24th Parliament · 1st Session
The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 3 p.m., and read prayers.
– Is the Minister in charge of the Commonwealth Scientific and Industrial Research Organization aware that during a television interview in Perth, Dr. Davidson, a former officer of the Land Research Division of the C.S.I.R.O., said that he had left the organization because it would not publish the results of his research into the economics of developing the north? Is there in existence a report from Dr. Davidson on this subject? If so, is it a fact that the report was suppressed? Does the Government support the views which Dr. Davidson expressed? If it does, is that why the Government in its last Budget made no commitment for the construction of the main dam on the Ord River within at least the next three years?
– I am not aware of Dr. Davidson having appeared in a television interview in Western Australia or of any statement he may have made. If he worked tor the C.S.I.R.O., he would have worked either as or under the control of a divisional controller. A divisional controller in turn would be subject to direction by the executive of the organization, in relation to any scientific work undertaken. Neither the executive nor the head of a division is obliged to publish any findings that any particular scientific worker may wish them to publish. As far as I know no such findings have ever come to the notice of or been suppressed by the Government. If this man is dissatisfied because he believes that other scientists who are members of the executive have not paid sufficient attention to his views, he is quite entitled to express his opinion. This is not a matter in relation to which the Government has interfered.
– Will the Minister ^representing the Minister w for External
Affairs indicate what in the opinion of the Government would be the reaction of the Government of the United States of America to any attempt by a future Australian government to rewrite the Exmouth Gulf naval communication station agreement, as has been advocated by Mr. Calwell, with a view to providing for joint control of the base? Would not any insistence by an Australian government upon securing what would be a power to veto messages from the United States command to its own forces probably result in the base not being proceeded with? What would be the effect of such a policy on the Anzus pact?
– There is in existence an agreement between the Australian Government and the United States Government which has been given legislative form. Any attempt by Mr. Calwell to abrogate that agreement and to bring in a new one would require the reversal of the legislation and of the agreement between the two governments. In my view, it is perfectly clear that no American government could be expected to submit to a right of veto, which is in fact what Mr. Calwell wants, on the operation of such a station. It clearly follows that if this course were sought to be followed, the station would not be built, and damage would be done to the defence of the free world as a consequence.
– My question is addressed to the Minister for Health. Is it a fact that the drug aminophylline, which is commonly used in the treatment of asthma, has been removed from the free list? Is it correct that as a result of its removal tablets which now cost 5s. per 100 will in future cost patients from 30s. to 35s. per 100? If the drug has been removed from the free list can the Minister state the reason for its removal?
– It is not a fact that aminophylline has been removed from the free list. The compounds that make up the tablet which has been removed from the free list and which has a special brand name are still readily available under the free list arrangements. The recommendation to remove this brand-name drug from the free list, was made on the advice of the Pharmaceutical Benefits Advisory Committee which has been nominated by the Australian Medical Association. There are on the council representatives of the Australian pharmacy colleges. The committee, in its wisdom, recommended that the brand-name drug be removed from the list. My department and I are prepared to accept the advice of those who are best equipped to give advice in such matters rather than to accept the advice of the manufacturers. The public will suffer no disability whatever because, I repeat, the compounds are readily available on the free list. It may well be that the interests of patients will be better served, because the compounds will bc added in the proportions recommended by the patients’ doctors.
– My question, which is addressed to the Minister for Health, concerns statements published in various newspapers to the effect that the Minister for Health and another Minister of the Crown are endeavouring to set up offices in the new Commonwealth Centre in Sydney. 1 ask the Minister whether there is any truth in this report.
– I cannot speak for anybody else, but I can speak for myself. I had not even heard of the proposal to which Senator McKellar has referred until I read of it in a newspaper. I have never applied for an office in a capital city, other than for the office I occupy in Melbourne. In fairness to the newspaper which published the report, I asked my department whether it could give me information on the matter, and I make the reply readily available because 1 think it will be of interest to the Senate, lt is as follows: -
A request was made in 1961- nine months before I had the honour to be appointed Minister for Health - to (he Chairman of the Steering Committee on Accommodation in the new Commonwealth Centre, Sydney, (or accommodation for the Minister for Health, as well as for the department. The previous Minister for Health, who resided in Queensland, spent considerable time in Sydney on his way to and from Brisbane. He had many meetings and discussions in Sydney in connexion with the National Health Scheme and expressed a desire to nave accommodation in Sydney.
In view of this, whilst it was not customary to provide a Queensland Minister with offices in Sydney, the request was made. Furthermore, the then Minister did not have a special room for himself in the Ministerial rooms in the Common wealth Bank building. It is understood that the request was considered reasonable by the Steering Committee. However, the matter was nol pressed and accommodation was not made available.
I repeat, Mr. President, that neither 1 nor my department has applied for accommoda-tion in the new Commonwealth Centre or in any other building in Sydney, nor have we applied for accommodation in any other capital city.
– Did the Leader of the Government in the Senate see the production statistics released by the Commonwealth Statistician on 23rd October showing a big drop in production of manufactured goods in Australia in September compared with production in August? If this trend continues, will it be a sign of fewer employment possibilities in the future? Will the Minister comment on the Statistician’s figures and give the reason for the reduction?
– I did not see the statistics but 1 suggest that Senator Cavanagh might interpret the figures in the ordinary way. It is very unwise to compare statistics for one month with those of the previous month. A much better result is obtained by comparing statistics for one month with those of the same month in the preceding year. As to any lack of employment in Australia, I believe the wish is father to the thought so far as Senator Cavanagh is concerned. There will be no lack of employment in Australia.
– Will the Minister for National Development inform the Senate what progress is being made with the brigalow lands development scheme in central Queensland?
– I am glad to have an opportunity to inform the Senate on the progress of the brigalow lands scheme. I was in the area a couple of weeks ago and I was impressed wilh what had been done. Although the project was started only this year, those in charge of the operations expect to be able to burn off about 100,000 acres of timber that has already been pulled in that short time. 1 have no expert ‘ knowledge of this matter, but the brigalow scheme seems to mc to be a first-class proposal involving the clearing of more than 4,000,000 acres in the Rockhampton-Fitzroy basin area which at present is carrying about 125,000 head of cattle and returning about £1,000,000 a year. When the project is finished in three or four years’ time, the area will carry more than 400,000 head of cattle with production valued, perhaps, as high as £7,000,000 a year. This production will be of tremendous assistance to our export income. It ‘ will result in great development and progress in the whole area along the Fitzroy River from Rockhampton to Gladstone. It is a project which should arouse the interest and approval of every Australian.
– Has the Leader of the Government in the Senate read the latest reports of findings of the gal I up poll showing a substantial swing in public opinion against the- Government compared with the previous gallup poll which showed that 71 per cent, of people were in favour of the Australian Labour Party’s policy on the North West Cape communication base? Docs the Minister think that, considering prevailing public opinion on the North West Cape station and defence generally, the Prime Minister has made a great mistake in gambling on an election for the House of Representatives?
That is a very friendly sort of question. The gallup poll was taken on 15th October.. Much has happened since that date. I think we will all be better informed when we see the next gallup poll during the course of the election campaign which 1 am very confident will show a much better result than the one recently published.
– Has the
Minister representing the Minister for Primary Industry read reports that the Victorian Wheat and Wool Growers’ Association believes that the imposition of a substantial wool promotion levy on growers before a satisfactory marketing plan is formulated, would be against the best interests of the wool industry? Is this view opposed to that of the Government?
– That is a pretty difficult question to answer, because it is not spelled out in sufficient detail for me to wrestle with it. The Government’s policy over the past fourteen years in relation to primary industries and most other industries - but with special emphasis on primary industries - has been to invite spokesmen for an industry to place their case before it. On every occasion when representatives of an industry have spoken with one voice the Government has done its utmost to meet their needs. The buoyancy of the industries indicates how successful that policy has been. The wool levy is receiving a great deal of public attention. The Government’s attitude is that when the wool industry makes up its mind what it wants and brings its proposals to the Government, the Government will examine them sympathetically.
– I ask the Minister representing the Minister for Immigration whether he has seen the sub-leader in the Adelaide “ News “ of last Friday, the first paragraph of which reads -
It is a strange situation that international confidence man “ Champagne Percy “ King should be a more or less welcome resident of this country, while retired American schoolteacher Harold Orr and his wife are told to go.
Does the Minister desire to comment on that sub-leader?
– I did see the subleader referred to. I saw also an excellent statement by the Minister for Immigration on the facts about this gentleman, including the fact that he had married an Australian girl. In view of the circumstances, I think that statement is an adequate reply to the question. If the honorable senator will read that statement, he will find that he will be better informed.
(Question No. 99.)
asked the Minister representing the Treasurer, upon notice -
What have been the increases or decreases in productivity during the last five years, as shown by the gross national product- per person employed, in Australia and in the various countries in respect of which reasonably reliable statistics or estimates arc available?
– The Treasurer has supplied the following answer: -
Becuse of the difficulties of concepts and deficiencies of data, there are no generally accepted standards for the measurement of productivity in the sense of quantity of product per unit of labour and capital used in production. For this reason, official investigations in most countries’, including Australia, must still be regarded as being in the experimental stages and it is not usual for official statisticians to publish indexes of productivity.
(Question No. 144.)
asked the Minister representing the Minister for Primary Industry, upon notice -
– The Minister for Primary Industry has supplied the following answers: -
(Question No. 157.)
Minister representing the Treasurer, upon notice -
– The Treasurer has supplied the following answer: -
The taxation liabilities of licensed clubs are governed by the principles that have been laid down by Parliament in the provisions of the Income Tax and Social Services Contribution Assessment Act and, in this particular field, the requirements of the law have remained unchanged for many years. I need hardly addthat these requirements are administered on a uniform basis throughout Australia and that the Commissioner of Taxation has no option but to enforce the law where cases come under notice in which a liability to tax exists but has not been satisfied.
Firstly it is mentioned that, since 1952, the whole of the income derived by clubs established for the encouragement or promotion of athletic games has been specifically exempt from tax. Likewise all the income of societies, associations and clubs established for musical purposes or for the encouragement of music, art, science or literature has been exempt since 1922.
It is an established principle of the Australian income tax system that a club or other voluntary organization does not derive income from its dealings with its own members. This rule, generally known as the principle of mutuality, is based on the substantial identity of the club and the members who join it, and the assumption that a man cannot make a profit from dealings with himself. Accordingly, no liability to taxation arises where any club does no more than provide liquor, meals, accommodation or other facilities for its own members.
The mutuality principle does not apply, however, to the income which a club derives from the investment of its own funds, or from trading with non-members. There are sound practical reasons underlying this distinction. An individual taxpayer is liable to pay income tax on any income he derives from the investment of his own savings or from trading with other persons and it could be regarded as anomalous if a corresponding liability were nol imposed where persons join together as a club and income is derived from investments which they jointly own through their membership of the club, or from the trading with non-members which the club carries out on their behalf.
As stated above, a licensed club docs not incur any liability to income tax in respect of subscriptions received from members or the surplus arising from sales to members or from the use of club facilities by members. The club’s taxable income is ascertained by taking as a starting point, the income received from investments, from sales to non-members and from the use of club facilities by non-members, and deducting from this figure an appropriate share of the expenses of running the club and any other deductions to which the club is entitled under specific provisions of the income tax law, e.g., deductions in respect of gifts to funds and institutions which are specified under section 78 of the assessment act.
In most cases, licensed clubs are deemed, for income tax purposes, to be non-profit companies. As such, they do not incur any liability to tax unless the taxable income, ascertained in the manner outlined above, exceeds £104. From £105 to £260, the rate of tax is limited to half of the amount by which the taxable income exceeds £104. Thereafter the rate is 6s. in the £1 up to £5,000 and 8s. in the £1 in respect of income in excess of £5,000.
In legislation which has been recently introduced by the Treasurer it is proposed to raise the existing exemption point from £104 to £208. It is also proposed that from £209 to £520, the rate of tax should be limited to half of the amount by which the taxable income exceeds £208.
The foregoing explanation should, I think, satisfy the honorable senator that no new principle has been introduced by the Government for the purpose of increasing the amount of income tax payable by licensed clubs but rather that an increased exemption from tax is to be granted to them.
– 1 present the report of the Joint Select Committee on Parliamentary and Government Publications and move -
That the report be printed.
The committee’s report explains to the Senate that in view of the impending dissolution of the House of Representatives and the adjournment of the Parliament somewhat earlier than was expected, the committee has found that it is unable to complete its report. The committee regrets this. The reference given to the committee was extensive in’ its scope and, of necessity, the inquiry has ranged over a large and quite diverse number of matters on which much valuable information has been received. The committee recommends in its report that it be reconstituted in the new Parliament to conclude its inquiry and report on the work done during the present session.
Question resolved in the affirmative.
– I present the following report of the Public Accounts Committee -
Sixty-third Report - Expenditure from the Advance to the Treasurer (Appropriation Act 1962-63) and Treasury Minute on the Fifty-second Report together with summary of that report.
Ordered to be printed.
Bill received from the House of Representatives.
Standing Orders suspended.
Motion (by Senator Paltridge) proposed -
That the bill bc now read a first time.
– I am adopting this unusual procedure in order to bring before the Senate a matter which I consider to be of vital importance. I do so because, as an Independent Senator, I can find no other way of bringing it to the notice of the Senate. I refer to the purchase of replacements for the Canberra bomber. It is because I think a discussion of this matter is so important that I have taken this course.
I raise this question because I used to believe once upon a time in the sincerity of the Prime Minister (Sir Robert Menzies) when he used to say, “ We are the Queen’s men, Ma’am; we are the Queen’s men “. The phrase is slightly redolent of the last century, slightly pendantic and slightly emotional, but, nevertheless, very expressive and embodying one concept - that is loyalty to the Queen or, to put it another way, loyalty to the British Commonwealth. To me, the key word of the phrase is ;’“;lo’yalty “. ‘ I am, therefore, in that sense, fy’ne “of the * Queen’s men. But we %ow find that there is a limitation to being a Queen’s man. Apparently we are only Queen’s mcn in the practical sense of being happy to accept her honours, happy to accept her titles, and indeed for some, her friendship; but we are not prepared to return her favours at all. We are indeed worse, much worse, than fair weather friends, taking all we can get but giving nothing in return. After all, docs not loyalty concede some obligation? Are we to bc loyal only in good times and not when people are down and out? Does the British Commonwealth mean anything to us? Or is it only a political expedient? When you answer those questions, you feel that you must do something.
So, we now find the members of this Government wretchedly, miserably, and indeed hypocritically, with the cheapest commercial cynicism you can find, turning their shamed faces away from the British Commonwealth and, without even giving the British Government a further chance for consultation, acting with what is in my view undue, and indeed suspicious, haste in accepting the offer of the United States of America with relation to bombers.
– There is an election on.
– I am not interested in the election. On Wednesday last, 1 asked the Minister a number of serious questions with relation to these bombers. I assumed they were serious, and they sounded serious. The Minister has not answered one of them - not one. All he would say in reply was that the Government was not motivated by the election. 1 was not interested in the election. 1 am still not interested in the election. If the Minister did not have the information, he should have said so. He would have increased his status if he had said straight out that he did not know the answer. But he did not. He just gave us the usual gobbledegook that you get when a Minister cither does not know the answer or wants to cover up the answer. So I did not even get an answer to one question.
The last two of that series of questions were-‘ directed towards asking the Government’ to give an undertaking not! to make a final decision in connexion with bomber replacements until after the election, because, as events had already shown, such a decision should not have ‘ been made on the eve of a general election. 1 asked cbe Government also to assure the Senate that further discussion would be held with the British Government before making a final decision. But apparently the Queen’s mcn are more interested in preserving their scats than in the unity of the British Commonwealth or the defence of Australia. Surely it was not too much to expect them to hold the matter up and let the British Government have another look at the matter. My final two questions, I thought, were of such a serious nature that they should not have been disregarded by the Minister. In fact, now that we know the American offer was accepted on Wednesday last, it may bc that the Minister knew that we were virtually committed to the United States type of aircraft while I was actually asking my questions.
If it is to be the policy of Australia, irrespective of which party is in power, that we arc to align ourselves militarily with the United States of America then I will accept it. I admit that I will do so reluctantly, but, nevertheless, 1 will accept it and will support the Government in purchasing United States equipment, but I have not that easy facility which some Government members have of being one of the Queen’s men one day and one of the President’s men the next day. Of course, the immediate necessity for the purchase of new planes arises from the need to defend ourselves in the event of war in the near north. That is obvious. We are not rushing into the purchase of these aircraft for any reason other than that we believe something may happen. By agreement, this area has been marked as a sphere of British influence and not of American influence, lt will bc side by side with the British and not the Americans that we will have to protect Malaysia and Papua and New Guinea. Therefore it is of Paramount importance - indeed, it is essential - that we should have Australian arms that are interchangeable with British arms. Furthermore, we need the new aircraft that we are seeking almost immediately. We need them to-day. If we are to stop the machinations of those who wish to confront ‘-us and our friends, we mus: do something- to get weapons immediately.
Within 24 hours the United Kingdom could provide Australia with two squadrons of V bombers fully manned, fully equipped and ready to defend or attack. In fact, I believe the United Kingdom has offered them to the Australian Government. Is that not worth something to us? Should not that offer be put on the scales and balanced against any other proposition? Is that offer to be discarded in favour of obtaining a problematical plane which may never take off? Our men could be trained to use the V bombers. The important point is that these planes would be effective immediately; they would be ready to take action. Better still, they would act as a deterrent to any confrontation.
Let us have a look at the capabilities of these two planes. I do not intend to go into all the details. All I can do is to tell honorable senators facts which they may find in any aeronautical magazine. What sort of aircraft are we to get as a stopgap? We have been offered the obsolete B-47E. It is as obsolete as the Canberra, which we intend to replace. Why do we not build more Canberras? There seems to be little sense in obtaining these B-47E aircraft. I admit that they are of the same specifications as the V bombers which have been offered to us by the British Government, but they have one very important and very serious disadvantage. The maximum height at which the B-47E can fly is 40,000 feet, which makes it very vulnerable to fighter aircraft. The British V bomber can fly at ii height of 55.000 feet. This is an important difference. The V bomber is a more modern aircraft, even though its speed, range and load are the same as those of the B-47E. As I indicated, its equipment is far more modern.
I do not want to discuss the Phantom F4C, which was mentioned in a Melbourne evening newspaper on Saturday last. It is a fighter aircraft and not a bomber. I hope the Government did not even consider it, because we are to have the Mirage fighter, which will do the same work as the Phantom F4C.
Now let us consider the plane that we want. What does the Royal Australian Air Force want? It wants a supersonic reconnaissance bomber. Both the TSR-2 and the F-111A satisfy this requirement, but there is an, important difference. ..Both fly at mach 2 or more than mach 2, but the TSR-2 is bigger and therefore can carry a more economical load of conventional bombs and still fly at supersonic speed. We do not want war, but if war comes we all pray .that conventional bombs and not nuclear bombs will be used. The F-111A cannot carry an economic load of conventional bombs. I wish members of the Ministry could get into their heads the thought that the purchase of F-111A aircraft means that we are committing ourselves to nuclear warfare. The moment we use that aircraft we will be committed to using nuclear bombs. Certainly it could carry conventional bombs, but it would do so so uneconomically that it would be a waste of time. The TSR-2 will carry both conventional and nuclear bombs. So if we were engaged in nuclear warfare, we could still use the TSR-2.
Now let us look at the matter of availability. The TSR-2 will be flying in a few months time. We are led to understand that it will be ready for service in 1967. But the F-111A is still on the drawing board; it is still in the design stage. Moreover, it is still the subject of dispute. The question of whether it will be built is still being considered by a congressional committee of inquiry, and that committee has adjourned. The design of the aircraft is still a matter of dispute between the Navy and the Army in the United States of America. Each service hopes to have the design modified to suit its own purpose. One wants a fighter and the other wants a bomber.
I am amazed to think that any Minister could be so naive as to believe that a plane which has not yet been finally designed will be ready to fly in 1967. Aeronautical people tell us that it is an impossibility. To suggest that it will fly so soon is pure United States of America sales talk. Testing the plane will take at least two years. Both the British and the Americans use the P.E.R.T. - programme evaluation receiver technique - method of construction. So it cannot be said that the Americans know how to build bombers more quickly and more efficiently than do the British. Admittedly a contract has been let for the building of the F-111A, hut nobody has started to build it . yet. How can that plane;- be ready to fly at. the same time as another aircraft which will bc in the air within the next few months? To suggest that it will be ready just does not make sense. Surely some of us have enough common sense to realize that any suggestion that we will get this plane by 1967 is so much hooey and that it is only an attempt to kid the public at election lime that the Government has something to offer.
– An election speech!
– 1 am not standing for re-election, so I do not really care whether you think it is an election speech or not. A plane in the air is of far more value to us than one that is still on the drawing board. The F-111A aircraft is of a completely new and untried concept. It will have movable and variable wings. We have never had planes with movable and variable wings before. This makes the whole plan quite hazardous - indeed, almost fictional. What worries mc is that we might have a fiasco such as we had with the Skybolt
– Why do you say it will be a fiasco? lt is something new.
– So was the Skybolt weapon; but it never left the ground.
– What you are saying is that you would not have anything new at all-
– 1 am not saying that. 1 am saying that this project is hazardous. This new concept of a movable and variable wing might work, but it will take much more time to lest than we have available. Here we have two planes, one of which is less conventional than the other. ls it not better to take the one that we know will fly rather than the one that will be a hazardous undertaking? I do not know whether the honorable senator remembers the Skybolt project, lt was a weapon made by the British at America’s request. The next we heard of it was that it was turned down completely.
– I think you mean that it was made by the Americans for the British.
– But the British paid for it.
– lt was made at the request of the British.
– I am glad that the honorable senator corrected mc. The point is that the Skybolt never left the ground. The same thing could happen with the F-111A aircraft. The Americans may never complete the programme. What guarantees have we that the T-11 lA will ever fly? We have not any such guarantee, but we do know that within a few months* time the TSR-2 will be flying. Apparently, the question of cost has made the Government lean towards the American aircraft. We have heard the Prime Minister say recently that the F-111A will be very, very, very - I must not forget that third “ very “ - much cheaper. Unless the Americans have made an offer of a very substantial cut, I should say that those prognostications would be very, very, very silly, because it cannot be staled how much an aircraft will cost. The British have said straight out that they will not add the developmental costs to the cost of the aircraft they are selling to Australia. That is a fact. I do not know whether it is a fact that the Americans have said they will not add the developmental costs, but 1 tlo know that the developmental cost factor in the F-11IA is somewhere between 200,000,000,000 dollars and 300,000,000.000 dollars. If that cost is to be loaded on to the cost of the aircraft it will make the total cost prohibitive.
The Prime Minister has said that the American aircraft will bc very much cheaper. It is well known in the aviation industry that the British cost of producing aircraft is cheaper than the American. If no developmental costs are to bc added, obviously the British aircraft would bc cheaper than the American aircraft, lt is extraordinary to hear that we are obtaining aircraft which arc cheaper than the British aircraft.
– What is the estimated cost of the ‘planes?
– I do not know, but I do know that the cost of British aircraft has always been up to 20 per cent, per aircraft cheaper than that of American aircraft.
– That is a pure guess.
– It is not a guess. In any event, my guess would bc the same as that of the Prime Minister, because he said he did not know.
– No, he did not say that.
– Yes. He said he had to wait until the Minister for Defence came back to discuss .the matter with him.
– That is a different story.
– Very well. Let me come to another aspect of this matter. I refer to its political implications. This is a very complex problem. If we want to tie ourselves to the apron strings of the United States we have to do this sort of thing, but the only basis I can find for purchasing American aircraft is that the Government has some secret agreement or arrangement with the United States. Od no other basis could the Government justify or explain this extraordinary and peculiar purchase of American aircraft.
I ask: Will the United States, which has important financial interests in oil in Indonesia, help us against that country? Will the Americans help us with warheads for these F-111A aircraft? Will the Americans be fighting alongside us? Will the United States provide nuclear warheads, because if it does not do so these aircraft will be completely useless, since they cannot carry a conventional load? Could we not have waited for, say, two months before we came to a decision? Before rebuffing the United Kingdom could we not have given it one more opportunity to offer us better terms? Instead of merely saying, “ What stupid rot you talk “, as Ministers seem to say when they do not know the answers, I hope that the Minister will answer specifically the questions I have asked or will say that he does not know the answers. lt does not matter which way we argue, in all the circumstances the British offer, both for the immediate supply of V- bombers and for the long-range offer of TSR-2 aircraft, is far superior to the United States offer?
– Who told you that?
– The Minister has not been listening. I have been telling the Senate a few of the facts. If there is any doubt, or even if the aircraft are as good as one another, surely there should be some loyalty in this Government which would sway it to the side of the British. We are ready, of course, to fight to the death for the Malaysians, the Papuans and the New Guineans, but apparently we are not ready to lift one linger to help the British economy or British prestige at a time when loyalty would be appreciated by the people of the United Kingdom.
– Loyalty and efficiency, too.
– Yes. We should do this, Mr. President, because we arc the Queen’s men.
– I take this opportunity to bring before the Senate a matter concerning the report of the Public Works Committee on the extension of the Stokes Hill wharf at Darwin, a project on which the Government proposes to spend £430,000. My interest in this matter was aroused when I read paragraphs 26, 27 and 28 of the report. I suppose that paragraph 28 is the most important. It states -
We believe that the proposed method of tendering should be given further consideration to ensure that this is the best way of protecting the wharf structure. The possibility of the use of spring piling should not be overlooked.
The wharf is to be extended by 97 feet. At the present time, it is 603 feet long, and it is proposed to extend it to a length of 700 feet. The existing wharf has no tendering system at all. The lack of such a system involves a hazard to the Stateowned ships which are constant users of the port of Darwin. They are constantly being damaged. Those who understand the port of Darwin will know that the prevailing winds are from the south-east and that these winds hold ships against the wharf. The willy-willies begin in the same area, and ships are driven on to the wharf. There is no protection for them. It is necessary, therefore, to have a system of spring piling, with a movement of four inches. That is the degree of movement of the spring piling on the 603 feet length of wharf. There is one thick pile which has to take the whole weight of the ship when it comes up against the wharf. It is proposed to extend the wharf by 70 feet, but at this stage it is not proposed to recommend fendering of the extension, nor has a fendering system been proposed for the present 603 feet of wharf.
The evidence given to the committee on this point was quite strong. We find the following statement in paragraph 3 of the summary of recommendations -
Further consideration should be given to the proposed method of fendering
The proposed method of fendering provided for rubber buffers. At page 5 of the evidence of Mr. O. C. C. White, the following statement appears: -
Timber fender piles will be used in accordance with common practice, since timber is elastic and saves the hulls of ships from damage. However, in ports such as Darwin, where ships have to berth without the assistance of tugs, the timber fendering suffers considerable damage if it is rigidly supported.
I assure the Senate that it is rigidly supported at Darwin -
Mere lt is proposed to take advantage of the experience gained by the department over the past eight years and to use rubber buffers between the timber fenders arid the steel structure. That is standard practice in our wharves throughout New Guinea and so on. j The answers given by Mr. Noble, at page j 56, were a little more enlightening. The transcript of evidence reads -
I On page 2 of your statement, under the head ing “ Design “ you refer to a modern system of fendering. This new structure will have rubber buffers. You say that the present wharf face should be similarly fendered. Is it proposed to do that?
Mr. Noble replied ;
The tendering here has been a contentious point for a number of years. With a 27 foot rise and fall of tide, you cannot adapt fendering designed for Geelong to Darwin. The chief trouble here and the chief cause of damage to the existing fendering is the fact that we must traverse ships along the face in getting them on and off the wharf, particularly in a strong south-easterly wind. The fact that you have to provide for a 26 foot vertical displacement plus a longitudinal displacement makes the design of this fendering unsuitable for the job.
Wilh the modern high-sided vessels, at low water there are projections and any movement of the vessel causes no little damage to the present fendering.
He was asked - r’ Is it proposed to change the fendering on the existing wharf?
And he replied - lt is proposed, but not in this current proposal.
I put it to the Government that the Western Australian Government, over many years, has had experience of tidal ports with much greater rise and fall of tide than at Darwin. The rise and fall are 28 feet at Broome, 31 feet at Derby and 30 feet at Wyndham. The new berth at Wyndham has been completed only in. the past two years and there is an elaborate system of fendering at the wharf there. I suggest that engineers of the Department of Works be sent to Wyndham to look at the fendering system with a view to having a similar fendering system installed at Darwin. I can assure the Government that it would reduce the damage to State ships and to the wharf at Darwin. Over a period of years, the cost of putting in a proper fendering system would be saved to the State Government and to the Commonwealth Government. The recommendations of the Public Works Committee contained in paragraph 3 of its report are too vague. The committee intends to re-examine the matter but it will give consideration only to the last 70 feet and not to the 603 feet already constructed. I want the Government to take action to see that a proper fendering system is installed which will be suitable for such an important port as Darwin.
.- in reply - Senator Turnbull, to use his own words, has taken a rather unusual course in raising the matter of the purchase by the Government of the TFX bomber for the R.A.A.F. This was an unusual course, but it was necessary, presumably, because Senator Turnbull was not in the Senate chamber when he had an opportunity of talking about this matter. The opportunity was presented during one of his frequent absences from the Senate.
– The Minister has often been absent from the Senate, but I do not ask him what he has been doing.
– If the honorable senator cares to look through the Senate records, he will see that I have not been absent from the Senate in the past ten years, whereas his own absences are frequent and noted by all who sit in this chamber.
– I was at a conference learning more than I would in this chamber.
– It is for Senator Turnbull to say how he will spend his time. but the fact is that he was elected to sit in the Senate. Whether he docs or not is for his own determination. I make the point that if he had been in the place where he is elected to sit, he would have had an opportunity last Thursday night to say something about the purchase of these bombers. But he was not here and he took what he has described as the unusual course of raising the question in this debate. I take no objection to that. However, let me say at once that, as I understood his remarks, the honorable senator seemed to base his complaint on the ground that, by purchasing the TFX bomber which had not been manufactured in England, the Government had displayed some lack of loyalty to the United Kingdom. If the honorable senator’s concept of loyalty rests on what, in its essence, must be in part a commercial deal and in part a defence need, then his concept of loyalty is indeed unusual. Who could doubt the loyalty of this Government or of this nation to the United Kingdom?
– It was in doubt to-day.
– Senator Cavanagh would not know much about loyalty anyway.
– lt will be in doubt after 30th November.
– Will it? I thought that one could assume that even in the unlikely event of a Labour government’s being returned, it would remain loyal to the United Kingdom and the Commonwealth of Nations just as we are. This deal was not made, as might be suggested, in the shadow of an election. I made that point quite clear in answering a question which Senator Turnbull himself asked me last week. .1 stated as long ago as May, that this Government had despatched a mission overseas to survey all the aircraft that were available. The mission examined all that were available in the United Kingdom, France and the United States of America. Having examined what was available, it reported to the Government that the TFX aircraft which had been found in the United States of America was the- most modern and complete answer to our’ requirements. That is the reason why the Government saw fit to approve the purchase of this aircraft.
– That docs not line up with the statement made by the Prime Minister yesterday in a television broadcast.
– lt lines up precisely with the statement made by the Prime Minister on Thursday night. 1 did not hear what the Prime Minister said on television but I am sure it did not differ in substance from what he said on Thursday. The decision to purchase these bombers was made on the recommendation of the mission led by the Chief of the Air Staff, Sir Valston Hancock.
– Senator Turnbull knows better than the Chief of the Air Staff apparently.
– I was coming to that. A mission of Australians headed by our own Chief pf the Air Staff made the recommendation. It had available all the best technological advice and the mission recommended that this bomber was the best, the most modern and a complete answer to our requirements. Senator Turnbull now has stated that that is not so. He has implied that he knows better than the mission. In effect, that is what he said.
The Government having decided to make the purchase for the reasons stated, it emerged that the cost showed an advantage in favour of the American aircraft. I have no doubt that in the course of the next few days, the actual details of those costs will be spelt out. But I make the point that a decision was made to purchase this aircraft because a mission appointed by the Government recommended in strong terms that this was the aircraft we should buy. I say no more about it at this time because we had an opportunity of discussing the matter last Thursday night. If Senator Turnbull is here for any time this week, no doubt he will use the forms of the Senate to bring the matter up again.
Question resolved in the affirmative.
Bill read a first time.
– 1 move -
That the bill be now read a second lime.
The purpose of this bill is to declare the rates of income tax and social services contribution for the current financial year 1963-64. The rates proposed are the same as those declared for the financial year 1962-63. The 5 per cent. rebate of tax provided in 1962-63 for persons other than companies is also to be continued. The provisions of the bills declaring the rates of income tax for the financial years 1962-63 and 1963-64 are, with three exceptions, substantially the same. I propose therefore to speak only on the new provisions that will apply for 1963-64.
First, I would mention a proposal to double the minimum amount of taxable income on which tax is payable by individuals, trustees of estates and non-profit companies. For the financial year 1963-64 these persons will not have to pay tax unless the taxable income exceeds £208, whereas, for many years past, tax has been payable when the taxable income exceeded £104. This increase in the exemption level will provide a measure of tax relief and, at the same time, effect some savings in adminisstative costs by reducing the number of persons paying income lax.
I would next invite the attention of honorable senators to a proposal that where taxable income is in the range from £209 to £214 the tax payable is not to exceed one-half of the excess of the taxable income over £208. This provision is designed to prevent anomalies that might otherwise occur in this small range of incomes.
The remaining proposal an which I propose to comment will amend the age allowance provisions which authorize a special basis of taxation that may apply to men aged 65 or more and women aged 60 or more who are residents of Australia. At present a person of pensionable age who has a net income of £455 or less is not required to pay tax. The bill proposes to increase this exemption point by £26 to £481, in order to bring it into line with the increase of 10s. a week in the age pension for single persons.
It is also proposed to authorize marginal relief where a person, qualified by age, is in receipt of a net income somewhat in excess of the new exemption level of £481. Corresponding relief applied last year if the net income of a person was not greater than £520. The maximum amount of net income to which this relief may apply for 1963-64 will be increased to £556. For the 1962-63 year exemption was provided for married couples if the combined net income of the couple did not exceed £910 and both husband and wife were of pensionable age. A measure of relief was also authorized if the combined net income of the couple did not exceed £1,293.
It is proposed by the bill, that the application of this relief for the 1963-64 year will not depend upon both husband and wife being of pensionable age! The married couple provisions are to apply to a taxpayer qualified by age although his or her spouse, as the case may be, is not of pensionable age. This extension of the age allowance should be of assistance in many cases in which an aged person has a spouse who has not attained the specified age.
The proposals I have mentioned and other taxation measures are explained in a memorandum available to honorable senators and I do not propose to comment further on the bill at this stage.
I commend the bill to the Senate.
Debate (on motion by Senator Cooke) adjourned.
(No. 2) 1963.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Paltridge) read a first time.
Senator PALTRIDGE (Western Australia - Minister for Civil Aviation [4.10]. - I move -
That the bill be now read a second time.
The main purpose of this bill is to give effect to income tax proposals outlined by the Treasurer in his Budget speech. It will also amend, in a number of important respects, provisions of the income tax law authorizing taxation allowances for enterprises engaged in searching or mining for petroleum in Australia or the Territory of Papua and New Guinea and for investors in those enterprises. In addition, the bill contains provisions associated with our agreements wilh the Government of the United States of America concerning the status of the armed forces of that Government in Australia and its establishment of a naval communication station at North West Cape.
First I would invite the attention of honorable senators to a number of proposals designed to assist primary industries. It is proposed to introduce an investment allowance on new plant used wholly and exclusively in primary production in Australia. As indicated by the Treasurer in the statement made by him in September, the allowance is to be provided as an additional incentive for investment by primary producers in up-to-date plant with a view to improving productivity of land and the efficiency of primary production operations. For the purposes of the allowance, primary production, as defined in our income tax law, includes agricultural or pastoral pursuits, poultry farming and fishing, pearling or forest operations. 1 shall be referring at a greater length to forest operations at a later stage of this speech.
The investment allowance will take the form of a special deduction from assessable income of 20 per cent, of the cost, including installation costs, of qualifying plant. The allowance will be additional to the deductions now available to primary producers for depreciation at the special rate of 20 per cent, per annum of the cost of plant. The combined effect of the two allowances will be that in the year in which eligible plant is first used or installed ready for use, deductions totalling 40 per cent, of the cost of the plant will be allowable, comprised of 20 per cent, by way of investment allowance and 20 per cent, by way of special depreciation. Depreciation at the special rate of 20 per cent, of the cost will continue to be allowable as a deduction in each of the four succeeding years, so that the total amount deductible over five years will be 120 per cent, of the cost of the plant.
Plant eligible for the investment allowance will be new, but not second-hand or used, machinery and equipment used wholly and exclusively in carrying on a business of primary production. The allowance will bc based on capital expenditure incurred on such plant on or after 14th
August, 1963, under a contract entered into on or after that date. Should plant acquired genuinely for use in a business of primary production be sold, no amount of the investment allowance will be restored to the primary producer’s assessable income. As second-hand or used plant will not be eligible for the allowance, duplication of the deduction in respect of any particular unit of plant will not occur. Some categories of plant used by primary producers will not be included within the scope of the investment allowance. Plant acquired partly for private use, hand tools, loose tools and equipment, and road vehicles of the kind ordinarily used for the transport of persons or goods will all be ineligible for the allowance. Structural improvements, including fences, buildings, and wharfs will also not qualify.
Another allowance assisting primary producers will be an income tax deduction for the full cost of constructing or altering fences to protect land used in primary production from the ravages of animal pests, or to control the adverse effects of naturally occurring mineral salt. Income tax deductions are also to be authorized for the cost of extending telephone services to a property used for primary production purposes. It is proposed that the costs of the extension lines will be deductible in equal annual instalments over a period of ten years commencing with the year in which the relevant expenditure is incurred
I have already referred to forest operations. Under the present law, persons engaged in a business of extracting timber from a plantation or forest for milling are not generally regarded as primary producers. It is proposed in this bill to implement a recommendation of the Commonwealth Committee on Taxation that persons engaged in the planting or tending of trees for felling, or in felling trees for milling or other processing, be treated as primary producers for income tax purposes. This will have the effect, among other things, of entitling those persons to the proposed investment allowance for primary producers and to the special 20 per cent, rate of depreciation on machinery and equipment first used or installed ready for use in forest operations after 30th June, 1963. In the case of structural improvements on land used in forest operations the special rate of depreciation will be available on improvements completed after that date.
Again following’ a recommendation of the Commonwealth Committee on Taxation, it is proposed that capital expenditure on certain mill buildings and housing for employees be deductible for taxpayers engaged in a business of milling timber. The deductions will .be on the same basis as at present provided for expenditure on timber access roads. Broadly, this means that the cost of eligible buildings and housing may be deducted over the period of years they are used for the purposes for which they were constructed or purchased. When this period is expected to be in excess of 25 years a maximum usage period of 25 years will apply in calculating the deduction available.
I turn now to two proposals relating to private companies. The amount of profits which private companies may retain without incurring a liability for tax on undistributed income is to be increased with a view to encouraging those companies to utilize a greater proportion of their profits for expansion purposes. Under the existing provisions of the income tax law, a private company is entitled to retain, free of undistributed income tax, 50 per cent, of the first £1,000 of distributable income, other than property income, 40 per cent, of the next £1,000 and 35 per cent, of the balance. For practical purposes, the distributable income of a private company is its taxable income less the primary company tax payable on that income.
It is proposed that the retention allowance be increased to 50 per cent, of the first £5,000 of distributable income, other than property income, 45 per cent, of the next £5,000 and 40 per cent, of the balance. This substantial increase in the retention allowance will be available to private companies in relation to their distributable income of the 1962-63 income year and subsequent years. A private company avoids any liability for undistributed income tax if it makes a sufficient distribution of profits during the period of twelve months commencing two months before and ending ten’ months after trie” company’s income year. Speaking in a very general way, a sufficient distribution is the amount remaining after deducting from taxable income the sum of the primary tax payable and the retention allowance.
Cases arise where a private company is unable to determine accurately the amount that would constitute a sufficient distribution because of a delay in the issue of its notice of assessment .of primary tax. In other cases a distribution based on the taxable income originally assessed by the commissioner is found to be insufficient because of a subsequent increase in that taxable income consequent upon the primary tax assessment being amended. The bill will implement a recommendation of the Commonwealth committee that the commissioner be permitted, in circumstances of that nature, to grant a further period during which, a company may pay sufficient dividends to avoid a liability or an increased liability for undistributed income tax. In exercising his discretion the commissioner will be required to have regard to a number of matters including the date when the company lodged its return of income for the relevant year and when a full and true disclosure of all the facts necessary for its assessment was made. The bill also implements a number of other recommendations of the Commonwealth committee affecting businessmen and investors. All of these are outlined in the Budget papers and are explained in the explanatory memorandum circulated with the bill. Generally, the recommendations referred to relate to business expenses of a minor nature which would not otherwise be allowable as deductions because they have the character of capital outlays.
An important proposal of a different nature is that businessmen will be permitted, subject to the commissioner being satisfied that the circumstances justify such a course, to adopt a fourth basis of valuation for certain trading stock. Under the present law each article of trading stock may, at the option of the taxpayer, be valued at cost price, market selling value or replacement cost. The Commonwealth committee formed the opinion that, for some items of stock, none of those bases may be suitable. As recommended by the committee it is proposed to provide for a lower basis ‘‘of valuation to be applicable where none of the present bases is appropriate.
Also included in the bill are several proposals relating to concessional deductions in respect of a taxpayer and his dependants. It is proposed to raise the maximum deduction for education expenses of a dependent child from £100 to £150 and to remove the limitation of £150 per person on deductions for medical expenses. The maximum deduction for funeral expenses is to be increased to £50 in respect of each bereavement.
Other proposals in relation to concessional deductions will give effect to recommendations of the Commonwealth committee which are directed to eliminating anomalies and inconsistencies that came under the committee’s notice in its examination of our income tax law. Those proposals were broadly outlined in the Budget papers and are explained in the explanatory memorandum being circulated for the information of honorable senators. In addition to the proposed increase in the deduction for education expenses that I have mentioned, it is proposed to -modify the effect of Government assistance, granted for the purpose of educating a child, on the concessional deduction allowable in respect of the child. Government assistance granted for the purpose of educating a child, and taking the form of payments for the child’s school fees or similar expenses, will not be taken into account in determining the deduction available for the maintenance of a student child or any other dependent child who is not classed as a student child because he has not reached the age of sixteen years.
The bill also provides that other Government assistance, such as living allowances, will in future be. regarded as separate net income of a child. Under the present law the maintenance deduction for a student child in recept of such assistance is reduced by the full amount of the assistance provided. This will not happen in future. Following the proposed adoption of another Commonwealth committee recommendation, separate net income may be as much as £65 in a year before it affects the deduction available for the maintenance of any class of defendant;- Where the separate net income of a dependant exceeds £65 trie maintenance deduction otherwise allowable will be reduced by £1 for every £1 by which separate net income exceeds £65.
Among the other Budget proposals is one to amend the provisions of the income tax law authorizing deductions for gifts of £1 and upwards to specified funds and institutions. A deduction will be authorized for gifts to certain funds that provide money or other benefits for institutions referred to in those provisions. Deductions are also to be allowed for gifts to the Australian Institute of International Affairs, the National Safety Council of Australia and the Australian National Travel Association. It is also proposed that owners of flats under “ own-your-own flat “ company arrangements be allowed income tax deductions for rates and land tax effectively paid by them. Until now, these deductions have not been generally available because, under many of the arrangements, the flat owners are not personally liable for the rates and taxes.
I would like to refer now to provisions included in the bill relating to petroleum prospecting and mining in Australia or the Territory of Papua and New Guinea. A review by the Government of the relevant provisions of the present income tax law, some of which were introduced as long ago as 1939 and 1940, indicated that they are not, in detail, well suited to modern conditions. Amendment of those provisions was foreshadowed in statements issued by the Treasurer (Mr. Harold Holt) on 3rd February and 12th June of this year.
Existing provisions are based on the principle that income derived by an enterprise from the sale of petroleum that it has produced in Australia or the Territory, or the sale of products of that petroleum, should not be taxable until capital expenditure incurred by the enterprise in petroleum exploration or mining in Australia or the Territory has been recouped out of the income. This is achieved by the allowance of deductions for the capital expenditure from the income derived from the petroleum mining operations.
In future capital expenditure that may qualify for deduction will include expenses associated with the raising of capital for petroleum prospecting or mining operations and expenditure on residential’, .accommodation ‘and amenities ‘provided’ for’ mining employees or their dependants at or near the mining site. Expenditure incurred in acquiring rights to prospect or mine for petroleum or technical information relating to a particular area will, within limits specified in the bill, also be brought within the scope of the capital expenditure that is deductible.
Pipe lines used in transporting petroleum from a well in Australia or the Territory to a refinery or a terminal will be outside the scope of deductible capital expenditure. So will refineries. It is proposed, however, that pipe lines and ancillary plant used primarily, principally and directly in connexion with the operation of a pipe line, will be eligible for special depreciation allowances. The cost of the pipe line and the ancillary plant will be deductible in equal annual instalments over a period of five years. The owner of a pipe line will, however, have the right to elect that the cost be allowed as deductions over, a longer period. The special depreciation allowances will be available in respect of a pipe line construction of which is commenced on or before 30th June, 1968, and completed not later than 31st December, 1969. If a pipe line qualifies for the allowances, plant ancillary to it will also qualify if installed on or before 31st December, 1969.
Provision is also being made for cases where petroleum prospecting or mining operations are carried on under joint venture or “ farm out “ arrangements. A payment of a share of income from the sale of petroleum made by a producer of petroleum under arrangements of this nature will be treated as income derived from the sale of petroleum in the hands of the person receiving the payment. Other provisions of the bill relate to disposals of property that has been used in petroleum prospecting or mining operations, to the termination of the use of property in those operations, and to other matters of a technical nature associated with the taxation of persons engaged in searching or mining for oil and investors in companies so engaged.
One particular matter 1 would mention is the proposed taxation provisions in relation te petroleum search subsidies paid by the Commonwealth. Honorable senators arc, of course, aware that these subsidies have been paid by the Conimonwealtfv.si.nce 1957 for the purpose of assisting oil exploration in this country and the Territory of Papua and New Guinea. The Government has been advised that the probable effect of the existing provisions of the income tax law is that the subsidies are liable to taxation in the hands of the recipients. This result was not intended and it is proposed by this bill to ensure that oil search subsidies paid by the Commonwealth in the past and in the future are not taxable. The deductions available for capital expenditure incurred in prospecting for petroleum will, however, be reduced by amounts corresponding to the amount of the expenditure which is, in effect, reimbursed by the payment of the subsidies.
Finally, I would mention briefly the provisions of the bill relating to our agreements with the Government of the United States of America concerning the establishment of the naval communication station in Western Australia and the status of United States forces in Australia. Speaking generally, as far as income tax is concerned, the agreements bind us to exempt from our income tax the income of American civilians and military personnel derived here solely in consequence of their connexion with the establishment or maintenance of the communication station.
The exemption will operate only so long as the United States Government imposes tax on the income. The essence of the agreements in the income tax sphere is that the relative position of each country to American personnel will not be altered, for income tax purposes, by the presence of these people in Australia in connexion with the establishment of the communication station. No exemptions are proposed for people connected with the establishment or maintenance of the station who are citizens of Australia or ordinarily resident here. Similarly the income of a company incorporated in Australia and carrying out a contract for the construction or maintenance of the station will not be exempt.
Further explanations of the proposed amendments are contained in the explanatory memorandum to which I have already referred. I now submit the bill for the consideration of the Senate.
Debate (on motion by Senator Cooke) adjourned. v ‘,.« j
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Paltridge) read a first time.
. -I move -
That the bill be now read a second time.
The purpose of this bill is to bring the Income Tax (International Agreements) Act into line with the broad concept of our recent agreements with the Government of the United States of America concerning the establishment of the naval communication station at North West Cape. The bill is supplementary to the Income Tax Assessment Bill on which I have already spoken.
Broadly speaking, the intention of the agreements, insofar as taxation matters are concerned, is that the presence in Australia of United States contractors and other personnel in connexion with the North West Cape project should not, of itself, render them subject to Australian income tax, or to a greater amount of Australian income tax than they would otherwise pay. The bill is designed to ensure that United States contractors who carry on business in Australia for the sole purpose of establishing the North West Cape station will not, for the reason only that they are carrying on business here for that purpose, become liable to a higher rate of Australian tax than would otherwise be applicable to dividends that they may receive from Australian companies.
A memorandum explaining technical features of the bill is available to honorable senators and I do not propose to speak on the bill at great length at this stage. I commend the bill to honorable senators.
Debate (on motion by Senator Cooke) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Paltridge) read a first time.
– I move -
That the bill be now read a second time.
This bill serves two purposes. The first is to implement a proposal to double the existing statutory exemption for Commonwealth estate duty purposes and to shade out the exemptions more slowly than in the past. In his Budget speech the. Treasurer mentioned that the Government had examined a number of representations concerning the incidence of estate duty. After considering these representations very carefully the Government reached the view that, to preserve equity between all classes of taxpayers, the best thing to do would be to raise the exemption limits provided under the act. This decision is being implemented by this bill.
Under the law as at present enacted, estate duty is not payable where an estate of £5,000 or less passes wholly to the deceased’s widow, widower, children or grandchildren. This bill proposes that, in future, the exemption will extend to estates of £10,000 or less. Furthermore, under the present law, where the value of an estate exceeds £5,000, the exemption diminishes at the rate of £1 for every £3 of the excess of the estate over £5,000. This provision is to be amended so that the exemption will diminish by £1 for every £4 by which the value of an estate exceeds £10,000. The exemption will disappear only when the net estate is as high as £50,000.
For estates that do not pass to a deceased’s widow, widower, children or grandchildren the level of exemption is to be increased from £2,500 to £5,000. In relation to estates that do not pass to the widow or other specified relatives, the new exemption will diminish by £1 for every £4 by which the value of the estate exceeds £5,000 and will finally fade out when the net estate reaches £25,000.
The other purpose of the bill is to give effect to the exemptions from estate duty agreed to in the North West Cape Naval Communication Station Agreement and the Status of Forces Agreement with the
United States of America. Under these agreements, Australia is to exempt from estate duty certain personal property of American personnel who are here solely for purposes prescribed by one or other of the agreements. The exemption is, however, conditional on the property being subject to estate tax imposed by the Government of the United States. The clauses of the bill have been explained in an explanatory memorandum relating to this and other taxation measures and I do not think I need to elaborate further at this stage. I commend the bill to honorable senators.
Debate (on motion by Senator Cooke) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Paltridge) read a first time.
– 1 move -
That the bill be now read q second time.
This bill proposes amendments to the gift duty law to implement terms of our agreements with the Government of the United States in connexion with the North West Cape project and the status of United States forces in Australia. Under those agreements, Australia has, in broad terms, undertaken to exempt from Commonwealth gift duty gifts of certain personal property made by United States contractors and personnel who are in Australia solely for purposes prescribed by one or other of the agreements, provided such gifts are not exempt from duty under United States law. The bill gives effect to this undertaking. A memorandum explaining the clauses of the bill has been prepared for honorable senators. I commend the bill to the Senate.
Debate (on motion by Senator Cooke) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Paltridge) read a first time.
. 1 move -
That the bill be now read a second lime.
The main purpose of this bill is to authorize the payment in 1963-64 of special grants totalling £11,450,000 to the States of Western Australia and Tasmania. The payment of these grants has been recommended by the Commonwealth Grants Commission in its thirtieth report which has already been tabled. The bill also authorizes the payment of advances to Western Australia and Tasmania in the earlier months of 1964-65 pending the authorization by Parliament of the special grants for that year. A similar provision has been included in the legislation authorizing payments of grants for a number of years.
Under the procedures currently employed by the commission the special grants recommended for payment each year consist of two parts. One part is based on the commission’s assessment of a claimant State’s financial needs for the year in which the grant is to be paid, and is regarded by the commission as an advance payment subject to final adjustment two years later when the commission has completed its examination of the audited results of the States for that year. The other part of the grant represents the final adjustment of the advance payment made two years earlier.
In accordance with its usual practice, the commission has arrived at its recommendations by making a detailed comparison of the budgets of each of the claimant States with those of the standard States, particular account being taken of differences in levels of expenditures and efforts to raise revenue. As in the two preceding years, the commission has taken the States of New Sou:h Wales and Victoria as the standard States for the purpose of these comparisons. The special grants which the commission has recommended for payment in 1.963-64 and the special grants paid in 1962-63 are set out in a table which, with the concurrence of honorable senators, I incorporate in “ Hansard “.
In arriving at the adjustments to the advance payments made to the claimant States in 1961-62, the commission examined the budget results of the standard States of New South Wales and Victoria and concluded that it would be appropriate, if comparability were to be preserved between the financial positions of the claimant and the standard States, to adopt a deficit standard of 2s. per capita in respect of 1961-62. The adjustments and the advance payments made to the claimant States have been calculated on this basis so that each of these States is thus left with a deficit to fund in respect of budgets for that year.
In arriving at its recommendations ns to the amount of the advance peyments which should be made to the claimant States in a financial year, the commission makes an assessment of the prospective budget results of the standard States and then recommends the advance payments which it considers would place the claimant States in a comparable financial position, subject of course to a review of these advance payments two years later. In considering the budget prospects for 1963-64 of the two standard States, New South Wales and Victoria, the commission came to the conclusion that, unless they made use of their shares of the £20,000,000 additional assistance grants for 1963-64 to assist their budgets, they would incur substantial deficits.
The manner in which the commission should treat additional assistance grants for the purpose of placing the budgets of the standard and claimant States on a comparable basis was considered at some length by the commission during the year. This matter is discussed in chapters 4 and 7 of its report. In deciding to adopt a deficit budget standard of 30s. per head for the purpose of determining the advanced pay ments, the commission took the view that unless the standard States made use of .their shares of the additional assistance grants for 1963-64 to assist their budgets, they might well be left with deficits of much the same amount. It therefore decided that the appropriate, course was to leave open to the claimant States the. same choice as to the use of the . additional assistance grants as appeared to be available to the non-claimant States. It recognised, of course, that special grants paid on this basis in 1963-64 would be subject to review in 1965-66 when the actual results for the current financial year are known.
In total the special grants recommended for payment in 1963-64 are £199,000 greater than those paid in 1962-63. The effect of adopting the commission’s recommendations would be to increase the total general revenue grants - that is, the financial assistance grants plus the special grants - payable to the two claimant States by £2,394,000 this financial year, using for this purpose the Statistician’s latest estimates of the financial assistance grants. For Western Australia the increase will be approximately £1,474,000, and for Tasmania approximately £920,000. In addition, Western Australia will receive £1,882,000 and Tasmania will receive £1,408,000 from the additional assistance grant of £20,000,000 being provided in 1963-64 for employment-giving activities.
The Grants Commission’s recommendations have been adopted without amendment in every year since the commission was established in 1933. The Government considers that the commission’s recommendations regarding special grants for Western Australia and Tasmania in 1963-64 should be adopted. I, therefore, commend the bill to honorable senators.
Debate (on motion by Senator McKenna’ adjourned.
Debate resumed from 24th October (vide page 1427), on motion by Senator Sir William Spooner -
That the bill be now read a second time.
– On Wednesday last we passed the River Murray Waters Bill, which provided for the building of the Chowilla dam near the border of South Australia and Victoria at a cost of £14,000,000. In doing so we ratified an agreement between the Commonwealth and the States of South Australia, New South Wales and Victoria under which each party agreed to pay portion of the cost of building the dam. In his secondreading speech on that measure, the Minister for National Development (Senator Sir William Spooner) informed us that during the negotiations that led to the decision to construct this reservoir the Government of New South Wales indicated that it was not. at this stage, in a position to provide its share of the cost. We were informed that an agreement had been entered into between the Commonwealth and New South Wales whereby the Commonwealth would advance the money to New South Wales. That State is to repay each Commonwealth payment in twenty equal half-yearly instalments. We arc now asked to ratify that agreement between the Commonwealth and New South Wales, which makes the necessary arrangements for repayment, security and interest. The Australian Labour Party - the party that is concerned about the development of Australia - acknowledges the importance of this legislation, just as it acknowledged the importance of the River Murray Waters Bill and the Menindee Lakes Storage Agreement Bill. Wc support the measure without reservation.
The bill is really a formal measure. It is the sort of measure that one would expect in relation to an agreement between governments affecting the . terms of repayment of advances made by one to the other. As I said earlier, provision has been made for the amount advanced by the Commonwealth to the State to be repaid in twenty equal half-yearly instalments, commencing tcn years from the date the Commonwealth payment to the State is made. That pro vision may be of some significance. It is expected that the dam will not be completed until 1970. In the intervening period the four parties to the agreement will have to make advances toward the cost of the dam, which will be constructed by the South Australian Government as the construction agent for the River Murray Commission.
The payment of this money will be made under section 96 of the Constitution. Interest, at the long-term bond rate applying when each payment by the Commonwealth is made, will be paid to the Commonwealth by the State at six-monthly intervals from the time the Commonwealth payment is made, on the outstanding balance of each Commonwealth payment. Although this is the normal transaction that one would expect as between governments, the agreement gives rise to all the doubts, mistrusts and suggestions that we would expect in a private agreement. I am not implying, of course, that the Commonwealth will make a profit from the arrangement. Indeed, the money is to be advanced to New South Wales at the same rate of interest as the Commonwealth will pay on long-term bonds.
In his second-reading speech, the Minister said -
During the inter-government discussions that Jed to the decision for construction of the reservoir as a work under the River Murray Waters Agreement, the Government of New South Wales indicated that, while it fully agreed with the desirability of going ahead with the project as quickly as possible, it was not in a position to provide ils one-quarter share of the cost because of the extent of its other water conservation obligations.
It will be noted that the Government of New South Wales is not able to provide its share of the cost because of its commitment to expenditure on other water conservation problems. We do not know what the other water conservation problems are, whether it is necessary for New South Wales to expend money on them at this time, or whether that State is unable generally to find sufficient money to overcome its water conservation and reticulation problems. The fact that New South Wales should experience some difficulty in meeting its obligation in relation to the Chowilla dam, which will be of vital importance to South Australia and of immense importance also to New South Wales and Victoria, makes one wonder whether the shortage of finance is retarding the development of our water resources. The provision of adequate supplies of water is vital to the development of Australia.
Whether New South Wales will be in a better position in ten years’ time to meet its current water supply problems, and also to meet repayments on the Chowilla dam scheme and the interest burden, is another matter. It is a problem that should be considered by those who appreciate the importance of water resources to the future development of Australia and the necessity to preserve the relatively limited supplies of water that we have available. In many developed and settled areas of South Australia further development is hampered somewhat by the lack of suitable water reticulation and sewerage schemes. At one time, many such schemes would have been considered impossible from an engineering point of view, but to-day they are possible. Unfortunately, because of our methods of financing public works they are not always a financial possibility.
The Minister for National Development stated last week that the Australian Water Resources Council had been established some two years ago to inquire into the water resources of this country. It is to be hoped that the council will carry out a speedy investigation, that it will be aware of the importance of the Chowilla dam to South Australia, and that it will appreciate that the dam could not have become a possibility if the Commonwealth had not come to the rescue of the State of New South Wales. The Government of New South Wales had other commitments in the provision of water supplies. It might well bc that other States could conserve and reticulate water which flows within their borders, to the benefit of the development of Australia and of the national welfare, if there were a method by which suitable schemes could be financed. During the time that the Australian Water Resources Council is inquiring into water resources and their conservation, we should have a similar committee inquiring into the possibility of financing water conservation programmes without the necessity to burden the development of Australia with interest payments. As we know, - whenever money is advanced to] States,, which;- ‘are trying . .to “‘assist, in (national development interest must be paid on the money. The Royal Commission on Monetary and Banking Systems found that in such circumstances it was possible for money to be provided without interest. We should be inquiring to ascertain whether it is possible to conserve our water supplies for the future development of Australia, without threatening our economy at the same time.
I read recently in an article on northern development that as much water flows into the oceans from the northern rivers of Australia as from the southern rivers. Yet, in the north, the water is flowing away from areas which are parched. The conservation of water supplies in the north of Australia, without the consequent burden of interest which seems to accompany every advance of money that is made for such purposes, is a matter for the future. In the meantime, I have been authorized by the Australian Labour Party to assure the Government that it supports this bill and will support any other measure which may lead to the development of Australia.
– I think we all appreciate that at this stage of the life of the Parliament it is well to be expeditious. I congratulate Senator Cavanagh on the brevity of his speech. He covered the situation in a manner which, I think, was clear to all of us. We appreciate the fact that the Opposition is entirely in accord with the Government on the measure. At the outset of my remarks I wish to pay a tribute to the governments which have made possible this great work of constructing the Chowilla dam. First, I wish to mention the Commonwealth Government. I shall leave my own State of South Australia until last, although I think that in the ultimate the South Australian Government will play the most important part of all the governments concerned. The Commonwealth Government, having learned of the ambition of South Australia to improve its water resources, co-operated in the most fruitful way. We should pay a tribute to the Minister for National Development (Senator Sir William Spooner) for his work in this connexion. He has always appreciated the great worth of his portfolio. I should think ‘there is no way in which we could better i; preserve ..and develop this great country than by the conservation of water. That fact is recognized to the full by all the governments concerned in the Chowilla dam project, and that is why we have before us this measure which follows two bills that were discussed in the Parliament last week.
The Commonwealth Government became aware of this scheme through the. representations of Sir Thomas Playford, the Premier of South Australia, and it very generously met the Premier’s suggestions by offering, in the first place, to pay a quarter of the cost of the dam. That was the first step. At that stage we had not jumped all the hurdles by any means. There were many negotiations. At the instance of Senator Sir William Spooner, the River Murray Commission examined the whole matter and did a very thorough job in investigating a scheme which was to cost a great deal of money and to involve three State Governments and the Commonwealth Government.
Finally, as a result of the representations of the Minister, the River Murray Commission met and evolved a scheme whereby the Governments of Victoria, New South Wales and South Australia, and the Commonwealth Government, would embark on this ambitious project to construct the Chowilla dam. It was estimated that the cost of the dam would be in the vicinity of ?14,000,000. That is a great deal of money, as we all recognize. It was appreciated that the construction of the dam would be a considerable feat of engineering. During the debate last week an honorable senator stated that at one time it seemed almost impossible to dam the Murray River at any particular point. I understand that a great deal of time was taken in determining the exact place where a dam could be constructed. A survey was made of an area not far from the border of South Australia and Victoria where, it was considered, the construction of a dam would bc possible. I shall not discuss the details of the construction, but I think it was made clear during the debate last week that the Chowilla dam will be the largest dam in Australia and will hold more water than any other water conservation project.
I have had the opportunity to visit the dam site. It was something of a revelation to me to sec the work being done to bring this great scheme to fruition. In the first place, it is necessary to construct an earth wall which will extend for some miles across country which apparently is flat. However, there is a depression in it and this will enable the engineers finally to determine the exact site of the dam. Some people have been doubtful of the practicability of the scheme. In this area of high temperatures the rate of evaporation will bc high also. For the record, I propose to quote from a letter I have received from Mr. H. O. Hannaford of Kingswood, South Australia who happens lo be a distant relative of mine. This letter has probably been received by other honorable senators also. Mr. Hannaford expresses a view contrary to that held by the governments concerned and the River Murray Commission. Mr. Hannaford states in his letter -
Now the South Australian Government wilh the Rivers Commission’s approval, want to build a dam at Chowilla, which will hold the water back and spread it over the countryside where it will be exposed lo an evaporation rate of about five feet per annum, and with such an immense area of water much will be lost in the limestone caverns.
Evaporation is an annual process; only clear water vapor is taken up the remainder of the water becoming more saline each year.
Mr. Hannaford then made this interesting prediction ;
If Chowilla is built I predict the river orchards will begin to die in live years. There will be trouble in the dairies lower down the river. The water pumped to the city will rot our bellies and the exodus from Adelaide begin.
That is riot a very comforting prediction, and I do not agree with it. But I mention this letter to show that at least one person in Australia does not agree with the Chowilla dam project. I am on the side of the experts and I am convinced that Mr. Hannaford is wrong. One of the masler minds behind the early investigations into the Chowilla dam project was Mr. J. R. Dridan, chief of the Engineering and Water Supply Department in South Australia. He has insisted that the damming of the Murray River was essential although in the first place he did not recommend that the dam should necessarily be at Chowilla. Mr. Dridan can be given credit in no small degree for this work and I pay a tribute to him for what he has done. A driving force -in the ‘project has been the Premier of South Australia, Sir Thomas Playford.
Nobody in Australia realizes more fully than he the need for water resources in the development of Australia. He has been unremitting in his work for water conservation and reticulation. The result of his work can be seen in the rather remarkable water systems in South Australia where the rainfall is below that of some other States. The project before the Senate is a great national plan.
In a country like Australia, the conservation of water is of paramount importance. I was interested in the reference by Senator Cavanagh to the Australian Water Resources Council which was set up about two years ago. This is a body worthy of our support. Australia is a dry continent compared with other countries and our water resources are relatively limited. Therefore, such an organization as the Australian Water Resources Council is essential. In addition to surface water, there are great underground resources which should be exploited fully. The future of Australia depends more upon water than on anything else. It is the key to our future development.
This measure provides that the Commonwealth Government will provide £3,500,000 on behalf of New South Wales to pay for that State’s share of the cost of construction of the Chowilla dam. The provision is not limited to £3,500,000 because the dam might cost more than the £14,000,000 originally estimated. In effect, the Commonwealth Government at the outset is accepting responsibility for half the cost of the dam. The estimated cost of £14,000,000 has been divided into four. Victoria and South Australia, apparently have no great difficulty in raising their share of the cost, as might be expected from two industrious and prosperous States, but unfortunately New South Wales could not see its way clear to raising the money and its share is being financed by the Commonwealth Government. That is satisfactory to me. The main thing is that the money will be forthcoming to enable the project to be started.
On behalf of the people of South Australia I thank the New South Wales Government for its co-operation in this scheme because we know that the Menindee lakes*- scheme as .very important to the construction of the Chowilla dam. From time to time, we will require water from these lakes. In South Australia, we realize that when the scheme is completed, about 1970, we . will have made another advance towards our industrial progress. It has been said by Sir Thomas Playford and others that if it were not for schemes such as this, South Australia’s development could be brought to a standstill. This vast quantity of water will provide a reservoir which will enable us effectively to cope with dry times. There will then be no reason why the rural and industrial development of South Australia should not continue more or less indefinitely. That is the hope behind the bill. When the scheme is completed, we shall have water resources that are absolutely vital to South Australia. That is not to say that New South Wales and Victoria, too, will not benefit. The development of large areas in both these States will be made possible.
We must have a broad national outlook, particularly in relation to water. The South Australian, Victorian, New South Wales and Commonwealth Governments have co-operated in a most praiseworthy way to bring this scheme to fruition. This bill is merely to provide the financial machinery. Without the help of the Commonwealth Government the scheme could not have been initiated. South Australians are particularly grateful to the Commonwealth for making this sum of money available to New South Wales to enable the scheme to be put into operation.
[5.18]. - in reply - The Chowilla dam, when completed, will be the largest water storage in Australia. It is no exaggeration to say that it will transform the potentialities of South Australia. When engaged in these negotiations, the South Australian Premier produced facts and figures, which showed that without the Chowilla dam, progress in South Australia, in relation not only to closer settlement but also to industrial development, could come to a halt ten years hence because , of lack of adequate water supplies. So one feels a good deal of satisfaction in seeing this arrangement brought lo finality. 1 should think that the valley of the river Murray is or.e of the richest parts of Australia. Sometimes not sufficient attention is given to the transformation which has occurred over the past decade, with the Snowy Mountains Hydro-electric Authority putting about 1,750,000 acre-feet of additional water into the Murray and Mumimbidgee, with the enlargement of the Hume weir to its present capacity of 2,500,000 acre-feet, with the approval by the Parliament of the proposal for the completion of the Blowering dam which will store 1,300,000 acre-feet, and with this further proposal in respect of Chowilla. These are really great national projects in one of the richest parts of Australia. They do not have around them any elements of uncertainty, because the districts are well established, the settlers are well experienced, and the water can be used as soon as it becomes available.
– What will be produced there?
Senator Benn, who comes from Queensland and apparently does not know the geography of this part of the world, I say that in the river Murray valley is produced in great quantities almost every primary product which can be produced in temperate parts of Australia. It is the richest agricultural and pastoral area in Australia. Its possibilities are limited only by the amount of water that can be made available to it. Therein lies the tremendous importance of the four great projects to which I have referred. These works have been arranged in co-operation not only between governments but also between technical officers. I believe that the recently formed Australian Water Resources Council will really leave its mark on Australia. Leading engineers in the field of water resources, looking at the position as a whole, sit down and examine the steps that are necessary to measure our water supplies and use them to the best advantage.
The bill is having a very good passage. I thank honorable senators for the manner in which they have supported it. Indeed, I am in the happy position of not having - to reply to any criticism at all. In this transaction, as in the Blowering dam transaction, the Commonwealth is acting beyond the line of duty. It is going much further than it need go by finding for New South Wales its share of the finances so that work may proceed. As a result of the Commonwealth’s decision, Australia will reap very rich dividends.
Senator Hannaford mentioned evaporation. That was one of the matters that were examined closely by the River Murray Commission. It is inevitable that with the storage spread over such a vast area, evaporation will be greater than if the storage were deeper and more compact. That is just one of the facts of life.
The Menindee storage was built primarily so that New South Wales could discharge i s obligations to South Australia under the River Murray Waters Act. The first proposal was that, by using Menindee waters, construction of Chowilla could be postponed. Nobody really had any heart in that suggestion. Everybody wanted to see Chowilla go ahead. The proposal was examined in detail and one of the interesting facts that emerged was that in drought periods New South Wales would obtain greater benefit from the use of Menindee waters as part of the River Murray Commission’s control system than by retaining them for its own use. By making the Menindee waters available for the next seven years, prior to the completion of the Chowilla dam, New South Wales will receive an income of about £160,000 a year, but by making its contribution to the general good of the river Murray valley the State is sowing a seed that will bear fruit in the future. One of the great difficulties in the past has been to get governments to agree on terms relating to the distribution of water. As has been said by each speaker, water is such a valuable asset in Australia that everybody has been most concerned to maintain his rights, with the result that the negotiation of agreements has always been a difficult task.
Australia will receive much good from each of the agreements that have been negotiated - the agreements associated with the Snowy Mountains scheme, the Hume weir, the Blowering dam, and now the Chowilla clam. The ramifications of these agreements will spread far beyond the boundaries of the Murray valley which will receive the first benefits; they will spread throughout the whole of Australia.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Debate resumed from 24th October (vide page 1434), on motion by Senator Sir William Spooner -
That the bill be now read a second lime.
.- The Opposition supports this bill and also the States Grants (Universities) Bill (No. 2) which is associated with it. The first of these two .bills authorizes the expenditure of considerable sums of money on State universities in Australia over the triennium which is about to begin - the third triennium since the system of dealing with universities in this way was introduced after the Murray report in 1957. The second bill is a less momentous one which deals with the use to be made of a sum of £150,000 that was not used by the University of New South Wales for the purpose for which it had been allocated - the establishment of a residential college. Some consequential action is being taken with regard to that amount.
The bill relating to financial assistance to universities is one of first-class importance. Tt relates, as 1 have said, to the third triennium since the introduction in 1958 of the system of budgeting for university finances over a three-year period. The present bill authorizes the expenditure of about £60,000,000 by the Commonwealth on university education in the Slates over the next three years. This expenditure by the Commonwealth will be matched by an expenditure by the States of £90,000,000. What is envisaged by the bill is that the Commonwealth should provide £60,000,000 and the States £90,000,000 over the period of the triennium.
The Opposition in supporting the measure is fully conscious of the very great importance that university educa tion has in the life of the community, lt is part of the whole system of education that obtains in Australia. The Opposition welcomes the expenditure of a substantial sum on university education, whether the amount is £60,000,000, £50,000,000 or £100,000,000. The opening of gates to further opportunity in education at the tertiary level, as well as at other levels, is a step which the Opposition appreciates. What I will say is not intended to deprecate what has been done up to the present stage. I want, however, to emphasize that compared with the magnitude of the problem in Australia the crisis in education has not called forth a sufficient response from the Government over the years. Whilst the present situation contains elements which are to be commended, nevertheless it is clear that there is absolutely no room for complacency on the part of the Government, and that there arc some real dangers facing the universities, as indeed the whole of Australia’s educational programme.
I think we are all indebted to the Australian Universities Commission for a very elaborate, painstaking and thorough second report which forms the basis of the second-reading speech and the Government’s recommendations in the present bill. The report repays careful reading. 1 would suggest to honorable senators that any one who reads it with a full sense of responsibility must realize that there are areas in which dangers lurk and that perils lie ahead for the Australian educational system. I want to mention a few of those dangers because to me they seem to be important. To some extent, the careful language used in the report Lends to obscure the crisis of major proportions that we have in our educational system to-day.
I have had the privilege of asking question after question of the Leader of the Government in the Senate (Senator Sir William Spooner) on the subject of the crisis in education. I have always received courtesy from him but have also received the gentle answers that turneth away wrath. 1 have been told that education is primarily a matter for the States, that the Commonwealth is doing all that it can within reason in relation to the educational system and that after all, education is. only one of a number of sectional interests pressing upon the Government, and upon the Treasury, for recognition. I do not accept that view about education. I believe that education is so fundamental, not only to the present life of the community, but also to the whole of Australia’s future development, that expenditure on the educational system, whether it be at tertiary, secondary, technical or primary level, cannot be considered in the same manner as a request for assistance for a particular project, or some measure for which it is appropriate for a State to seek assistance and for the Commonwealth to grant assistance. Education is the very life-blood of a community. Nothing but an effort which measures up to that high challenge can be regarded as satisfactory. I want to contrast the attitude of the Government on this question with that of the enlightened approach in Great Britain. The very formidable Robbins committee in Great Britain has just presented its report on tertiary education to the Parliament of Great Britain. That committee estimates that over the next seventeen years £1,420,000,000 will be required in capital cost alone. The Melbourne “Herald” of 24th October gives a summary of the main features of the report and states -
The report urges a dramatic upgrading of higher education on the list of Britain’s national priorities as “ a probable condition for the maintenance of our material position in the world an essential condition for the realisation in the modern age of the ideals of a free and democratic society “. . . . “ Both in general cultural standards and in competitive intellectual power, vigorous action is needed to avert the danger of a serious relative decline of this country’s standing.”
The report refers, of course, to the position in Great Britain. The problems are not always the same there as they are in this country. It would be wrong not to acknowledge the differences and not to appreciate the very great problems and the immense complexity of the whole area of university life, learning, teaching and research, the contribution that the universities make to the community, and the reciprocal relationships between the universities and the community. We recognize all those things, and we recognize that there is not a simple formula that provides the answer. We recognize, too, that it is not money alone that makes a great university or a great centre of learning. Nevertheless, a very substantial expenditure of money is required.
I want to turn to a few problems which are highlighted by the report of the Universities Commission and which are referred to, albeit briefly, in the Minister’s speech. Perhaps the most serious question arises out of the population explosion that has occurred in the universities over the past decade. The Minister has said, very properly, that during this triennium we can expect an increase of about 40 per cent, in the number of equivalent full-time enrolments at universities. That is a figure which is simply staggering. It means that in the triennium 1963-66 equivalent fulltime enrolments at all Australian universities will rise from about 53,000 to 74,000, compared with a rise of about 11,000 in the present triennium.
One thing that has become absolutely clear about predictions in the fields of education and employment is that there is always an under-estimate. I do not say that in criticism of those who try to make assessments, but we know perfectly well that over the last decade, however fantastic the predictions may have seemed in terms of expansion and enrolment, the actual numbers have always exceeded the predictions. It may well be that this will be the position also in 1964, 1965 and 1966.
– That was not the experience of the last triennium. The enrolments were over-estimated.
– I stand to be corrected if the Minister can point to those figures, but to make the position clear I point out that I was not speaking especially of a particular period of time. I was looking at the last decade and saying that the most fantastic estimates have turned out to be conservative. The commission’s report says that the funds provided, especially for research have turned out to be too modest. But the point I was making was that a rapidly expanding student population will create a terrific need for university staff. It is true that the Minister has suggested the problem but he has not dealt with it. It is a problem of great magnitude for which the solution is not at the moment apparent. The Minister acknowledged that the Universities Commission expects that difficulty will be experienced in recruiting suitable qualified academic staff. The reality is that during the next three years an increase of university staff of about 2,000 will be needed. That means that we shall need not just 2,000 bodies - not 2,000 sausages turned out at the end of a machine - but 2,000 university teachers, including a due proportion of those at the highest levels, such as professors, readers, senior lecturers, senior researchers. Where will they come from? The most optimistic estimates do not suggest that the demand for university teachers will be met. The commission reports that there will be serious shortages.
There are ways of tackling the problem, and the commission deals with some of them. But the central problem that is posed by the commission is this: Whereas in recent years we have been able to recruit a fair proportion of our university teachers from abroad - particularly from the British universities - that source of supply in the coming years . will be more limited than it has been in the past. The commission said at page 41 of the report -
For example, the requirements of British universities in the immediate future are likely to absorb about 1,000 new members of staff per annum from their own potential sources of recruitment estimated as totalling 3,000. Australia will have to depend increasingly upon its own resources.
That means that we will have to make a most determined effort not only to train the required number of ordinary graduates, but to give post-graduate education to a very large number of university graduates so that the demands of the universities can be met. Of course, university teaching is not the only career for university graduates. They go into the professions, into government administration, into business and into commerce. We cannot expect all our university graduates to become university teachers, and we must inevitably come to grips with this central problem of where the universities can look if they have not sufficient teachers.
I noticed with approval that the commission recommended an increase in the number of university scholarships, both for beginners and for those in later years, and that the Government has now announced Some increases. But no provision has been made for post-graduate scholarships. I would have thought that this was an area in which critical attention should be focused because this is the ground that has to be made up most rapidly. The question of staff shortages is of course only one aspect of the problem. It is more complicated than that because we face two problems. One is the problem of maintaining the present level of attainment in capacity so as to teach the required number of students, and the other is the problem of improving our standards and the quality of university work. AH the recommendations of the Australian Universities Commission are based upon the assumption of maintaining present standards. The commission puts it this way -
After considering these factors it is possible (o conclude in very general terms only that some 2,000 new staff members will be required in the 1964-66 triennium if present standards are not to deteriorate. This means an increase of 40 per cent, between 1963 and 1966.
We have had evidence, which 1 think is serious enough, of some dilution in the proportion of professors and senior teachers, or readers, to the total number of academic staff. The commission makes it clear in its report that whereas the tables show that in 1939 21.3 per cent, of the total academic staff were professors, in 1963 only 9.5 per cent, of the total academic staff were professors. So that what we have is a smaller number of professors, proportionately, to the total staff. The commission draws attention to the fact that this is a serious defect, although the remedy is not obvious except that the universities should provide additional professors.
There are several matters with which I want to deal apart from staff shortages. There is the whole question of research. The Australian Universities Commission deals with that in its report. It is not necessary to look for sources that are opposed to the Government for information about this. The commission itself, which has the very heavy responsibility of dealing with these matters and acting as a kind of buffer between the universities and the Government, albeit it has the status of a government department, has this to say at page 49 of its report -
Inadequate support for research in the midfifties, which was commented upon critically by the Murray Committee “persisted until 1961. when thi first .’.signs of improvement were discernible!
Because of the extraordinary growth in the numbers seeking post-graduate training, the financial difficulties of the State universities in respect of their research activities remain serious.
Nobody could suggest that research is not a fundamental problem relating to the development and growth of the universities. I do not make the point in any partisan spirit. It is an essential question because here at the level of research is made a contribution which cannot be made at any other level in the community.
Whether it is in a university, whether it is in an institution like the Commonwealth Scientific and Industrial Research Organization where much research is done, or whether it is in the National Health and Medical Research Council, or any other such institution, this activity requires the application of the fruits of tertiary educationat its highest level. I note with interest that the Minister foreshadows in his speech on the bill that in due course some attention will be given by the Government to the whole question of Commonwealth involvement in research. This, obviously, is not the occasion to tease out the implications of that statement or to make more than a general comment upon the importance of research, but the Australian Universities Commission which covers a good deal of ground in its valuable report, says this -
The prediction that the funds provided for the State universities were likely to prove too modest-
This is dealing with research - has been confirmed in the university submissions for the 1964-66 triennium, and by discussions during the Commission’s triennial visits during 1962. There is evidence that predictions made as recently as 1961 of post-graduate enrolments have already been exceeded, and that the universities arc confronted by real problems in budgeting for post-graduate research.
As I have said, this is an extremely important subject and it is not to be treated in a partisan way but with a full sense of responsibility. In my own State of Victoria quite recently, there was published a report which had been made to the Victorian Government by a very distinguished committee headed by Lieutenant-General Ramsay, a former Director of Education in that State. The committee included Sir George Paton, Vice-Chancellor of the University of Melbourne, Dr. Matheson, ViceChancellor of Monash University in Victoria and a number of other distinguished educationists.Again, last week I asked the
Leader of the Government in the Senate (Senator Sir William Spooner) a question about this point. That committee had reported that over the next seven years in Victoria alone we would require an expenditure of something like £170,000,000 on university education. It was said by the Minister in reply that this was rather in the nature of a piece of special pleading or the advocacy of a cause in isolation, as he put it, and that the Government has to consider the many demands that were made upon the public purse. I am fully conscious of that. I realize that it is not sufficient just to open your mouth, ask for many many millions of pounds and hope that everybody else’s position can be ignored. But when the Premier of Victoria, Mr. Bolte, was asked for his reaction to the Ramsay committee’s proposals, he said that the Government would do its best to implement them. Presumably that meant that the proposals were regarded as sound but that, of course, the State alone could not finance proposals of this high order and therefore it would be necessary to look to the Commonwealth in the matter.
We of the Opposition take the view that, willy nilly, education must be a national responsibility and approached on a national basis. Whether it is applied to university education, to secondary education or to technical or primary education, boldness will pay dividends. When I am met with the reply that these requests for more substantial grants to the States for educational purposes are idealistic or unrealistic, I can only reply that sometimes the boldest and most imaginative proposals are the most realistic in the long run. That is the approach we make to the matter because it is not a question of competing needs. A good deal of credit has been claimed by the Government for its proposals, but when you analyse the increase proposed by this bill - and I do not decry it, because it is welcome - it is only £16,000,000 more than was spent in the previous triennium. This means only an extra £5,000,000-odd a year over the next three years.
– From one source only.
– From the Commonwealth.
– Which has tobe matched.
– I appreciate that. As the Minister points out, it has to be matched by a corresponding grant. The States have to find £90,000,000 in order to attract the Commonwealth grant of £60,000,000. To the Commonwealth it will mean a sum of £5,000,000, or a little more, for each of the next three years in addition to what has been provided over the last triennium. lt is welcome, but it does not measure up to the dimensions of the problem.
As I said earlier, we believe that education is a national responsibility. There was a time when the Prime Minister (Sir Robert Menzies) accepted that view. In 1945, as Leader of the Opposition, he moved in another place for the fullest investigation into the primary, secondary, technical and tertiary aspects of education. He said, in effect, that limited objectives were not sufficient. That is the view we have always taken. We are now in the year 1963. The Opposition has pressed for an investigation of needs on a national basis. As the Minister for National Development mentioned, a committee is inquiring into tertiary education. The Australian Universities Commission has gone to some pains in its resport to ensure that the results of the committee’s investigations are not anticipated. But we look forward very eagerly to that report. I do not know that it will be to the present Government that the commission will eventually report, but whether it does or not sooner or later wc will want to know the results of the investigation. We appreciate that an inquiry into tertiary education cannot be completed in a matter of weeks. But certainly the observations of the Universities Commission are of great importance, and the observations of’ the committee on tertiary education will be closely studied. I think the Minister said they would be available about the middle of next year.
– They were promised for earlier this year and then they were promised for the end of this year. I understand that the latest promise is for January, 1964.
– I did not think I misheard the Minister when he referred in his second-reading speech to the middle of next year.
– No, I did not say that.
– Even earlier than the middle of next year may be a little too late for this Government. Whether the pressure arises from the Ramsay report in Victoria, whether it comes from the State Ministers for Education who have repeatedly sought increased Commonwealth finance over recent years, whether it comes from members of the teaching profession who are dissatisfied with salaries - the Minister referred to the Government’s attempt to meet the impatience of university staff with an interim fixation of £4,600 as the basic salary for professors - whether it comes from distinguished men of the calibre of Sir Douglas Copland, Sir Mark Oliphant, or from other men of science and learning and people with foresight in the Government and Opposition ranks, everybody wants to see education given number one priority. Acceptable as this measure is, it falls short of that high ideal.
We support the Universities (Financial Assistance) Bill. We offer our comments in the spirit of constructive criticism. The States Grants (Universities) Bill (No. 2) 1963 deals wilh a sum of £150,000 which ought to have been applied to halls of residence within the University of New South Wales, which for some reason was not used and which is to be allocated for use on halls of residence generally. I should like to know the reason for the failure of the University of New South Wales to make use of the grant. Subject to that comment, we support that measure too.
Sitting suspended from 6 to 8 p.m.
Senator LAUGHT (South Australia) [8.0’J. - It gives me pleasure to discuss the subject of university education in the Senate this evening. I recognize that human talent is a nation’s most valuable asset. Let it not be wasted, because national survival, economic progress and the fulfilment of individual capacity depend on it. There has been a quickening interest in tertiary education, as the census results of 1954 and 1961 have shown. The percentage of young people in the 17-year-old group who completed secondary education courses in the various
States between 1954 and 1961 rose as follows: New South Wales, from 12 per cent, to 18 per cent.; Victoria, from 5 per cent, to 9 per cent.; Queensland, from 7 per cent, to 17 per cent.; South Australia, from 10 per cent, to 23 per cent.; Western Australia, from 8 per cent, to 13 per cent.; and Tasmania, from 3 per cent, to 6 per cent. There is a considerable degree of variation in those figures, but the trend is the same throughout. This welcome rise in the interest of 17-year-olds in secondary education presents a challenge to those responsible for tertiary education. This bill, read in conjunction with the second-reading speech of the Minister for National Development (Senator Sir William Spooner), shows that the Government has concerned itself with the problem.
The number of Commonwealth scholarships has been increased from 4,000 to 5,000 a year, whilst the number of scholarships commenced in the second or subsequent years has risen from 500 to 780. So, at the level of Commonwealth scholarships the Government has shown a great awareness of the increase in the numbers requiring tertiary education. This bill is most illuminating in regard to the finance which the Government considers should be made available in the next three years. Normally, of course, university education is the responsibility of the States. In one of the documents circulated with the Budget papers appears a statement dealing with Commonwealth payments to the States. It shows that between the years 1951-52 and 1963-64, grants to universities rose from £1,400,000 to £17,900,000. In the thirteen years, the grants totalled £86,000,000. The amount provided for in the bill before the Senate this evening is £60,000,000 for the next three years. The fact that the grants have increased from £86,000,000 in thirteen years to £60,000,000 in three years is some measure of the assistance which the Commonwealth is providing in the field of tertiary education.
I am very pleased that provision is made for the triennium system to operate. I think that is far better than to make an annual vote available. A three-year vote is excellent because it gives the institutions adequate opportunity to plan well ahead. The Commonwealth proposes to provide £60,000,000 in the next three years, and the
States will have to provide £70,000,000 from their own resources. Students’ fees are expected to yield £20,000,000. Of course, in addition to making that provision, the Commonwealth is responsible for the Australian National University, and financial provision for that university could well be of the order of £20,000,000 in the next three years. We are, in effect, considering the financial allotments for a partnership in tertiary education between the Commonwealth and the States. Over the years, the State Parliaments have been linked with the various universities. For instance, members of the Parliament of South Australia sit on the university council, and the Budget of the State of South Australia has always paid heed to the requirements of the University of Adelaide.
The most interesting development that has occurred in the years since the Murray committee presented its report is that the State Governments have come to accept the Australian Universities Commission as an expert body to which they may turn for advice on general matters regarding university development and not just on matters of university finance. This bill pays the commission the compliment of accepting its recommendations virtually in toto. I think we should examine for a minute or two the method of approach of the Universities Commission, on whose report this bill has been founded. In 1961 the commission sent out a questionnaire dealing with the 1964-66 triennium. As a Senate representative on the council of the Australian National University, I was in effect on the inside looking out. We had to answer the questions asked on this exhaustive questionnaire about the requirements for the years 1964-66. In 1962, the commission visited all the universities and institutes from Perth to Townsville. It was a most timeconsuming and arduous work for these mcn of great distinction. In their travels from place to place they interviewed administrators, staff, students and heads of colleges. What is of more importance, they interviewed Premiers and State Ministers. In the course of their inquiries they checked on the way in which the universities were expending the money that had been allotted to them for the 1961-63 triennium. One could not expect a more thorough investigation, to be “made than that made! by the commission. The investigation has formed the basis of the bill before the Senate. lt is of interest to consider some of the findings of the commission. It calculated, according to demographic principles, that the years 1961-63 would be years of high student numbers, and that the years 1964 and 196S would show some slackening in the pace of this growth. As Senator Cohen has pointed out, the commission came to the obvious conclusion that there would be a great staff shortage because of this large increase in student numbers, and it highlighted this matter in its report. Later, 1 shall make certain suggestions regarding the way in which I think this staff shortage may be overcome. It should bc remembered that Australia is a high-income country. 1 have discovered from United Nations sources that the gross national product of Australia in proportion to population ranks sixth in the world. The countries ahead of Australia are the United States of America, Canada, Sweden, Switzerland and New Zealand. Those following Australia were the United Kingdom, West Germany and France. So with this very high gross national product, there is a special need in Australia for skilled teachers, researchers, scientists and technicians.
In the course of this report and in making suggestions for financial commitments, the commission has taken particular notice of the requirements of the country in which we live. The commission noted that there is a noticeable increase in the numbers of post-graduate students. This, of course, should be encouraging to Senator Cohen who particularly raised this question of post-graduate work and research work. Already, Australian universities have made quite a mark. In Canberra, we have the Australian National University. One of the distinguished professors of that university, Sir John Eccles, was recently awarded the Nobel Prize in conjunction wilh some others and thus was put into world class. We have Professor Bok of the Australian National University who is in world class as an astronomer and Sir John Crawford of the Australian National University, Department of Pacific Studies, who is regarded in Australia and the United States of America as an economist of great note. So already - in the very short time these research institutions have been established and in the time they have progressed - wc have acquired men of note and rank in any company.
A further finding of the commission showed the interest that the universities are encouraged to take in the whole question of computers including the training of students in their use. Electronic data processing is important to research, and it is pleasing to note that a recommendation has been made for some money to be set aside for this most modern equipment.
The commission turned its attention to a requirement - as it thought - for medical education at the University of Tasmania. Another interesting factor in the commission’s report was the stress it placed on residential accommodation. It is expected that 16.5 per cent, of the full-time students in residence in 1966 will be attached to one of the residential colleges of the Australian universities.
Throughout its report, the commission set ils face against the exclusion of qualified students from a place in a university. Quotas were distasteful to the commission. As the Government has supported details of the report of the commission, it can be seen that in its allotment of money, the Government has, where possible, also set its face against the exclusion of any qualified student from a place in a university. I propose to make several observations on these grants and then, as a senator from South Australia, I shall examine in some detail the grants that have been projected in the direction of South Australia. There is a great danger that when a government enters a field - whether it is State or Federal - there is a tendency for other people who have already been in that field to vacate it. The history of universities in Australia over the years has been one of remarkable benefit from private individuals in the community. I know that in South Australia the University of Adelaide was established entirely by the generosity of a number of leading South Australian pioneer people. Large buildings at the University of Adelaide are named after these benefactors. I think of the Hughes, Darling, Bonython, Elders and the BarrSmith buildings. These buildings were all named after South Australian folk who, during their lifetime and by virtue of their testamentary dispositions, have benefited the University of Adelaide. I trust that the benefits we are discussing to-night, coming from the Commonwealth and State governments, will not cause all these wells of generosity to dry up.
I am encouraged to read that benefactions have been made especially to the Sydney University. One was recently made by a person living in the Channel Islands and this involved a very large amount. That is most encouraging. I believe there is still plenty of opportunity for private benefactions, even though most outstanding contributions are coming from governments at this time.
I cannot think of a better way for private benefactors to assist our universities than by lending a hand wilh residential colleges. Residential colleges throughout Australia have been established under the guidance of various religious denominations and the Government has had no qualms about making a contribution to those existing institutions and enabling them to extend. In South Australia, St. Mark’s College of the Church of England has been helped and the Aquinas College of the Roman Catholic Church has been helped. These colleges are meeting a great need. I believe that one of the problems of Australian universities can be met by the extension of halls of residence or residential colleges.
It is noted in the report that there are quotas in some of the universities. For example, in Monash and Sydney, all faculties have quotas. There are no quotas in Queensland, Tasmania, or in the Australian National University. There are some quotas in particular faculties’, for instance, there is a small quota of students who are not able to get into the Adelaide University to study medicine. If there could be an extension of the residential college idea, it would be possible for students from one State who are barred by a quota, to go into residence in another State.
The report notes that the University of Tasmania could take hundreds of students as many places at that university arc not filled at present. I believe that students who are prevented from entering universities b’y the quota system could be fitted in by the extension of residential facilities. I believe, also, that our vast contribution under the Colombo Plan to the assistance of Asian students could bc met by the extension of the residential college idea.
As one reads this report, one gets the impression that there are a number of loose ends in the administration of the universities throughout the States which could be tied up. In particular, we have in the two universities in Victoria the impossibility - as the commission puts it - of students being transferred from one university to the other because of the differences in curricula. It seems a great pity that all facilities cannot be used because of these differences. It seems a pity that students should be blocked because there are no vacancies in their faculties in universities in their own State while there are vacancies in other States. I hope that these problems will be solved.
I conclude by paying a tribute to the Government for what it proposes to do in South Australia. In that connexion, I highlight the fact that the Australian Universities Commission, having taken courage from the success of the Townsville university annexe, has recommended that an institute of technology be created in Whyalla, a relatively new centre in an isolated part of South Australia on the western shores of Spencer Gulf. Whyalla is entirely devoted to industry. It is the shipping port for iron ore from the Middleback’ Ranges. It is the head-quarters of the shipbuilding establishment of the Broken Hill Proprietary Company Limited, and a vast steel plant is being established there. It is a town - in South Australia one would call it a city - of about 20,000 people, and its population has grown to that number from 400 or 500 about 25 years ago. It gives me great encouragement to report to the Senate to-night that provision is made for the establishment in Whyalla of a school of technology, at which a bachelor of technology degree will be available in the course of time. Naturally, the allotment of money in this triennium for such an institution is not great. The important fact is that in the last triennium there was a recommendation for establishment at Townsville of a university annexe, which has become estab.lished and has proved.. its.t worth y already!
South Australia is now to be favored. I hope that the same success will attend the South Australian venture as has attended the Townsville venture. An amount of £121,000 will be provided from Commonwealth sources, to be matched by £121,000 from State sources, for a building for the faculty of technology at Whyalla. During the course of the building some small amounts will be provided for recurrent expenses - £5,000 in the first year, £7,000 in the second year and £9,000 in the third year. I congratulate the Government upon adopting that part of the report of the commission. 1 should like to mention another establishment in South Australia that gives us great pleasure indeed, namely, the new university at Bedford Park, about seven miles south of Adelaide. The allotment of money for Bedford Park is really quite exciting. An amount of £744,000 will be allotted for the erection of a building for the faculties of arts and science, £.164,000 for the library, and £108,000 for general installations, water, electricity, gas and other services, and preparation of the site. I emphasize the importance of the site, which consists of several hundred acres in the most glorious part of the Adelaide foothills. Buildings of the university will be at various levels, with playing fields in between. The new Bedford Park’ university should be really one of the show places of Australia.
All this has come about as a result of the encouragement given in the report of the Australian Universities Commission and the imagination of the Government in adopting such a report. I have been able to deal only with several aspects of the report, which I commend to the Senate. I pay a high tribute to those responsible for compiling it. It is a document that could go into the hands of any institution in the world as an example of a very clear, concise and thorough report. The greatest compliment that can be paid to the Australian Universities Commission is in the fact that the State governments and the Commonwealth Government are right behind the report in every detail. The criticism of the Murray report, valid as it was at the time of the presentation of the report seven or eight years ago, is becoming of less importance. Some of the major items of criticism have been met by legislation three years ago for the triennium that is just finishing and by the provision being made this evening for the next triennium. Accordingly, I support the two bills before the Senate.
– Briefly, in replying to this debate on behalf of the Leader of the Government in the Senate (Senator Sir William Spooner), I should like to express appreciation of the fact that on all sides the advance which is being made in university education in Australia has been accepted and that a tribute has been paid to it. There is, of course, no doubt at all that in this field there are still unsolved problems. In a country such as Australia, as vital and as growing as Australia is, these problems are likely always to be with us. What is important and significant is that they should be recognized by whatever government may be in office in Australia and that appropriate action should be taken, so far as the requirements of Australia will permit, to overcome those problems which can be easily overcome and to plan for the overcoming of those which are less tractable.
The legislation before us carries one step further the plans for providing university education which were inaugurated by this Australian Government when it took the first step by appointing a committee under the chairmanship of Sir Keith Murray to indicate what was required of a government to meet the commitments of Australia, as it was then and as it was envisaged to grow, in the field of university education. This first attempt to attack this problem by the appointment of an independent committee composed of people who had no axe to grind for the universities or for one party or another, who were completely independent academics, was, I think, one of the great advances in the field of education in this country. I am pleased’ to see that Sir Keith” Murray is in Canberra to-day, having received great encouragement, I am sure, from seeing the universities which were the subject of his report - the Australian National University, the University of Queensland, and the University of Sydney - and the great results of the recommendation that were made. As a result of his recommendations, the first universities grants bill was brought into this
Parliament, lt gave universities throughout Australia a new deal, which is now being carried on by this bill which represents a very significant advance in overcoming the monetary problem of the universities, which is only one of the problems that they have to face. The significant fact is that we now have before us a bill to raise, during the next three years. £40,000,000 a year for universities. During this triennium, as a result of this bill, more than £150,000,000 will be available for this purpose.
The mere reciting of a monetary figure is not significant. What is significant is that the bill now before the Senate puts into legislative form, and makes available to the universities, with one small exception to which I shall refer later, 100 per cent, of what has been recommended by this independent body, the Australian Universities Commission. These recommendations are based on the commission’s judgment of what the universities of Australia will require during the next triennium. There have been indications in some quarters that the bill does not go far enough, that what is provided monetarily is not enough, and that other things should have been thought of. As I have said, the Australian Universities Commission is an independent body. It has made its recommendations on what it believes are the requirements of universities. With the exception of the field of research, the bill now before the Senate carries out 100 per cent of those recommendations. There are few who would say that the commission did not know what it was talking about, and it is some credit to the commission that its recommendations have been fully carried out.
This monetary grant can, of course, provide only for such things as buildings and equipment in the first instance. They are vitally important in enabling the life of the university to be carried on but they are not the things which really provide for the soul of a university. They are things without which a university cannot function but they are not all that a university requires. Any one who has travelled around Australia and has seen the exciting building programme being carried on at, for example, the University of Queensland, in Brisbane, the University of Western Australia, in Perth and the new university in
Victoria - the classrooms, the buildings, the places of residence for the faculties and the equipment for students to use - cannot but feel that there is a great and upsurging wave in this part of the educational field of Australia. However, the real problem, after all this development has been achieved - as it will be achieved - is the provision - as has been mentioned previously - of sufficient teachers of quality to enable us to accomplish what we have set out to accomplish in the field of university education.
In Australia we have turned our backs - and rightly so - on the solution to the problem which has been achieved by such countries as the Soviet Union and others where only the top 10 per cent, of the intellectuals of the community are afforded a proper university education. In such countries the problem of providing really top-class teachers is easily solved. We have turned our back on that easy solution and have decided to give all those capable of matriculating an opportunity to obtain a university education and a university degree. The problem of providing a sufficient number of teachers, particularly for first-year students, is much greater in Australia than it is in countries which have solved their problems in an easier way, but, I think, in the long run have solved them in a way which will not be to their advantage.
All we can do in respect of this matter is what is proposed to be done in this bill and what has been done in the past. The intention is to bring from overseas people who are able to fulfil our needs. From what has been done already in the field of university education we are getting results, not only in quantity, but also in quality. Of the graduates coming in increasing numbers from our universities, I suppose not all will be attracted to an academic career. Not all will be attracted to become teachers of the new generation. But we can hope that a larger and larger proportion of a larger and larger number will be so attracted. As an example of the way in which we are gaining this improvement in quality, I point out that of those who entered the university in 1951 only 57 per cent, graduated. Therefore, of those who ‘entered a university only 57 per cent, were available to fulfil not only the professional requirements of other professions but also the requirements of the teaching profession. But of those who entered a university in 1956, 70 per cent, graduated. I have not the figures for the years later than that to indicate the way in which the proportion of those who graduate is increasing, but there is no doubt that we will get more and more graduates. I think it was Senator Cohen who pointed out that we had an increase of about 11,000 students in the last triennium and we can expect an increase of 28,000 in the next triennium. If this improvement in quality increases we will eventually - not quickly because there is no quick way of overcoming this problem : - have the number of graduates which the money provided by this bill will enable us to put through universities, and with the increase in quality we will, in a predictable time be able to provide what is more important than any monetary contribution - dedicated teachers to instruct the generations to come.
I believe that future generations of Australian students, as well as existing generations, should be grateful to the present Prime Minister of Australia (Sir Robert Menzies) who in this field has given of his very best. It is his approach to this matter that has resulted in the carrying out of the recommendations of such an independent body as the Australian Universities Commission. There have been references in this debate to other fields of education not directly connected with this bill. The field of tertiary education has been mentioned. All I can say in relation to that is that the Government is awaiting a report from a commission similar to the universities commission. The commission was set up to examine this particular field and to make recommendations to the Australian Government, as distinguished from the governments of the subdivisions of Australia, in respect of this field of tertiary education. There has been an indication that when these recommendations have been made a bill will be introduced into this Parliament. The problem in the field of university education has been solved, as the bill before the Senate gives evidence. In the field of other tertiary education we can only wait until we receive a fair and unequivocal report from an independent body, similar to the Australian Universities Commission, which has led to this great advance in university education in Australia. I do not think there is very much that it is necessary for me to add to this debate. I should say, however, that a concrete attempt is being made to hurry up the time at which wc will be able to overcome the problem of providing teachers and academics for the new generations of undergraduates that arc coming on.
The. post-graduate awards which are being made will provide for up to 225 a year. The increase of Commonwealth scholarships from 4,000 to 5,000 a year is again an indication of the assistance being given to put through universities, with good grace, people who will be able in their turn to carry the torch. I do not think it matters much in this field who is in government in Australia at any time. If the recommendations of independent commissions count for as much as they should, and if we believe as I think we all do in the qualifications of those who form the present Universities Commission, then there is no government now, nor will there be in the future, which could do more than carry out 100 per cent, of the recommendations of such a body. That, Sir, is all that the bill now before us suggests that the Senate should do. The only recommendation that it is not proposed to implement is in the field of research, which is a minor field and one in respect of which further reports have been called for. Therefore, I can do no more than add my commendation to that of Senator Laught.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Wade) read a first time.
.- I move-
That the bill be now read a second time.
This bill relates to one part - and one part only - of the National Health Act. As stated in the short title, it is a bill to amend the provisions of the act relating to the special accounts of hospital benefits organizations. Honorable senators will no doubt bc familiar with the general purposes of the special account system. It will, however, assist our consideration of the bill if I refer briefly to the origin of this system and the more important developments during its growth.
The special account system came into operation on 1st January, 1959. Prior to this time a very substantial number of claims for hospital fund benefit had been disallowed by application of the hospital funds’ rules relating to pre-existing ailments, chronic illness and maximum annual benefits. In the year ended 30th June, 1958, for example, 8.3 per cent, of hospital fund benefit claims were disallowed by the funds’ pre-existing ailments mlc; 1.3 per cent, of claims by the chronic illness rule and 2.6 per cent, of claims because they exceeded the funds’ maximum annual limit. Tn that year, that is the year ended 30th June, 1958, hospital fund contributors were disqualified from hospital fund benefit for more than 1,179,000 days by rules of this sort. The funds were hot in a position to remove these restrictions without Government assistance, as the payment of benefits in all these cases would have made them insolvent. Consequently my predecessor sponsored legislation which brought the special ‘ account system into being to remedy the deficiency in the hospital benefits system brought about by these necessary but restrictive fund rules.
The special account system has mct with criticism from time to time and, indeed, it has some. defects which this bill proposes to remove. But it is well to remember the great benefits this system has brought to contributors. As I have mentioned, five years ago the position was that over 12 per cent, of claims for hospital fund benefit, representing more than 1,100,000 hospital days in a year, were being disallowed by the funds. To-day, fund benefit, at least up to the standard rate, is being paid for these claims, virtually without exception. This is a great improvement in the scheme brought about by practical co-operation between the Commonwealth Government and the hospital insurance organizations in the ‘’’ operation of the special account plan.
The total hospital benefits paid from the special accounts from the date they came into operation until 30th June, 1963, amounted to over £12,000,000. An appreciable part of this total represents benefits that the contributors would not have received if this special account system were not in operation. The 365,000 contributors who are at present in . special accounts, as well as the 2,800,000 members of the ordinary accounts, have an assured, benefit coverage up to the standard rate of benefit. The Commonwealth Government’s guarantee enables them to be paid benefits even if their claims fall within the funds’ pre-existing ailment, chronic illness or maximum annual benefit rules. In each of four years since the special account systc.ni became properly developed the Commonwealth payments ^towards the special account deficits of the organizations have been .in the vicinity of £2,000,000 per year.
These figures indicate how valuable the special account plan has been in making the hospital benefits scheme so comprehensive. Successful as the special accounts- have been, the Government- has, nevertheless, been aware of. some deficiencies in the plan and, after consultation with the hospital benefits funds, it has evolved the proposals in this bill to ‘ make good these defects.
The most important provision in the bill is clause 4 which provides for the removal from the act of the requirement that contributors must bc transferred to the special account at the age of 65. This means that contributors aged 65 or over will receive exactly the same benefit entitlements as other contributors and ‘’ that a contributor’s age will have no bearing at all on his eligibility for hospital fund benefit. Where funds’ rules provide that contributors’ claims are not to be limited to the amount of the hospital charges, persons over 65 will receive the advantage of this equally with other contributors. Persons aged 65 or more who are transferred back to ordinary accounts and who wish to be members of more than one organization will have this right on the same basis as other contributors.
A further important amendment is the removal from the act of the requirement that special account contributors may not be paid benefits in excess of the hospital’s charges. This rule has caused criticism, particularly where it has applied to claims for hospital benefit for a dependant of a special account contributor and the dependant’s claim has not been the subject of a pre-existing ailment, chronic illness or similar restrictive rule. As a result of the amendment, special account contributors’ benefits will no longer be limited by the act to the amount of the hospital’s charges and they will be entitled to the same benefits as ordinary contributors, in accordance with the rules of the funds. In cases where the fund’s rules provide that contributors’ claims are not to be limited to the amount of the hospital’s charges, that rule will apply equally to special account and ordinary contributors. In cases where funds’ rules limit a contributor’s benefits to the amount of the hospital’s charges that position also will apply equally to special account and ordinary contributors.
The other important provisions in the bill do not affect the rights of contributors at all but they alter the arrangements between the Commonwealth and the hospital insurance funds for the debiting of benefits to the special account. Hospital funds pay benefits from their ordinary accounts for a maximum of days, generally 84 or 91 days per year. The present position is that contributors who are in hospital for more than the maximum period are transferred to special accounts at the end of the maximum period and receive standard rate benefits from then on. The new provision in clause 5 will enable funds to transfer the liability for these contributors to the special account 21 days before the maximum period terminates. This will be financially helpful to the funds and it will not affect contributors at all, because they will continue to be entitled to their full insured rate of benefit for the full maximum period in a year and standard rate of benefit thereafter.
Clause 6 provides that where benefits are paid to contributors in excess of the hospital charges, the amounts in excess of the hospital charges will be debited to the funds’ ordinary accounts. As I mentioned earlier, the position of the contributor will not be affected as contributors’ entitlements will be the same whether they are ordinary or special account contributors. The remaining provisions in the bill are of a machinery nature only and do not affect the substance of the existing arrangements. In particular they do not affect the basic part of the plan that special account contributors are entitled to benefits amounting to £12 12s. a week for hospital treatment for pre-existing ailments, chronic illnesses and all days in excess of funds’ maximum annual limits. I am pleased to inform the Senate that the amendments proposed in this bill meet wilh the approval of the hospital benefit insurance organizations. A special committee comprising representatives of the insurance organizations has been consulted in regard to the amendments and it has endorsed them as being constructive steps to remove anomalies from the scheme. I commend the bill to honorable senators.
Debate (on motion by Senator Arnold) adjourned.
Assent to the following bills reported:-
Loan (Mousing) Bill (No. 2) 1963.
Commonwealth Banks Bill 1963.
Stevedoring Industry Bill 1963.
Appropriation Bill 1963-64.
Appropriation (Works and Services) Bill 1963-64.
Submarine Cables and Pipelines Protection Bill 1963.
Wine Overseas Marketing Bill 1963.
Disabled Persons Accommodation Bill 1963.
Crimes (Aircraft) Bill 1963.
Debate resumed (vide page 1462).
– There being no objection, that course will bc followed.
– The Opposition agrees to the course suggested by the Minister for Customs and Excise (Senator Henty). It is regrettable that this course should bc necessary because two of the five bills are of particular importance to the people of Australia and the debate on them should not . have been delayed until this late stage. The bills to be discussed are the Income Tax and Social Services Contribution Bill 1963, the Income Tax and Social Services Contribution Assessment Bill (No. 2) 1963, the Income Tax (International Agreements) Bill 1963, the Estate Duty Assessment Bill 1963 and the Gift Duty Assessment Bill 1963. The scope of first two of these measures is extremely wide. Many of the amendments proposed by them stem from the recommendations made by the Commonwealth Committee on Taxation whose report was presented to the Parliament on 17th August, 1962. It seems strange that although the report was presented two years ago the Government has hitherto made no move to implement the recommendations contained in it. The “ Taxpayers’ Bulletin” of 11th August, 1962, slated -
The Treasurers Budget Speech this week together with the White Paper on National Income which was presented at the same time enables us to accurately measure the burden of taxation carried by the Australian taxpayer during the financial year 1961-62.
It is the opinion of the Taxpayers’ Association and, I think, of most people, that the people should have benefited from the implementation qf that .committee’s recommendations during the last taxation year. The Opposition pressed for the implementation of the recommendations, especially that relating to the raising of the minimum income for which returns would bc required, but the Government took no action. Now, in the closing hours of the session, and I believe and hope, the closing hours of the life of this Government, these bills are submitted to us.
An examination of this Government’s . taxation policy discloses that, especially during the latter years of its term of office, the Government has been singularly neglectful of the average working man, the man earning up to £25 a week. Wageearners in that bracket represent 75 per cent of the taxpayers of Australia. These people have been treated very miserably by the Government. Let us consider what is happening to these persons who are in the lower income bracket and whom the Government says it is now exempting from the payment of tax. I point out that the Government has not forgotten to recoup from such persons by way of indirect taxes the amount of money that it has been prepared to hand to them by a reduction of direct taxes. I have only sufficient time available to me to deal with the figures for 1962 and 1963. Were it not for the fact that the Government has allowed me only three-quarters of an hour to deal with these five important bills, I could quote figures covering a much longer period. The figures which have been made available to me by the statistical service of the Parliamentary Library reveal that for the year 1961-62 the Government collected £848,000,000 in direct taxation and in the following year £831,600,000, a reduction of £16,400,000.’ Revenue from indirect taxation for the year- 1961-62 amounted to £568,500,000 and for the year 1962-63, £608,900,000, an increase of £40,400,000.
In the light of those figures, the Government should not play up too much the fact that persons in the lower income bracket are enjoying some relief from direct taxation. The position probably is that the taxpayer is finding it more difficult to live, because there is no exemption from indirect taxation for the pensioner, the child and any other dependent person. With the concurrence of honorable senators, I incor porate in “ Hansard “ the following statistics: -
It seems to me and to quite a number of other people that there has been inordinate delay on the part of the Government and the Treasurer (Mr. Harold Holt) in introducing, three or four days before the end of this Parliament, the bills we are debating to-night. The following comments in the “Taxpayers’ Bulletin” of 21st September about the delay in introducing this legislation are quite interesting: -
There has been an unusual delay in introducing legislation to give effect to the tax changes announced in the Commonwealth Budget for 1963-64.
The Budget speech delivered by Mr. Holt on August 13 outlined with brief detail the tax proposals intended.
Customarily legislation is brought into the House a few days later and gives the Minister an opportunity in his Second Reading speeches and by memoranda, usually circulated, to explain the proposals in more detail.
At the time of writing only the Sales Tax legislation has been introduced.
This delay is regrettable for several reasons . . relief to classes of taxpayers is being held up . . . uncertainty exists as to the scope of proposed amendments.
That criticism, which was offered on 21st September, was quite justified. I should say that the introduction of these measures has been timed by the Government. To use an Australian term, the Government has given the Parliament the bird. Its action is like throwing a dead bird on the stage at the close of an act. The Government says, in effect, “We will not have to answer for this “. It is unfortunate that we are not being afforded an opportunity to discuss in greater detail not only the proposals contained in this legislation, some of which are quite commendable, but also many other proposals which could make the incidence of taxation more equitable to that 75 per cent. of the taxpayers to which I referred earlier.
As I indicated earlier, many of the proposals contained in the legislation now before us are the result of recommendations made by the Commonwealth Committee on Taxation. I should like the Minister, when replying, to give me some information about the matter raised in paragraph 808 and the succeeding paragraphs of the committee’s report. Paragraph 809 reacts -
Another matter of simplification concerns the lilies of the Acts. The title of the Assessment Act is “ The Income Tax and Social Services Contribution Assessment Act 1936-1961 “ and the title of the current Rales Act is “The Income Tax and Social Services Contribution Act I960”.
That title is being retained in the present legislation. Paragraph SIO reads -
The titles date back to 1950. Prior to that year there were separate levies for Income Tax and for Social Services Contribution. In 1950, Iiic iwo levies were amalgamated into a single lax which was in truth an income tax. The words “ Social Services Contribution “ were no doubt retained in the titles as a reminder that one of iiic reasons for the high rates of income lax was that money was needed for the existing and expanding social services provided by Parliament.
The report continues, in paragraph 811. -
In various submissions, we received complaints (hai (he lilies of the two Acts are cumbersome and troublesome particularly where in documents relating to the Acts, the lilies may have to be repeated many times.
The committee suggested that the words “ and Social Services Contribution “ should be deleted from the title.
The Government has said from lime to time that it cannot increase child endowment or other social service benefits like the maternity allowance and the funeral benefit because not sufficient money is available. 1 should like to know to what account monies collected under the name social services contribution have been paid, and from what account the Government has managed to appropriate money for social services. Since 1950 has it worked’ a swindle on the Australian people by paying social service contributions into Consolidated Revenue? it has destroyed the great social services financial structure that Labour established when the National Welfare Fund was created. I should like the Minister to tell the Senate how much money “has been collected by this Government for social services but not appropriated for that purpose. It would be interesting to know how just or unjust this Government has been in its collection and appropriation of social service contributions and how the family man has been treated. As the Committee on Taxation states, the Government has not appropriated this money for the purpose for which it was originally raised. The committee has gone as far as to say that the position has got so far out of hand that the title of the legislation should omit reference to social services contribution.
There are other aspects of our taxation legislation which could be examined with a view to ascertaining whether this Government appreciates the manner in which taxation affects the majority of the Australian taxpayers. It is admitted that these bills provide for some very valuable lax concessions. Tn the time available to us to discuss the bills we cannot possibly deal with all the matters covered by them, but I propose to refer to some of them. The Government, in continuing the 5 per cent, flat rate of reduction of income tax which has operated for the last three years, is perpetuating an injustice against taxpayers in the lower income brackets.
If we turn to the taxation statistics for 1961-62, in respect of income derived in the year ended 30th June, 1961, we find that there were 3,220,000 taxpayers who earned incomes of £1,300 a year, or about £25 a week. They represented 74 per cent, of all taxpayers and they paid 31 per cent, of the total taxes collected. At the other end of the tax scale, there were 1 10,000 taxpayers who earned income of £3,000 a year, or about £60 a week. They represented 2.5 per cent, of all taxpayers and they paid almost precisely the same percentage of total taxes as did the first group. Therefore, 2.5 per cent, of the taxpayers, whose incomes were approximately £60 a week, derived the same aggregate benefit from the flat rate of reduction as did the 3,220,000 taxpayers in the low income group, or three-quarters of the total number of taxpayers in the Australian community. I cannot see how the Government can argue that that is equitable. It simply means that the man- who has a high income is being given the most benefit. The Government acknowledges in other respects that people on low incomes should pay a smaller amount of tax. Yet, in respect of the flat rate reduction of 5 per cent, in income tax, the low income earner receives a very small benefit although he may well be the person in the community who bears the greatest load of responsibility.- The Government has not been fair in this respect.
Let us consider further the position of the man with a taxable income of about £1,200 a year, who pays £149 lis. 8d. in income tax. Under the 5 per cent, flat rate of reduction he receives a reduction of only £7 9s. per annum. The man on £3,200 a year, who is on almost the lowest scale in the exclusive bracket, receives a reduction of £41 16s. The man with a taxable income of £1.0,000 a year receives a reduction of £231., while the person in the really exclusive income bracket, who pays tax at the rate of 13s. 4d. in the £1, receives a reduction of £421. If that is the Government’s idea of equitable treatment for the average Australian taxpayer I. assure it that that is not the way in which the Opposition regards equity in taxation. The Government is to bc commended for having increased the amount below which income tax is not payable. The Opposition has been pressing for that to be done since 1959. The Commonwealth Committee on Taxation recommended in 1961 that it should be done. As a matter of fact, that matter came within the scope of the charter of the committee, lt was required to report on anomalies in the taxation field and “ on simplifying the taxation system without diminishing the taxation return to the Government,
This proposal, of which much has. been made, sprang from the Opposition and was endorsed by the Commonwealth Committee on Taxation. Studied in any light, it is a good economic move, because the amount of tax collected from this source does not really justify the time spent in
Assessing, preparing documents . and so on. The report of the Commissioner of Taxation states that in 1952 the statutory exemption applied to income of up ‘to £200 and that if the income exceeded £200 the statutory exemption was reduced by £1 for each £2 by which it was exceeded. When the system of uniform taxation came into force in 1943 the minimum taxable income of £157 was reduced to £105, and tor all practical purposes it continued at that level up to the present time. There are 101 reasons, including inflation, why the matter should have been considered during this Government’s term of office. J am glad that something has now been done from an administrative point of view, but I do not think that the Government can claim great credit because of the inordinate delay that has occurred.
On other matters to which members of the Opposition have referred from time to lime, the Government has not been so eager to help the taxpayer. One matter on which members of the Australian Labour Party have been pressing for consideration concerns the need for taxpayers generally to be able to claim as a taxable deduction amounts spent on fares in travelling to and from their work. If a man is working in an administrative position and is earning a big salary no doubt he will have a motor car which is provided by his firm. If he provides the motor car himself he receives a taxation deduction in respect of travelling expenses. However, the majority of taxpayers are not entitled to deduct fares from their assessable income. Some of the most seriously affected in this respect are persons who work in the transport industry. How often do we hear criticism of transport ^workers? Yet, it must be remembered that the transport worker must provide his own conveyance so that he may travel to his place of work. In many instances, transport workers are required to work broken shifts. Although they incur a lot of expense in the way of fares they are not entitled to claim them as a taxation deduction.
There is another matter in which the Government has played almost a hypocritical part. I refer to the taxation zone allowances. Honorable senators on both sides of the chamber agree that we should encourage people to live and work in the north of Australia. However, I do not think that the taxation anomalies which affect the people who go to the north of Australia have been adequately considered. I have made representations in respect of one anomaly for some time, and so has the honorable member for Stirling (Mr. Webb), in another place. My first submission to the Minister was made in June, 1961, as a result of representations by Mr. John Currie, the general secretary of the Western Australian Teachers Union, concerning tax anomalies affecting teachers transferred to northern areas. Because such teachers do not serve for more than six months in any one year in a tax concession area they are not entitled to the tax deductions which apply to the Northern Territory, or in taxation zones A and B. The Minister for Civil Aviation (Senator Paltridge) also wrote to the Treasurer on the matter, and because he had done so, I received a letter from the Treasurer, through the Minister for Civil Aviation, concerning it. The letter stated -
I attach a letter recently sent by the Acting Prime Minister to the assistant general secretary of the State School Teachers Union of W.A. in reply to representations from the Teachers Union seeking concessional taxation allowances for State school teachers in northern areas of W.A.
You will recall that the Union made simultaneous approaches to yourself and myself and that you asked that you be informed of any advice 1 received in the matter from the Prime Minister.
It was said the matter was too involved to be sorted out. That is hypocritical. The Government knows that teachers and others are likely to be transferred and this matter could easily be adjusted. It should have received some attention from the Government. I should like to know whether the Government will consider a review of the anomalies in relation to the two matters that I have raised.
The second-reading speech of the Minister is a mere summary of the facts. Second-reading speeches are becoming merely a rehash of some highlights of the legislation. In this case an explanatory memorandum has been issued with the circulated copies of the speech by the authority of the Treasurer. The Minister thus has taken the lazy way out. His speech of a foolscap page and a quarter is supposed to cover a bill of more than 80 clauses. Each of them is important because is deals with taxation. But the Minister, in a lazy slipshod way, has submitted a second-reading speech to the Senate and has then stated, in effect, “ If you want to know more about the bill, go to the explanatory memorandum “. In other words, he is saying, “ I do not know much about it, but some little treasure in the Treasury or in the Taxation Branch has written an explanation of what it is all about”.
This sort of thing is making a farce of democracy. It makes the Parliament look silly in the eyes of the people. We discuss bills providing for the expenditure of millions of pounds, and the Minister submits a slap-dash, lazy speech of one and a quarter pages with a long explanatory docu ment that never gets into “Hansard”.’ Since 1 have been in the Senate, debates on. taxation have deteriorated to such an extent that they have become almost a farce. TheMinister says he is satisfied and implies that . the Opposition should also be satisfied because some public servant has prepared an explanatory document. But if the public are to have a chance of analysing the explana- . tory documents, they should be in “ Hansard “ and not in the Minister’s speech. That would give the people an opportunity of analysing the bill.
In the Income Tax and Social Services. Contribution. Bill, there is a provision to exempt certain persons of pensionable age from taxes. This amendment has been’ brought about by inflation and it is a com- : mendable proposal. Then we have the Income Tax and Social Services Contribution Assessment Bill (No. 2) to which the ‘ Opposition proposes to move an amendment relating to concessions on the purchase of machinery. I shall move the amendment in ‘ the committee stage. It relates to the section of the bill dealing with the proposal to grant an investment allowance on new plant used . exclusively for primary production in Australia. As the Minister has stated in his , second-reading speech, the allowance is designed to be an additional incentive to primary producers to install modern plant with a view to improving the efficiency of primary production operations. This is a commendable and generous concession. It provides for an allowance of 40 per cent, in the first year and then 20 per cent, for four years making total deductions of 120 per. cent. The concession is to operate from 14th August, 1963.
This will be of great benefit to primary . producers but the Opposition wants to pre- . sent another side to the matter. We propose an amendment to provide that the concession will apply not only to new plant. I . think the proposal is justified. Some farmers might be able to buy new plant but others, because of their financial position or the size of their farms, cannot afford new plant. They can buy second-hand plant of an appropriate type and we suggest that concessional deductions should apply to such plant. The Government’s object is to see that the most up-to-date plant is available to those who can afford it. But there is another : side to the picture, lt must not be forgotten that new plant will have to be utilized for a period of five years in order to qualify the taxpayer for the full remission. At some stage some person should get the advantage of the deductions. Consideration should be given to the producer who makes additions to his plant within the limits of his economic ability by the purchase of second-hand plant and so improves his capacity to produce. Why should he bc cast out of the ring in the same fashion as the worker who is not allowed to claim travelling expenses incurred in proceeding to and. from work as a deduction from income? Workers have received only a small benefit from the tax remission of 5 per cent. A struggling farmer cannot alford to buy new plant. He buys secondhand plant at a price that be can afford. So, whilst improving his productive capacity, he avoids over-capitalizing his farm. So far as this concession is concerned, he is out. A line of demarcation is drawn, and wc think this is wrong. 1 do not know how the position can be remedied. Our amendment will offer an opportunity to those officers of the Taxation Branch who have sympathy for these people. Their sympathy is indicated in the explanatory document which has been circulated, but obviously it is not shared by Ministers. The contents of the explanatory document are not included in the secondreading speech, and so they do not appear in “ Hansard “. The Government may say that our proposal is impracticable but I am sure that the officers of the Taxation Branch will be able to overcome any difficulties.
There is quite a lot of material in the second-reading speech which should be examined. For instance, reference is made to the discretion of the Commissioner of Taxation to grant an extension of the period during which a private company may make a sufficient distribution of its distributable income in order to avoid undistributed income tax. It1 is quite impossible for us to give such matters full study within the time allotted.
The bill contains some laudable provisions, but they will not benefit 75 per cent, of the taxpayers. These have been totally forgotten by this Government in its Father Christmas activities. The bill proposes increases in concessional deductions in respect of a taxpayer and bis dependants. The maximum deduction for education expenses of a dependent child is to be raised from £100 to £150 and the ceiling of £150 a person on deductions for medical expenses is to be removed altogether. The maximum allowable deduction for funeral expenses is to be increased to £50 in respect of each bereavement. We have no complaint about that. Every one will die some day so the benefit of that concession will be spread throughout the community. However the amount has been fixed at the very minimum; it could not be made any lower. Whilst it is most necessary for the Government to provide relief for persons who are educating children, relief is not being provided for those persons who really have to make sacrifices in order to keep their children at school.
– This will benefit just the top brass.
– That is so. I have five children, which is not a big family. I could not have devoted £750 of my income, which was then about £1,250, to education. That would have left only £500 for the rest of the needs of the family. Those increased concessions will go mostly to the 21 per cent, of privileged taxpayers receiving from £3,200 to £16,000 a year. No real benefit will be received by 75 per cent, of the taxpayers.
The Government decided hastily to go to the people and has thrown this measure into the ring at the last minute although it has had. two years to introduce the reforms th.U the bill proposes. This is a last minute dash which will assist only the top brass. The Government has neglected the large section of the people who have been poorly treated in the past, not only in the raising of taxation but also in the distribution of taxation revenues. The Commonwealth Committee on Taxation which was established by the Government said that it was thoroughly dishonest to link social services contributions with income tax. The only reason that the Government allows the title of the legislation to remain in its present form is to justify the high rate of taxation. The Government claims all the credit for social services. It never acknowledges that the people themselves have paid for the social services, as the title of the bill shows.
The Government is merely doling out the people’s money. In more than a decade it has not been able to effect any improvement in child endowment. Let the Government wake up, because the people have awakened to the fact that they have contributed for child endowment. They know that they are justly entitled to increases, but the Government is not providing increases. The Government should alter the title of the legislation, saying straight out that this is income tax legislation and that the Government will do what it likes with the revenue that it produces. Social services contributions should be set aside to go to the people who are entitled to them, taking into account inflation and the present level of taxation-
The legislation is very well drafted. The explanatory memorandum gives a full explanation of it. I have mentioned some of the objections of the Opposition. It is an unusual procedure to deal with five bills at once. This allows me to devote only about seven minutes to each. I find that I cannot give an adequate coverage of the measures in that time. I hope that some senators behind me will carry on the debate after I cease.
The third measure is the Income Tax (International Agreements) Bill, which is supplementary to the Income Tax Assessment Bill. It is merely a necessary machinery measure, and the Opposition has no objection to it. The purpose is to bring the Income Tax (International Agreements) Act into line with the broad concept of the recent agreement with the Government of the United States of America concerning the establishment of the naval communications station at North West Cape The bill deals with an unusual situation that has arisen. It is designed to ensure that United States contractors who come to Australia for the purpose of establishing the station will not, for the reason’ only that they are carrying on business here for this purpose, become liable to a higher rate of Australian tax than would otherwise apply to dividends that they may receive from Australian companies. The Opposition will not propose any amendment ot this measure.
Then we come to a further measure, the fourth on the list, the Estate Duty Assessment Bill. I have had association with this matter for a long time. I think that the first adjustment upwards was made as a result of the request I made to a Labour Government when it was in office.. It is very necessary that the exemption limit be changed from time to time, particularly during times of inflation. A person might buy a home for £2,000 which will be valued at the time of his death at as much as £3,000 or £4,000. The result is that the widow of a person who has put the whole of his life savings into a little home is penalized. At the time he purchased the home it may have cost him only £2,000 but, as a result of increases in prices, his property may be valued for probate purposes at £4,000. When the breadwinner dies his widow is faced with the impost of probate. I think that the proposed amendment is justified.
Under the law at present estate duty is not payable on an estate of £5,000 or less that passes wholly to a deceased’s widow, widower, children or grandchildren. It is proposed by this bill that in future this exemption will apply to estates of £10,000 or less. Furthermore, under the present law, where the value of an estate exceeds £5,000 the exemption diminishes at the rate of £1 for every £3 of the excess of the estate over £5,000. It is proposed to amend this provision so that the exemption will diminish by £1 for every £4 of excess over £10,000 and will cease only when the value of the estate is £50,000 or more.
I admit that an estate of £50,000 is a. pretty healthy estate to protect, but there will be other payments which will have to come out of the estate. In order to treat the small person equitably, the same privilege has to be given right throughout the community. No doubt other payments have to come out of these larger estates as well as estate and probate duty. The deceased person would no doubt have had obligations to those who had worked for him and other debts would, no doubt, have to be recovered from the estate. I think that the amendment is warranted. I have always recommended a move such as this. The Opposition has no objection to the bill.
I now come to the Gift Duty Assessment Bill which is the fifth of these bills that we are dealing with together. As I have said, it is really a parody on parliamentary procedures that measures of this nature should be dealt with jointly just because the Government is in such a hurry to go to the people. This is something which has been forced on the Opposition. In other circumstances we would have debated measures such as this for days and, sometimes, for a week.
– That statement is not fair. J put the suggestion to the Senate that the bills be considered together and the Senate agreed to that procedure.
– It had Buckley’s choice. It is well known that this sessional period will end this week. We have had one week of legislation by exhaustion. Were we to propose to debate these bills as they should be debated in this Parliament, we would find ourselves debating them- right up until the date the Prime Minister has set down for the election. In normal circumstances we would do that. We are not being unfair, we arc merely being sane about the matter, but I repeat that we had Buckley’s choice. lt could be said that the fair thing to do would have been to give the Opposition an opportunity to. consider the bill after introducing it. At times our leader has insisted on that being done. However, because the Government wants to go on with the matter we will justify the attitude of the Opposition before the people. Any disrespect to the Parliament is the fault of the Government and not the fault of the Opposition. Let nic make it quite clear that the taxpayers themselves are concerned about the inordinate delay there has been in introducing these measures since the time the Treasurer made his Budget speech. There is no excuse for such delay unless the Treasurer does not have competent officers to furnish him with the information, and 1 am sure that that is not the case. I can ‘ remember occasions when the officers of the department were very much up-to-date. If a Minister wanted information it was made available to him immediately. I cannot understand this delay, particularly when the Government knew there was going to be a general election in an attempt to get it out of some awkward position.” I make no apology for trie remarks I have made. I have nothing to apologize for. The Opposition has met the Government in every respect.
Having answered the Minister’s interjection rather at length let me say that the Opposition docs not object to the Gift Duty Assessment Bill 1963. This bill proposes amendments to the gift duty law to implement terms of our agreements with the Government of the United States in connexion with the North West Cape project and the status of United States forces in Australia. Under those agreements, Australia has, in broad terms, undertaken to exempt from Commonwealth gift duty gifts of certain personal property made by United States contractors and personnel who are in Australia solely for purposes prescribed by one or other of the agreements, provided such gifts are not exempt from duty under United States law. This is a machinery measure to which the Opposition has no objection. We want to help the Americans to carry on, without the abrogation of any agreement we have with them. The bill is necessary and we have no objection to it.
I have given a rough resume of the attitude of the Opposition to this legislation. However, 1 think that if the Minister has any conscience he should ask that the explanatory memorandum that has been circulated should be incorporated in “ Hansard “ in order to make his speech intelligible to the public. It was not very intelligible to the Senate. The measure has not been explained to the Parliament as it should have been. I think therefore that the Minister would be doing a great service to the public if he asks that the explanatory memorandum be incorporated in “ Hansard “.
– I have very much pleasure in supporting the bills before the Senate. [ am somewhat at a loss to understand the complaint about having insufficient time to debate these bills. I, could have understood the complaint had we been imposing some further burdens on the community. What are we setting out to do in this legislation? We are giving relief to the community. I always think that when a bill gives relief it does not require a great deal of debating. We are all very pleased that this relief is being given to the taxpayers, and the sooner the measure is put through the Parliament, and the relief comes into’ operation,- the better. I. say that to discount the argument raised by my friend,- Senator Cooke.
As he pointed out- five bills are being discussed to-night, the Income Tax and Social Services Contribution
Bill 1963, the Income Tax and Social Services Contribution Assessment Bill (No. 2) 1963, the Income Tax (International Agreements) Bill 1963, the Estate Duty Assessment Bill 1963, and the Gift Duty Assessment Bill 1963. I am very pleased indeed to know, that with some slight exceptions, these bills have met with the approval of the Opposition. However, I must join issue with Senator Cooke on his remarks about the explanatory notes. I think it is an excellent idea to have these explanatory notes issued. They are of great benefit to honorable senators and I sincerely hope that in matters of this kind similar notes will be issued in the future. The provisions about which I am mostly concerned to-night are those related to the primary producers. Unfortunately, there is still a large section of the community which docs not recognize that Australia rides on the back of the primary producers. Primary producers have been allowed a special deduction for investment in new plant and equipment, as mentioned by Senator Cooke who apparently wants this deduction extended to second-hand plant. I remind the honorable senator that if it is made easier for the primary producer to buy new plant, the plant that he has been using becomes available for some one else. Therefore, those people acquiring secondhand plant do receive a benefit. In the circumstances, I think that benefit is fair enough.
A concession is granted in respect of the cost of extending telephone lines. This will be of help to primary producers in many areas. In the inland regions, particularly, the extension of a telephone service does not involve the provision of merely 1 or 2 miles of line; sometimes a line has to be carried for 7, 15 or 20 miles. The cost of putting up such a line to-day is considerable. I think it only fair that the cost of that extension should be regarded as a deduction for income tax purposes.-
I am indeed pleased to see that forest and timber operations have been brought into the category of primary production. There is no doubt at all that over the past four or five years this section of primal y production has suffered under our income tax provisions. The allowing of expenditure on fences as a deduction for income tax purposes is also a good idea. If a primary producer is to get the maximum efficiency from his property it must be well fenced and well watered.
The concessions granted in respect of medical and dental expenses will prove to be of great benefit. The benefit of the concessions will not be confined to a few taxpayers as Senator Cooke would have us believe. If honorable senators opposite were in power, I wonder how far they would extend these concessions. After all, there is a limit to what can be done. The record of this Government in affording help to the. community is one of which any government could be proud. As supporters of the Government, we on this side of the chamber are proud of its record in this respect.
Provision is made for an investment allowance. This relates to new machinery, to which I referred earlier. The investment allowance is not 40 per cent, but 20 per cent. However, in addition to that allowance a further 20 per cent, each year is to be permitted as a depreciation allowance. Eventually, the total allowance for depreciation and investment reaches 120 per cent. I suggest that an allowance such as that is not bad, whether it is provided by this Government, a Labour government or anybody else.
Another innovation that will prove helpful is one that has been advocated for some time. I refer to retention allowances. Under the existing provisions of the income tax law a private company is entitled to retain, free of income tax, 50 per cent, of the first £1,000 of reduced distributable income, other than property income. Under this legislation the retention allowance will be increased to 50 per cent, of the first £5,000 of undistributed income other than property income, 45 per cent, of the second £5,000, and 40 per cent, of the balance. The new provisions must be of substantial help to the companies concerned, and I, for one, am very pleased to see that the Government is making concessions in this direction.
I mentioned earlier the deductions for education and medical expenses. The increased deduction for education expenses will be of considerable help. I think all honorable senators are aware that people who do not live near a suitable school are often faced with great expenses in providing education for their children. That has proved to be one of the drawbacks to decentralization in all States of Australia. Some people live miles from the nearest township and they find that unless they are prepared to incur substantial expense, the education of. their children has to suffer. The concession provided in this bill will be valuable. 1 come now to estate duty. This is a subject on which I have been working for some time. I have been a member of a committee which, over the last two years, has made representations to the Treasurer (Mr. Harold Holt) on this very matter. To many of us it has seemed wrong that people who have worked hard all their lives, who are getting on in years and who want to leave something for their children, find very often that their children will be faced with heavy estate duty. When both parents die within a short time of each other the estate duty is sometimes so great that the children are not able to find the money. That means that the property has to be sold and that the children have to leave it. This is particularly unfortunate when it means that sons who have been trained to farming are forced off the land.
One argument used in this connexion, particularly by representatives from New South Wales, was that the burden of estate duty rested more heavily on residents of New South Wales than residents of most other States. We felt that if we could get the Federal Government to make concessions, such as has now been made, that would encourage the New South Wales Government to grant similar concessions. That has been the case. I am pleased to see that the New South Wales Government has either brought in an act, or is to bring in an act, to raise the exemption from probate duty from £5,000 to £10,000 as is proposed in the bill now before the Senate. The capital value of property has increased over the last ten or fifteen years and an estate which is now valued at only £5,000 must inevitably be only small. Property owners who perhaps have continued to live frugally over the years have found that the value of their estate has increased considerably, but they have not had any benefit from the increased value. They do not get benefit from it unless they sell it. They finl that a considerable amount would be required for probate duties if they were to dic. The lifting of the exemption limit from £5,000 to £10,000 will treat these property owners more equitably, lt will be of great help to them. When this increased exemption is coupled with that given in New South Wales it will be of even greater value. As’ Senator Cooke mentioned, there is to be introduced a sliding scale cf probate duty at the rate of £1 for every £4 on an estate of up to £50,000. When the value of the estate is £50,000, the full amount of tax is payable, but all estates below that value, derive some benefit according to a sliding scale. Whether the benefit is the same as that applying in New South Wales, I am not sure, but at least it does apply on a sliding scale and it will, benefit many estates. Certainly the present owners of. the estates will know now that some advantage will be gained by those who survive them. I said that I propose to be brief. J repeat that if we were proposing to impose additional burdens on the people it might be necessary for us to spend more time in debating these measures but as we are proposing to grant relief and extend benefits I do not think the spending of more time in debating these bills is warranted. I support them and sincerely hope the Senate will carry them with very little further debate.
– I do not wish to delay the passage of these bills unduly. They are designed to give effect to a number of proposals outlined in the Treasurer’s Budget speech. As Senator McKellar has said, they are designed to assist a large number of taxpayers. Senator Cooke admitted that some of the proposed concessions were very valuable, and I agree with him. I shall not deal with those concessions because Senator McKellar has already referred to them.
If I may, I should like to advert to the subject of estate duty. I feel that the present practice of valuing properties for estate duty purposes presses very heavily on the beneficiaries in some instances. The South Australian and Victorian governments have introduced into their laws special provisions relating to the valuation of rural lands for estate duty purposes. Estates of people in those two States derive some benefit from these special provisions, but in no State at all is there any protection for people in cases where the estate consists mainly of equity stock. As we all know, the valuation is made at the time of the death, but very often anything from six to eighteen months elapses before estate duty is assessed.. In cases where there are great fluctations in the prices of stock, the value of the estate is very often’ considerably lower at the time when probate is assessed than it was at the time of death. I have known of cases in which the value of the estate has dropped by as much as 50 per cent, by the time the duty is assessed. In many such cases the widow is forced to sacrifice income-earning stock in order to raise sufficient money to pay the duty. In some cases even her home has to be sacrificed.
I know that it is traditional to assess probate on the value of the estate at the time of death, but I do feel that this does cause great hardship in many instances. 1 have no solution to offer. Whether it would be practicable to base the duty on the” value of the estate as at the time of assessment I do not know. I do not think that if that system were adopted it would make much difference to the revenue received by the Government, but beneficiaries in estates that had increased in value would be able to find the money with which to pay the duty. Under the present system, in many cases where the value of equity stock, or even land and property drops, the beneficiaries have little or nothing left after paying estate duty. I do not wish to speak further on this matter. I have had placed before me many cases in which hardship does arise because of this practice of valuation. I have very much pleasure in supporting the measures.
– I should like to deal first with the matters raised by Senator Cooke. I was interested in his comments on the explanatory memorandum.
– It is an excellent document.
– If the honorable senator cares to read the comments made by his own leader over the last two or three years he would earn t that his leader gives the Minister and- his department full credit for circulating these excellent explanatory memoranda. I remind him that a copy of each memorandum is supplied to every honorable senator. Senator Cooke said that the Minister showed laziness in his second-reading speech, that he omitted many, things which he should have included in it. Those matters were covered in the explanatory memorandum. In effect, Senator Cooke is asking that the Minister do his home work for him.
– No. I want the public to know what the Minister has to say.
– The explanatory memorandum was issued to the honorable senator to read and digest. If he would only take the trouble to read it he would find the answers to any questions that he may have.
– I want it to go into “ Hansard “ so that the public will know’ what the Minister thinks.
– The honorable senator wants the Minister to do his home work for him. I suggest to the honorable senator that this is a very valuable document. It has been available to every honorable senator for a week now. If the honorable senator had only taken the trouble to study it he would not be complaining now about certain things not being included in the Minister’s second-reading speech. I repeat that his own leader, Senator McKenna, has paid tribute to the Minister for making the memorandum available.
Senator Cooke stated also, that the proposed reduction in taxation will amount to £6,100,000. That is correct. I remind him also that the benefit is spread over a greater number of taxpayers. The honorable senator complains that the 5 per. cent, flat rate reduction is inequitable. He forgets to mention, of course, just how equitable the flat rate is to the taxpayer when it is a flat rate increase. He forgets to point out that the greater proportion of the benefit then is enjoyed by taxpayers on the lower incomes. It is easy to argue that a flat rate reduction is inequitable tq persons on lower incomes; but if the honorable senator wishes to argue that way he must also argue that when a flat rate increase is made the man on the lower income gets the greater benefit.
Senator Cooke also asked, why we continue to call the act the Income Tax and Social Services Contribution Act. He argues that although the Government says to the taxpayer, “ We are giving you this “, the fact is that the Government is only returning the taxpayers’ own money to them. That is quite right. Nobody will dispute that. He says that we are trying to hide this fact by retaining in the title the words “ and Social Services Contribution “. If we had wanted to do that, we would not have retained those words in” the title.
– You should appropriate it for the purpose for which you collected it.
– The honorable senator had an hour in which to offer his explanations. I intend to answer the points that he . raised. I think that perhaps the Chair should take note of the fact that I did not interrupt the honorable senator once. 1 repeat that the honorable senator said that by retaining in the title the words “ and Social Services Contribution” we are endeavouring to hide from the taxpayer the purpose for which the appropriation is made. I again remind him that if we had wanted to hide anything from the public we would have removed those words from the title. In the last financial year a sum of ?41 1,386,000 was appropriated for social services from a total income tax collection of ?906,000,000. In other words, a little more than 45 per cent, of the total tax collection was appropriated for social services.
Senator Cooke said that, although direct taxation had been reduced by ?16,400,000, indirect taxation had increased. I point out that the population of Australia has ‘icon increasing as a result not only of migration but also of natural increase. The population of Australia is now more than 11,000,000. The majority of those people are good Australians who drink beer, smoke cigarettes and indulge in similar pleasant habits which contribute to receipts from indirect taxation. Indirect taxation increases steadily as the . population increases. This Government has ‘ consistently increased social service benefits.
The Income Tax and Social Service Contribution Bill 1963 has one or two good points about which I want to remind the
Senate. Honorable senators on both sides of the chamber will approve the raising from ?104 to ?208 of the level below which people are exempted from the payment of tax. In other words, this year people will not have to .pay income tax unless their income exceeds ?208 whereas for may years past income in excess of ?104 a year attracted tax. The raising of the exemption will be of direct benefit to people in receipt of a small income.
Another aspect of the measure which is attractive to us all is the proposal to amend the age allowance provisions, which authorize a special basis of taxation for men aged 65 years or more and women aged 60 years or more. At present, a person of pensionable age who has a net income of ?455 or less is not required to pay tax. The bill proposes to increase this exemption by ?26 to ?481 to bring it into line with the increase of 10s. a week in the age pension for single persons. It is also proposed that the application of relief for the year 1963- 64 will not depend upon both a husband and wife being of pensionable age. I think all honorable senators have had brought to their notice cases in which one partner was of pensionable” age and the other was not. This anomaly is to be. removed. The married couple provisions will apply to a taxpayer who is qualified by age although his or her spouse, as the case may be, is not of pensionable age.
A great number of other concessions have been provided for in these bills. Senator Wedgwood, in dealing with estates and equity in stocks put her finger on a ‘ very difficult problem. Delay in assessing estates for probate purposes creates some difficulty. The value pf stocks or any other asset in an estate can recede while the probate is being assessed. On the other hand, the value of such assets could rise. Nobody has yet been able to indicate how this problem can be overcome fairly. The equity does not pass to the trustees until the probate is approved and the duty is paid. Therefore, it is not possible to sell the stocks immediately death occurs. If there is any suggestion that the value of the stocks will recede, the trustee has not any power to dispose of them.
Question resolved in the affirmative.
Bill read a second time.
Clause 1 - (Short title and citation).
– I ask the Minister for Customsand Excise (Senator Henty) to give , honorable senators a more adequate or more truthful explanation of the reasons for the recommendations of the Commonwealth Committee on Taxation about the title of the act. I remind the Minister that the suggestions I made at the second-reading stage were not my own but were taken from the report of that committee. I asked the Minister to explain what led the committee to submit to the Government recommendations which were based on evidence taken from 1959 to 1961, I repeat that they were not Cooke’s suggestions. I sought from the Minister not abuse but merely an explanation of the reasons for the committee’s recommendations.
The members of that committee, which was under the chairmanship of Mr. Justice Ligertwood, were responsible persons, and I do not believe they would have thought as the Minister apparently thought when he replied to me. Are we to understand that evidence was placed before the committee to the effect that the real purpose of the social services contribution is being disregarded by the Government and that the money is not being kept in trust, as was originally intended, to provide a national insurance for the people who contributed it? It is not a case of a welfare State making a payment to a mendicant, but of the Government paying something from a fund to people who have contributed to their future welfare under an act administered by the Government. I wish to know from the Minister whether that concept of taxation and of the social services contribution has been amended, or whether we are still operating in accordance with it. What led the committee to think that the provision had been left in the act only to justify the high incidence of taxation?
– I fully understood Senator Cooke’s remarks and I was aware that he had criticized the Government because, as he said, it wished to hide the fact that the rates of tax imposed under the Income Tax and Social Services Con tribution Assessment Bill were in fact imposed for the purpose of paying social services. He said that the Government was merely returning to the people, in the form of social services, money that had been collected from them. He contended that we were trying to hide something by continuing to include in this bill reference to the social services contribution. My argument is that if we wished to hide it wc would take that reference out of the title of the bill. This Income Tax and Social Services Contribution Assessment Bill 1963 makes public the rates of tax which will be collected in order to pay the social services contribution. That makes it clear to the people that when they pay their income tax part of it will be used for social services. The honorable senator said that until 1949 a special contribution was made and placed in a social services fund. I well remember, when we came to office, that although the fund existed on paper there was nothing in it in fact. All the money had been spent. The Government, in its wisdom, concluded that the best thing to do was to have one fund to cover amounts raised by income tax for social services and other purposes.
– I am not at all happy wilh the Minister’s reply to my comments. He has reiterated what he alleges I said during the second-reading debate, but I do not think he would pretend to express the thoughts that were in the mind of the Commonwealth Committee on Taxation when it made its recommendation in this respect. Will he kindly answer the questions I have asked, including the question about the title of this’ bill?
– The answer, Mr. Chairman, is that the Treasurer (Mr* Harold Holt) has not seen fit to accept, the reasons advanced by the committee.
Clause agreed to.
Clause 2 agreed to.
Remainder of bill - by leave - taken as a whole, and agreed to.
Bill reported without requests; report adopted.
Bill (on motion by Senator Henty) read a third time.
Consideration resumed (vide page 1466).
Question resolved in the affirmative.
Bill read a second time.
Clauses 1 to 14 - by leave - taken together, and agreed to.
After section sixty-two aa of the Principal Act the following section is inserted: - “62ab. - (1.)In this section - goods ‘ includes live stock; new ‘ means not having previously been cither used by any person or acquired or held by any person for use by that person. “ (4.) Subject to this section, where the taxpayer has, on or after the fourteenth day of August, one thousand nine hundred and sixtythree, incurred expenditure of a capital nature (not being expenditure incurred in pursuance of a contract entered into before that date) on a new unit of property to which this section applies, there shall be allowed as a deduction from his assessable income of the first year of income during which that unit is either used for the purpose of producing assessable income or installed ready for use for that purpose and held in reserve an amount equal to one-fifth of that expenditure.
In proposed section 62ab (1.) leave out “ ‘ new ‘ means not having previously been either used by any person or acquired or held by any person for use by that person.”.
The Opposition appreciates that in applying the investment allowance only to new equipment the Government was of the opinion that if it were applied to second-hand equipment there could be room for abuse. Sub-section (2.) of proposed section 62ab, which clause 15 seeks to insert in the principal act, provides that -
Subject to the next succeeding sub-section, this section applies in relation to units of properly being plant or articles owned by the taxpayer and for use by the taxpayer wholly and exclusively for the purpose of carrying on in Australia a business of primary production.
The object of the provision is to encourage the use of the best possible plant in primary production. Sub-section (3.) states that the allowance does not apply to various items, such as buildings, wharfs, fences, dams, cooking appliances, hand implements and other loose tools. Many items which probably are necessary in primary production are exempted. Sub-section (4.) provides -
Subject to this section, where the taxpayer has, on or after the fourteenth day of August, One thousand nine hundred and sixty-three, incurred expenditure of a capital nature (not being expenditure incurred in pursuance of a contract entered into before that date) on a new unit of property to which this section applies, there shall be allowed as a deduction from his assessable income of the first year of income during which that unit is either used for the purpose of producing assessable income or installed ready for use for that purpose and held in reserve an amount equal to one-fifth of that expenditure.
That provision refers to a new unit. A second-hand unit may be new so far as a primary producer is concerned. It will make his operations more efficient and give him a better chance to increase his production. He should not be at a disadvantage in relation to this concession merely because his property does not justify the purchase of new equipment. He can get an efficient second-hand unit at a reasonable price, and to him it is a new unit. Why should there be differentiation between the haves and the have-nots? The man I have in mind has gone to the full extent of his capital resources, but he is hedged in by circumstances. First, he has to justify the purchase of capital equipment, and then he has to get credit. The Government proposes that some producers shall get a concession and that others shall not. We think that is wrong. If a farmer puts a secondhand unit on his farm of a kind he has not used before, it is new so far as he is concerned and it is helping production. Why deny him the benefit of a concession that a more affluent man can get? The Commissioner of Taxation is to be permitted considerable discretion in this matter, because a further provision is as follows:-
Where the Commissioner is satisfied that -
a contract was entered into by a taxpayer before the fourteenth day of August, One thousand nine hundred and sixtythree, for the acquisition by the taxpayer of a unit of property;
on or after that date, the taxpayer has entered into a contract (whether with the same or another person) for the acquisition of the same unit of property or of another unit of property identical with, or having a purpose similar to that of, the unit of property to which the earlier contract related and intended by the taxpayer to be in lieu of that unit; and
the taxpayer entered into the later contract for the purpose of obtaining a deduction under this section or a greater deduction under this section than the deduction to which he would otherwise have been entitled, the Commissioner may refuse to allow a deduction under this section in relation to the expenditure of the taxpayer in pursuance of the later contract, or may allow such a deduction in relation to such part only of that expenditure as he thinks fit.
The Commissioner is thus given a control over such a primary producer which he does not have over an affluent man who can buy a new unit. A man who can buy a unit that is new to his property but is not in fact a new unit is to be governed by the Commissioner of Taxation, so that he cannot cheat. Why should that man be denied a concession that is allowed to a man of more means? It seems that the rich are to get richer and the poor are to get poorer. Once a rich man buys new plant and gets the initial concession, it is good business for him to invest again. There is no need to deny similar benefits to the little man who is struggling. His liabilities are such that the bank controls his credit.. The Opposition believes that this concession should be uniform in operation. The Commissioner of Taxation has power to police all deals. I think our case is unanswerable. The bill also provides -
a taxpayer sells or otherwise disposes ofa unit of property’ in respect of which a deduction has been allowed or is allow able under this section in any assessment in respect of the taxpayer; and
the Commissioner is satisfied that the unit was acquired by the taxpayer for the purpose of selling or otherwise disposing of the unit after becoming entitled to that deduction, there shall, if the Commissioner so determines, be included in the assessable income of the taxpayer of the year of income in which the sale or disposal takes place such amount, not exceeding the amount of that deduction, as the Commissioner determines.
A deduction under this section is not allowable in respect of expenditure that has been allowed or is allowable as a deduction under section seventyfive of this Act.
There is adequate opportunity to guard against abuse or the sales of material con trary to the provisions of the legislation,It is quite likely that a purchaser will decide after a couple of years that he will dispose of his property while it is in good condition. In the eyes of some other primary producer, it is a new unit and the price is within the limits of his finances. So long as a man is putting another unit into production on his property, he should be ableto obtain the concession that is available to a more affluent farmer.
.’- I wish to refer to the definition of “ new “ in clause 15. It is the practice of salesmen of mechanical equipment, including farm plant and motor cars, to offer what are called demonstration models. To all intents and purposes, this machinery is new. For example, machinery might be given a certain amount of use at an agricultural show or. at a field day as a demonstration. I am thinking of equipment such as tractors, ploughs and disc harrows. We must try to clarify what actually constitutes new equipment How is the Government to differentiate between a new vehicle and one that has been used, perhaps for demonstration purposes or perhaps for a short period by a man who has been unable to keep up with the payments? Such a vehicle may be taken back by the seller and resold as a new vehicle. This provision should be clarified.
A buyer may trade in a substantial piece of equipment on the purchase of new equipment. He may have a small tractor that has done a very useful job up to the present stage of development of his property, but he may need heavier equipment with more power. He may offer his used tractor or other equipment as a trade-in.In these days of very keen competition, tremendous incentives in the form of trade-in allowances are offered. Regularly , we see advertisements inviting people to bring along an old razor blade and to receive a £10 allowance on a new razor. Buyers are allowed £100 for old washing machines or £110 for old television sets. It is quite, likely that a primary producer may take advantage of such a concession in the purchase of new equipment.
I should like the Minister to explain how the term “ new “ will be applied. Surely taxation officers could not distinguish between a brand-new vehicle that had been driven 25 miles to a farm and one that had been used as a demonstrator. Once an engine has been turned over, it is very difficult to say how many revolutions it has done or how many miles it has travelled. The price paid by the cash customer may differ from the price paid by the man who deals on overdraft, or the price paid by the man who trades in equipment, or the price paid by the man who buys a demonstration model. These variations could lead to discrimination in favour of one person and against another.
As Senator Cooke argued, a man buys new farm equipment in order to do extra work - for instance, developmental work. He does not buy it just for the sake of buying it. The intention is to give him an incentive to get suitable equipment. If he can buy on a good market at a price lower than the price shown in the window of the agent, and if he can make a better deal than is usually made, he should be given every incentive to do that. I should like the Minister to give a ruling on that matter. It would be of value to those who will inevitably come against this line of demarcation, if opportunity were taken to amend the definition of “ new “ to cover equipment that is new to the property or new to the owner and is being used for primary production. The depreciation allowance is applicable to second-hand equipment, and it seems discriminatory not to apply the investment allowance to such equipment. I should like the Minister to put on record, and to state for my own information, where the line of demarcation is to be drawn.
– The proposed 20 per cent, investment allowance is to apply to new plant and equipment used wholly and exclusively in the business of primary production. The amendments suggest that it should be available in respect of second-hand plant. I point out that second-hand plant is normally subject to the depreciation allowance every year. However, the investment allowance is to apply only once, to new plant. If the investment allowance were to apply to second-hand plant, it would be applied first when the plant was new, again when the plant was sold to another farmer, and again whenever the plant was resold. The provision would be impossible to police. The department could not keep track of all the transactions. The depreciation allowance applies to a machine over a number of years, but the investment allowance will apply only once. This provision is in line with the provision introduced last year to make an investment allowance to manufacturers.
Although a primary producer will be allowed to claim an investment allowance only once, he will be permitted to depreciate his machinery and plant at the rate of 20 per cent, per annum, so that in investment allowance and depreciation allowance he will be able to write off 120 per cent, of his expenditure on machinery and plant. Under the legislation no part of the 20 per cent, special allowance will be written back to the assessable income if the primary producer sells plant acquired genuinely for use in primary production.
Senator O’Byrne asks for a definition of “ new “. A new machine is defined as a machine not having previously been used by any person or acquired or held by any person for use by that person. Plant will be accepted as new as long as it is bought from a normal retail or wholesale source. The honorable senator also raised a question as to cost, referring to demonstration models and trade-ins. The allowance of 20 per cent., of course, will apply only to the price that the buyer actually pays. He will have to establish what he paid. He may trade in another piece of equipment or he may buy a demonstration model. Perhaps a new model is introduced and an old model is superseded. A few old models may be left on the floor and they may be sold at a reduced price in order to clear them. The investment will be applied to the cost, which must be established by the buyer.
Senator Cooke suggested that this provision will benefit only wealthy people. He has quite the wrong slant, because a piece of equipment may cost only £20, £25 or £50. There are items of plant that are not costly. If they are purchased new by a primary producer, he will be entitled to 20 per cent, investment allowance on them.
.- J should like to bring to the Minister’s notice one point about this clause. I have some difficulty in understanding the meaning and therefore I am led to believe that something has been omitted from sub-clause (2.). I should like to know the real position in relation to sub-section (2.) of proposed section 62ab which reads -
Subject to the next succeeding sub-section, this section applies in relation to units of property being plant or articles owned by the taxpayer and for use by the taxpayer wholly and exclusively for the purpose of carrying on in Australia a business of primary production. 1 refer the Minister to sub-section (4.) wherein it is stated that the deduction which is allowable is in respect of expenditure on a new unit of property - either used for the purpose of producing assessable income or installed ready for use for that purpose and held in reserve-
And is - an amount equal to one-fifth of that expenditure.
Those lines prompt me to think that words have been left out of sub-section (2.). Perhaps the reference in sub-section (2.) should read -
I suggest that the first thing to grasp is that the grammar of sub-section (2.) is completely incongruous and quite unacceptable. Either it is owned for use by the taxpayer, owned and possessed for use by the taxpayer or owned and intended for use by the taxpayer. It is necessary that a verb qualify the purpose phrase - “ for use “. The presence of the double expression in subsection (4.) shows that the expenditure allowable as a deduction is in respect of a unit either used for the purpose of producing assessable income or installed ready for use for that purpose and held in reserve. The deduction allowable is an amount equal to one-fifth of that expenditure. The language of sub-section (4.) prompts me to think that probably the words “ used or installed ready for use “ have been omitted from sub-section (2.).
– The honorable senator has raised a point of drafting. I do not find it so difficult to understand as he apparently does. Subsection (2.) of proposed section 62ab makes it clear that ’ plant or articles -ist *bc- - owned by the taxpayer and for use by the taxpayer wholly and exclusively for the purpose of carrying on in Australia a business of primary production.
I do not see any difficulty in that, and the Parliamentary Draftsman clearly considers that it fulfils the purpose intended. From my limited reading it fulfils the purpose. However, I am glad that Senator Wright has brought the matter to our attention. I will take it up with the Minister.
,- If that is the standard expression in present legislation, I will leave it at that, lt will now be known that it is deliberately adopted.
I now refer to sub-section (4.) in relation to the discussion that has just taken place about cases where there have been trade-ins. If a tractor is purchased at a retail price of £2,000 and a used tractor is traded in on it for £500, I rather think that the correct interpretation of sub-section (4.) would limit the allowable deduction to 20 per cent, of £1,500. I gathered from the discussion that it was being suggested that the investment allowance is allowable on the full purchase price. From the way in which sub-section (4.) has been drawn it does not seem to me that the amount on which the investment allowance of 20 per cent, is calculated is the purchase price but is the actual expenditure incurred. Because there was a trade-in the allowance would be calculated on the purchase price less the amount allowed for the trade-in. That is how I understand the language of subsection (4:).
– I am glad that Senator Wright has raised this matter. I first interpreted the sub-section in the same way as he does, and believed that in the case described by the honorable senator the investment allowance would be calculated on £1,500. However, the department has advised me that the investment allowance is allowable on the full purchase price of £2,000 The amount of £500 is regarded as the sale price of an old item.
Clause agreed to.
Remainder of - bill - by leave - taken as a whole.
.- I want to raise only one other question. It is not of substance, but it is of interest to me. In proposed section 124dc of the bill this expression appears -
Where- . . the Commissioner is satisfied that, having regard to any connexion between the vendor and the purchaser or to any other relevant circumstances, those persons were not dealing with each other at arms length; . . .
I ask the Minister whether his advisers will put us in possession of information to show whether the expression “ at arm’s length “ occurs elsewhere in legislation of the Commonwealth or in any other statute written in the English language. I find it a most novel expression to be written into an act of Parliament. I ask myself what interpretation it is expected that a court or the Commissioner of Taxation would give to the phrase.
– I am advised that the expression “ at arm’s length “ has not been before the Australian courts. However, it is used overseas and in international tax agreements. Briefly, it is comparable with longer terms such as “ entirely independent basis “ or “ as though they were not associated “ or “ by reason of control of management or ownership of capital “. But those longer terms would not be wholly explanatory. The term “ at arm’s length “ appears in Australian double tax agreements and in other tax agreements.
Remainder of bill agreed to.
Bill reported without amendment; report adopted.
Bill (on motion by Senator Henty) read a third time.
Consideration resumed (vide page 1467).
Question resolved in the affirmative.
Bill read a second time.
– Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -
That the Chairman do now leave the Chair and report to the Senate.
Question resolved in the negative.
Bill agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
Consideration resumed (vide page 1468).
Question resolved in the affirmative.
Bill read a second time, and passed through its. remaining stages without amendment or debate.
Consideration resumed (vide page 1468).
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Wade) read . a first time.
.- I move-
That the bill be now read a second time.
The purpose of this bill is to amend certain provisions of the principal act to enable’ changes in the constitution of the Australian Dairy Produce Board which the board considers to be desirable and necessary in the light of its increasing responsibilities and activities in the marketing of dairy products. Due to these increased activities which have resulted in recent years in the appointment to the board’s staff of a number of executive and technical officers, the board recently sought and obtained the approval of the
Public Service Board for a re-organization of its staff structure. Allied to this reorganization is the present proposal of the board for amendment of the dairy legislation the effect of which will be, first, to abolish the position of the member of the board responsible for the administration of the research and promotion programmes and, secondly, to provide for the appointment of a deputy chairman from among sit! ing members of the board.
In regard to the first position, in 1958 when legislation was enacted lo provide the board with powers to engage in research and sales promotion, a special position on the membership of the board was created for the purpose of co-ordinating all aspects of the research and promotion programmes. The successful implementation of the scheme may be attributed in no small measure to the outstanding administrative ability of the late Mr. Hedley Clark who occupied this position from its creation until his sudden death in April, 1963. The position has since been left vacant and the two sections originally established by Mr. Clark (jo administer the programmes have been co-ordinated into the new staff structure under the direction of senior executives. As this re-arrangement of administration is functioning satisfactorily under competent executive supervision, the board considers the special position of the member for research and promotion is now no longer necessary.
On the second proposal because of its increased activities and the growing demand on the chairman, Mr. E. G. Roberts, to attend important overseas conferences, the board has requested that provision be made for the appointment of a deputy chairman from among sitting board members to take over the responsibilities of the position in Mr. Robert’s absences. The principal act in its present form provides only that, in the absence of the chairman from a meeting of the board, the members present shall elect one of those present to preside at that meeting only. The Government is fully aware of the extreme pressure on Mr. Roberts in recent years and feels that the appointment of a deputy chairman will considerably ease the pressure on him as well as ensure continuity of direction of the board’s activities during his frequent absences overseas.
The bill makes provision for the deputy chairman to be appointed by the Minister from among the sitting members pf the board and it is proposed therefore to appoint Mr. J. P. Norton, O.B.E., to the position at the appropriate time. Mr. Norton, who is the representative on the board of cooperative butter and cheese factories of Western Australia, has had a long and distinguished association with the dairy industry and has the necessary knowledge and qualifications for the position. He is a former president of the Australian Dairy Farmers Federation and later served as a member of the Dairy Industry Investigation Committee from its inception in 1953 until it was disbanded in 1962. He was honoured some time ago by Her Majesty the Queen for his valuable services to the dairy industry.
The remaining provisions in the bill relate to function’s of the deputy chairman in calling and presiding over meetings of lbc board and the executive committee of the board when the chairman is absent overseas on the business of the board or has been granted leave of absence by the board.
The amendments to the prinicpal act provided in this bill will require complementary amendments also to the Dairy Produce Research and Sales Promotion Act 1958 and a separate bill has been drafted for this purpose. I commend the bill lo honorable senators.
Debate (on motion by Senator Kennelly) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Wade) read a first time.
.- I move-.
That the bill be now read a second time.
As I mentioned in my second-reading speech on the Dairy Produce Export Control Bill, the Government has been requested by the Australian Dairy Produce Board to abolish by legislation, the position of the member of the board responsible for its research and sales promotion programmes. The purpose of this bill, which is consequential upon the Dairy Produce Export Control Bill, is to amend the Dairy Produce Research and Sales Promotion Act accordingly. I commend the bill to the Senate.
Debate (on motion by Senator Kennelly) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Henty) read a first time.
. -I move -
That the bill be now read a secondtime.
The bill now before the Senate will give effect to the decision of the Government to pay a bounty of £3 per ton on superphosphate manufactured in Australia and sold for use in Australia during the three years which began on the 14th August, 1963. Honorable senators will recall this bounty was announced by the Treasurer (Mr. Harold Holt) in his Budget speech. Superphosphate, which represents over 90 per cent, of all artificial fertilizers used in primary production in Australia, has played a major part in the development of our primary industries because Australian soils generally are deficient in phosphorus. Superphosphate has made our great Australian wheat industry possible, while the remarkable expansion in pasture improvement throughout southern Australia in recent years’ has also been due to this fertilizer.
The bounty of £3 per ton will encourage the most economic use of our agricultural resources and will also act as a. stimulus to further expansion in pasture improvement. The cost of superphosphate has a marked effect on the budget of most primary producers and the bounty of £3. per ton, representing, as it does, a reduction of as much as one-third in the ex-works price of bulk superphosphate in some States, will have a very appreciable effect in reducing these costs.
Superphosphate is produced by the reaction of sulphuric and/or phosphoric acid on phosphate rock which, in the main, is imported from three small islands - Nauru, Ocean and Christmas Islands. Superphosphate is produced from Cairns in north Queensland to Geraldton in Western Australia in twenty factories owned by fourteen companies. The 21st factory is now being erected at Esperance, Western Australia. During 1962-63, more than 2,850,000 tons of superphosphate valued at approximately £30,000,000 were produced in Australia.
The fertilizer value of superphosphate is measured by its soluble content of phosphorus . pentoxide, usually expressed at P2O5. The bounty will be based on this P2O5 content. There has been only one grade of superphosphate produced in Australia, until now; this is known as standard or single superphosphate containing 22 per cent.P2O5 of which 20 per cent.P2O5 is in the form of water and ammonium citrate soluble phosphorus, pentoxide The Government’s original announcement covered this grade of superphosphate, The percentage of solubleP2O5 content of superphosphate varies slightly as between manufacturing plants according to’ the source and quality of the phosphate rock used in manufacture. In these circumstances, 20 per cent., plus or minus 0.5 per cent., has been fixed as the solubleP2O5 content of superphosphate to qualify for the full bounty as £3 per ton.
It is expected that the bounty will cause an increase in the demand for superphosphate, in which case it may be necessary to import phosphate rock from other than our normal sources of supply. Such phosphate rock is generally of a lower grade than that normally used in Australia and the use of such material in the manufacture of superphosphate may result in a reduction in the presentP2O5 content of single standard superphosphate sold in Australia. The bill therefore provides for the Minister to vary the minimum solubleP2O5 content to qualify for the full bounty of £3 per ton.
For some years, new types of superphosphate, including double superphosphate and triple superphosphate, have been available overseas. These superphosphates contain 40 per cent.P2O5 and 50 per cent. P2O5 respectively, compared with 20 per cent. P-05 in standard superphosphate. The advantages of these higher analysis superphosphates are a saving in transport and distribution costs resulting in a lower cost of phosphatic fertilizers on the ground. They also make available to the consumer a greater range of fertilizer mixtures from which he may choose. A new plant at Port Kembla, New South Wales, erected by Australian Fertilisers Limited at a cost of £1,230,000, will next month commence to manufacture these new superphosphates for the first time in Australia. ‘ Imperial Chemical Industries of Australia arid New Zealand Limited have also announced plans’ to spend a similar amount’ of money on the same type of plant in ‘Victoria; this will come into operation in about’ eighteen’ months’ time. ‘
The Government has now decided that these enriched forms of superphosphate will attract bounty pro rata according to their percentage of soluble P2Os as compared with standard superphosphate. Thus, double superphosphate will attract a’ bounty of £6 per ton while triple superphosphate will attract a bounty of £7 10s.” per ton. It is not expected that the introduction of these new concentrated ‘superphosphates will lead to any increase in the annual ‘.amount of bounty payable under the bill. A grazier who has used 100 tons’ of single super-1 phosphate on his pastures annually may, in the future, spread 50 tons of double - superphosphate to obtain the same rate of application of phosphate. Tn either case he would be entitled to bounty of £300:
As an alternative to the present practice of mixing superphosphate with sulphate of ammonia, the new plants now being installed will enable ammonia to be added at the appropriate stage of manufacture of superphosphate to provide cither ammoniated superphosphate or ammonium phosphate. These new ammonium-based fertilizers will not only reduce transport costs but also reduce the acidifying action of an equivalent mixture containing sulphate of ammonia and superphosphate.
As honorable senators will know, a field in which Australia has led the world has been in the addition of trace and other elements to superphosphate; for example, superphosphate with cobalt added, or sulphur-fortified superphosphate. On all these new products and mixtures, bounty ‘ Will be paid on the phosphate content’ in accordance with the amount of soluble by weight contained therein related to ‘ the basic payment of £3 per ton for ‘ standard superphosphate.
Since the announcement of the bounty, the Government lias received representations for the bounty to be extended to other fertilizer products such as fertilizers made from waste materials which contain some phosphate, the principal one being blood and bone meal. This fertilizer fills a rather different need from that of superphosphate”; it. is used mainly for horticultural purposes . arid also’ contains nitrogen. There are also some inorganic materials Which contain various percentages of phosphate and are’ used for’ particular purposes. The usage of these materials’ in comparison with superphosphate is very small indeed. Compared with superphosphate, these materials are ‘ much less rich in readily available phosphate and will hot be eligible for bounty.
Representations have also been made to include within the provisions of the bounty, scheme,, finely ground or calcined .rock, phosphate, when these products are used, for fertilizer purposes. However, although research carried out by the Commonwealth Scientific and Industrial Research Organization and State Departments of Agriculture have indicated the possibility of these, pro-, ducts being of value on certain soils, a stage in the investigations has not been reached when authoritative advice can be given to the User that they provide an economic and’ efficient source of phosphate. The Government has decided, for these reasons, that such products will not be bountiable at this point of time.
As honorable senators are aware, it has been decided to pay the bounty as from the 14th August, 1963, through superphosphate manufacturers. The convenience and advantages of this method were clearly demonstrated, in an earlier superphosphate subsidy scheme. Since the announcement of the bounty, discussions have taken place between Government officers and superphosphate manufacturers, who have been most co-operative. The full reduction in the price of superphosphate, resulting from the bounty, is already being passed on to users by most manufacturers in anticipation of the enactment of this legislation. The problem of stocks in . the pipe-line was appreciated by the Government and raised the question of the point of sale. .It was decided that ownership of stocks be determined by accepting that a sale has been completed when the property in the goods passed from the manufacturer. .
There were four categories of superphosphate stocks which were considered - stocks, the property of the manufacturer; stocks owned by distributors or retailers; stocks possessed by mixers, either as superphosphate or incoporated in mixtures; and stocks in the hands of consumers, lt is the invariable rule under Commonwealth taxing laws, for example, sales tax and duties of Customs and Excise, that new or amended rates of tax apply as from the commencement of business on the day after the announcement of the change is made. For example, goods which have left the hands of wholesalers are not affected by any change in sales tax. In the case of superphosphate it was necessary to apply the same principle. Superphosphate stocks, whether held as such or as part of a fertilizer mixture, which were owned by superphosphate manufacturers offered no problem as they will attract bounty under the bill when used by the manufacturer or sold by him for use in Australia. Stocks of superphosphate were held by most distributors and retailers at the commencing date of the bounty. These stocks will not attract bounty.
The preparation and sale of mixed fertilizers containing superphosphate is undertaken by a number of companies other than superphosphate manufacturers. The benefit of. the bounty cannot be extended to their stocks of superphosphate without giving similar treatment to distributors and retailers. Users, who held stocks at the date of commencement of the bounty scheme, particularly those who may have been induced by industry to co-operate in early delivery schemes, have also made representations to have the benefit of bounty applied to their stocks. However, such stocks cannot bc given any special concession as the principle of Government taxing laws must be applied here also. To pay bounty on these stocks would be unfair to those users who had purchased and1 spread their superphosphate earlier in the season. In addition there would be tremendous administrative difficulties in tracing such transactions. There would always be some one adversely affected by being just outside the point of operation of the legislation, whatever the point of time or the point of production or distribution at which the scheme becomes effective.
This bounty will make a contribution to users of superphosphate valued at approximately £7,000,000 in 1963-64 and £9,000,000 in a full year. 1 suggest to honorable senators that this measure will do much for our national weil-being by giving the greatest possible encouragement to, and being a most effective means of boosting productivity and expansion of, our great rural industries. I commend the bill to honorable senators.
Debate (on motion by Senator Ridley) adjourned.
Senate adjourned at 11.25 p.m.
Cite as: Australia, Senate, Debates, 28 October 1963, viewed 22 October 2017, <http://historichansard.net/senate/1963/19631028_senate_24_s24/>.