERSON:

– At first it was suggested that the cost of the opera house would be £3,500,000. Now the cost is up to £12,500,000 and it is not finished yet. Honorable senators opposite talk about shortage of money for housing. What sort of a story is that in relation to New South Wales? The honorable senator has drawn me away from my argument.

Although the Opposition says that .it is not opposed to the bill, its amendment, if carried, would defeat the measure. The appointment of a committee to investigate the housing position is suggested. I do not think that the housing position is nearly as bad as the Opposition would have us believe. A university professor made about three or four attempts to estimate housing requirements and on every occasion produced a different answer. I am not particularly impressed by the suggestion that a committee be appointed. Recently the “ Australian Financial Review “, under the headline, “ Home approvals soar - Indicators point to vigorous building boom “, stated -

Evidence of the coming boom in housing construction in Australia continues to accumulate. The latest indication of the good times -in’ store for home building is the news that in the three months ended August this year the value of houses and flats approved rose to £93,600,000.

That is a pretty strong argument. It is not a Government statement but a statement by an objective journal which has high prestige throughout the Commonwealth. It went on to say -

This figure is close to the £95,400,000 in houses and flats approved for building during the buoyant times of the three months ended August, 1960.

The “Australian Financial Review” has no fears about the future of home building.

The August, 1963, issue of the Reserve Bank “Statistical Bulletin” showed the amounts of new loans approved by savings banks for housing. They are -

Referring to those figures, the “Australian Financial Review” made this comment -

It is clear from these statistics that in the last twelve months there has been an explosive development of new lending approvals for housing.

That is a comment that is completely untinged by the influence of politics. I am sure that what this journal describes as an “ explosive development of new lending approvals for housing” stems from this Government’s approach to this problem.

Sitting suspended from 5.45 to 8 p.m.

Senator ANDERSON:

– Before the sitting was suspended, I was speaking on the Loan (Housing) Bill (No. 2) 1963 authorizing the raising of £49,800,000 for housing to be advanced to the States in 1963-64. Senator Fitzgerald has moved an amendment to the motion for the second reading .proposing to leave out all words after “ That “ and inserting certain words in their place. Part of the amendment reads - whilst not in any way opposing the passage of the bill.

If all the words after “ That “ are’ left out, the bill must be opposed. If the amendment is carried, the bill cannot proceed.

Senator McKenna:

– That is not right. The bill could be submitted again.

Senator ANDERSON:

– I repeat that the bill could not proceed, as the Leader of the Opposition admits by his interjection. The amendment is designed to prevent the passage of the bill. The Government has a fine record in housing. Construction of homes has reached a rate of about 100,000 a year. If we can maintain that rate we shall not only meet our current demands but make inroads on the lag in housing. It is foolish, of course, to think that housing in Australia can be met entirely through government agencies. The housing industry requires strong support from the private sector and we must keep in mind the contributions of banks, insurance companies, building societies and other institutions. In his second-reading speech the Minister for National Development (Senator Sir William Spooner) said that in 1961 contributions by the private sector to housing amounted to £79.720,000. This total had risen to £81,400,000 in 1961-62 and in the last quarter of 1962-63 was running at the rate of £113,000,000 a year.

Senator Wright:

– Is that their contribution?

Senator ANDERSON:

– In terms of financial contributions to housing generally. The point I was making is that there is quite a misguided belief in some quarters that the housing finance problem can be solved by direct contributions from the Commonwealth Government, which has limited constitutional powers, or indirect contributions through State instrumentalities. But, in fact, the private sector is the most important in the housing industry. Its contribution to housing depends, of course, on the national economic climate. If the economic climate were poor, clearly the finance provided for bousing through banks, insurance companies, permanent building societies and the .like would fall away. It is of the very essence that you must have a good economic climate, a stable government - a government in which the general public has confidence - so that funds will be available from the private sector for housing.

Senator Wright:

– What were the figures the honorable senator gave us as the contribution of the private sector? Did they show the value of houses built by private owners?

Senator ANDERSON:

– No, the funds of money made available through the various private channels.

Senator Wright:

– Financial institutions financing private homes?

Senator ANDERSON__ Yes. Permanent building societies are a new feature in home finance, and run parallel with the terminating societies which receive great financial assistance through the housing agreement. The permanent building societies seek money from the public. They have a very low management cost and make money available to home owners. The advantage of these organizations, as distinct from the terminating societies, is that they can lend more. They have no limit, such as £3,500. They can lend money on different terms. Their loans attract a higher rate of interest, but this is comparable with the requirements of the market. Generally speaking, permanent building societies borrow money at 6 per cent, from the public and lend it out at about 7 per cent, plus a management cost bringing the total to Ti per cent. That is a very low management charge. They are non-profit organizations and have a revolving fund in a sense in that any accumulation of funds naturally goes into providing more finance for homes.

But the whole crux of their operations - and indeed of the operations of the insurance companies and banks - is that the public has confidence in these institutions. To that extent, the accomplishment of the Government in providing additional money for home-building over a period of years through the private sector reflects the confidence that is held in the Government. I am happy to support the bill. The Government’s record is a good one and I concur with the statement in the “ Australian Financial Review “ that .there has been a great impetus .ito. -the building industry in

Australia. It stated that there was every indication of a boom in home ownership.

Senator MCCLELLAND:
New South Wales

Senator Anderson has made an excellent case for support of the amendment moved by the Opposition. Apart from some theoretical or procedural approach relating to amendments of this kind in the Senate, the honorable senator did not relate his remarks to condemnation of the amendment that has been moved by Senator Fitzgerald. On behalf of the Opposition, Senator Fitzgerald moved the following amendment to the motion for the second reading -

Leave out all words after “That”, insert: - “ whilst not in any way opposing the passage of the bill, the Senate expresses the view that the Government should give effect to the recommendation of the Conference of State Housing Ministers in Melbourne on the 19th March, 1963, that a committee of inquiry be established consisting of representatives of the Commonwealth Government and the State governments to inquire into the anticipated increased housing requirements arising during the next five years “.

I intend to address my remarks in support of the amendment that has been moved by Senator Fitzgerald.

As Senator Anderson has said, the purpose of this bill is to authorize the raising and expending of a sum of money not exceeding £49,850,000 for the purpose of housing the people of Australia. The money to be borrowed under the bill is to be advanced to the States in accordance with the Housing Agreement Act 1961. The provision of houses for the Australian people is one of the. most important matters for the Parliament of the Commonwealth to discuss. Despite the statements that have been made from time to time by members of the Government, and by its supporters and spokesmen, the housing requirements of the Australian people are not being met. The Minister for National Development (Senator Sir William Spooner), who is at the table, stated in his speech on the Budget earlier in the current sessional period that well over 1,000,000 homes had been built in Australia during the last decade. The Treasurer (Mr. Harold Holt) stated in his second-reading speech on .this bill that the rate of home commencements annually was at present of the order of 90,000. Despite lh-i claim that 1,000,000 have been built in the last decade’ and’ that 90)000 homes are being provided annually, according to the Treasurer’s estimate, the facts of the housing situation are perfectly clear. No one requires statistics or evidence in writing to be able to see that all the people of Australia are not housed adequately. Evidence of the lag in housing may be seen day after day. It is only necessary to note the number of people who queue at the office of the Housing Commission in Sydney, and presumably at similar places in other capital cities, for one to realize that many people are eager to place their names on the long lists of those waiting to be provided with suitable and reasonable accommodation.

Although eighteen years have passed since the end of the World War II, we still have migrants living in inadequate hostels throughout Australia. Indeed, we have only to glance at the advertising sections of the large metropolitan daily newspapers, particularly at weekends, to see large numbers of advertisements in the “ Wanted to Rent “ and “ Wanted to Let “ columns, indicating an acute., shortage of homes in Australia. We see young people going to estate agents and plaguing them for accommodation at a reasonable cost. Although a number of homes are available for occupation, unfortunately far too many of them are much too expensive for young people.

Senator Toohey:

– A lot of them are owned by speculators, too.

Senator MCCLELLAND:

– Yes, many of of them are owned by speculators who have placed a false value on them. All of those factors provide clear and tangible evidence that insufficient has been done by authorities - I use the word collectively - in Federal, State and municipal spheres to ensure that the needs of Australians seeking homes are met. A great number of people have been waiting for four, five or six years for reasonable accommodation.

On 30th April last, when speaking in this chamber on a similar bill, I was able to cite various figures which had been made available by the housing authorities in the States of the Commonwealth. They showed that as at 30th June, 1962, or some fifteen or sixteen months ago, there was a total of 74,945 people registered for accommodation . with State Housing Commissions alone; For the- benefit -of the record, Sir, let me state again the figures as they were at that time, State by State. In New South Wales, there were 36,322 people registered with the Housing Commission for accommodation. In Victoria there were 13,147; in Queensland, 4,166; in South Australia, 12,000; in Western Australia, 7,658; and in Tasmania, 1,652. I understand that, as at 30th June this year, the number of people registered in New South Wales has appreciated from the figure of 36,322, to which I have just referred, to more than 40,000.

We must add to this vast army of home seekers those requiring accommodation in the Australian Capital Territory and also ex-servicemen seeking assistance from the War Service Homes Division to obtain homes. According to the last annual report of the War Service Homes Division, at 30th June of this year 10,607 applicants were awaiting satisfaction of their applications. A survey recently was carried out in the metropolitan areas of the six capital cities with a view to ascertaining the numbers and characteristics of ex-service personnel and war widows, with a view to assessing the likely future demand for assistance from the War Service Homes Division. The survey covered 1 per cent, of all dwellings in the metropolitan areas of the six capital cities, and it was estimated that approximately 1 14,000 further applications would be received from persons now eligible for assistance under the War Service Homes Act.

If assistance to obtain houses can be provided departmentally, as with war service homes, it not only can be done but should be done on a national scale. On a conservative estimate, there must be at least 100,000 people in Australia today who need homes but cannot obtain them. They cannot get homes, either because they have not the money to buy them, or because the Government has not provided sufficient funds to meet the needs of the underprivileged section - to use a common political term - of the community. This is why we of the Opposition say that some positive plan of action needs to be undertaken.

However, before one can embark on a positive plan of action, one must ascertain by a survey what the needs of the com munity are. On 16th September last I was in Wollongong and I had the privilege of receiving a deputation from the building industry group of the labour council at Wollongong. The figures for house building that were cited for that area alone were rather alarming. It was stated that in 1960, in the immediate area of Wollongong, 392 brick cottages, 8.15 weatherboard cottages and 487 fibro cottages were constructed. In 1961, 307 brick cottages were constructed, but the number of weatherboard cottages declined to 460. Likewise, the number of fibro cottages dropped from 487 in 1960 to 301 in 1961. In 1962, 462 weatherboard houses and 346 fibro houses were constructed. A cursory perusal of the figures I have cited enables one to see that the number of brick homes constructed has remained at about the same figure, moving only from 392 in 1960 to 307 in 1961 and to 325 in 1962. The interesting feature is the decline in the number of weatherboard and fibro cottages in those years. These are the homes that one would expect to be purchased by the working class section of the community. Whereas 815 weatherboard cottages were constructed in 1960, only 460 were built in 1961 and only 462 were built in 1962. A similar pattern exists in the construction of fibro cottages.

Senator Hannaford:

– To what do you attribute that?

Senator MCCLELLAND:

– I attribute that to the fact that although homes may be available, the people have not the wherewithal to purchase them or to embark on the construction of a dwelling. These people have not sufficent capital to enable them to approach a bank and obtain a loan. The figures I have given relate to houses constructed privately in and around Wollongong; the figures do not include cottages built by the Housing Commission of New South Wales.

In trying to estimate the housing needs of the Australian people, one has to consider not only the matters I have mentioned already but also the problem of slum clearance in the larger metropolitan cities. To remove the slums as expeditiously as possible is desirable not only for aesthetic and health reasons, but also because Australian commercial life is now centred in the large coastal cities around the Commonwealth The slums stand on land, the value of which has appreciated considerably. Indeed, I suppose it would be fair to say that in Sydney the land on which the slums stand is worth four or even five times the value of the tenements.

As the commercial tempo of the great cities quickens, so too must our housing problem become more acute. As the large commercial houses spread into what are now the inner metropolitan suburbs, houses have to be pulled down to make room for them. As a consequence, traffic problems become greater. The workers have to travel further to work. The tempo of the city is quicker, but the movement of traffic is slower, thus adding to costs. Freight charges increase and overheads - sometimes referred to as invisibles - tend to rise. In these circumstances they often rise quickly.

This brings me to what is needed in future planning to provide homes. I understand that this problem is being tackled in the United States of America, Italy and France. In Australia we should be giving consideration to the establishment in the near future of satellite towns. A recent edition of the American magazine “ Time “ reported that in the United States just south of Los Angeles a huge tract of land had been opened up by a well known America architect and planner. Unfortunately, his name escapes me for the moment. This man was given the task of planning, architecturally end aesthetically, completely new towns to relieve the growing demand in the vast City of Los Angeles. The article indicated that this kind of approach to the problem is being made also in Italy and France. I believe that it is time that we in Australia started to think about this solution to our housing problem in our large cities. Sydney now has a population in excess of 2,000,000. We find that workers are settling as far as 40 or 50 miles from their place of employment and travelling that distance to and from work each day, simply because that is the only place where they can afford to buy land. Essential services, such as sewerage, are not available to them, and I understand that the authorities in Sydney have stated that these cervices will not be available to outlying areas for another ten or fifteen years.

I come now to the population growth that we hope to have within the next five, ten or fifteen years. Unless there is planning on a national basis, and in a co-ordinated and effective manner, we will not be very far ahead of where we were in the immediate post-war years. At that time we found that with the growth of the cities, the overtaxing of essential services such as transport presented problems that had to be tackled as a matter of necessity. From my reading it appears that in the not too distant future - I believe by the year 2,000 - Sydney will have a population of not 2,000,000, but in the vicinity of 5,000,000. I suggest that the planning that I recommend must be undertaken now and must be co-ordinated now if it is to be carried out satisfactorily and effectively in the future. Housing must be placed on a national basis.

I believe that, first, to co-ordinate all our activities there must be a national and, indeed, a rational survey of our housing requirements. This, as indicated by Senator Fitzgerald in proposing his amendment, was sought by the State housing Ministers in March. Unfortunately, nothing of a tangible nature has been undertaken on a national basis. Something has been done in Victoria. According to the Melbourne “Sun” of Tuesday, 17th September, the Minister for Housing in that State, Mr. Thompson, said that the Victorian Cabinet had ordered a survey to ascertain Victoria’s housing needs for the next five years. The Minister said that the survey would be carried out by the Housing Commission and that, at present, there was no authoritative information on the number of houses and flats that should be built each year to meet Victorian housingneeds. Mr. Thompson said that the survey results would be of great value in planning Victoria’s future housing programmes.

Mr. President, it was last March, as the mover of the amendment has said, that all the housing Ministers of the various States asked that the Commonwealth initiate an inquiry into the housing demands of the people of Australia having regard to the progress and the development expected to take place within the next five years. I think it was suggested in the resolution of the housing Ministers that the committee should consist of five members, three being appointed by the Commonwealth and two by the States, one of the representatives of the Commonwealth being the chairman. I understand that no housing survey has been conducted on a national basis since the 1940’s. If my memory serves me correctly, a select committee of the Parliament was established during that time and I think that the honorable member for Port Adelaide (Mr. Thompson) in another place was the only member of that committee who still sits in the Federal Parliament. I understand that the CommonwealthState housing arrangements as they exist to-day were based on the recommendations of that committee. Since that time there have been changes in methods of production; there have been vast changes in the number of people requiring accommodation; there have been changes in methods of manufacture; and there have been changes in all facets of the corn.munity I believe that the question of housing should be examined on a national basis.

Senator Wright:

– That was the committee that recommended the nationalization of all land?

Senator MCCLELLAND:

– That could well be. I have not read the report for some time. I am not suggesting that that should happen now. lt could well be that another committee would make such a recommendation. It could well be that another committee would not make such a recommendation. But for the purpose of investigating the true situation, what is wrong with conducting a more modern and up-to-date survey in 1963?

During the debate on the Loan (Housing) Bill which was passed by the Parliament earlier this year reference was made by honorable senators on both sides of the chamber to the value of the work of Dr. Hall who, from time to time, has conducted surveys into the housing needs of the people. I think the Minister for National Development (Senator Sir William Spooner) said at the time that Dr. Hall was not forecasting the number of homes that would be needed but, in fact, the number of homes that would be built during a given period. In other words, when Dr. Hall said that in 1970 we should need 130,000 homes, or whatever the figure was, he was not estimating that that would bc, the, number of homes, required to be constructed for the purpose of meeting the housing needs of the Australian people but that that number of homes would bc constructed. The Minister, during the course of his remarks, said that his department had made an estimate and be set out the means by which that estimate had been made. In fairness to the Minister I must say that he pointed out that that was only an estimate and not a definite figure.

It is the intention by means of the amendment moved by Senator Fitzgerald, to obtain an accurate national survey of the housing requirements of the people of Australia in order to meet the situation in the next four or five years. Housing problems cause great social and psychological problems. I understand that, according to statistics, about 80,000 young couples marry in this country each year. An average of between 80,000 and 90,000 migrants arrive on these shores each year. I believe that in order to encourage family life and in order to give workers and their families a sense of security we must have a crash programme in regard to housing. That brings me to the policy of the Australian Labour party which is as follows: - The provision of increased funds through Commonwealth-State housing arrangements so that many more new houses can be built and sub-standard houses replaced; the establishment of a home finance commission to provide finance to construct homes and to guarantee loans from those who will lend at low interest and on low deposits; encouragement of savings ‘ banks and assurance societies to lend more of their funds for housing; establishment of a works planning council to plan public works nationally over at least a five-year period; the establishment of regional development authorities to provide services and coordinate development within their regions.

This’ matter must be tackled practically and realistically. That can be done effectively only by having the whole needs of the Australian community surveyed on a national basis as outlined in the amendment moved by Senator Fitzgerald. This should be carried out in a public fashion, calling for evidence from all sections of the community so that the needs of the Australian community can be assessed accurately in a commonsense and realistic approach to the question. I support the amendment moved 10 ably by my colleague. Senator Fitzgerald, and I trust that it will be agreed to by the Senate.

Senator WILLESEE:
Western Australia

– Very briefly, 1 wish to support the amendment proposed by my friend and colleague, Senator Fitzgerald, which provides for a survey to be made on this allImportant question of housing. Legislation of the kind which Ls before us is quite common in this place. It comes up twice a year in order to appropriate the amount of money that the Commonwealth will allow to the States having regard to their budgetary position. It provides for the mone’y that the State housing commissions and the building societies will give to the people.

Senator Anderson, either by design or accident, injected a certain amount of confusion into the debate when he said that the Opposition was trying to defeat the motion for the second reading of the bill. One of the aspects of debates on ‘housing measures which has impressed me is that financial provision for housing has never been opposed by the Opposition. If honorable senators look at the “Hansard” record of the debates, they will see that such measures have always attracted much comment and much useful criticism, from both sides of both Houses of the Parliament. I should think that the Minister for National Development (Senator Sir William Spooner), who is in charge of the bill, would welcome that comment. Carping criticism has given place to constructive criticism whenever we have considered the subject of housing.

There is something basically wrong with a nation if it does not apply itself to ensuring that young married couples are adequately housed. Recently I listened to a lecture by a member of a certain religious denomination to doctors and such people about the problems that confront young married couples. To my amazement, this person said after attending the seminar, which ran for over a week, he believed that young couples who could not get satisfactory accommodation would do better to put off their marriage for some time. I never thought I would hear a member of any .religious denomination advising young couples not to marry because of the problems that confronted them. I have always thought that one ought to approach that great gamble by diving into the water and splashing through the turbulent stream, not by waiting and putting one’s toe into the water to see what the problems would be. That comment struck me very forcibly. Probably if I had not listened to that lecture I would not have been speaking tonight. I think it is a very healthy sign when the subject of housing attracts not only the blessing of the Opposition, but also the constructive criticism and friendly advice that is tendered to the the Minister from both sides of the House.

I thought that Senator Anderson got off the beam when he suggested that because of the form that Senator Fitzgerald used in moving the amendment, the Opposition was bent on preventing the passage of the bill. The amendment commences with these words -

Leave out all words after “ That “, insert - “ whilst not in any way opposing the passage of the bill …”

The amendment is designed to provide that, instead of the bill being read a second time; the Government should be requested to conduct the investigation about which Senator McClelland has been talking. I suppose that, technically speaking, if the motion were agreed to the bill would not be read a second time. But I point out that the amendment also reads - “whilst not in any way opposing the passage of the bill. . . .”

Surely anybody with common sense - I give this Government, which will not last beyond 30th November, credit for that - will agree that in the light of those words we do not in any way oppose this measure.

The amendment really is in two parts. First, it is designed to provide moneys for the various State housing commissions. Although the work of these commissions varies to some degree, I venture to say that they are doing a remarkably good job, particularly when we have regard to the unprecedented pressures that have been brought to bear in the post-war period and the immigration programme that has been pursued ever since World War II. Secondly, we want to ascertain what our housing requirements will be during the next five years. The whole, housing programme*, in . which (his bill will play a part, has a double impact on the people of Australia. First, it has an economic impact. It is probably true to say that in the smaller States, including Western Australia, the building industry is the principal secondary industry. It is the point around which other industries revolve. If there is a slackening of the Building programme in the smaller States, unemployment creeps in in all sorts of allied industries. When you move away from the governmental level and down to the personal level, the housing programme has a tremendous social impact. No young married couple, and no elderly or middleaged married couple, can attain happiness unless they are adequately housed.

After fourteen years in this place, I feel frustrated when I hear people brush aside the problems of education and housing by saying, “ Have a look at the Constitution “. People hide behind that mouldy edifice from lime to time. They say, “This is a State matter “. The day on which the Commonwealth took the taxing powers away from the States, the whole constitutional position was altered. Even though in respect of these matters the Commonwealth may not have a legal obligation to the people df Australia, it has a moral obligation.

The last occasion on which we discussed a measure of this kind was on the 2nd or 3rd April last, when we were asked to provide a supplementary amount for the States for the year 1962-63. Through budgets, supplementary budgets, credit squeezes and that kind of thing a Commonwealth Government can apply pressure to lending agencies such as the Commonwealth Bank, the private trading banks and the insurance companies. So it is fairly clear that the main economic string is held by the Commonwealth Government. If the Commonwealth wanted to reduce the amount that would otherwise be provided for in this bill, it has a direct economic string which it can use against the States. If the Government, as it did in about 1961, wants to manipulate through the taxation laws the amount of money that the insurance companies pay into the building funds, it can do so. In fact, within the last couple of years the Government has encouraged the insurance companies, through the taxation laws, to invest money in loans instead of housing by giving them a 2s. in the £1 rebate in relation to income they receive from bonds. Obviously it is to the profit of the insurance companies to invest in loans rather than in housing. I can quite understand a government which has difficulty in filling loans wanting to do something of that nature. But in the management of budgets, whether they be household budgets or Commonwealth budgets, it is necessary to ensure that one is not robbing Peter to pay Paul. I suppose the Government decided to encourage the insurance companies to invest in loans after it had due regard to all the circumstances. The Government’s action had the effect of closing the aperture through which moneys flowed into the provision of homes and of diverting those funds to loans. While you have this economic string running from the Commonwealth Government down through its various puppets, the States, and finally to the home owner, obviously what is done with the money is going to fit the economic mood of the government of the day in the Commonwealth sphere. It is no good arguing that this is a completely State affair at a time when,’ particularly as a result of uniform taxation, the pursestrings are in the hands of the Commonwealth.

I shall speak only briefly on this matter since we have plenty of opportunities throughout the parliamentary year to speak about housing. I support the amendment. Because of our remoteness, as legislators working in Canberra, we frequently do not know all of the problems that face people who have to live in the houses built with this money. During the whole of this session when we have been dealing with various subjects of administration I have had the feeling that we have problems which arise from the fact that since the Second World War Australia, in many ways has, like Topsy, “ just growed “. After we emerged from the Second World War we went through the inflationary period of the 1950’s, and later we suddenly found ourselves facing the tremendous problems of the sixties. I have been somewhat bewildered to know exactly how we should be spending the available money in the best interests of the whole community. It is the solemn responsibility of anybody who has the job of spending money raised by taxation to know exactly how it can be spent in the best interests of the community. That is why we say to-night that there ought to be a survey of the kind we request.

_ .1

The Premiers have asked for such a survey. The idea of haying” a survey is not new to the Minister for National’ Development. He dealt with that very matter in April when a similar matter was before the Senate. He dealt with it very clearly and slowly because of its importance. I do not pretend for one moment that the Minister has an easy job in this. It is not easy, because of the constitutional limitations that apply, to take over all the things which have been thrown, into the Commonwealth’s lap during and since the Second World War. It is not easy, having taken over practically all the financial responsibility as a result of uniform taxation, for the Commonwealth to bring the States together and get agreement among them as to the allocation of funds. The job is not easy, and I can assure the Minister that any assistance that an Opposition or anybody in Australia could give him in doing his part of the job would be readily given.

On the last occasion when Senator Sir William Spooner dealt with this matter he spoke of the problems of analysing the figures connected with it. He spoke of the assessment made by Dr. Hall regarding Australia’s future housing requirements and he said that we had to have some basis on which to start. I appreciate that fact.- He said on one occasion that it was a temptation for the States to pass the buck, or place the problem in the Commonwealth’s plate. He said the States tended to leave to the Commonwealth the responsibility for estimating the housing requirements of the future, and that the States were doing this at the moment. That is an argument which I resist by instinct as well as because of my training. Probably my Public Service background makes me feel more keenly that the Commonwealth can carry out such jobs much more efficiently than the States can carry them out. When the Commonwealth carries out such a job there is, first, a uniformity of approach and an impartiality which are of tremendous value. If the Commonwealth Government finally adopts the suggestion we make to-night the result would be much more rewarding and there would be much more particularity about the investigation of the needs of the Australian people in the housing field than would be the case if the matter were left to the States.

I want to make a comment on a tactic which has been used in the other place and which has been used here by Senator Anderson. Quotations have been made from various newspapers on the subject of housing. Somebody will say in a speech that the Sydney “ Morning Herald “, a financial journal, or some other newspaper has said that we are spending more money on housing this year than last year. It is also claimed that we have a higher percentage of people in Australia living in their own homes than any other country can show. I agree with that, and long may the position continue; but the Government ought not to boast. No matter how well we have done we should not rest on our oars. The Government should be looking for more water through which to row. That is the whole purpose of this debate to-night.

As a result of legislation passed by this Parliament insurance companies are supposed to devote a certain proportion of their money available for lending to public works and housing. It could well have become, in relation to that money, a question of public works versus housing. It would be interesting to see the information that a survey of the nature we suggest might produce. I fear that housing might well have come off second-best in this regard, and I suggest that the Minister does not know whether or not that is the case. It would take very skilled people, making a close survey, to find out exactly what the position is. Then we would know whether that particular action of the Government in amending the taxation laws has been good or bad in its effects on housing. I will give the Minister for National Development credit by saying that if he realized that it turned out to be a bad thing he would be the first to ask the Government to take action to reverse the flow of finance into the proper channel.

An interesting document titled, I think, “Housing for Migrants” is in existence. I think that the Minister must have read it. On reading it I wondered whether it would not be possible to ask the governments of other countries whom we help by taking their migrants to. consider whether they in turn could help us to solve the increase in our housing problem which is caused by immigration. I wondered whether the Government had looked at that situation. 1 do not want to belittle the problem involved, but surely if we are facing a financial problem in regard to the provision of housing it would be fair to ask those countries to try to do something to help us house their people who come here.

I can see that some bad effects might flow from that. It could be said that national groups might form in Australia, groups of the very kind that our immigration laws try to prevent. I do not know whether that would happen, and I think that a survey of the kind requested might shed some light on that aspect. It also might shed some light on the effect of the amendment of the tax laws on investment in housing by insurance companies. I often feel that when we deal with housing we do not get down to the basic problems that confront the people. We are sometimes inclined, when we are in Canberra, to get our feet a little bit off the ground and forget about the problems of the people whom we are actually putting into the houses. It is not much good putting a young couple into a house, wishing them a happy wedded life, and then telling them that the house will be a financial burden on them for the rest of their working lives.

Senator Anderson, who served for a term in the Cumberland County Council, might try to explain the way in which land subdivisions are taking place in Australia. Whatever he might say about this matter it still will not convince me that there is not a better way to do the job. It seems strange that the taxpayers pay for the building of roads and footpaths and the installation of sewerage and electricity services in outer suburbs, and the people who benefit from this in the first place are those who have the art of buying land at a low price and selling it at a high price. Those are the people to whom we have to genuflect nowadays. A survey might find that profits made by the sale of such land are staggering in their size. If we start at that level - after all, one must have land because a house cannot be suspended by skyhooks - it can be seen that the young people of Aus tralia are held to ransom by the system with, which we seem to have grown up. There is something basically wrong with the nation when the provision of this fundamental requirement is being retarded by profiteers.

Senator Anderson said that local councils demanded that 10 per cent, of land subdivided should be used for the provision of parks and playing fields. I hope I do not misquote him when I say that he said that was a bad thing because it increased the cost of land. I wonder whether if we calculated all the elements that raise the final cost of land to the purchaser, we would not find that the allocation of 10 per cent, of an area to parks, playing fields or playgrounds for the future children of that locality had an infinitesimal effect, and that the major element was the excessive profit made on the sale. I would not deny profit to people who have some initiative, but something ought to be done to remedy the problems associated with this fundamental issue. I think that all will agree that although the Commonwealth has complete economic domination it is merely passing the money to the States, saying, “From here on, it is up to you “. I believe that there is something in the old proverb that he who pays the piper should call the tune. The Commonwealth being completely responsible for housing finance to-day, it ought to ensure that in the end we get value for our money.

In the course of an inquiry, all these things must come under scrutiny. As I have said before in this chamber, I am afraid our attitude is that as long as Joe Brown and his wife get a block of land and a house our responsibility is ended.. The great Australian individuality, about which we boast, is being lost when an area of 10 or 15 acres of ground is cut into blocks of the minimum size allowed by the local authority, to give the greatest number of blocks to the subdivider. The Commonwealth should be moving more and more into this field and saying not only that houses should be built but also that they should have charm and individuality. Perhaps in some places it could require that the blocks be half an acre in area in order to provide something different in housing settlement.

I was reading an answer by a Minister in another place to a question on the vexed subject of raising money on first mortgage while awaiting funds from a State housing authority. I noted that the interest charged is as high as 9 or 10 per cent”. It seems amazing to me that it is beyond the wit of governments and men, when an all-time record amount of money- well over £200,000,000 - is lying in savings banks, to remedy the situation that fellow citizens and possibly relatives of the depositors are borrowing money at interest rates as high as 10 per cent, to tide them over the period while they are awaiting an advance which is guaranteed to them in about twenty months, as I think the period is now.

All these aspects could well be investigated. This is what the amendment urges the Government to do. We know that these things go on from day to day but we do not know their extent or the seriousness of them. As we have shown by proposing this amendment, we believe that the position is very serious. Senator Sir William Spooner, who is in charge of the bill, will probably say that these are passing phases which are not of any great urgency, at the moment. It is easy to become blase about housing. The attitude is that as long as people get shelter they are all right. ‘ People who are waiting for a bus can go into shelter sheds for protection from the clements, but they will not be very comfortable.

I reject completely the proposition that because we have a very high rate of home ownership in Australia we ought to rest on our oars. This amendment merely asks the Government to do what the State Premiers have asked it to do. Everybody who has ever made a study of housing, from Mr. Warren McDonald’ to university people, wants the Government to institute some sort of. investigation: I do not see how we can ever have too many houses. That might be possible in the older countries, but not in Australia with its expanding population. However, if we reached a stage where there, were too many, a short halt could. be called and the demand would very rapidly^ catch up.

We endorse the request of- the State Premiers for an- investigation. All the reading and research that we have done supports our view that an examination of the housing, problem is required. We make this proposal seriously and not for any political gain. We do not suggest that the passage of the bill should be hindered in any way. Because housing is a basic problem, our proposal is in the interests of the Australian people and especially of the young married people, who are the cornerstone of any nation.

Senator DITTMER:
Queensland

– I should like to make a few pertinent remarks on the bill. I do not propose to speak at any great length, in view of the announcement that was made to-night in another place. I realize that there is a tremendous amount of legislation to be considered before the Government, in its temerity, has to face the people. My party is quite prepared to accept the electoral challenge, particularly on this issue of housing. It is interesting to recall that over the past two years, despite repeated challenges on housing and other national issues, the Prime Minister (Sir Robert Menzies) and his conglomeration of associates, embracing two parties, have not been prepared to face the electors. Now because of fortuitous circumstances they find unemployment at its minimum - every one knows that this is due to seasonal conditions, particularly in some States - and they have decided to face the people.

An amount of £49,000,000 is to be provided to the States under this bill. Allowing £3,500 as the average cost of . a house, exclusive of the cost of the allotment, this amount will provide about 14,000 houses. The Minister for National Development (Senator Sir William Spooner) has referred to the construction of about 86,000 houses. Almost all home-building has been handed to authorities outside governmental control. Near enough to one-third of this amount of £49,000,000 is to go to approved building societies. A certain proportion is to be allocated for the provision of houses for members of the defence forces. We do not quarrel with the provision of housing for members of the- defence forces. On the matter of defence policy we are not afraid to- accept the Government’s electoral challenge although - we know that when the Government supporters go to the people they will attempt to belittle Labour, lt is an attempt to belittle the Labour Party and its espousal of defence. On the issue of housing, why cannot there be consideration for the people on low wages and in receipt of social service benefits? Why cannot there be a reversion to the rental rebate system which characterized the Labour Government’s approach to housing? The Curtin Government was not frightened to set up a committee of inquiry into housing needs. The Chifley Government was not afraid to face up to its responsibilities. But repeatedly the Minister for National Development, as the Leader of the Government in this chamber, has refused a committee of inquiry.

As late as last May, Doctor Hall issued a new booklet in which he set out carefully the housing situation. He admitted that there were deficiencies in the booklet because of its size, but it did direct attention to certain definite features of the housing problem which could be visualized by any responsible government. It showed trends in the demand for housing now and in the next few years. Doctor Hall stated that this was the time to expand the programme of slum clearance. Incidentally, he said that in a few years’ time there would be an increasing demand for new homes by newly married couples and immigrants. Yet the Government has consistently refused to establish a committee of inquiry to show the real housing needs of Australia over the next five years, or preferably over ten years.

The Government points to the money it has provided for housing - and stands pat on its record. It claims that it has discharged its responsibilities because it has made so many millions of pounds available. Only recently, in 1960-61, when it appeared that new homes only were in demand, the Government panicked. Perhaps the demand for houses in relation to materials and manpower might have been too great; but the Government’s remedy was not the solution to the problem. It practically threw the building industry into chaos. That is nothing new for this Government. It has been a stop-go, stay-put, hold-advance government. No business has been able to look forward confidently to a period of stability. Nobody can tell what the Government will do in the near or distant future.

The Government should face up to its responsibilities. It has boasted that Australia has one of the highest levels of homeownership in the world, but many of the people do not own their homes. Many of those who are said to own their homes are in the process of acquiring them, and because of the high rate of interest are denying themselves many things to get possession of a home. What could be wrong with a committee of inquiry, and eventually an administrative body to attend to housing, under Commonwealth control? As recently as this year, the Premiers of all States expressed concern about the future of housing and asked the Government courteously, and in the interests of the nation, that a committee of inquiry be set up. The Government has done nothing at all about it.

When we analyse the funds made available to the States we find a disparity between the States. The Minister for National Development might say that Queensland did not ask for more. It is rather interesting to find that Queensland, with one-seventh of the Commonwealth’s population, is receiving approximately onetwelfth of the money available for housing. When you think in terms of area, extra expense, difficult climatic conditions and the cost of building, you realize how parsimonious the Commonwealth anti-Labour Government has been in its treatment of Queensland. If it has not been parsimonious, then its political associates in control of the treasury bench in the Queensland Parliament have fallen down on their responsibilities.

I ask the Minister to ensure that there shall be an equitable distribution of the money available for housing. I ask the Government to set up a committee of inquiry to be followed by a permanent administrative set-up to assess the housing requirements of the Australian people over the next five years, or preferably over the next ten years. I ask for a reversion to the rental rebate system so that people who are entitled to homes and are least able to afford them can get access to a home. I appeal to the Minister. Despite the deficiencies of his administration in this field he now has opportunities to rectify those deficiencies when he and his colleagues go on the hustings. If they do not do so, they will be debited with their sins of the past and will lose votes. This will hurt them, for they are fond of the glamour that goes with control of the treasury bench. I ask the Leader of the Government to consider the right of the people to housing and the right of the building industry to stability. If he does this he cannot resist the repeated pleas, not only of the State ministers but of the building industry and of those who are associated with banking and other institutions. It is useless to say that the sayings banks have been authorized to lend 35 per cent, of their deposits for housing. The Minister knows that in the past twelve months the average investment from this source was only 22 per cent, of deposits, and that the banks could lend up to 30 per cent.

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

[9.20]. - Queensland will go ahead much faster than it is already going ahead when the people who represent it in this Parliament praise its virtues instead of constantly decrying it. When I was in Rockhampton a week or so ago I made the theme of my speech there, “ Queensland’s greatest disadvantage is the knockers that come from Queensland “. If the people who come from Queensland were to paint a reasonably optimistic picture of the future of the State there would be greater capital investment and even better things happening there than arc happening at the present time. We have had an example of decrying one’s own State from Senator Dittmer to-night. He. never makes a speech in the Senate without in some way criticizing Queensland.

Senator Dittmer:

– On a point of order, Mr. Deputy President, 1 object to that statement by the Minister. J have never decried my State, but I have decried the present Government. I have never decried Queensland’s possibilities, or what Queensland could mean to the Australian nation.

The DEPUTY PRESIDENT (Senator McKellar) - Order! The point of order is not upheld.

Senator Brown:

– It is gross political humbug to talk in that way.

The DEPUTY PRESIDENT. - Order!

Senator Brown:

Senator Dittmer has never decried Queensland.

The DEPUTY PRESIDENT.- Order!

Senator Sir WILLIAM SPOONER:

Senator Dittmer made the theme of his speech the bad housing., conditions in Queensland. 1 should think that the Queensland Government has ordered its housing programme perhaps as efficiently as has the government of any other State in the Commonwealth. The present situation in Queensland is that the government of the State has said, as I understand it, that there is no longer any need for a list of priorities for homes from the Housing Commission of Queensland. A situation has been reached in which people who approach the commission receive attention in their turn.

The Queensland Government is at the present time sponsoring building societies, not to provide loans for new homes but to restrict their activities to providing finance for the purchase of second-hand homes. Yet, we have a Queensland senator who cannot say a good word about his own State. He always wants to decry it. I say to Senator Dittmer, “ If that is your approach to things, be sure your sins will find you out “. Senator Dittmer asked why the rental rebate scheme has not been restored. The rental rebate scheme is operating in four States of the Commonwealth, so not only does he not know of conditions in his own State, but also he does not know of the conditions that relate to housing generally.

Having made those few comments on Senator Dittmer’s remarks, let me come back to the substance of the matter, which is the amendment that has been moved on behalf of the Opposition. It is important, as are all matters that relate to housing. I think we have to test the amendment by asking: What value would be derived from the kind of inquiry which the Opposition suggests should be made? Value could only be obtained from it if we were satisfied that there was likely to be a good measure of accuracy in the results achieved. If an estimate is made, it is necessary to be reasonably sure that it is accurate within comparatively small margins of error. If, on the other hand, an inaccurate estimate is made, much harm is done to the building industry and to the community generally.

The decision of the Commonwealth to decline to participate in an inquiry of the kind suggested was not taken lightly, lt is of no use to participate in an inquiry unless you really feel that the answer to be obtained will be helpful to the community as a whole. As honorable senators know, it is necessary to begin on the basis that housing estimates are already made by the Commonwealth and by the various State authorities. For my sins, on the last occasion that the subject of housing was before the Senate I stood up in my place and gave the Commonwealth estimate and the reasons on which it was based. I gave the Senate an opportunity to see for itself the margin of error that occurs in the various figures, and to gauge the problems that are involved in this question. Senator Dittmer, inaccurate as usual, said that the request for an inquiry came from the Premiers. That is not so. lt came from the State housing Ministers. I say, with respect, that there is a difference between the Premiers and the State housing Ministers. If we look at the decision of the Premiers we shall see that actions speak louder than words. I think that the relevant figures are stated in my second-reading speech on the bill. Year by year, the Premiers have been reducing the proportion of their total resources that they devote to housing. That has been done as a result of decisions of the respective State governments. My colleagues, the State housing Ministers, have a particular interest in this matter. They want to sec more and more funds devoted to housing.

Senator Dittmer:

Mr. Minister, would they not submit that proposition to their Premiers before they made it to you?

Senator Sir WILLIAM SPOONER:

– No, they did not do so. This was the result of a resolution passed at a meeting of State housing Ministers.

I do not want to go over the technical grounds that I covered on the last occasion on which I spoke on this subject. We must always keep in the back of our minds that estimates of housing requirements and needs are, in the last resort, influenced to a major extent by the personal opinions of those who make the estimates. I have previously stated the relevant figures in the Senate. Mathematically, my department has said: “We can do no more than say that something between 80,000 and 88,000 will be required - there is a tremendous possible margin of error - and that whatever is achieved over and above that figure will be applied to improving housing standards “. The whole art of this exercise lies in the view that you take of housing standards, which is not a mere matter of architecture. I do not know the right word to use in this respect, but I suppose a kind of technical term is required to describe the various groups who need houses. I have heard statements from the .other side in the course of this debate that the need for houses in Australia is of the order of 110,000 a year. From memory, Senator Fitzgerald used that figure. For the purpose of illustrating the damage that a wrong estimate can do, let us assume that the figure cited is wrong. If that estimate came out with the authority of the Commonwealth Government behind it we would have the building industry of Australia, geared up to produce 110,000 houses a year, whereas in fact 110,000 houses would not be wanted. It is absurd to say that there is a demand for that number of houses in Australia at the present time. The present rate of building is of the order of 95,000 houses a year.

Senator O’Byrne:

– The demand?

Senator Sir WILLIAM SPOONER:

– I am not saying that is the demand; I said that is the number of houses being built at present. The demand figure is increasing, as a result of the increased population, at the rale of about 1 ,000 houses a year. The feeling is that the demand will increase by about 5,000 a year within the next two or three years.

To produce wrong estimates would be a serious matter. All those who are interested in housing are already preparing estimates. The Commonwealth prepares them; the State governments prepare them; most of the major finance institutions prepare them; and then we get economists like Dr. Hall preparing them. If I criticize or comment on figures produced by Dr. Hall or anyone else I am not decrying their work. Every one of these people who produces estimates and publishes them finds it necessary to amend them continually. As time goes on we may get a better basis for our estimates. We shall certainly get a better basis at the end of this year when we have further statistics, which are not yet available. Mr. President, in the light of what I have said, I think the Opposition will realize that the Government opposes the amendment.

Question put -

Thatthe words proposed to be left out (Senator Fitzgerald’s amendment) be left out.

The Senate divided. (The President - Senator Sir Alister McMullin.)

AYES: 27

NOES: 28

Majority . . . . 1

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Original question resolved in the affirmative.

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

page 1134

COMMONWEALTH BANKS BILL 1963

Second Reading

Debate resumed from 9th October (vide p3ge 1001), on motion by Senator Paltridge

That the bill be now read a second time.

Senator BENN:
Queensland

.- Mr. Deputy President, the purpose of this bill is to transfer the sum of ?5,000,000 from the Consolidated Revenue Fund to the capital account of the Commonwealth Development Bank. It is interesting to look back a few years to see what was done to provide the Development Bank with capital when it was first established by the Government. At that time the Mortgage Bank Department and the Industrial Finance Department of the Commonwealth Bank were in operation and the capital of those departments was added to that of the Development Bank. The Commonwealth Reserve Bank also made a contribution of ?5,000,000 to the capital account of the Development Bank at that time. In addition, the sum of ?5,000,000 was transferred from the Consolidated Revenue Fund to the capital account of the Development Bank. So at that time approximately ?15,000,000 was credited to the capital account of the Development Bank. Since then, a further sum of ?5,000,000 has” been taken from the Consolidated Revenue Fund and transferred to the capital account of the Development Bank. At the present time, the Development Bank has a capital of approximately ?31,000,000. However, under legislation passed in 1959, the bank has the right to use its profits as capita] and its annual profit is transferred to its reserve fund. So, with other funds made available from the Commonwealth Savings Bank and from the Commonwealth Banking Corporation, the Development Bank is able to carry on throughout each year.

Mr. Deputy President, it is interesting to see for whom the bank specifically operates. It does not operate as the seven major banks and the Commonwealth Banking Corporation operate. ‘ Its operations have been designedly restricted. To use a colloqualism, we might call this the “battlers’ bank”. That would, perhaps, very aptly describe it. It is not intended for wealthy people who have assets and can lodge securities with other banks in order to obtain a loan. It is intended exclusively for people whose assets are limited. Section 73 of the principal act reads - (1.) In determining whether or not finance shall be provided for a person, the Development Bank shall have regard primarily to the prospects of the operations of that person becoming, or continuing to be, successful and shall not necessarily have regard to the value of the security available in respect of that finance. (2.) The Development Bank shall not provide finance for a person to enable that person to acquire goods for use otherwise than in the course of his business.

Therefore, the finance of the bank is to be confined to those who require comparatively small sums for the purpose of rural development and industrial development. Banking operations of this kind have been carried on by the Commonwealth for some considerable time having regard to the fact that they were conducted by the Mortgage Bank Department and the Industrial Finance Department of the Commonwealth Bank prior to the establishment of the Development Bank which has now functioned for a number of years.

There is need for a. bank of this nature in the Commonwealth. Every honorable senator knows of some person who has been enabled to make a success of his enterprise by having had a comparatively small loan made available to him. Perhaps he has been a dairy farmer who required a small amount to cultivate a portion of his land. He may riot have had sufficient assets for security for a loan from any of the seven major banks or the Commonwealth Banking Corporation and may have been granted a loan by the Development Bank which enabled him to succeed. I know of a farmer in the Townsville district who took to potato growing. He was able to get a small loan for the purpose of acquiring seed and putting in his crop. He was one of the fortunate potato growers at that time because he was able to harvest his potato crop in mid-season. From a comparatively small area he was able to grow potatoes which sold for £6,000. 1 shall not cite any other instances in support of. my case because the Opposition docs not propose to vote against the bill. We support it because we know that it is most, necessary to have legislation of this nature.

Last financial year, the Development Bank made a profit of £890,675. In the previous financial year it made a profit of £683,707. One might well ask why the profit for the financial year 1962-63 was considerably greater than that for 1961-62. The answer is that a credit, squeeze was operating for a part of 1961-62. There was a great lack of finance and people were more or less driven to the- Development Bank to obtain assistance. The loans out standing are not so considerable when one considers that the seven trading banks and the Commonwealth Banking Corporation have outstanding about £1,300,000,000 which they have loaned to people for various purposes. At the present time, the Development Bank has £32,946,000 outstanding. One assumes from that fact that the bank is doing good work and that it fulfils a want in the community. Rural loans outstanding as at 30th June last were classified as follows: Sheep, £11,054,000; dairying, £3,570,000; cattle, £2,621,000; wheat, £2,055,000; fruit growing, £1,145,000; poultry, £600,000; grain crops other than wheat, £406,000; and other primary industries, £1,069,000. The total amount for outstanding rural loans is £22,520,000. If we look at the industrial side of the batik’s business, we find that loans amounting to £10,426,000 were granted. The sum included loans for the following activities: - Engineering, £1,924,000; chemical products, £1,403,000; foodstuffs and preservation, £968,000; electrical and allied manufacturing, £544,000; building materials and fittings, £547,000; other manufacturing, £2,383,000; transport, storage and communication, £1,311,000; other industrial activity, £1,346.000.

It is interesting to look at the report of the Development Bank and to note the number of approvals that have been granted. In 1961-62 there were 2,527 approvals and the amount involved was £13,000,000. In 1962-63 the number of applications approved was 1,718. The real test of the bank’s worth lies in the number of applications submitted and in the production that follows the granting of loans. One can travel around the Commonwealth without seeing the result of the bank’s activity. It is unlike travelling to the Snowy Mountains scheme, where one can see evidence of many millions of pounds having been spent over the last tcn or fifteen years.

I believe that the Commonwealth Development Bank is doing a lot of good in the sphere in which it operates. 1 hope that at some time in the future the Government will be able to increase its capital. I do not know whether the Government can continue to take money that is contributed to the Consolidated Revenue Fund by the taxpayers of the Commonwealth and make it available to the Development Bank. When we -think of development in this context, we

I mentioned a while ago that legislation had been passed to allow the annual profits of the bank to be paid into a reserve fund. I note that approximately £7,500,000 has been paid to the credit of that fund. The bank has many agencies. The Commonwealth Banking Corporation and the seven major trading banks are agents of the Development Bank. It may seem odd to some persons that the trading banks should be agents of the Development Bank. But the Development Bank conducts a class of banking activityt hat does not appeal to the seven major trading banks and the Commonwealth Banking Corporation. This class of activity covers the battlers, who are prepared to develop an area of land or undertake some industrial activity - men who are prepared to trust in their own untried capacity. I have met men who have been employed in sawmills, who have worked on the roads or who have done other classes of work for comparatively small wages but who were prepared to strike out on their own. I am sure that Senator Sherrington, who is seated opposite me, could mention men in north Queensland who were canecutters and who, after getting a small loan, were able to acquire a cane farm and are now making a very comfortable living indeed.

I said a little earlier that the Development Bank has many agencies. It is very difficult for me to believe that the seven major trading banks would divert any business to the Commonwealth Development Bank. If a person goes to the Development Bank, is granted a loan, makes good and acquires considerable assets, I imagine that when he has deposits to make the seven major trading banks would seek his business. The ramifications of the Development Bank are Australia-wide. They extend to the Northern Territory and the Australian Capital Territory and even to Papua and New Guinea and Norfolk Island. Considering the area over which the bank’s activities are spread, the capital available is comparatively small. I should like to see the capital increased by £100,000,000 or even trebled so that we could have development on a greater scale.

The bank does not advertise. You never see any advertisements for it in the press. It seems to me that the bank relies upon the trading banks, including the Commonwealth Trading Bank, to send clients to it. I think that the Commonwealth Development Bank should be out looking for customers in an effort to expand its functions. I pointed out a little while ago that we have different ideas of what constitutes development. Some of us think of development in terms of the Snowy Mountains project. Development in the aggregate covers a wide field. It includes improved farms, the establishment of small industrial undertakings and people getting a living as a result.

In conclusion, I reiterate that the Opposition does not intend to oppose the bill, and I look forward to a further increase of the capital of the Commonwealth Development Bank in the future.

Senator McKELLAR:
New South Wales

– I have very much pleasure in supporting the bill. It is a measure to provide the Commonwealth Development Bank with additional capital of £5,000,000. This is not, of course, the first occasion on which a bill of this kind has been before the Senate, and 1 hope sincerely that it will not be the last occasion. Indeed, I hope that the amount that the Parliament will be asked to devote to this purpose will be larger in the future. I was glad to hear Senator Benn, speaking on behalf of the Opposition, express his approbation of the bill, and I appreciated his concluding remarks that he too hoped that the bank would be provided with further capital in the future.

The Commonwealth Development Bank has not been in existence very long, but already it has more than proved its worth. It has lent more than £90,000,000 since its inception, and since the 30th June of this year some 7,000 loans have been approved/ In this connexion we must remember that the applicants who come to the bank for loans come only when money is not available to them on reasonable terms from any other source. That must be kept in mind.

Of the £90,000,000 that 1 have just mentioned, £30,000,000 has been allocated to rural loans and £25,000,000 to hire purchase in rural areas, making a total of £55,000,000 granted to the rural sector. Last year £24,800,000 was lent, which represented a fall of £4,400,000 in lending in that twelve months. It is considered that this contraction in lending by the bank was brought about by the introduction of term-lending by trading banks. That was a measure brought in by the Government at the request of the trading banks to give them an opportunity to compete to some extent with the Commonwealth Development Bank and to provide additional capital for the rural sector. That has been a very great help indeed. As I have mentioned on more than one occasion, one of the shortcomings of the term loans is the comparatively short term on which they are lent to the rural borrower. The term is from five to eight years only. That is the term laid down as something to be aimed at but, as I have mentioned before, the banks do not adhere rigidly to that term if the circumstances warrant an extension of the period. It would be far preferable for a borrower to obtain money for a longer period than five to eight years.

I know that one of the objections to an extension of the term is that there would be a lesser amount of money in what might be called the revolving fund - that money would be lent out and not soon be available for fresh lending. However, I feel that the period of term-lending could very well be increased to ten, twelve or even fifteen years. Since term-lending came into operation an amount of about £57,000,000 has been so lent. We were told only this afternoon, in reply to a question, that the interest charged ranges from 54 per cent, to 6 per cent, for rural borrowers and from 6 per cent, to about 7 per cent, for other borrowers, the rate varying according to the type of loan and the conditions on which it is made available.

Senator Benn gave us some figures which I - assume were taken from the report of the Commonwealth Development Bank. I should like to run through the same figures very quickly to show the classifications of rural loans outstanding at 30th June, 1963. The amount lent for sheep this year was £11,054,000; for dairying, £3,570,000; for cattle, £2,621,000; for wheat, £2,055,000; for fruit-growing, £1,145,000; for poultry, £600,000; for grain crops other than wheat, £406,000; and for other primary industries, £1,069,000, making a total of £22,520,000.

Another table in the report is most interesting. It is headed “ Loans Approved. Year ended 30th June, 1963 - Classified According to Amount”. I obtained the impression, listening to Senator Benn, that he had the idea that most of the loans approved by the bank were on the small side. I am not suggesting that my interpretation of his remarks is correct, but that was the impression I gleaned. That, of course, is not the case, as I think the figures I am about to cite will prove. In the case of loans from £1 to £2,000, altogether 487 loans were approved, amounting to £572,000. In the range £2,001 to £5,000, there were 721 loans approved, amounting to £2,398,000. In the range £5,001 to £10,000 there were 338 borrowers and the amount borrowed was £2,363,000. In the case of loans ranging from £10,001 to £20*000 there were 112 borrowers and the amount borrowed was £1,601,000. In the £20i001 to £50,000 range there were 50 borrowers and the amount borrowed was £1,528,000. In the range over £50,000 there were only ten borrowers who borrowed £835,000.

The same table shows that there were 464 rural borrowers in the £1 to £2,000 range who borrowed £544,000. In the range from £2,001 to £5,000 there were 686 rural borrowers who borrowed £2,268,000. In the range from £5,001 to £10,000, 302 borrowers borrowed £2,000,098. In the range from £10,001 to £20,000 there were 69 borrowers who borrowed £946,000. In the range from £20,001 to £50,000 there were fifteen borrowers who borrowed £379,000. There was one person who was lucky enough to borrow more than £50,000. He obtained £94,000. He did very well indeed.

That gives some idea of the activities of the Commonwealth Development Bank. One hears many questions from time to time about the percentage of loans by the bank going to the rural sector. I do not know about other honorable senators, but from time to time I have been asked why the old Mortgage Bank Department cannot be brought back into existence.

As it is quite a long time since the Mortgage Bank Department was in existence, it might be worth while to have a very brief look at the way in which it operated. I am quite sure that many of those persons who are pressing for the return of such a system will find, upon examination, that it was not nearly as good as they are apt to think and that in many respects it could not compare with the present set-up of the Commonwealth Development Bank. Under the old system the security that was required by the Mortgage Bank Department was a first mortgage on land that was being used for primary production. It was not prepared to accept, as the Commonwealth Development Bank is prepared to accept, second and third mortgages. Acceptance of second and third mortgages by the Development Bank is very handy indeed for primary producers.

The Mortgage Bank Department ensured that it did not lend more than 70 per cent, of its valuation of the property concerned and it would not accept any security other than the property. For instance, it would not accept as security bonds or other assets. Its loans were for periods of not less than five years or more than 41 years. There was a disability in the old system, as compared with the Development Bank system, in that attention was paid only to the financial equity of the borrower. The Development Bank places emphasis on the individual and his capacity to make an undertaking pay. His equity is not regarded to the same extent. We must remember also that the Development Bank is, to quite an extent, using borrowed money. When one hears from time to time from some people - not a great many - that the rate of interest charged by the Development Bank is too high, this fact must be remembered.

Senator Benn:

asked what would happen when all these additional funds had been exhausted. He seemed to think that that time would arrive fairly soon. We must remember that in its early years of existence the Development Bank will need more and more capital, but after a period a revolving fund will operate and money repaid by early borrowers will become available again. Senator Benn also suggested that migrants should be made aware of the services of the Development Bank, but 1 should like to point out to him that the bank would not have an opportunity to assess whether a recent arrival would make a good borrower, in the sound financial sense, and this would militate against borrowing by migrants.

The honorable senator also said that the bank was not doing enough advertising. It is not of much use to advertise that a bank has money to lend unless it has plenty of money. That is one of the difficulties with the Development Bank. There is no doubt that it could lend much more money if it were available. Although the bank has never run out of money, there is the feeling that it must husband its capital, without denying advances to borrowers. That is one of the reasons why it has not been advertising. Some of the top men of the bank have told me that for some lime they have thought that sufficient advantage was not being taken of the bank. That is probably true.

Last week when I said that the Development Bank was playing its part in the development of irrigated farms under the Coleambally and Mumimbidgee schemes, I was taken to task. I reiterate that the bank is playing its part. It has had applications from this area and it has made advances on those applications. It is doing a very good job in that area, as it is over the rest of Australia.

It is enlightening for those of us who are interested in rural finance to look at what is needed in the way of equity in relation to rate of return. It is axiomatic, of course, that the lower the rate of return the greater is the need for equity. I think that there is a critical point in the relationship between borrowing and personal equity beyond which operations cannot satisfactorily continue. I propose to give a few instances. Take the case where a loan is subject to repayment in twenty years at an interest rate of 6 per cent, per annum. An operator whose rate of return on total funds employed - these being the value of all assets - was 5 per cent., could borrow a maximum of 58 per cent, of those funds and, therefore, would need a minimum personal equity amounting to 42 per cent. A man whose rate of return was 4 per cent, per annum would be subject to a maximum borrowing/ minimum equity ratio of 46/54. The lower the return, obviously the higher the equity would need to be. A man whose rate of return was 3 per cent, per annum would need an equity of 65 per cent.; a man whose return was 2 per cent, would need an equity of 77 per cent.; and a man whose rate of return was 1 per cent, would need an equity of 88 per cent. Those rates would be regarded as a fairly reliable yardstick by most financial institutions. lt is quite obvious that it would not be of much use for any one to go along to a bank for a loan unless he could show that his return would enable him to service the loan he hoped to get.

Many of us have spoken each year on this legislation over a period of several years. 1 do not think that there is any need to speak at length. I give the bill my blessing and once again pay a tribute to the work that the Development Bank has done. The addition of this £5,000,000 to its capital will assist it to do similar work in future.

Senator PROWSE:
Western Australia

, - It gives me pleasure to support this bill, which is to carry out the intention that was in the mind of the Government when the bank was established that there should be regular increases of capital to enable the bank to do the work for which it was set up. Its origin on 14th January, 1960, marked the commencement of a new era in banking in Australia, particularly with regard to rural finance. Since the Development Bank came into the rural banking picture, wc have seen less and less dependence upon overdraft financing and short-term lending by big pastoral houses. We have seen term loans replacing dependence upon overdraft finance to provide for the medium-term loans that are needed for many types of agricultural development. Above all, the Development Bank with its longer-term loans has helped to give a greater measure of security and solidity to the whole financial structure. In so many ways the Development Bank has played an invaluable part in Australia’s rural economy. I am stressing the subject of rural investments even though I cannot ignore the very great value that the Commonwealth Development Bank has in providing loans for secondary industry. I am particularly concerned about the finance for those small industries that we see developing in country districts. It is interesting to note the comment that the report of the Commonwealth Development Bank has to make on this point -

  1. . it would seem nevertheless that small industrialists are not generally aware of the extent to which facilities of the Development Bank are available to them.

I think it is a great pity that that statement is true. Maybe the very real pressures of centralization of the bigger industrial organizations ‘are preventing the development of small industries in Australia. The need for this sort of thing was brought home very forcibly this year at the Perth Royal Show when we saw a development such as was mentioned only the other day by way of a question in the Senate. This was the development of hovercraft to solve one of the very real problems of agriculture - the difficulty of crop spraying under adverse conditions, such as when the ground is boggy. This is an interesting development and an example of the ingenuity of our people - an ingenuity that has helped us to conquer the disabilities that have faced the rural people in the development of Australia. We see also new types of machinery developed for dealing with clover harvesting - one of the most difficult kinds of harvesting.

These skills arid the ingenuity of our people are what we need to develop, with adequate finance. This is one of the purposes that those who conceived the idea of a bank ot :this sort “had in .mind. .It is a pity we are- hot making full-use of -this sort of finance to bolster and back the skills of our people.

However important the Commonwealth Development Bank is in this field I feel sure that the main activity will be in agricultural development. To my mind, the bank is not carrying out the original purpose with regard to agricultural development. I want to remind the Senate of that part of the secondreading speech of the Treasurer (Mr. Harold Holt) in introducing the legislation by which the Development Bank came into being. He said, as reported in “ Hansard “ -

The Development Bank will be required, when determining whether or not to make a loan, to have regard primarily to the prospect of the borrower’s operation being a success rather than the amount of security the borrower can provide in support of the loan.

Now, I wish to direct attention to a paragraph from the report and balance sheet of the Commonwealth Development Bank for 1963-

The Bank does not restrict the amount of any individual loan to a predetermined percentage of the value of the security available but, for an applicant to have prospects of success, it is necessary for him to have an appropriate equity in his venture.

Another statement refers to the prospect of the borrower becoming or continuing to be successful. The judgment that must be applied to this matter of probability of the borrower becoming or continuing to be successful depends on the ability of the borrower to pay interest at the rate of 6 per cent, and to meet repayments of principal when due. This is the crux of the matter. What is this judgment? The judgment is that the borrower shall be able to pay interest at 6 per cent, and meet repayments.

Now let me turn to an examination of a statement by Mr. B. B. Callaghan, generalmanager of the Commonwealth Development Bank of Australia, in an address to the school on sheep and wool improvement at the University of New South Wales on 13th May, 1963. He said-

In the high rainfall zone of New South Wales, the rate of return on capital fell from 6.1 per cent, for the five years 1952/53-1956/57 to 2.85 per cent, for the years 1957/58-1959/60. In the wheat/sheep zone, the return fell from 5.5 per cent to 3.48 per cent, and in the pastoral zone from 14.2 per cent, to 5.45 per cent, and, as remarked earlier, this picture is broadly representative of what happened on an Australia-wide basis.

It is necessary to read on so as not to take this statement out of its context. Mr. Callaghan continued -

It is true, of course, that statistics, and especially statistics of this kind, must be very carefully interpreted and we should recognize very clearly that what we have been comparing are two periods only. Moreover, they are two periods in which at least the first period (1952/57) was one that, in an historical sense,’ is out of line - it was a period when prices and net returns were much higher than they have been historically. Furthermore, it is important to recognize that most properties were bought and developed at the lower costs of an earlier period and thus it is not correct to deduce from the figures regarding rates of return that every wool producer is in financial difficulties. By the same token, of course, it is probable that, by now, any producer who laid his plans on the basis of a continuation of the 1950/57 level of costs and returns will find himself in financial trouble - returns have fallen and costs have risen. In this regard, the position of the new settler scarcely needs emphasis.

Mr. Callaghan went on to give two examples of the difficulties the bank has of assessing a basis of equity under these two bases of cost. He worked out a proposition of an average high rainfall zone farm in which £30,000 had been invested iri 1952-57. This would earn sufficient to enable a debt of £18,000 to be repaid on. the basis of a twenty-year term at 6 per cent, per annum - that is to say, the borrower would need to subscribe about £ 1 2,000. That was with a debt of £ 1 8,000. But now the bank is faced with the situation that a farmer would have to have £22,000 equity on the 1957-60 basis to obtain a loan of £8,000.

I have quoted the figures for New South Wales, but in case anyone is in doubt whether these figures are representative, I quote those for the other States. These figures are derived from a survey of the sheep industry conducted by the Bureau of Agricultural Economics. In Victoria, the rate of return on capital in the wheat-sheep zone was .94 per cent., and in the high rainfall zone it was 1.77 per cent., which is lower than the figure for New South Wales. In South Australia the figures were. for the. pastoral zone 4.8 per cent., wheat-sheep zone 2.1 per cent., and in the high rainfall zone, 1.4 per cent. The relevant figures in Western Australia were 6.4 per cent., 6.5 per cent., and 4 per cent. The figure given for Queensland was 3.9 per cent, and for Tasmania 1.3 per cent.

Debate interrupted.

page 1141

ADJOURNMENT

The PRESIDENT (Senator the Hon. Sir Alister McMullin). - Order! In conformity with the sessional order relating to the adjournment of the Senate, 1 formally put the question -

That the Senate do now adjourn.

Question resolved in the negative.

page 1141

COMMONWEALTH BANKS BILL 1963

Second Reading

Debate resumed.

Senator PROWSE:

– Whatever interpretation is placed on those figures, we must concede that they are authentic and relate to properties that are well developed. The conclusion we must draw from them is that, in order to meet capital repayments and interest at the rate of 6 per cent, on a Development Bank loan, the borrower would need to have a considerable equity in the property concerned. Having regard to the figures I have presented, it could well be that the equity which a borrower was required to hold would be every bit as great as that which would bc required by the orthodox banks. One is therefore forced to the conclusion that the money which has been advanced to borrowers so far by the Development Bank could equally well have been advanced by the existing banks, provided that they could have made long-term loans. That is to say, the Development Bank is not operating according to the charter on which it was established and first of all considering the prospects of a borrower succeeding. One obligation is negated by the other. Because of the necessity to collect 6 per cent, interest, plus repayments, it is impossible for the banks to have greater regard to prospects of success than to equity. In those . circumstances, and because of the low returns from agricultural property during the years I have mentioned, the requirement regarding equity is at least as stringent as that which the orthodox banking system would impose. Therefore, I contend that the problem of development will never bc solved while the earning capacity of the industry is as low as it is.

Having regard to the facts I have just stated, is it surprising that the loan approvals fell from 2,527 in 1961-62 to 1,718 in 1962-63, and that the amount of advances fell from £13,000,000 to £9,300,000 last year7 Perhaps it is difficult to find sufficient applicants with the necessaryqualifications to pass the acid test of eligibility. An intending borrower must have the prospect of being able successfully to make repayments and to meet interest charges of 6 per cent.,, although the established farmers of New South Wales are earning only 2.8 per cent, on their capital. We must remember that new development has to be undertaken at present cost levels. Therefore, the earning ratio must be less than it was formerly.

While I am on the subject of interest rates, I wish to comment on the fact that the Commonwealth finds it advisable to provide money at*3_ per cent, under the Housing Agreement Act. I agree that it is a good thing to .make money available for housing at a low rate -.of interest, but is it any more important to provide money for housing at such a rate of interest than it is to find similar money for development? We could never pay for our houses unless, at the same time as our population was increasing, we carried on with development. So, there is a very strong argument for having another look at the interest requirement of the Development Bank. Until we take a much closer look at this matter I feel that the bank will never really carry out its true function of backing skill, courage and enterprise.

The Development Bank has performed a valuable service in introducing long-term lending to the banking structure, but its developmental function must be restricted to fields that could be covered by the orthodox banks if it expects to obtain a return of 6 per cent, on development finance. I hope that the Government will at some time re-examine the purpose for which the bank exists and the conditions under which it is required to operate. In the meantime, I gladly support the bill.

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

– in reply - It is always a pleasure to close the debate on a bill which has been accepted by both sides of the chamber. On this occasion it is particularly pleasurable because I believe that the Commonwealth Development Bank has fulfilled to a very great extent the purpose for which it was established and has in fact supplied capital to organizations and people who, in ordinary circumstances, would not have had access to necessary capital for development. Senator Benn stated that the bank was restricted in its activities. Such a criticism overlooks the fact that this is a bank with a special purpose. It was established not to cover the wide field of general financing, as are trading banks, but to meet a special purpose which has been defined in the act and which, I believe, has been met.

Since the Commonwealth Development Bank was established we have seen what I regard and what the Government also regards as a very satisfactory extension of the private banks into the field of term lending. I remember that years ago when I was a young man, this aspect of banking was a regular feature of private banking. The banks undertook long-term development finance on a large scale. However, over the last quarter of a century or thereabouts, the official attitude was to discourage private banking from entering this field. With the establishment of the Commonwealth Bank, the trading banks have come back into the field. It is my belief, and also that of the Government, that this is all to the good. It adds to the breadth of the base on which finance of this kind is made available, and it adds diversity and, to a limited extent, healthy competition, amongst borrowers. Reference was made, particularly by Senator Prowse, to the fact that last year there was a down-turn in applications to the Commonwealth Development Bank, and the honorable senator developed a very knowledgeable argument as to why that may have happened. I suggest, with respect, that one factor accounting for that downturn was that, under the term lending fund arrangements of the private banks, finance of a long-term kind became available.

Senator Wright:

– But how do you answer the argument that there is no future in borrowing at 6 per cent., even for development, if you can get a return of only 3 per cent.?

Senator PALTRIDGE:

– That is an interesting argument and one which I followed very closely. I know of Senator Prowse’s particular interest in this; I have had the opportunity to discuss it with him. It may well be that there is occasion to look, particularly in respect of some cases, at the sort of thing he is referring to. But I suggest that by and large the Commonwealth Development Bank and the term lending fund have, between them, provided over a very large area the type of finance that is wanted by so many people engaged in development projects.

I was interested to hear a reference made to the period for which loans are made and the suggestion that that period is frequently too short. I remind the Senate that under the terms of the legislation there is no limit to the period for which loans can be obtained from the Commonwealth Development Bank. Many of the bank’s loans are. for periods ranging up to fifteen years, and quite a number of loans have been for periods up to 25 years. In some cases an abatement of interest has been made for the first few years of the loan - ranging up to five years. In no case has the bank refused an otherwise acceptable application on the ground that the term of repayment sought by the applicant was too long.

Although I acknowledge the existence in some cases of the type of difficulty to which Senator Prowse referred, I indicate that the Commonwealth Development Bank, in extending its loans, is going to great lengths to see that it carries into effect the charter which is was given three and one-half years ago. Some pretty impressive figures were given during the debate to show the extent and the growth of the business undertaken by this bank in its three and one-half years of existence. The figures are impressive indeed, and I think it is the record of the bank itself which has led both Houses of Parliament, and the public, to regard this as a venture which, in the words of Senator McKellar, has fulfilled a very worth-while function. I repeat my pleasure at the way this bill has been accepted by the Senate.

Question resolved in the affirmative.

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

page 1142

ADJOURNMENT

Seats at Air Terminals.

Motion (by Senator Paltridge) proposed -

That the Senate do now adjourn.

Senator AYLETT (Tasmania) [10.451.- I wish to bring to the attention of the

Minister for Civil Aviation (Senator Paltridge) an anomaly that has been created at some air terminals. No Minister can be aware of every detail of his department’s administration and I do not doubt for a moment that the Minister for Civil Aviation is unaware of the inadequate seating accommodation that is provided at one air terminal that I visit quite frequently. I refer to the Coolangatta airport. When Her Majesty the Queen visited that city some time back half the seating accommodation was removed from the terminal. Since then all seats have been removed and some seats of a different type installed. There are 27 seats at the terminal. At peak periods the terminal caters for between 200 and 300 people, and at normal times, anything from 50 to 100. I believe that it is most unjust that elderly ladies should have to prop themselves up on sticks, trying to stand when they are unable to do so. lt is also unjust that expectant mothers should have to stand about waiting for planes, or that people, like myself, with gammy legs have no seats available. For us it becomes a matter of sitting down or falling down when our legs go, so we have to sit on the floor. The air terminal at Coolangatta needs about four times as many seats as it now has. There is great hardship on the travelling public.

I asked airways officials about the seating shortage and I was told that somebody from Brisbane, who evidently did not know about the requirements of the district, visited the terminal and ordered that the seats be removed. I know that the Minister has a humanitarian sense of duty and I know that he would be very disgusted if a Labour Government were in power and he were forced to sit on the floor because no seats were available. I ask the Minister, as politely as I can, to see whether seats can be provided at Coolangatta for people who, like myself, cannot stand around for a long time and who would enjoy a rest while waiting for planes.

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

– in reply - I shall certainly have the matter investigated. I do not know why there is such a shortage of seats at Coolangatta airport. I will ask my officers to investigate and, if the shortage exists, I will see that the deficiency is made good.

Question resolved in the affirmative.

Senate adjourned at 10.49 p.m.

Cite as: Australia, Senate, Debates, 15 October 1963, viewed 22 October 2017, <http://historichansard.net/senate/1963/19631015_senate_24_s24/>.