Senate
23 April 1964

25th Parliament · 1st Session

  1. Senate
  2. 25th Parliament
  3. 1964

The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 1 1 a.m., and read prayers.

page 857

QUESTION

OIL SEARCH

Senator CORMACK:
VICTORIA

– I preface with two comments a question which I direct to the Leader of the Government and Minister for National Development. First, the question may involve policy matters and, therefore, the Minister may be reluctant to answer it. Secondly, the question seems to involve constitutional problems. My question is: In view of the statement made some time ago in this chamber toy the Leader of the Government to the effect that the Australian Water Resources Council was examining the problem of water basins which cross State boundaries, would he care to inform me whether or not some study has been made of possible oil fields : that may lie across State boundaries, and the measures that would need to be applied to enable reasonable control over them? I ask the question in view of the possible development of oil fields in the corner of Queensland, Western Australia and South Australia. Is the boundary between South Australia and New South Wales in dispute, as was the boundary between Victoria and South Australia, which was eventually settled by the payment of some £250,000 in the early 1930’s?

Senator Sir WILLIAM SPOONER:

– I shall deal, first, with the subject of oil. “The sedimentary basins in which oil is found are no respecters of State boundaries. They run across areas in more than one State. The oil search programme - that is, the air surveys and the geological surveys carried out by my department and by the oil companies - also cover geological areas rather than State areas. I have never heard mention previously of the point raised by Senator Cormack. All of the tenements are in the hands of State Governments. I am now restricting myself to the land mass -of Australia. There have been some disputes concerning off-shore drilling. The Northern Territory and Western Australia have each purported to give licences covering the same area, and there has been difficulty in defining where the off-shore area ends as between States. However, so far as the land mass is concerned, I am sure that the State Governments in the issue of tenements restrict the tenements to areas in their States. If an oil company is searching in a particular geological area which extends over the boundary line of two States, I am sure that if I investigated the matter I would find that that company had two tenements, one from each of the two States. I am sorry that I cannot answer the question about the dispute on boundaries now, but when I get an answer to it, that answer will make a further addition to the sum total of my knowledge.

page 857

QUESTION

ARMY TANKS

Senator BROWN:
QUEENSLAND

– I desire to ask a few questions of the Minister representing the Minister for the Army. I again refer to the tanks which were the principals in the farce at Tin Can Bay recently. Senator Sir William Spooner’s replies to my questions were mere tory soothing syrup - generalizations and not specific. Possibly he has to reply to too many questions and is developing a form of political obscurantism, which leaves honorable senators in a state of obfuscation.

The PRESIDENT:

– Order! Senator Brown, will you ask your questions? Your observations are far too long altogether.

Senator BROWN:

– I think it is interesting to make observations, if only to myself. After 32 years in the Senate one has to amuse himself occasionally. I have about eight questions. They are: How many 50-ton Centurion tanks are now in commission? Are they not all obsolete? Are they not too heavy to be transported by air? Do they still use petrol, which makes them death traps, or have they been converted and fitted with diesel engines? Has the Army any smaller tanks, such as the 8.7-ton Swiss tanks which can be readily transported by air? Does not the smaller Swiss tank carry a 90 millimetre gun whilst our own 50-ton Centurion tank carries a gun of 76.2 millimetres calibre? Is it true that the Swiss have a tank in the same weight range as the Centurion tank that mounts, not one but 20 rocket tubes, each of 145 millimetres calibre? Will the Minister furnish the Senate with a full comparative report concerning the tank position?

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

– In answer to the honorable senator’s questions, let me say that I am glad to know that he realizes that his observations are of interest only to himself. That is one admission that I am glad to hear.

Senator Brown:

– These questions are important from Australia’s point of view. You are a stupid Minister to talk like that.

The PRESIDENT:

– Order !

Senator Brown:

– This is important.

The PRESIDENT:

– Order !

Senator Brown:

– You know it, and the Government should know it.

The PRESIDENT:

– Order! Senator Brown, you will remain silent.

Senator Brown:

– I will remain silent.

Senator HENTY:

– In the circumstances, I have no intention of answering the questions.

page 858

QUESTION

SECURITY SERVICE

Senator BRANSON:
WESTERN AUSTRALIA

– My question is directed to the Minister representing the Attorney-General. Is the Minister aware that on Saturday night, 18th April, in the nation-wide television programme “ Four Corners “ the subject of fascism was discussed? ls he also aware that in answer to a question by Dr. Malcolm Mackay, the Government member for Evans, Senator Cohen, an Opposition senator, strongly, and even vehemently advocated an intensification of the activities of the Australian security service? Will the Minister convey this information to the Prime Minister in order that he may intensify the operations of the security service, as advocated by Senator Cohen?

Senator GORTON:
Minister for Works · VICTORIA · LP

– -<I did not see the television programme referred to, but 1 am informed that it took place.

Senator Brown:

– It was a very good presentation.

Senator GORTON:

– No doubt it was. I have been informed that it took place and that Senator Cohen expressed the views that have been attributed to him by Senator Branson. I shall make those views known to the Attorney-General and the Prime Minister to see whether, in their view, there is a need to augment the security service so that its functions can be better carried out. J assure the Senate that this Government, equally with Senator Cohen, believes that it is necessary to be fully informed of the activities of subversive groups inside this country, whether they are Fascist groups or Communist groups, because in either case the activities pose the same threat of ultimate tyranny and of an alien type of government which this country has never had and should never have. It is important that activity of this kind be stopped, or at least, that all the information possible about it is made known to the Government in the case of communism, fascism or any other form of totalitarianism. I shall endeavour to see that the Government does have full information placed before it, so that the necessary security service to combat theactivities of such groups may be provided.

page 858

QUESTION

DEFENCE

Senator TANGNEY:
WESTERN AUSTRALIA

– I desire to ask a. question of the Minister representing theMinister for Defence. Has the attention of the Minister been directed to the statement, of Rear-Admiral Oldham, formerly Flag Officer Commanding East Australia Area,, that Australia’s Navy was inadequate, theArmy immovable and the Air Forceimpotent? In the light of the recent firm commitments of Australia to the defence of Malaysia, will the Minister consider making equally firm commitments to the defence of Australia in order to convincethe people of the adequacy of our defences?’

Senator Sir WILLIAM SPOONER:

– I read in this morning’s newspaper a statement attributed to Rear-Admiral Oldham,, who has now retired. I read it as an expression of a retired ex-service officer whohad had a very distinguished career, whohad a great love for his profession and whowanted to see the defence services greater than they are at the present time. It is not. a statement that Rear-Admiral Oldham would have made had he been a servingofficer. He has been retired for a couple of years. All service officers want to seegreater defence services. Service in the defences forces is their profession. The Government has the responsibility to allocate national resources, and as I have said on other occasions in the Senate, every onewould like to see greater resources. Wehave to match all the demands on the economy to ensure that our resources are adequate to meet our commitments under the various treaties into which we have entered. Whether we will extend the- treaties in other directions, I cannot say in answer to a question without notice. I think that the steps that are taken in that direction are better discussed in private than in public.

page 859

QUESTION

KANGAROO SKIN PRODUCTS

page 859

QUESTION

CENSORSHIP

Senator CAVANAGH:
SOUTH AUSTRALIA

– I ask the Minister for Customs and Excise whether his department has prohibited the distribution of the book “A.B.Z. of Love”, which is a book on marriage guidance written by two Danish authors named Sten and Inge Haegler. Is not the suitability of a book on sexual instruction a matter for consideration by experts with medical qualifications? Are there any such experts on the Literature Censorship Board, which advises the Minister?

Senator HENTY:
LP

– A book such as the one referred to by the honorable senator is referred to the Director-General of Health for advice. That procedure was followed in this case.

page 859

QUESTION

INVESTMENT IN LAND DEVELOPMENT

Senator ANDERSON:
NEW SOUTH WALES

– Has the Leader of the Government in the Senate seen a report in this morning’s press that the president of the Stock and Station Agents Association of New South Wales has launched an attack upon the New South Wales Government for hindering investment in underdeveloped land? I ask whether the Minister has read the following statement which has been attributed to the gentleman in question -

The Commonwealth Government provides special tax concessions to encourage people to invest in land and in the plant, equipment and fertilizers for its development.

The State Government impedes, to the point of impossibility, such investment by many people with the necessary capital to acquire and improve underdeveloped land.

Has the Minister noted that in New South Wales the difficulty relates apparently to land title deficiencies? In view of the tremendous efforts being made by this Government in the development of Australia, and the apparent limiting factor caused by the New South Wales Government, will the Minister make representations to the State Government to investigate the problem so that the tremendous forward work being done in national development can be pursued without interruption?

Senator Sir WILLIAM SPOONER:

– I have not seen the newspaper report, but I am not unfamiliar with the problem. Basically, of course, the difference between the Commonwealth Government and the New South Wales Government is that the Commonwealth Government has a liberal approach to these problems. It commences by asking whether the problems can be surmounted by private investment and by private enterprise. If the work cannot be dome by private investment and private enterprise then it is time to consider whether there should be governmental activity. I do not think it is unfair to say that the first approach of the New South Wales Government - ‘being a Labour Government - is to ask whether the job can be done by governments. The New South Wales Government would like to have it done by governments. If it cannot be done by governments, only then does private investment and private enterprise get its opportunity. That sort of policy must react by retarding land development because there is no greater individualist than a man on a farming property. He wants as little government control and government interference and as few government arrangements as possible. This policy of the New South Wales Government, unfortunately, is one of the reasons why that State is not making the progress that is being made by other States of the Commonwealth in this and in other directions.

page 860

QUESTION

PENSIONERS TELEPHONE RENTALS

Senator SANDFORD:
VICTORIA

– My question is directed to the Minister representing the Postmaster-General. Before the forthcoming Budget is considered will he recommend to the Postmaster-General that he give favorable consideration to granting a concession in telephone rentals payable by age and invalid pensioners? I point out to the Minister - as he is no doubt aware himself - that many thousands of these people find a telephone service absolutely essential because of their age and the various disabilities from which they suffer. At present they cannot afford to pay the very high telephone rental out of the pensions on which they have to exist. Will the Minister refer the request to the Postmaster-General so that he can give the matter some consideration?

Senator WADE:
Minister for Health · VICTORIA · CP

– I shall bring the honorable senator’s representation to’ the notice of the Postmaster-General. However, I think it could be argued that the matter might not necessarily be confined to the attention of the Postmaster-General; it might well come within the scope of the Minister for Social Services. Having said that, I repeat that I will bring this matter to the notice of my colleague. I am sure it will be considered when the Budget discussions are being held.

page 860

QUESTION

MENTAL DISORDERS IN WOMEN

Senator WEDGWOOD:
VICTORIA

– Has the attention of the Minister for Health been directed to a report to the International Federation of Business and Professional Women by Dr. Irene Bernard, chairman of the federation’s sub-committee on the World Health Organization, that women are more prone to mental disorders than are men? In the circumstances, can the Minister inform the Senate whether the Commonwealth Department of Health has undertaken, or is likely to undertake, any research into this aspect of mental health?

Senator WADE:
CP

– As far as I know the Department of Health has not undertaken any research into this matter. For my own part, I would be a little loath at this stage even to suggest that women were more prone to mental disorders than men. But far be it from me to challenge the opinion of such a famous person as the honorable senator quoted. I believe that the average woman would maintain most forcefully that her mental stability was equal to that of any male. At this stage, I cannot see any justification for instigating research into this field. If statistics can be produced to indicate there is a case, I will be pleased to look into it.

page 860

QUESTION

RESTRICTIVE TRADE PRACTICES

Senator ORMONDE:
NEW SOUTH WALES

– I direct a question to the Leader of the Government in the Senate. Now that Sir Garfield Barwick has been appointed to the position of Chief Justice of the High Court of Australia, what happens to the Barwick proposals to control monopolies?

Senator Sir WILLIAM SPOONER:

– I do not think that we in this Senate should discuss an appointment of that calibre. I would not like to be regarded as making any comment upon it at all. The time at which the Chief Justice of the High Court of Australia is appointed, whoever he may be, may be the time to go into this activity.

page 861

QUESTION

TELEVISION

Senator COHEN:
VICTORIA

– My question is directed to the Minister representing the PostmasterGeneral. Did the former PostmasterGeneral, Mr. Davidson, in a statement on 16th August, 1963, say that it was the long-standing policy of the Government, from which it had no intention of departing, that no person or company should be in a position to control more than one metropolitan and one country television licence? Did the former Minister further say that the Government was anxious that television, as a powerful means of mass communication, should not fall into too few hands, and that the Government had decided upon a detailed review of the shareholdings and voting arrangements of the commercial television stations with a view to considering whether any and what amendments should be made to the existing legislation in order to ensure that the policies of the Government would be implemented? In view of the present Minister’s decision to grant the third television licence in Brisbane to the company in which the Ansett companies have acquired a 48.9 per cent, interest and his finding that the recent transactions are not in contravention of the present act, may we expect an early report on the result of the Government’s review?

Senator WADE:
CP

– The honorable senator has asked me to confirm a quotation made by a former Postmaster-General on 16th August, 1963. Quite frankly, I could not accept responsibility for confirming or denying the accuracy of the quotation. I think the honorable senator is somewhat confused when he says that the Government’s policy is that no individual or body shall control more than one metropolitan or one country television station. My understanding of the Governments’ policy is that no individual or body shall control more than two television stations.

Tn this regard, reference has been made to the shareholding activities of Mr. Ansett, with particular reference to the Brisbane station. For the benefit of the honorable senator, I will quote what the PostmasterGeneral has said in this regard -

At present, Ansett Transport Industries Limited control only one station - ATV, Channel 0 in Melbournethrough its wholly-owned subsidiary Austarama Television Proprietary Limited. Its only other interests are a S per cent, shareholding in South Australian Telecasters Limited (the third Adelaide commercial television station), and a 4.5 per cent, shareholding in Swan Television Limited, the second Perth station. The transaction therefore is not in contravention of the act.

The honorable senator has asked further when the Government will declare its attitude on policy matters. I think I am justified in saying to the honorable senator that matters in which Government policy are involved are matters for the Government and not matters for discussion at question time.

page 861

QUESTION

MONOPOLIES AND RESTRICTIVE TRADE PRACTICES

Senator BISHOP:
SOUTH AUSTRALIA

– I wish to ask a quesquestion of the Minister representing the Attorney-General. It relates to the Government’s announced policy to legislate in respect of restrictive trade practices. Does the Minister consider that trends to monopolization continue in Australia and that recent moves in the biscuit industry reveal a development which runs counter to the general principles on this subject announced by the Prime Minister? Does the Minister agree that an inquiry into such trends, and particularly into current moves in the biscuit industry, could be of great value at this stage of the proposed legislation? Will the Government consider setting up such an inquiry?

Senator GORTON:
LP

– The legislation to which the honorable senator refers is, to the best of my knowledge, designed to prevent restrictive trade practices, that is, to prevent whole sections of an industry banding together in order to fix certain conditions as to prices or sales and denying a particular trader any supplies if he does not conform with what is generally agreed in the trade.

Senator Hannan:

– When that is detrimental to the public interest.

Senator GORTON:

– Yes, when that is done to the detriment of the public interest. That is the broad field in which the proposed restrictive trade practices legislation will operate. I do not think the matters referred to by the honorable senator fall into that field. Therefore, they would not be covered by the legislation unless they led to the sort of action which the legislation is designed to stop. The legislation is designed to stop action to the public detriment.

page 862

QUESTION

AVIATION

Senator TANGNEY:

– I direct a question to the Minister for Civil Aviation. Is he aware of the remarkable feats of two American aviatrixes, one of whom has already completed a solo trip around the world in a single-engined plane and the other of whom is in the process of completing an even more hazardous journey, following the route taken by the late Amelia Earhart? When the latter journey has been completed, perhaps when the Senate is in recess next week, will he, as a gesture of goodwill to America and of admiration of these gallant women, forward them a letter of congratulation from the Commonwealth of Australia?

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

– I will give close consideration to the suggestion made by the honorable senator. It is just possible that I may have the opportunity of improving on her suggestion. I will be in the United States of America within the next two or three weeks on civil aviation business and will have an opportunity to see both these aviatrixes.

page 862

QUESTION

BOOK CENSORSHIP

Senator CAVANAGH:

– I ask the

Minister for Customs and Excise a question arising from an answer to a question that I asked a few minutes ago. Does the Department of Health advise the Department of Customs and Excise, when books on marriage guidance are referred to it, on the value of the books from the aspect of health or on their pornographic nature? Was the book “A.B.Z. of Love” prohibited because it was detrimental for health reasons or because it was considered pornographic?

Senator HENTY:
LP

– I understand that the Department of Health advised on the health aspect of the book. Speaking from memory, I think the recommendation was that the book should not be made available for general release but could be made available to medical men, professional men or ministers of religion.

page 862

QUESTION

HEALTH

Senator MCCLELLAND:
NEW SOUTH WALES

– J. direct a question to the Minister for Health. Will the Minister be visiting Tasmania in the near future to inform the people of Tasmania, among other things, on the Government’s policy on health? If so, will the Minister be approaching the chairman of the Australian Broadcasting Commission to allot him time on the national television station in Hobart for this purpose, among others?

Senator WADE:
CP

– The question cornfounds me entirely and I have no idea of what lies behind it. It is not my intention to visit Tasmania in the near future. I should like the honorable senator to know that when the Department of Health has information of interest to the public of Australia, time is always provided for its dissemination. The information we want to make available to the people on health matters is accepted by all broadcasting stations and newspapers and is transmitted to the people in the interests of national health. If there is any innuendo in the question, I resent it greatly.

page 862

QUESTION

WOOL

Senator COOKE:
through Senator O’Byrne

asked the Minister representing the Minister for Primary Industry, upon notice -

  1. Will the Minister comment upon a report appearing in the Melbourne “ Age “ of 14th April, 1964, that Mr. Bolte has accused the Australian Wool Board of making behind-the-scene moves to close down small wool-selling centres in Australia and of sabotaging the Australian wool industry?
  2. Has the Australian Wool Board any intention of closing down wool-selling centres in Victoria or any other State, and has it the power to close them down?
  3. Is it a fact that many wool-selling centres were established as a result of strong representations by growers, and then only by the direction of a Labour government in the interests of decentralisation and in the face of strong organized resistance by wool buyers?
  4. Will the Minister give an assurance that, in the interests of wool-growers, no centres for the selling of wool will be closed down?
Senator WADE:
CP

– The Minister for Primary Industry has supplied the following answers: - 1 and 2. 1 have read the press report referred to by the honorable senator. The position is that at the express wish of wool-growers, the Australian Wool Board is at present investigating all aspects of wool marketing. As part of its investigation, the Wool Board is examining the adequacy and economics of present wool selling centres. However, I must emphasise that under the Wool Industry Act 1962, the board has no power to close any wool selling centres. Its function is purely investigatory.

The findings and recommendations of the board must be submitted to the Australian Wool Industry Conference, which will determine the attitude of the woolgrowing industry to the Board’s proposals. It will then be a matter for the conference to negotiate with appropriate organisations and authorities regarding the implementation of any of the board’s proposals which it may favour. Again, I should like to stress that like the Australian Wool Board, the conference has no power to close any selling centres.

  1. The circumstances surrounding the establishment of country wool selling centres differed in certain respects in the various centres and accordingly, it is not possible to make generalisations.
  2. While the Commonwealth Government is naturally interested in matters relating to the wool industry, the question of the location of wool selling centres falls outside its jurisdiction and is fundamentally the concern of the Slate governments.

page 863

QUESTION

SOUTH-EAST ASIA TREATY ORGANIZATION

(Question No. 107.)

Senator COHEN:

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

  1. What has been the total expenditure of the South-East Asia Treaty Organization since its establishment?
  2. What has been the total cost of membership of the organization to each of the member nations?
Senator GORTON:
LP

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

  1. Although the Manila Treaty was signed in September, 1954, the South-East Asia Treaty Organization secretariat was not established until 1956. Since that date there have been two budgets each year, one for the Civil Organization and one for the Military Planning Office. Because of the dale on which the secretariat was set up the budget for the year 1956-57 was for a period of nine months and that for 1957-58 for fifteen months. In subsequent years all budgets have been for the twelve-month period commencing 1st July. Over this whole period from the year 1956-57 to 1963-64 the estimated budgets approved for the Civil Organization have totalled 124,000 United States dollars. For the same period the Military Planning Office budgets have totalled United Stales dollars 806,000.
  2. For the first two years budgetary costs were shared equally between the eight members. However, commencing in the year 1958-59 assessments have been made on a proportionate basis related to the members’ capacity to pay and their degree of involvement in the treaty area. The proportions arc: United States 25 per cent.; Britain, 16 per cent.; Australia and France each 134 per cent.; and New Zealand, Pakistan, the Philippines and Thailand each 8 per cent. On this basis the totals paid for all members towards the organization’s civil and military budgets respectively for the period 1956-57 to 1963-64 are approximately -

In addition to budgetary contributions all member States have incurred expenditure as a result of their participation in Seato’s combined operations, but this is covered, as in Australia’s case, by national defence votes. So far as Australia is concerned the principal expenditure resulting directly from our membership of Seato is the cost of the Australian Seato aid programme. Since the Seato aid programme was approved in 1956 total expenditure to 30th June, 1963, has been £3,771,000 Australian. It is expected that a further £1,000,000 Australian will be spent in the year 1963-64.

page 863

QUESTION

CIVIL AVIATION

(Question No. 118.)

Senator MURPHY:
NEW SOUTH WALES

asked the Minister for Civil Aviation, upon notice -

  1. In each of the last five years (a) how many accidents occurred, involving Australian civil aircraft, in which persons were killed or injured, (b) how many persons were killed and how many injured, and (c) what was the ratio of the number of accidents involving death or injury to the number of civil aircraft on the Australian register?
  2. In respect of (a) light aircraft and (b) other aircraft, what was the average flying time for each accident involving death or injury in Australia?
Senator PALTRIDGE:
LP

– It is assumed that the honorable senators question is intended to refer to all aircraft and all classes of operation, in which case the following answers are applicable: -

1 -

1959- (a) 30; (b) 13F, 15S, 11M; (c) 1 to 43.3. 1960- (a) 40; (b) 52F, 25S, 36M; (c) 1 to 36.7. 1961- (a) 42; (b) 49F, 6S, 24M; (c) 1 to 36.8. 1962- (a) 34; (b) 13F, 12S, 27M; (c) 1 to 49.8. 1963- (a) 35; (b) 24F, 10S.18M: (c)1 to 53.2.

Under sub-question (b) the letters F. S and M refer respectively to fatalities, persons seriously injured and persons suffering minor injuries. The figures relate to all persons, that is, passengers and crew members.

For passenger-carrying regular public transport services, it is a matter of record that there have been only two fatal accidents, on Australian services, since 1953 and during this period some 26,000,000 passengers have been carried, 16,000,000,000 passenger miles have been flown and the aircraft employed on these services have flown 3,000,000 hours. This safety record is acknowledged to be outstanding by world standards.

Maintained records do not readily permit the provision of figures related specifically to “light aircraft and to other aircraft”. For practical purposes, however, regular public transport services may be taken as representative of heavy aircraft and all other operations as being representative of light aircraft. In relation to these sub-divisions the required details are as follows: - 1959 - Regular public transport services, no accidents, other operation 9283 hours. 1960 - Regular public transport services, 91,470 hours, other operation 9337 hours. 1961 - Regular public transport services, 138,538 hours, other operation 9074 hours. 1962 - Regular public transport services, 130,017 hours, other operation 13,607 hours. 1963 - Regular public transport services, no accidents.

Hours flown in “ other operations “ during 1963 are not yet available but the hours per accident would approximate 14,500.

page 864

EXPENDITURE FROM CONSOLIDATED REVENUE FUND

Report of Public Accounts Committee

Senator WEDGWOOD:
Victoria

– I present the following report of the Public Accounts Committee: -

Sixty-fourth Report - Expenditure from the Consolidated Revenue Fund for the Year 1962-63.

The report presents the results of the committee’s investigations into the accuracy of departmental estimating for the year ended 30th June, 1963. Public hearings were held in connexion with a large number of votes, and the committee’s comments appear at the conclusion of the report on each separate vote investigated by the committee. In addition to the votes reported on in detail, the committee lists also a relatively large number of votes to which consideration was given by it and in relation to which departmental explanations have been obtained. The committee feels that in recent years the majority of departments have given greater attention to the preparation of their estimates and, as a result, a substantial improvement is now evident. Instances of unsatisfactory estimating have been commented on, where appropriate, in chapter 2 of the report. I move -

That the paper be printed.

Question resolved in the affirmative.

page 864

LEAVE OF ABSENCE

Motion (by Senator Sir William Spooner) - by leave - agreed to -

That Senator Vincent be granted leave of absence for one month on account of ill health.

page 864

SPECIAL ADJOURNMENT

Motion (by Senator Sir William Spooner) agreed to -

That the Senate, at its rising, adjourn till Tuesday, 5th May, at 3 p.m.

page 864

FOREIGN AFFAIRS COMMITTEE

Message received from the House of Representatives requesting the concurrence of the Senate in the appointment of a Joint Committee on Foreign Affairs in the following terms: -

That a joint committee be appointed to consider foreign affairs generally and to report to the Minister for External Affairs upon such matters as are referred to it by the Minister.

That thirteen members of the House of Representatives be appointed to serve on such committee.

That the Minister for External Affairs shall make available to the committee information within such categories or on such conditions as he may consider desirable.

That, notwithstanding anything contained in the Standing Orders -

the persons appointed for the lime being to serve on the committee shall constitute the committee notwithstanding any failure by the Senate or the House of Representatives to appoint the full number of senators or members referred to in this resolution;

the members of the committee shall hold office as a joint committee until the House of Representatives expires by dissolution or effluxion of time;

the committee shall have power to appoint sub-committees consisting of four or more of its members; and to refer to any such sub-committees any of the matters which the committee is empowered to consider;

the committee or any sub-committee shall have power to adjourn from place to place and to sit during any recess or adjournment of the Parliament and during the sittings of either House of the Parliament;

the committee and its sub-committees shall sit in camera and their proceedings shall be secret unless the Minister at the request of the committee otherwise directs;

(i) one third of the number of members appointed to the committee for the time being shall constitute a quorum of the committee, save that where the number of members is not divisible by three without remainder the quorum shall be the number next higher than onethird of the number of members for the time being;

three members of a sub-committee shall constitute a quorum of that sub-committee;

(i) on every occasion when the committee reports to the Minister on any matter pursuant to his request the committee shall inform the Parliament of the fact that it has so reported, otherwise the proceedings of the committee shall not be reported to either House;

if members of the Opposition are serving on the committee, the Minister shall forward a copy of any such report as he has requested to the Leader of the Opposition for his confidential information;

the committee may communicate with the Minister but all communications with the Minister and the fact of any such communication shall be confidential to the committee and the Minister;

the committee shall have power to invite persons to give evidence before the committee;

with the consent of the Minister for External Affairs, the committee shall have power to call for official papers or records;

all written and oral evidence submitted to or received by the committee in camera shall be confidential to the committee and the Minister;

the chairman of the committee, at the request of any member who dissents from any of the conclusions of the committee expressed in any report or communication submitted or made to the Minister, shall in the report or communication record the fact of such member’s dissent and append to the report or communication a summary, agreed upon between the chairman and the member, of the member’s reasons for dissent;

the Senate be asked to appoint seven of its members to serve on such committee.

That the committee have power to consider the minutes of evidence and records of the Joint Committee on Foreign Affairs appointed in the previous Parliament relating to any matter on which that committee had not completed its consideration.

That a message be sent to the Senate requesting its concurrence.

Motion (by Senator Gorton) - by leave - agreed to -

That the Senate concurs in the Resolution transmitted to the Senate by Message No. 28 of the House of Representatives relating to the appointment of a Joint Committee on Foreign Affairs.

That Senators Cole, Hannan, Maher, Scott and Vincent be members of such joint committee.

That, until such time as the two remaining vacancies for members of the Senate on this committee are filled by members of the Opposition, Senators Sir Walter Cooper and Laught be members of the committee.

That the foregoing resolutions be communicated to the House of Representatives by message.

page 865

WOOL INDUSTRY BILL 1964

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator WADE:
Minister for Health · Victoria · CP

.-I move-

That the bill be now read a second time.

The purpose of this bill is to amend the Wool Industry Act 1962 in three respects. First, it is proposed to insert into the act provisions which will give effect to the Government’s undertaking to contribute funds for expanded wool promotion activities. Secondly, amendments are proposed to those sections of the act which define the wool-growers’ contributions for promotion and research, as well as the Government’s research contribution. These amendments are necessary because, on the recommendation of the Australian Wool Industry Conference, it is proposed to change the levy which is paid by woolgrowers for promotion and research from a per-bale basis to a percentage of sale value. I shall introduce bills to give effect to this change immediately after this bill. Finally, it is proposed to give the Australian Wool Board borrowing rights to assist it to overcome temporary shortfalls in revenue.

In considering this bill, it is necessary to keep in mind that any action to assist the wool-growing industry amounts to safeguarding the well-being of this country. No other industry has contributed more to our ability to sustain the economic expansion which we have witnessed in recent years. Year after year wool earns for Australia more export income than any other commodity. In 1962-63 the export income from wool amounted to £407,000,000, which was 38 per cent, of our total merchandise exports. For the last half century, the proportion of our export income earned from wool has only once fallen below 30 per cent., and in many years it was around the 50 per cent, level. It is difficult to envisage any other commodity approaching wool in its importance in our export trade in the foreseeable future. Australia will have to continue to rely on on wool to provide much of the foreign exchange necessary to import basic materials and equipment for her current needs as well as further industrial growth. Some 95 per cent, of our wool is exported and the world demand for wool is therefore of crucial importance to Australia. It is essential that this demand should continue at a level which will return remunerative prices for the wool-grower and yield satisfactory export earnings. However, because of the increasing availability of synthetic fibres, Australia can ill afford to be complacent about the position of wool.

Since 1936, Australian wool-growers have levied themselves to defend wool’s share of the total textile market. From the initial rate of 6d. a bale, growers have stepped up their levy payments to 10s. Od. a bale. However, the stage has been reached where the increasing variety and growing production of synthetic fibres calls for substantially greater funds if a really effective promotion campaign is to be mounted to counter the present as well as future competition. It cannot be overlooked that prospects are for further intensification of this competition as patent rights for the major synthetic fibres are beginning to expire this year. In order to meet the challenge inherent in this situation, the International Wool Secretariat, which conducts wool promotion throughout the world on behalf of Australia, New Zealand and South Africa, drew up a plan for greatly expanded promotion activities. This plan calls for an annual expenditure of £A 16,250,000 over the next five years, of which Australia is expected to provide 64 per cent. The programme received full support of the three International Wool Secretariat partners and in June last year the Australian Wool Board asked wool-growers, through the Australian V/ool Industry Conference, to meet Australia’s share of the costs. This amounts to £10,400,000 annually, which is about four times more than the amount which wool-growers at present contribute through their promotion levy of 10s. Od. a bale. Faced with the prospect of such a substantial increase in their levy payments, wool-growers approached the Government, through the Wool Industry Conference, for assistance in finding the additional funds. The Government gave very careful consideration to their request and concluded that, in view of the key importance of wool to the Australian economy and the special circumstances with which the wool industry is confronted, this assistance should be granted.

The terms of the Government’s decision were announced by the Prime Minister (Sir Robert Menzies) in October last and provide ‘ that for a period of three years commencing on 1st July, 1964, the Government should match £1 for £1 the funds contributed by wool-growers for promotion in excess of their present contribution of 10s. Od. a bale. At the end of the threeyear period, the Government will review its assistance in the light of circumstances prevailing at that time. The decision also provided that the Australian Wool Board should’ submit each year a comprehensive report to the Government on the operation of the programme. This will enable the Government to keep the position under review and assess the effectiveness of the International Wool Secretariat wool promotion programme. The Government’s decision was welcomed by the Wool Industry Conference and wool-growers generally. At a meeting of the conference in January last, it was decided by a large majority, 40 to 10, that the levy paid by woolgrowers for wool promotion should bc increased to the extent necessary to provide, together with the Government contribution, a target sum of £11,000,000 per annum. As the present levy paid by wool-growers for promotion yields about £2,500,000, the additional amount to be provided by the wool-growers and the Government will be about £8,500,000 per annum. The Government’s offer to match any increase in the funds contributed by wool-growers means that its contribution will be half this amount, that is, about £4,250,000 per annum. The wool-growers’ increased annual contribution of about £6,750,000 includes a sum of about £600,000 for the financing of wool promotion in Australia on a scale similar to that of recent years, and for other activities of the Wool Board in this country.

In seeking the Government’s support for the financing of wool promotion, the Wool Industry Conference also suggested that wool-growers and the Government should increase their present contributions for wool research in order to avoid an unduly rapid depletion of the Wool Research Trust Fund. The Government considers that the reserves in the fund are adequate for the time being, but it will review the position after the Wool Board has had the opportunity of examining future financial requirements for research. Accordingly, the present contributions by wool-growers and the Government which are 2s.0d. a bale and 4s.0d. a bale respectively, making a total of 6s.0d. a bale, will continue unchanged. Provision to this effect is made in the bill.

The bill also defines the financial commitments of wool-growers and the Government in regard to wool promotion. With the proposed change in the method of collecting the levies paid by wool-growers for promotion and research, to which I referred earlier, these levies will be collected as a single composite percentage deduction from the sale value of wool. Accordingly, the bill defines the wool-growers’ contribution for promotion as the total amount collected by way of levy less an amount equivalent to 2s. a bale for research. In defining the Government’s contribution for promotion, the bill provides that the Government’s matching contribution will not apply to the present levy of 10s. a bale paid by woolgrowers for promotion. Accordingly, the Government’s contribution for promotion will be equal to the total amount collected from growers on a percentage of value basis less the 10s. a bale that growers pay at present for promotion and the 2s. a bale for research. Payments of the Government’s contribution for promotion will be made to the Wool Board on a monthly basis concurrently with the levy collections from wool-growers.

Provision is made in the bill to widen the borrowing powers of the Australian Wool Board, which are at present confined to borrowing moneys, with the approval of the Treasurer, for the activities of the Australian Wool Testing Authority. The extension of the borrowing powers is proposed in order to assist the Wool Board to overcome temporary shortfalls in revenue in revenue for wool promotion. The financial requirements of the International Wool Secretariat are greatest in the early part of the financial year, as it conducts its major promotion campaigns in the northern hemisphere autumn. However, during this period only a relatively small proportion of the wool clip is sold and the receipts of the Wool Board could be insufficient to cover its commitments to the International Wool Secretariat in the early part of the financial year. It is therefore proposed that the Wool Board should be granted the power to borrow money from its bankers for wool promotion purposes against anticipated receipts from levy collections and from the Government’s contribution.

Finally, the bill contains saving clauses to permit payments to be made to the Australian Wool Board and the Wool Research Trust Fund of moneys collected under existing legislation after its proposed repeal. The Government is keenly aware of the need to take all possible action to stimulate the demand for wool and so ensure the prosperity of our greatest industry and, indeed, of this country. This bill is therefore designed to provide the Australian Wool Board with the resources which will enable it to join with its counterparts in New Zealand and South Africa in mounting a major promotion campaign for wool throughout the world. I commend the bill to honorable senators.

Debate (on motion by Senator Kennedy) adjourned.

page 867

WOOL TAX BILL (No. 1) 1964

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator WADE:
Minister for Health · Victoria · CP

.-I move-

That the bill be now read a second time,

This is the first of the five wool tax bills under which it is proposed to change the levy paid by wool-growers for promotion and research from a flat charge per bale to a percentage deduction from the proceeds of wool sold. The bills are also designed to permit the amount of levy payable by wool-growers to be increased in order to finance an expanded wool promotion campaign. I dealt with this subject in my second reading speech on the Wool Industry Bill. All five bills are similar in their provisions except that they deal with wool passing through different marketing channels. The need for five separate bills arises from a constitutional requirement that laws imposing taxation shall deal with one subject of taxation only. This bill relates to wool which is sold by wool-brokers.

In changing the method of collecting the levy paid by wool-growers from a unit charge per bale to a percentage of sale value, the Government is acting on a recommendation made by the Australian Wool Industry Conference. The conference considers that the present method, which is a flat charge per bale, falls much more heavily on the growers of low-priced wool than on those whose wool fetches high prices. To date the rates of the wool tax have been relatively low so that the per bale tax on the grower of low-priced wool has not been unduly onerous. However, with the proposed substantial increase in the tax, a uniform per bale charge on all wool could be burdensome to the producer of low-priced wools. Furthermore, the per bale tax does not make any allowance for fluctuations in wool prices which occur within a selling season. This means that two growers who produce similar wool pay the same tax irrespective of the fact that due to a fall in wool prices the grower who sold his wool before the fall received a higher price.

It might be said that a change to a percentage of value basis could operate against the grower who produces the better quality wool and so act as a disincentive. However, apart from the fact that environmental conditions play an important part in the quality of wool produced in various areas, it is also considered that the tax will not be of such magnitude as to act as a disincentive in this regard. On balance the Government considers that a levy based on a percentage of value will be more equitable for wool-growers generally.

As at present, the new tax will apply to shorn wool only. Although the Wool Industry Conference suggested that the tax be extended to embrace wool other than shorn, it was found after thorough examination that this would not be practicable at the present time. The main obstacle is the extent of physical appraisement which would be involved in order to determine sale value and to identify tax-paid and taxfree wools. However, this question may be reviewed at a later date should circumstances warrant it.

As recommended by the Wool Industry Conference, the wool tax bills provide for a maximum rate of levy of 2 per cent. The actual rate which will be imposed in any one year will be fixed by regulation on the recommendation of the Wool Industry Conference. The rate recommended by the conference will be such as to cover woolgrowers’ contributions for wool promotion as well as for wool research. The increased tax on a percentage of value basis will come into operation on 1st July, 1964. Appropriate provisions are contained in all the wool tax bills to ensure that wool upon which tax is imposed under the new legislation or the existing legislation is not taxed again. I commend the bill to honorable senators.

Debate (on motion by Senator Kennelly) adjourned.

page 868

WOOL TAX BILL (No. 2)1 964

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator WADE:
Minister for Health · Victoria · CP

.- I move-

That the bill be now read a secondtime. This bill provides for the imposition of the wool tax on a percentage of value basis on wool which is purchased by a registered wool-dealer from a person other than a wool-broker. In most instances this wool will be purchased by registered wool-dealers direct from wool-growers. However, the bill also applies to wool which will be purchased by registered wool-dealers from unregistered wool-dealers. The provisions of the bill are similar to those of Wool Tax Bill (No. 1) 1964, which I explained when introducing that bill. 1 commend the bill to honorable senators.

Debate (on motion by Senator Kennelly) adjourned.

page 869

WOOL TAX BILL (No. 3) 1964

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator WADE:
Minister for Health · Victoria · CP

.- I move-

That the bill be now read a second time.

This bill deals with the imposition of the wool tax on a percentage of value basis on wool which is purchased by a manufacturer direct from wool-growers or unregistered wool-dealers. The provisions of the bill are similar to those in the other wool tax bills. I commend the bill to honorable senators.

Debate (on motion by Senator Kennedy) adjourned.

page 869

WOOL TAX BILL (No. 4) 1964

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator WADE:
Minister for Health · Victoria · CP

.-I move-

That the bill be now read a second time.

This bill deals with the imposition of the wool tax on a percentage of value basis on wool which is subjected by a manufacturer to a process other than scouring or carbonizing, on behalf of another person who owns the wool. It also covers wool which is grown by the manufacturer himself. The provisions of the bill are similar to those in the other wool tax bills. I commend the bill to honorable senators.

Debate (on motion by Senator Kennelly) adjourned.

page 869

WOOL TAX BILL (No. 5) 1964

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator WADE:
Minister for Health · Victoria · CP

– I move-

That the bill be now read a second time.

This bill deals with the imposition of the wool tax on a percentage of value basis on wool which is exported without having been previously taxed at the taxing points provided for in the other bills. The provisions of the bill are similar to those in the other wool tax bills. I commend the bill to honorable senators.

Debate (on motion by Senator Kennelly) adjourned.

page 869

WOOL TAX (ADMINISTRATION) BILL 1964

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator WADE:
Minister for Health · Victoria · CP

– I move-

That the bill be now read a second time.

This bill contains the administrative arrangements for the collection of the ad valorem levy to be imposed under the five wool tax bills. The change in the method of collecting the levy paid by wool-growers for research and promotion from a flat charge per bale to a percentage of sale value will require a major modification to the collection procedures. As in the case of the existing wool tax, the Commissioner of Taxation will be charged with the general administration of the new tax.

Separate provisions are required for the collection of the tax on shorn wool marketed through different channels and these have been provided for in the bill. The separate categories are wool sold by a broker at auction or otherwise, which accounts for about 90 per cent, of the wool clip; wool purchased by registered dealers directly from growers or unregistered dealers; wool purchased by manufacturers directly from glowers or unregistered dealers; wool processed by a manufacturer on commission which has not previously borne tax; wool grown by the manufacturer himself; and wool exported that has not previously been taxed.

In the case of wool sold by a broker, the tax will be imposed on the gross price for which he sells the wool. Wool purchased by a registered dealer will be taxed on the purchase price plus an allowance for transport and handling charges to make the basis of the tax comparable to wool on the broker’s floor. Wool purchased will be taxed on the purchase price plus an allowance for transport and handling charges to the manufacturer’s premises. The taxable value of the wool processed by a manufacturer on commission or grown by the manufacturer himself will be the value as appraised by the Australian Wool Board. Finally, in the case of wool which is exported without passing previously through a taxing point, the exporter can pay tax on the value as appraised by the Australian Wool Board. Alternatively, the exporter can enter into an arrangement with the Commissioner of Taxation to have the wool taxed on the price realised overseas less the charges incurred in moving the wool from Australia to the overseas point of sale.

As I mentioned earlier, the great bulk of the wool clip is sold by brokers and most of the remainder is purchased by registered dealers. Accordingly, the amount of wool which will require appraisement for tax purposes will be very small. Wool-selling brokers will be required to register with the Commissioner of Taxation as will the manufacturers who handle wool which has not previously passed through a taxing point. The registration will carry with it an obligation to furnish a monthly return and remit tax collected to the Commissioner of Taxation. As at present they will be empowered under the legislation to recover the tax from their clients.

Registration of exporters will be required only where they export without payment of tax under an arrangement with the Commissioner, the tax to be paid later on a value determined on the basis of the price received overseas for the wool. Wooldealers will be given the option of registering with the Commissioner of Taxation and, if they so elect, they will be subject to the same obligations and rights as woolbrokers.

For those dealers who buy only from growers it may be more convenient to remain unregistered and so avoid the obligation to furnish monthly returns and remit tax to the Commissioner of Taxation. The wool handled by them will be taxed at some later stage, perhaps when sold by a broker, or sold to a registered dealer or to a manufacturer, or when exported. However, the dealers who buy wool not only from growers but also from brokers and who mix these wools may find it advantageous to register. This will enable them to avoid the risk of paying double taxation because of the difficulty of identifying the tax-paid wool after it has been mixed with tax-free wool.

The bill provides for wool-brokers and registered wool-dealers to issue certificates in a form approved by the commissioner to identify wool on which tax has been paid. These certificates, or certificates issued by the commissioner, will accompany the wool whenever it changes hands before being manufactured or exported in order to avoid the wool being taxed twice. Woolbrokers and wool-dealers will also be authorised to issue certificates for the identification of skin wool, which is exempt from the tax. Special provision is made in the bill for the certification of wool which is to he scoured or carbonized on commission or for resale in order to ensure that such wool is not taxed twice or conversely, that it does not escape tax. The reason Ibr this provision is that wool, when scoured or carbonized, loses its original identity.

As a safeguard that no shorn wool leaves Australia without paying tax, ships’ agents will not bc permitted to accept wool for export unless it is accompanied by evidence as to payment of tax or arrangements for payment of tax. In cases where the Commissioner of Taxation is not satisfied that the taxable value of wool has been correctly stated, the bill empowers him to make his own assessment of this value.

The remaining provisions of the bill relate to the procedures which will apply to the collection and payment of tax, including provisions concerning objections, reviews and appeals on assessments, as well as the penal provisions and prosecutions for infractions of the act. These provisions are similar to those commonly made in all taxing acts. The arrangements for the collection of wool tax on an ad valorem basis which are outlined in this bill are more complicated than those which obtain under the existing per-bale system. However, this will be more than offset by the greater equity which the new form of tax will provide for the individual wool grower. 1 commend the bill to honourable senators.

Debate (on motion by Senator Kennelly) adjourned.

page 871

WOOL TAX LEGISLATION REPEAL BILL 1964

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator WADE:
Minister for Health · Victoria · CP

,- I move-

That the bill be now read a second time.

The purpose of this bill is to repeal all existing acts which govern the imposition, payment and collection of the tax paid by wool-growers for wool promotion and research. This action is necessary in order to make way for the new wool tax arrangements which have been outlined in my second-reading speeches on the five wool tax bills and the Wool Tax (Administration) Bill.

The bill contains the usual type of saving clause in relation to liability for tax arising out of the receipt into store or export of shorn wool prior to 1st July, 1964. However, the bill also contains a clause which provides especially that unsold wool in brokers’ stores as at 30th June, 1964, and which was received after 31st March, 1964, will not be subject to tax under the repealed legislation. This wool will be subject to the new rate of tax which is to commence on 1st July, 1964. I commend the bill to honourable senators.

Debate (on motion by Senator Kennelly) adjourned.

page 871

LIVE-STOCK SLAUGHTER LEVY BILL 1964

Second Reading

Debate resumed from 14th April (vide page 614), on motion by Senator Wade -

That the bill be now read a second lime.

Senator WILLESEE:
Western Australia

– You will remember, Sir, that Senator Wade suggested that the debate on the second reading of these bills be taken together. I have nothing further to add at the second-reading stage. I have already foreshadowed an amendment to be moved during the committee stage of the bill and the Australian Labour Party will reserve its remarks until that stage.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clause . 1 agreed to.

Clause 2 (Commencement).

Senator WILLESEE:
Western Australia

– I should like to ask the Minister for Health (Senator Wade) whether there is any reason why this bill might be held up. I have a recollection that there was a suggestion that the proclamation of some sections might be deferred. I cannot put my finger on the suggestion at the moment. I was wondering whether the Minister could comment on the date on which the bill will come into operation. In other words would the Government have any purpose in withholding proclamation, or will the bill be proclaimed in the usual manner after a short effluxion of time?

Senator WADE:
Minister for Health · Victoria · CP

.- It is proposed that the bill will come into operation on 1st July. There is no hidden mystery in the clause as it is worded.

Clause agreed to.

Clauses 3 to 5 agreed to.

Clause 6. (I.) The rate of levy on the slaughter of live stock being cattle is such amount per head of cattle slaughtered as is prescribed from timeto time. (2.) The rate of levy on the slaughter of live-stock being sheep is such amount per head of sheep slaughtered as is prescribed fromtime to time. (3.) The rate of levy on the slaughter of livestock beinglambs is such amount per head of lambs slaughtered as is prescribed from lime to time.

Senator CORMACK:
Victoria

– I move -

In sub-clause (1.), after “amount”, insert “ (not exceeding Seven shillings and sixpence) “;

In sub-clause (2.), after “amount”, insert “ (not exceeding Ninepence “;

In sub-clause (3.), after “amount”, insert “ (not exceeding Ninepence) “.

With the indulgence of honorable senators, I would like to make some observations in relation to this matter and in support of the requests which I have circulated to honorable senators. I would be recreant to the Senate if I did not, in the first place, pay a tribute to the Minister representing the Minister for Primary Industry, Senator Wade. With great patience and understanding of the responsibilities that the Senate owes to the electors and, indeed, the responsibility that 1 feel the Senate owes to Parliament, he has discussed with me problems that relate to this tax bill. Secondly, I would like to say to honorable senators that the debate on the principal bill, both in the secondreading stage and in committee, illustrated to a high and desirable degree the quality that is inherent in the Senate, and the acknowledgment and understanding of honorable senators of the responsibility that the Senate owes to the Parliament and the people. The intrusions into the debate by Senators Willesee, Murphy and Cavanagh in the committee stage of the principal bill were of first-class importance. I think I am entitled to say, and must say, that, on this side, Senator Wright last night adduced powerful arguments in relation to the bill. I make these observations, not as a supplicant for the honorable senator’s favour in relation to the requests I have circulated, but because - 1 think that honorable senators have an added responsibility, because of the pressure of business in the Parliament today, to review with the closest scrutiny legislation that emanates from another place, particularly when it breaks new ground.

Senator Willesee, in his speech on the motion for the second reading of the Meat Industry Bill, remarked that I seemed to regard boards with some abhorrence. As Senator Willesee will recall, I interjected that 1 did not regard them with abhorrence at all. But honorable senators are entitled to know what my feelings about boards are. This is germane to the requests that I have circulated. My attitude to boards is one of cold and cynical detachment. Last night, I mentioned that I had spent, not hours but days and weeks and months examining the operations of boards. The more one examines the operations of boards the more disconcerted one tends to become at their operation. I am sorry that Senator Kennelly is not here. He comes from the pit of Victorian politics where the cocks wear long spurs. He knows very well that boards are not all they appear to be in theory.

I mention to honorable senators as an illustration the famous potato board in Victoria which was involved with three main constituents, not two main constituents as the Meat Board is involved with. It related to the character and quality of the potato which is far more subtle than when it is boiled and fried and put on your plate. In Victoria, potatoes were grown in three separate seasons. There were the early, middle and late potato-growing areas. In order to get justice in Victoria it was felt by the potato board and by the growers that each year there would have to be an election for a new board which should fix the price of potatoes. It became not a question of getting some rationale into the sale of potatoes, but a war within the constituents of the board and the board itself. The struggle was to see, for instance, that in one year the growers of early potatoes got control of the markets so that they could extend the early growing potato season. This would deprive the middle period growers of their full growing season. The next year, the middle-season growers would have control of the board, and another it would be the late period growers. So, what began as a rational attempt to bring some order into an industry, which is inherently chaotic, developed into a situation where the board was operating in the interests of various constituents inside the industry.

On this question of boards, I am reminded of a story that will illustrate some of the problems that the primary producers face in dealing with them. I remember calling one night on a farmer whom I had known boy and man for nearly 40 years. I found him sitting in front of the fire with four buckets in front of him. Each bucket held some barley. I asked him, “ What are you doing with these buckets of barley?” He said, “ Well, all my life I have been trying to establish a barley board “. Eventually, he was successful in establishing a barley board. He continued, “ For the last two years, I have had my barley docked by the board as not being up to sample.” In order to make this story clear to honorable senators, I mention that one of the methods of testing barley, its weight and so on, is to put an annulus into a bag, take out a sample and look at it. The inspector, who does this, makes a decision at that stage whether or not the barley is up to specification. The farmer informed me that he had protested violently that his barley was up to standard. As he was a very good and careful farmer, coming from an area that produces the best barley in the world, I was prepared to accept his story and acknowledge that what he was saying was true. Senator Mattner, who is interjecting about the quality of South Australian barley, by some extra-sensory perception, always instinctively puts his State straight to the top.

I asked this farmer what he was doing with the four buckets of barley. He explained to mc that he had seen the local schoolteacher who had explained to him that he had to develop some statistical evidence that he was right and the barley board was wrong, otherwise his protestation was without effect. What he had done was to take a sample of barley from each of his bags, and eventually he weighed out a bushel of barley. In the evening, with the barley in front of him, he examined every seed and tossed the barley that was not up to standard into one bag and the barley that was of the highest specification required by the masters into another bag. He established thereby exactly the percentage of barIcy that was up to standard. It was only after that laborious exercise that he was able to make any impression on the board. I have used those two stories to illustrate to honorable senators the fact that boards are not always the answer to a problem.

I think I have made it clear - I attempted to do so in the second-reading debate - that as this is a tax bill it is necessary for the Senate to acknowledge its constitutional responsibilities and return to the House of Representatives this bill which imposes a levy, and to remind the House of Representatives that in the interests of the taxpayers who, in this case, will be the meat producers, that the Senate feels that there should be an upper limit to the amount of tax that the board is to levy by regulation.

Senator Drake-Brockman:

– Can the honorable senator tell us why he fixed on these levies?

Senator CORMACK:

– I will come to that in a moment. I would like, if I am permitted, not to traverse all the constitutional aspects but to move immediately to the problem as to how these levies should be fixed, or what the upper limit of these levies should be. In another context last night I mentioned by interjection that the New Zealand Meat Board upon which, substantially, this legislation is modelled is the board, which in seeking under-developed markets or uneconomic markets, has incurred substantial losses in the sale of its meat.

In 1962 - which, as I mentioned to honorable senators last night, was the last year for which I could get accurate figures for the operations of this board - the loss amounted to £2,000,000. I also mentioned that the New Zealand Meat Board was operating with a substantial corpus of somewhere near £A40,000,000. The Australian Meat Board, however, has to operate de novo. To use an American phrase, £2,000,000 is not hay in any man’s language. This loss by the New Zealand Meat Board must cause honorable senators to pause and ask whether some limit should be placed upon the operations of the Australian Meat Board. Unless an upper limit were placed on the levies, the board, if it became involved in difficulties post facto, might have recourse to a substantial increase in the levies upon the meat producers. I think this is a rather alarming situation. If a company or an incorporated body were trading at a loss, it would be reasonably easy for the shareholders to take action to remedy any defects in the management, but under the principal bill, which we passed last night, it seems to me that for the first three years of the operation of this board it will not be possible to take action against what amounts to a board of directors if it finds itself involved in large losses.

It was foreshadowed, both in another place and here, the Ministry having it in mind to raise a specific sum of money to enable the board to get off the ground, that the levy would be 5s. for oxen and 6d. for lambs and sheep, and it was estimated that this would raise an additional sum of £1,000,000. Obviously that is what the board and the Government believe would be the amount of money required to get the board operating. Let me now answer Senator Drake-Brockman’s query. 1 take the view that the sum of money that would be raised by a levy 50 per cent, greater than that suggested - I have mentioned 7s. 6d. for oxen and 9d. for lambs and sheep - would be adequate to enable the board to begin its operations. If the upper limit were fixed at that level, the limitations imposed on the board would not be too onerous. Then, if the board got into real trouble, there would be a means by which the Parliament could intervene directly in the operations of the Meat Board, in the interests of the producers. 1 hope that, following this summary that I have given to honorable senators, they will concede, first, the constitutional requirement which 1 mentioned, secondly, the desirability of imposing an upper limit, and thirdly, that the limit I have proposed is reasonable. If honorable senators are agreeable to support this request, I would like to say publicly in the Senate that the Meat Board should not consider the levies that 1 have mentioned to be the minimum levies.

The TEMPORARY CHAIRMAN (Senator Anderson:
NEW SOUTH WALES

– Order! The honorable senator’s time has expired.

Senator WRIGHT:
Tasmania

– I rise merely for the purpose of allowing Senator Cormack to continue his speech.

Sitting suspended from 12.45 to 2.15 p.m.

Senator CORMACK:
Victoria

– Before the sitting was suspended, I involved the Deputy Chairman and the committee in some embarrassment because I was engrossed in what I was saying and, for the moment, forgot the procedures of this committee. I hope honorable senators will forgive me. 1 am indebted to Senator Mattner who pointed out that I had not made it clear - which is perfectly true - what situation would result if my request were approved by honorable senators and if the House of Representatives accepted such a request from the Senate, as. in view of parliamentary practice. 1 feel that the other place should accept it.

As I see the situation, if an upper limit were placed on the taxing capacity of the Australian Meat Board, and if the board, by incompetency or bad luck, exceeded its capacity to fund its liabilities the Minister responsible for the operations of the board would have to ask Parliament to bail the board out. The alternative would be for the board to have its assets put into estreat by the Treasury.

The Parliament in such a situation could deal with the incompetence of the board. Parliament should never abdicate its authority to act on behalf of constituents. In this case, it is the constituents who are producing the taxes. I think it is fundamental that the Parliament should put itself in a position where it can have a continuous oversight of the operations of a board which may involve the taxpayer - in this case the meat producers - in liabilities that cannot be assessed. I do not propose to trespass on the time of the committee any longer, but I commend the amendment to the committee and abide by the wisdom of honorable senators. However, if the Minister has any views on the request, perhaps he would inform the committee of them.

Senator WADE:
Minister for Health · Victoria · CP

– 1 merely say at this stage that one could not but fail to be impressed with the powerful case that Senator Cormack has made in support of his request, particularly the latter portion of his speech concerning taxation. I should like to have a few minutes to consider this matter and perhaps the debate might proceed while I confer with my advisers on machinery proposals.

Senator WILLESEE:
Western Australia

– I am glad that the Minister proposes to look at this proposal. I rose to say that, after examining the amendment, the Australian Labour Party has decided to support it. Clause 6 of the bill states -

The rate of levy on the slaughter of live-stock being cattle is such amounts per head of cattle slaughtered as is prescribed from time to time.

Under the Acts Interpretation Act, the word “ prescribed “ means prescribed in the bill or by regulation. As the relevant amount is not prescribed in this bill, it will be prescribed by regulation. The Opposition supports this proposal with some reservations because we believe that the amount of levy ought to be written into this bill. As honorable senators know, there was some little worry in another place when the Minister for Primary Industry (Mr. Adermann) said that if the levy was at the rate of 5s. a head on cattle and 6d. on sheep and Jambs, an amount of £1,700,000 would be raised. Then the Minister was careful to explain in another place that he had plucked the figure out of the air and that the levies he had named were not meant to be a suggestion of the amount that might bc charged.

We feel that the amount of the levies should be written into the bill and this could be done without much trouble. The amount of levy would not be varied from day to day. lt could be fixed for a number of seasons. If the Government decides on 5s. or an amount up to 7s. 6d. as Senator Cormack suggested, the amount should be written into this bill and any changes should be effected by amending the legislation. The amendment would not have to be very complicated. It would merely fix the amount which could apply for a year or until further notice.

However, it is obvious that the Government will not accept such a proposition. Therefore, we look to improve the bill. We feel that the fixation of an upper limit for the levy would be an improvement. From inquiries I have made - although they are necessarily limited - it appears that amounts of 7s. 6d. and 9d. would be a very high upper limit and I should like the Minister for Health to comment on this. If the upper limit that is fixed is not real, there is not much point in fixing it. To select a ridiculous amount, there would be no point in making the upper limit £50, for example.

The Minister knows something about the meat industry and I should like him to inform honorable senators whether he considers 7s. 6d. would be a very high upper limit. If the Minister for Primary Industry in another place was not picking out a hypothetical figure when he gave 5s. as the levy on cattle, and if it approximates what the slaughter levy will be, the 50 per cent, increase on that amount suggested by Senator Cormack seems to be a little high. The Opposition is disappointed that the amount of levy is not stated in the bill. Nevertheless, any sort of fixation would bc an improvement. If the Minister for Health considers that the proposed amount is high - and his knowledge would be better than mine - perhaps the amount could be lowered to a more realistic figure. With those reservations, we consider that the amendment would improve the bill and the Australian Labour Party is prepared at this stage to support Senator Cormack’s amendment.

Senator O’BYRNE:
Tasmania

– I should like some clarification of clause 6 (I.) which states -

The rate of levy on the slaughter of live-stock being cattle is such amount per head of cattle slaughtered as is prescribed from time to time.

The definition of “ cattle “ provides that it covers any beast over 220 lb. and up to an unlimited weight. Any beast comes under the definition of “ cattle “ if it weighs 220 lb. Is there any likelihood that a sliding scale might be applied in the future? A man who produced a very fat and sappy young weaner and was prepared to sell at the weight of 220 lb. or over would pay the equivalent of a farthing per lb. levy. A man who produces and fattens a beast, and dresses it at 600 lb. or 700 lb. will pay only a quarter of the per-lb. levy. I believe that some elasticity should exist to provide for an approach such as that by the people concerned. Under the legislation relating to the wool industry provision was made, by agreement, for a levy on a pro rata basis on the price of wool rather than on a pcrbale basis.

I refer to another matter which is of interest to me. Clause 6 (3.) provides -

The rate of levy on the slaughter of live-stock being lambs in such amount per head of lambs slaughtered as is prescribed from time to time.

In every business these days, people look at legislation for an escape clause. Escape clauses are being used right, left and centre, and discovering them provides a feast for legal men and a great proportion of their income.

Senator Wright:

– Due to the inattention of the legislature.

Senator O’BYRNE:

– That is true. I am glad that the honorable senator said that. This is why I suggest that this matter be cleared up. The clause relates to “ amount per head of lambs slaughtered “. The lamb may be of any weight. I believe that the size required for export is 33 lb., plus or minus a few pounds. A lamb is at its best shape and size for export at about 33 lb.

That is a classification purely for export, but Senator Mattner will bear me out when I say that within Australia a lamb may be classified as such up to the time it becomes a two-tooth. It goes through the stages of weaner and hogget-

Senator Mattner:

– No.

Senator O’BYRNE:

– Yes, a hogget until it is a two-tooth.

Senator Hannaford:

– A hogget is a twotooth.

The CHAIRMAN (Senator McKellar:
NEW SOUTH WALES

Order!

Senator O’BYRNE:

– It is maiden ewe when it is a two-tooth. Some pretty longtoothed sheep will be killed as lambs unless there is a very clear definition of a lamb.

Senator Hannaford:

– The butcher describes it as a lamb until it is a twotooth.

Senator Mattner:

– It is defined in the bill.

Senator Willesee:

– It means a sheep that has yet to cut a permanent incisor tooth.

Senator O’BYRNE:

– The weight of a lamb may vary, and the levy will be the same on lambs that are nine months old as on lambs that are thirteen or fourteen months old. The weight will depend upon the part of the country in which the Iambs are born.

Senator Hannaford:

– And on the breed, too.

Senator O’BYRNE:

– That is true. The bill defines a lamb as a sheep that has not cut its permanent incisor teeth. It will cease to be a lamb when the milk teeth are displaced by the incisors. There may be quite a variation in that period. The bill should not permit any person who is paying a levy on lambs to have an advantage over any one else.

Senator WADE:
Minister for Health · Victoria · CP

– I have had an opportunity to discuss with my officers the point raised concerning the administrative practicability of Senator Cormack’s requests. I am clearly of opinion that the Government is in a position to accept the requests and that it should, in fact, accept them, because of the principles involved. For that reason, I am prepared to recommend to the other place, on behalf of the Senate, that an amendment be accepted. I do not think that there is any need for me to traverse the ground. Senator Cormack has explained the position.

Senator Willesee:

– You do not think that the amount is too high?

Senator WADE:

– I shall comment on the amount when I dispose of the principles involved. Senator Willesee asked me for all the information that I could give him concerning the amounts set as upper limits. I think it should be emphasized that these are upper limits. That should be kept before the notice of the Australian Meat Board and the industry. As stated in the second-reading speech, it might well be that the amount of 5s. would be adequate to get the board into operation or, as somebody said, to get it off the ground. It is very difficult to estimate at this point of time what the financial requirements of the board will be in order to achieve the objectives for which it is being established. From all the information that I can secure, there is no doubt in my mind that the first year’s levy will not exceed 5s. on cattle and 6d. on lamb and mutton.

Senator Cormack adequately stressed the point that before any action is taken by the board to increase the levy dramatically Parliament should express its opinion, as the custodian and guardian of the taxpayers’ interests. I think it right and proper that there should be a margin of, say, 50 per cent, on the 5s., to place the ceiling sufficiently high to give the board room in which to manoeuvre in the first, second or third year, as the case may be. If it can then state a good case to support an increase, it will have the right and opportunity through normal channels to present that case to the Parliament. Parliament will then have a say, and that is where I believe the say should be.

Senator O’Byrne sought information about a sliding scale. When I give him some of the figures, as briefly as I can, he will understand, I am sure, that it would be a practical impossibility, in the interests of the industry, to entertain such a proposal. I venture to say that the administrative costs of endeavouring to implement such a scheme might well shadow the levy, particularly in relation to sheep. In 1962-63, 4,222,000 head of cattle and 33,993,000 head of sheep were slaughtered. This matter has been discussed at great length with all sections of the industry. As I said a few days ago in reply to a similar question, I am confident that although sections of the industry may be called upon to pay a higher proportion of the levy in relation to value of stock slaughtered, the overall gain will compensate for any out-of-balance contribution that they might make. 1 believe that the industry itself acknowledges and appreciates that fact and is prepared to accept the proposals that we put before the committee.

Senator WRIGHT:
Tasmania

.- J hope that I can key in to the tone of the debate. I start by paying a compliment to Senator Cormack for the contribution that he has made to the improvement of this bill, by drawing our attention to the constitutional situation and also to some facets of the industry. I was very pleased to hear the ‘Minister, after consulting with his officers, announce his acceptance of the amendment, but I believe one or two matters should be stated to indicate that the committee has considered the matter with a slightly wider ambit. Although this measure gives power, by regulation, to levy taxation, one or two factors create safeguards that are not ordinarily attached to regulations. I refer to the provisions of what will be section 8 (2.), which require that before the Governor-General makes regulations under that section prescribing the amount for the purposes of section 6 of the act, he shall take into consideration any recommendations with respect to the amount made to the Minister by the board. It is not beneath the dignity of the GovernorGeneral, when he comes to the process of making regulations, to be required to take into consideration recommendations by the board.

If we examine sub-sections (3.) and (4.), we find a further safeguard on this regulationmaking power written into the measure. It is provided that before making any recommendation in relation to the amount per head the board shall consult with the Australian Woolgrowers and Graziers Council, the Australian Wool and Meat Producers Federation, the Australian Cattle and Beef Research Committee and - I emphasize these words because they are of significance as showing inconsistency with the argument used on the main bill - “ such other organizations, if any, as are prescribed “. When we wanted to bring that particular facet into the permissible ambit of the Minister’s consideration for the purposes of appointing the board, we were denied. Because the draftsman had not written such a provision into the main bill, it was regarded as a matter that could not be considered. However, I am pleased to note that by this bill the Governor-General is not permitted to make any regulation as to the amount until he has taken into consideration the recommendations of the board; and the board is not permitted to make any such recommendations before it consults with the Graziers Council, the Meat Producers Federation, the Cattle and Beef Research Committee and such other organization as is prescribed.

The next matter relates to the per head basis of the levy that is to be imposed. I should not think that Senator O’Byrne’s suggestion on this is at all practicable. I want to refer again to a subject I referred to in my speech in the second-reading debate - the advantages of a levy per head compared with a levy in accordance with values. The Minister’s officers were good enough to inform me on Thursday last that the number of cattle slaughtered in 1962-63 was 4,200,000 and that the number of sheep and lambs slaughtered in the same year was 33,900,000. Assuming an average sales value of £35 per head for cattle and 85s. per head for sheep and lambs, the total sales value would be about £A.292,000,000. To raise an amount by a percentage levy on this assumed sales value equal to the amount that would be raised by a flat rate levy of 5s. per head for cattle and 6d. per head for sheep, a levy of about .6 per cent, would be required. So that the amount involved in the levy of 5s. per head for cattle and 6d. per head for sheep is equivalent to a through-put levy of about .6 per cent, of these assumed values.

Senator Hannaford:

– But you would have to separate the two levies.

Senator WRIGHT:

– That has to be done now. The levy on beef is entirely separate from the levy on the other classes of meat. I raise this matter because when wool was being dealt with in this chamber we agreed that it should be dealt with on the basis of a levy per bale. Further consideration, however, suggested the acceptance of a levy according to value. My inquiries into the matter lead me to accept the view that there would be some difficulty in finding a value for meat. I am informed that a very large percentage of cattle and sheep sales are sales by private treaty, and that would make effective checking almost impossible. I have been informed that the Minister for Primary Industry (Mr. Adermann) has given the industry an undertaking to review this levy from time to time. I would invite the Minister in charge of the bill here, if that is so, to put that on record in our debates, because I would like to have the advantage of that undertaking if the occasion arises to disallow a regulation to make an excessive levy. The industry has requested a flatrate levy, and I am prepared to go along with that.

Next we come to the amount. For the purpose of getting some ceiling I am prepared to go along with Senator Cormack’s amendment, which places a ceiling of 7s. 6d. and 9d. a head respectively on cattle and sheep. However, the fixing of those figures shows less responsibility than I could warmly approve of, in view of the absence of any factual financial material before the Senate to justify amounts so high. In the Minister’s second-reading speech the following statement appears -

The funds which are collected for purposes other than beef research will be administered by the Australian Meat Board. In a normal year a levy of 5s. per head on cattle and 6d. per head on sheep and lambs would provide an industry contribution of about £1,700,000. For the purposes of comparison, it is mentioned that in 1962-63 the amounts collected from the meat export charge and the beef research levy were f 2 19,000 and £406,000 respectively.

There is not one word or one figure in that statement to justify in any way an increase in the levy. There is not one word as to the purpose to which it is proposed to apply the extra money that will be raised. It was expressly stated by Senator Cormack in the second-reading debate that the money was to be used to create what he called a revolving fund. 1 should have thought the fund would be more of a recurring annual fund to finance losses on the board’s trading. That was implicit in his speech to this, committee. I think that before financing a budget of that sort we ought to know what is the justification for an increase of £1,000,000. I make one observation to test that statement. Last week I was in the minority in refusing to offer subsidies to the television industry, at the expense of Consolidated Revenue, amounting to about £1.000.000. I wanted the industry to pay its own way. Yet, the meat producers who are to promote the export business for the nation’s benefit as well as their own are being specifically levied an additional £1,000,000 without so far as any honorable senator has heard, a figure or a fact to justify such an increase.

I should think that the appropriate limit to fix would be at the most 5s. per head for cattle and 6d. per head for sheep, which would give the board £1,000,000 over its present financial receipts. I support with real regret the amendment that has been moved. I think it provides for an excessive ceiling.

Senator MATTNER:
South Australia

– I support Senator Cormack’s amendment. Although it has been suggested, even in the Minister’s secondreading speech, that the proposed levy may be 5s. per head for cattle and 6d. per head for sheep, that does not mean that it will be 5s. a head for cattle and 6d. per head for sheep. This is a board which consists of representatives of the producer. The last thing that the producer wants to do is to levy himself excessively because he knows that that will damage his markets. The fact that Senator Cormack in his amendment proposes to raise the limits to 7s. 6d. per head for cattle and 9d. per head for sheep does not mean that the levies will reach those limits. I believe and confidently expect that, with this competent board, the levies will be considerably less than those limits. Having given the board the power to control the meat industry, surely we have enough trust in it to know that it will not impose an excessive levy.

Senator WADE:
Minister for Health · Victoria · CP

– In reply to a question asked by Senator Wright, I have no hesitation in giving the honorable senator the unqualified assurance that the Government will review the method of imposing the levy if the activities of the board, as proposed in the legislation, create anomalies. I have to-day introduced in this chamber a series of wool bills which may well be a yardstick for this board. We have honoured an undertaking given previously along similar lines.

Senator MURPHY:
New South Wales

– Senator Cormack has raised a matter of great importance, and the committee is indebted to him for having done so. This is a bill which is designed to impose a levy on the sale of certain livestock. Of course, it does not impose a levy at all. It purports to be a tax bill, but it does not impose a tax. What it does is to authorize some one else to impose a tax.

Senator Prowse:

– On themselves.

Senator MURPHY:

– Yes. In this respect it is a departure from a great constitutional principle which goes back to the Bill of Rights. At that time Parliament insisted upon retaining unto itself the right to impose taxes. No taxation without the authorization of Parliament was permissible. From time to time the Executive in this country, and in other places, has endeavoured to get round this method of taxation, and all sorts of reasons have been suggested why that should be done. It is nothing to the point to say that taxation or levies might be imposed on the recommendation of various bodies, or because there is an agreement with somebody. Parliament ought to retain the right to impose taxes, but in this bill it is abdicating that right.

Senator Willesee has rightly said that the only way to vindicate the principles that have been advanced is to delete the provision which allows the prescription of the levy or tax. Taxes ought to be imposed by this Parliament. The committee, by this amendment, is saying, “ We will abdicate the right to impose the tax. We will allow somebody outside Parliament - the GovernorGeneral - to make regulations and impose the tax.” The Executive, in effect, will impose the tax. Taxes should not be imposed without the authorization of Parliament. The Parliament should understand what it is doing, and if it does understand what it is doing, it should take steps to prevent itself from abdicating the right to impose taxes. The view of the Australian Labour Party is that if a tax is to be imposed, it ought to be imposed directly by Parliament.

Requests agreed to. )

Clause, with requests, agreed to.

Clause 7 (By whom levy payable).

Senator O’BYRNE:
Tasmania

.- I wish to refer to clause 7 which states -

Levy on the slaughter of any live-stock is payable by the person who owns the live-stock at the lime when the slaughter takes place.

Has the Minister any statistics available to him which show what percentage of stock at the point of slaughter is owned by the producers? All the argument on this bill has been on the basis that the producer should have representation on the board because the board is dealing with his business and he is paying the levy. I should like to know whether there are statistics to prove that the producers own a great proportion of the stock at the point of slaughter. The usual procedure is that the producer sends his stock to the sale yard; the stock is bought there and taken to the slaughter house where it is slaughtered. It is possible that the people who are processing the meat, or the butchers, or everybody in this field, will be paying this levy and not the producers. I should like the Minister to clarify the position.

Senator WADE:
Minister for Health · Victoria · CP

– I am amazed that the honorable senator should raise this matter. It reminds me of Grimm’s fairy tales. Does he think that the butcher or the abattoir authorities would mildly agree to accept the responsibility of the producer that is provided for in this legislation, and pay the levy? I just cannot imagine such a thing happening.

Senator O’Byrne:

– Who is the owner of the stock at the point when the levy is imposed?

Senator WADE:

– The owner, of course, is the butcher, but if we follow the legislation through, it will be seen that there is another bill which authorizes the butcher to debit the charge against the producer. I give the honorable senator an unqualified assurance that the producer will be paying the levy. He should not think that the bighearted butcher will say, in effect “ Rather than lodge a claim against the producer, I will pay the levy “. The honorable senator may rest assured that the legislation provides that the producer shall pay the levy. The machinery of the matter is that the butcher pays it, but he has the right, which he will undoubtedly exercise, to claim from the producer.

Senator O’Byrne:

– The butcher will pay and will then get a refund?

Senator WADE:

– That is right.

Clause agreed to.

Remainder of bill - by leave - taken as a whole, and agreed to.

Bill reported with requests; report adopted.

page 880

SUSPENSION OF STANDING ORDERS

Motion (by Senator Wade) - by leave - agreed to -

That so much of the Standing Orders be suspended as would prevent the questions with regard to the remaining stages for the passage through the Senate of all the following bills: -

Live-stock Slaughter Levy Collection Bill 1964

Meat Export Charge Repeal Bill 1964

Cattle Slaughter Levy Repeal Bill 1964

Cattle and Beef Research Bill 1964

Meat Agreement (Deficiency Payments) Bill 1964

Meat Export (Additional Charge) Bill 1964 being put in one motion, at each stage, and the consideration of all of such bills together in Committee of the Whole, and as would prevent the reading of the short titles only on every order for the reading of the bills.

page 880

LIVE-STOCK SLAUGHTER LEVY COLLECTION BILL1 964

Second Readings

Consideration resumed from 14th April (vide pages 614 and 61 5), on motions by Senator Wade -

That the bill be now read a second time.

Question resolved in the affirmative.

Bills together read a second time.

In committee:

The bills.

Senator WRIGHT:
Tasmania

– I refer to clause10 of the Live-Stock Slaughter Levy Collection Bill, to which the Minister for Health (Senator Wade) referred a few moments ago when replying to the observations of Senator O’Byrne. Sub-clause (1 . ) provides -

Where a contract is made, whether at auction or otherwise, by which a person sells or agrees to sell live-stock to a person whose name is, at the time of the making of the contract, included in the List of Recognized Slaughterers kept under the next succeeding section, the amount that would, but for this section, be the price payable under the contract shall be deemed to be reduced for all purposes . . . by an amount ascertained by multiplying the rate per head of live-stock of the levy in force at the date of the contract by the number of live-stock comprised in the contract.

Senator O’Byrne’s observations were made without regard to that sub-section. That is understandable, because an understanding of a convulvulus of legislation such as we are now considering is very difficult. The Livestock Slaughter Levy Bill, which we have just passed, imposes a levy on the owner at the specific time of slaughter. Now we are considering a bill which passes back the incidence of that tax, not from everybody who submits livestock to abattoirs for slaughter, but only from persons whose names are included on the registered list of slaughterers. I should like to have specific information about that class. What is the significance of these people in the meat industry? Why are they to be singled out for special attention and to be given the right to pass back the levy to the meat producer? What were the vestigious manoeuvres which took place in regard to the levy which led to the Government’s alteration of the incidence of the levy from the owner at the time of slaughter to the producer who had sold to the slaughterer?

Senator WADE:
Minister for Health · Victoria · CP

– I have little to add to what I said before. I am afraid that at this point of time I cannot supply Senator Wright with the information he desires. Rather than delay the passage of the bill, I give the honorable senator the assurance that I will supply him later with the detailed information he wants.

Bills agreed to.

The CHAIRMAN:

– The question is that I report the bills without amendment.

Senator WRIGHT:
Tasmania

.- I direct attention now to the Meat Export (Additional Charge) Bill. The only operative clauses of this bill are clauses 4 and 5, which seek to repeal sections 7 and 9 of the principal act. I ask the Minister to indicate the effect of the sections that are to be repealed and why they are to be repealed. I would expect the purpose to be that the charges that are imposed by the principle act are to be replaced by the levy that wo have authorized to be made. I should like to have any information that the Minister can give me before the bills pass through their final stages.

Senator WADE:
Minister for Health · Victoria · CP

.- The honorable senator’s interpretation is correct.

Bills agreed to.

Bills reported without amendment; report adopted.

Third Readings

Bills (on motion by Senator Wade) together read a third time.

page 881

PARLIAMENTARY AND GOVERNMENT PUBLICATIONS

Report of Joint Select Committee

Motion (by Senator Sir William Spooner) - by leave - agreed to -

  1. That the Senate concurs in the resolution transmitted to the Senate by message No. 37 of the House of Representatives, namely, that the time for bringing up the report of the Joint Select Committee on Parliamentary and Government Publications be extended to 14lh May, 1964.
  2. That the foregoing resolution be communicated to the House of Representatives by message.

page 881

LOAN (QANTAS EMPIRE AIRWAYS LIMITED) BILL 1964

Second Reading

Debate resumed from 15th April (vide page 659), on motion by Senator Paltridge -

That the bill be now read a second time.

Senator O’BYRNE:
Tasmania

.- The Loan (Qantas Empire Airways Limited) Bill 1964 which is now before the Senate proposes an appropriation of loan funds to enable the proceeds of a borrowing of 25,000,000 dollars or about £11,200,000 to be advanced to Qantas Empire Airways Limited. The bill includes also an appropriation from the Consolidated Revenue Fund to enable the Commonwealth to meet payments of principal and interest and other charges associated with the loan. The Minister for Civil Aviation (Senator Paltridge) stated in his second-reading speech that the funds to meet these latter payments will be provided by Qantas so that there will be no net cost to the Commonwealth.

The bill itself meets with the general approval of the Opposition, but it is my intention, on behalf of the Opposition, to move an amendment. I move -

Leave out all words after “ That “, insert - “ the Senate whilst not declining to give the bill n second reading, is of opinion that the financing of the purchase of aircraft by Qantas Empire Airways Limited should be met from revenue and not from a loan raised overseas “.

I understand that the motion will be seconded later and that copies of the amendment have been circulated to honorable senators. The loan has as its object the purchase of three Boeing 707-338C jet aircraft. This addition will bring the total Qantas fleet of Boeings to sixteen. It is expected that the delivery dates will be between February and September of next year.

On an occasion like this, when we have a measure seeking funds for Qantas Empire Airways Limited before us, we should pay tribute to the people who administer that organization. The standards that have been set are a wonderful example of the efficiency of the Australian administrators, aircrews and the other people associated with the running of the airline. We are particularly fortunate that this international section of our airlines is equalled only by our internal airlines. Its success does great credit to all those concerned and I want to place on record an appreciation of the standards that have been set and the reputation which has been built up wherever this airline operates throughout the world.

Qantas Empire Airways Limited is also an excellent dollar and sterling earner for Australia. The annual report of the organization for 1962-63 discloses a profit of nearly 8 per cent, on operations. That profit is the best achieved by any international airline operating in the Western world. I should like to assure the Senate that the moving of this amendment should be construed in no way as being directed against the Qantas organization. Speaking on my behalf and, I am sure, on behalf of all honorable senators, I say that Australians generally are immensely proud of Qantas. The organization has done credit to itself and to our nation in the airline business.

It is interesting to note that Qantas is actively participating in bringing a large number of United Kingdom and European migrants by air to settle in Australia. The organization also is encouraging, and is tuning in with, the great growth of tourism which has become an important element in Australia’s balance of payments. In the year 1962-63 132,000 overseas tourists added £23,000,000 in direct spending to Australia’s national income, and the estimated inflow during the current year is 150,000 visitors, who are expected to spend £27,000,000. From those figures we can assume that Qantas is an important Australian industry. The organization employs, as disclosed in the annual report, 6,691 employees and its gross salaries and wages bill amounts to £10,363,966.

I think that every help should be given to the organization to enable it to provide the best possible return for the money invested in it. The organization takes pride in operating at the rate of profit that it has achieved. I notice that for the year 1961-62 the net profit of Qantas was £408,000 whereas last year the net profit was £1,406,000. The figures supplied by the Minister show that Qantas will have to pay the equivalent of £500,000 a year by way of interest to service this loan. In these days of keen business activity, it is surprising to me that the Treasurer (Mr. Harold Holt) has not done more efficient shopping in negotiating this loan for Qantas. It cannot be said that the interest rates are in any way attractive because the short term notes repayable in 1966-67 - a matter of two or three years from now - bear an interest rate of 4i per cent. The rate will increase in 1968-69 - a period of four or five years from now - to 4J per cent., and in 1970 to 5 per cent., in 1971 to 5i per cent., and in 1972 - the year in which the loan is expected to be fully repayed - the interest rate will rise to 5£ per cent. This means that Qantas Empire Airways Limited itself is obliged to bear this heavy burden of interest which, to a large extent, will offset its great value to Australia as a dollar and sterling earner. Instead of the full fruits of its very efficient activities returning to Australia a large proportion of its income will be sent back to America to meet an interest burden amounting to £500,000 a year.

We on the Opposition side believe that with our overseas balances at a record level of, I understand, £800,000,000 and with reserves of another £200,000,000, a much better arrangement could have been made for the financing of this loan. In terms of budget figures to-day, £11,500,000 is not a great sum of money. Financiers and treasurers speak so familiarly of huge amounts that such a sum as 25,000,000 dollars slips off their tongues very easily, lt means a tremendous lot to the Qantas organization to have to find this proportion of its annual profit in a pretty competitive field in the United States of America. Tt is our belief that arrangements should have been made in Australia to enable Qantas to draw on our own revenue for a shortterm loan. After all, the airline has been doing a very good job over the years in repaying its loans. The Minister for Civil Aviation has acknowledged this fact on his second-reading speech on the bill -

Including the present loan, the Commonweatlh has now borrowed 85,400,000 dollars in New York for the purchase of aircraft since 1956, of which 69,400,000 dollars has been for Qantas Empire Airways Limited and 16,000,000 dollars for TransAustralia Airlines. Of the earlier loans totalling 60,400,000 dollars, an amount of only 30,000.000 dollars, or less than half, remains to be repaid. In addition, a further 39,200,000 dollars has been borrowed for aircraft purposes from the International Bank and the Export-Import Bank of Washington, of which 28,900,000 dollars is still outstanding.

That statement shows that Qantas is repaying those loans out of its own earnings.

My argument is that it is not imperative for us at the present time to go to the United States of America to borrow this money. Our currency is respected throughout the world. Our credit has never been better. I think the Treasurer (Mr. Harold Holt) used a rather specious argument in another place recently when he said that the higher we keep our overseas balances the more likely people are to have confidence in Australia. I would like to know of any country in the world in which people could have more confidence than Australia. I think that the Treasurer is under-writing us, and doing a disservice to us by saying that we need to have overseas balances of £800,000,000 or more in order to be able to create the image to the world that Australia is credit worthy. The situation is that we are committing ourselves to the payment of additional interest to the United States, when the money could quite easily have been raised from other sources. It could be raised from our own revenue, which is buoyant. The last budget anticipated a deficit. At this stage of the financial year, that deficit is in sight of being overcome, if it has not already been overcome.

Another important matter is to be found in the Schedule of the bill. Section 7 reads -

The Commonwealth agrees that if any bank or the Agent is required to pay any interest equalization tax by any law of the United Slates of America hereafter enacted by reason of any of the transactions referred to herein, the Commonwealth will promptly, upon demand of the Agent, reimburse such Bank or the Agent as the case may be, for and save it harmless from any such tax so paid. In such event, the Commonwealth shall have the right, upon at least ten days’ written or telegraphic notice to the Agent and upon payment of all accrued and unpaid commitment fees, to terminate the commitments of the Banks to make loans hereunder, and shall also have the right, upon like notice, to repay all Notes then outstanding at the principal amount thereof and accrued interest to the date of prepayment.

Such a situation exists in the United States where, at the moment, there is the possibility of an interest equalization tax. No definite decision has been reached on this matter. The internal economic situation in the United States is under very close review. We had experience recently of the attitude of the United States Government towards imports from this country because of pressures from its primary industry sector. Throughout the whole economic picture of the United States there are readjustments and revaluations going on. To enter into an agreement at this particular point of time where we have relatively high rates of interest to pay, coupled with the uncertainty of the interest equalization tax, illustrates to me that the minds of our Treasury officials and our Treasurer lack elasticity. Why did they need to go into the United States market to raise this relatively small amount of money and run the risk of this proposed legislation affecting us adversely when there were alternatives available to them, including our own buoyant internal revenue?

The banks which are named in the Schedule are well known to people who are interested in reading economic and financial text-books. The Morgan Guaranty Trust Company of New York, the Chase Manhattan Bank, the Irving Trust Company and the Continental Illinois National Bank and Trust Company of Chicago are powerful American banking institutions that do not lend money without getting their pound of flesh. Of course, that is their business. They would not make this loan available unless they knew it was gilt-edged. In racing parlance, they want the advantage of twobob each way inasmuch as they are exacting more than current shopping interest rates. I understand, for instance, that loans have been negotiated through the International Bank for Reconstruction and Development, Switzerland and on the

British market at rates that compare more than favorably with those which are available to us. There is also to be an escape clause in the event of legislation being passed that will impose an equalization tax in the United States. So, taking the broad view of this whole transaction, we feel that the best has not been done by Qantas Empire Airways, and the best has not been done for the taxpayers of Australia. Our overeas debt continues to increase and so does our overseas interest liability. On the last occasion when I raised this matter, I remember that the Minister for Civil Aviation produced figures showing the percentage relationships of our national income and our national debt.

Senator Wright:

– You say that our national debt continues to increase. Have you the figures over the last ten years?

Senator O’BYRNE:

– Yes, although I have not got them readily available. The position is that we continue to raise overseas loans.

Senator Wright:

– Of com se, but what is the trend of the amount of our overseas indebtedness in the last ten years?

Senator O’BYRNE:

– I was about to quote the figures produced by the Minister for Civil Aviation during the discussion on the similar 1963 legislation. He spoke of the percentage relationship of our national revenue and our national debt. It is quite easy to be deceived by such percentages. We all know that prices have risen, that there has been inflation and that our population has increased. Therefore, our national revenue has increased correspondingly. To take the percentages of the present day and to compare them with those of past years does not give a true picture.

Senator Wright:

– I only raised the question because the bald statement that has been made seems to be contrary to the understanding of the position which I have from reading the figures in the reports of the Commonwealth Grants Commission year by year.

Senator O’BYRNE:

– I do not have the Grants Commission’s figures before me. to enable me to check up.

Senator Wright:

– 1 am simply seeking information.

Senator O’BYRNE:

– I am sorry, but I do not have the information at my fingertips to give to the honorable senator. With Hie development of this nation, I believe we should make every effort to reduce the amount of money going out. of this country in the form of interest payments. It is claimed by the Treasurer (Mr. Harold Holt) that it is of advantage to Australia to get money overseas because all the money available internally is needed for development, but I think this advantage is tempered by the fact that we are saddling ourselves and future generations with a very high annual interest liability. I understand that our annual interest liability on overseas borrowings amounts to nearly £34,000,000 now. To my mind, that raises the question of whether we should borrow overseas when our overseas balances are at such a high level and while £34,000,000 is going out of the country each year in interest payments. In my view, borrowing overseas to finance the activities of bodies such as Qantas Empire Airways Limited and Trans-Australia Airlines and to purchase dollar earners is not good business. Alternative means of raising the money should be found.

The amendment I have moved, which states that the Senate is of the opinion that the. financing of the purchase of aircraft by Qantas Empire Airways Limited should be done from revenue and not from a loan raised overseas, is a repetition of our consistent view that the method of finance used by the Government and the Treasurer cannot be justified as the most efficient method of financing such purchases. In the view of the Opposition, this method is imposing a burden on the nation which could be avoided.

I would like, finally, to repeat what I said earlier. We on this side of the chamber have the greatest admiration for the Qantas organization. We wish it well in the purchase of these new jet aircraft and hope that they will assist it to maintain its position in the forefront of international airline operators. We hope that its excellent record in every field of this endeavour will continue into the future.

Senator Cohen:

– -I desire to second the amendment and reserve my right to speak.

Senator MARRIOTT:
Tasmania

. -In rising to speak to the bill, following my Tasmanian colleague, Senator O’Byrne, who was the spokesman for the Australian Labour Party, I will deal first and quite briefly with the amendment he has moved. The amendment says, in effect: “ Do not borrow from America. Take the money required out of revenue, from the taxpayers “. To my way of thinking, the Labour Party is going through a period of muddled thinking and great dissension. It is giving to our great American allies the idea that at least one part of this nation is anti-American. Whenever there is a proposal to purchase from America or to co-operate with America in respect of defence services, it is hotly opposed by the left wing of the Australian Labour Party, which appears to-day to be the dominant section of the party. I refer for instance, to the North West Cape installation and the purchase from America of destroyers for the Royal Australian Navy. Those are two examples.

In this instance, the Government has decided to keep the Australian-owned international airline well up to modern standards and has arranged for it to obtain modern jet aircraft by September of 1965. The Government says - I believe quite rightly - “If we can get the money from American investors, at no cost whatever to the Australian taxpayer, why not do so?” The Qantas organization is responsible for the repayment of the loan and interest, and the Commonwealth is only a guarantor. If the Labour Party doubts the ability of Qantas to honour its part of this business contract, it should be reminded, and it should remember forever, that Qantas has never fallen down on an obligation in respect of repayment of interest, sinking fund charges and loan repayments on money which has been borrowed overseas. On many occasions, Trans-Australia Airlines has been financed by the same means, but we have heard no criticism from the Australian Labour Party of Government policy.

When this bill becomes law, it will not place any burden on the Australian taxpayers, but if the amendment that has been moved by Senator O’Byrne were agreed to, the Australian Government would have to get from the Australian people more than £11,000,000 in taxes to pay for aircraft that will not be delivered until September, 1965, and which will have a flying and earning life extending over a number of years.

I would never support a government that called on the taxpayers to provide from revenue for capital expenditure. One of the criticisms I have of the financial policy of this Government is that it has been too kind to future generations and a bit harsh on those who are living now because the Commonwealth takes too much out of revenue for capital expenditure. I refer in particular to the defence vote and to the expenditure which was incurred until recently on the Snowy Mountains scheme. Money was provided out of revenue for that scheme which will enhance Australia’s development for years to come. I believe that such money should come from loan funds and not from revenue.

The views that are held by various members of the Opposition on this matter provide an extraordinary example of the muddled thinking of the Australian Labour Party. Being in Opposition, it feels that it must amend or oppose every bill that conies into the Parliament. Over t’he years, the Labour Party has said to the Government, “ You must spend more money from revenue “, and “ You must reduce taxation “. This bill cuts out all that stupid thinking. Under the bill, it is proposed to raise money in the United States of America where Qantas Empire Airways Limited will buy aircraft mentioned in the bill. This will not cost the taxpayers a single penny. Any one who thinks that Qantas will fall down on the contract that is to be made in the terms of this legislation does not understand that Qantas is one of the world’s leading airlines. It is also one of the safest airlines in the world because it is controlled by Australian Department of Civil Aviation regulations. No country has better regulations for the safety and maintenance of aircraft than those we have in Australia.

The loan for the purchase of the aircraft will be just over £11,000,000 and it will enable Qantas to buy three 707-model jet aircraft. These aircraft are needed, not because Qantas has lost any aircraft or because its aircraft are unserviceable, but because Qantas gets so much business that its fleet of Boeing jet aircraft must be built up to sixteen. All Australians should be proud that their international airline which meets with terrific competition from other airlines throughout the world is able to continue to grow and operate successfully. I say with sincerity that one of the reasons for this success is that the Minister for Civil Aviation (Senator Paltridge), carrying on the work of his predecessors since 1949, has had a masterly advisory control over both our national and international airlines and Australians have benefited greatly.

In addition to its fine record of service and safety, Qantas Empire Airways Limited has had great advertising value. This hurts the Labour Party. I believe that Qantas does more to build up the tourist industry to Australia than any other medium we have. In 1956 I was in the United States of America for eight weeks and the only advertisements about Australia I read in American newspapers were paid for and inserted by Qantas Empire Airways Limited. The organization has put Australia on the map in America and has brought thousands of visitors to Australia each year. The future success and development of Australia rests largely on the development of the tourist industry which we have hardly touched. We are far behind New Zealand.

As I have said, Qantas has always been able to maintain repayments of loans and interest. It is a growing concern. No thinking person doubts that Qantas will observe the contract that is to be put into effect under the bill now before the Senate. I would hate to go to an election for return to this Parliament and say to the people of Tasmania, “We have had to buy more aircraft for Qantas. We decided that we would not borrow the money abroad but would take it out of revenue. That is why the Treasurer has increased taxes.” The Australian people would not stand for it. Senator Kennelly might express his doubts, but I believe the Australian people are fed up with governments which spend money from revenue on what are actually capital works.

Before the Labour Party moves stupid amendments and criticizes the Government it should be reminded of the fact that the Australian Loan Council, which had two Labour Premiers at the time - after 2nd May it will have only one - agreed to the proposition that Qantas should be able to purchase more jet aircraft to keep its fleet large enough for the business that it was getting and that the money should be borrowed from overseas without any burden being placed on the Australian taxpayer. The Labour Party has, I believe only for the purpose of opposing the Government, always objected to the borrowing of money from overseas. It forgets that Australia is going through a period of very great development. Many resources, formerly untouched and undreamt of by Labour governments, need development. We are only 11,000,000 people in a big continent and we want all the money we can get from within Australia to develop these resources. We ought to be grateful for the fact that this Government has so built up Australia’s reputation abroad that people with money to invest are willing to say: “ Righto. This is for Australia. We shall provide the loan.” When this happens, the Labour Party becomes anti-American. I do not know why this is so, because the Americans were our greatest allies in wartime. Whenever this Government introduces to the Parliament legislation to permit money to come to Australia from America, the Labour Party rises in opposition.

I should have thought, when I read the bill and the Minister’s second-reading speech, that a Labour Party spokesman would have risen to say: “ Qantas is a great international airline. We must keep it modern. It must purchase new aircraft. If we can get from abroad the money to purchase these new aircraft, without one penny cost to the taxpayers of Australia, the Government has achieved a notable victory and therefore we will support the bill. We have no criticism and we shall not move any stupid amendments, which mean nothing.”

If the press publishes the statements made by the Opposition, the Australian people, who now think they are over-taxed, will say, “Thank goodness that on 30th November last year we did not elect a Labour government, which would have had to tax us more to get this £11,200,000 to purchase aircraft for Qantas”. I believe that the amendment is mischievous and ill-conceived and that it should be completely opposed. I congratulate the Minister on being able to arrange the finance for the purchase of these aircraft to keep Qantas modern, because this airline is one of Australia’s greatest international assets. I support the bill.

Senator COHEN:
Victoria

.- Senator Marriott appears to have conducted this debate on the basis that it is possible to ignore the speech that was made by Senator O’Byrne in support of the amendment. Senator Marriott dealt with Senator O’Byrne’s speech as though Senator O’Byrne had made some entirely different speech. In fact, Senator Marriott has built up a series of straw men for his own edification and interest and has done his best to knock them down. He also drew a number of red herrings across the trail, because he completely misunderstood the attitude that the Australian Labour Party takes towards this bill.

The first thing is that Senator O’Byrne paid very proper tribute to the great work that has been done by Qantas Empire Airways Limited. To belittle the compliments that are paid by members of the Opposition does not help a proper discussion of these matters at all. In moving his amendment and in speaking to the motion for the second reading, Senator O’Byrne made it perfectly clear that we on this side of the chamber regarded Qantas as a very successful enterprise, so successful indeed that it pointed the way for similar government-type enterprise over very wide areas of the Australian economy. I do not at this stage want to go into fields that are not covered by this bill. One can wonder why, in the light of the remarkable progress made by Qantas this Government has run away consistently from the problem of creating an overseas shipping line. The need for such an overseas shipping line is very strong and the demand for it is growing not only in term’s of building the ships in Australia but also in terms of developing Australia’s international trade.

The CHAIRMAN__ The honorable senator is getting away from the bill.

Senator COHEN:

– With respect I am making only a passing reference. I arn merely saying that Senator Marriott misses the point when he states that the Australian Labour Party does not pay proper deference to, and does not properly appreciate the work of, Qantas. On the contrary, we think that splendid work has been done by Qantas, and we should like to see this method of organizing industry and activity adopted in fields other than air transport - passenger or freight.

The substance of the issue between the Government and the Opposition in this debate is not whether Qantas will be able to pay its way. Nobody has ever suggested that Qantas will fall down on meeting its obligations. Senator Marriott made groat play of this, as though the Opposition had suggested that in some way Qantas might be defaulting if the purchase of the necessary aircraft were financed in this way. On the contrary, there is no question of Qantas defaulting. The real issue is the method by which, from a national point of view, the purchase of these aircraft should be financed. The Labour Party’s approach is that no convincing case has been made out by the Government as to why we should be seeking these loan funds overseas rather than financing the purchase by paying cash to the interests concerned, and letting the internal financing as between the Government and the airline operator be worked out. That is the simple way in which we approach this matter. We say that it can be adequately financed out of revenue. We say that the state of Australia’s overseas balances is such that there is no problem at all about the financing of the loan internally and that we should not go overseas always to look for funds. What is this finance for? It is just to purchase a few aircraft, costing £J 1,000,000.

Senator Morris:

– We also will be able to retain money here for development, ls not that so?

Senator COHEN:

– The money would bc retained here if it were advanced out of revenue. We. would not then, of course, have to pay an extra £500,000 by way of interest.

Senator Marriott:

– You are urging increased taxation.

Senator COHEN:

– I am not urging that at all. These things can be done by way of a Commonwealth Bank loan. This loan could be fixed up simply in five minutes, Drawing a red herring across the trail, Senator Marriott implied that the Labour Parly was pressing some kind of a sectional view. He referred to our producing what he called a stupid argument, not for the first time now, but whenever the financing of the purchase of aircraft by overseas loans arises. The view that we put forward about not always going over seas for funds is not simply the view of the Labour Party. I ask for leave to refer to an article in the Melbourne “! Herald “ of Saturday, 11th April, 1964, written by Mr. John Eddy.

Senator Marriott:

– Isn’t he your public relations officer?

Senator COHEN:

– No, but I am not above agreeing with arguments that are soundly based, no matter where they come from. This article, under the heading “ We Should Not Pawn Ourselves For Capital “, contains the following statement -

A few eyebrows were raised when the Federal Treasurer, Mr. Holt, addressing the Slock Exchange of Melbourne, recently, said he liked to borrow some millions overseas each year and, because of the temporary American tax on overseas investment, he proposed to transfer the borrowing to the London market.

Under the sub-heading “ Why Borrow More Money? “ the article continues -

As Australia’s reserve of overseas funds has risen to more than £800.000.000, compared wilh £300,000,000 in the crisis caused by overimporting three years ago, I wonder why the Government should want to borrow at all al this particular stage. On Government borrowing overseas, in sterling, U.S. dollars, Canadian dollars, Swiss francs, Netherlands guilders and German Deutsche marks, our interest liability is now £34,000,000 a year.

That is the figure that Senator O’Byrne mentioned some little time ago. That is not the view of some one whom Senator Marriott can glibly call stupid, just because he represents an opposite political view; it is the view of a journalist writing for one of Australia’s leading newspapers. He certainly was not writing in the interests of the Australian Labour Party.

Senator Marriott:

– What academic qualifications has he?

Senator COHEN:

– Senator Marriott should not make his position worse. He dropped a few boners during th: course of his address this afternoon and he should not make the position any worse. For some time now it has been obvious (hat the Government has been concerned about what might arise in relation to the equalization tax that has been imposed recently in the United States of America. I do not rely upon my own insight for this observa-tion. I rely upon the words of the Treasurer (Mr. Harold Holt) himself. In

October last, in reply to a question asked in the Senate, the Treasurer supplied1 an answer which contained the following words: -

Australia would adopt a “wait and see” approach to the New York market until it was clear what the effects of the proposed interest equalization tax would be.

As soon as the tax was foreshadowed, the Treasurer thought it was a proper attitude for Australia to wait and see. The concern he had in October of last year apparently has not been dissipated. In the “Taxpayers Bulletin” of Saturday, ll th April, 1964, there was a report of an address given by the Treasurer to the Stock Exchange of Melbourne. The report stated -

The Government was concerned at the effect of the U.S. Government’s recent interest equalization tax which, he said, seemed to be operating somewhat unreasonably against Australia. If Australia had to pay a substantial premium on its U.S. borrowings under the new bill, Australia would necessarily have to look to European sources for future raisings. Mr. Holt said that the new tax, which operated retrospectively from July 17 last year, applies to borrowings by 22 of the more developed countries, including Australia. The legislation was designed to impose a tax on any American resident who bought securities issued by a foreign borrower (including Governments as well as private borrowers).

The report concluded with these words -

The tax was one of a series of comprehensive measures on the United States balance-of-payments position. The effect was to increase by about one per cent, the interest cost to foreigners of obtaining capital in the United States.

It is perfectly clear from that report that it is not only members of the Opposition, taking up some partisan position - as Senator Marriott suggested quite falsely in this debate - who are concerned about the matter. The Federal Treasurer himself obviously has some misgivings about the application of the equalization tax. It is quite absurd for Senator Marriott to prate about the Labour Party’s attitude to borrowing in America, as though there were something anti-American, as he puts it, about the Opposition. That is quite a false charge, and I take this opportunity to say so at this stage of the debate on behalf of the Opposition. We do not object to borrowing under reasonable conditions, when borrowing is warranted, from the United States or from anywhere else, but we do not want to see this country pawned unnecessarily. Our whole attitude in relation to overseas borrowing or overseas investment is to encourage it where it means growth, but to be careful to see that it does not get out of hand so that eventually the control of Australian industry passes from Australian hands into the hands of overseas interests. Overseas borrowing is only a part of the whole problem of overseas investment in industry.

It is perfectly obvious, and members of the Opposition agree with this, that these aircraft are necessary. We do not even quibble about the type of aircraft that are envisaged by the bill, although I think it is worth pointing out that a change has taken place in recent years in the form of the legislation and in the form of the agreements made between the Qantas company and overseas interests. I refer to Act No. 59 of 1962, which is the Loan (Qantas Empire Airways Limited) Act. In the schedule to that act, which contains the agreement made between the Commonwealth interests and the American interests, the precise type of aircraft was incorporated. In the 1962 legislation reference was made to Boeing Model 707-1 38B aircraft and related spare parts and equipment. In 1960, when a similar loan was negotiated, there was reference to the modification of particular Boeings and the purchase of other Boeings. When the Parliament was asked to approve of the agreement, which was a schedule to the act, the precise aircraft and equipment that were the subject of the loan were revealed for the Senate to see. On this occasion, although there is a reference to aircraft and equipment in the Minister’s second-reading speech, there is no reference to the precise aircraft and equipment in the enacting clauses or in the agreement that is a schedule to the bill. There is merely a reference to aircraft and necessary equipment.

I should like to know the reason for the departure from a previous practice. I am not being critical of it, but the Senate should be informed of the reason for the departure. I ask the Minister, or any honorable senator who speaks in this debate on behalf of the Government, to explain to us why a different expression is used in the agreement, because if the Senate passes the legislation there will be nothing in the act to prevent the Government from changing its mind and purchasing some other type of equipment.

There is no reference to the particular aircraft or equipment in the bill. That is the point I make. J am not suggesting that there has been an intention to depart from what has been put to the Senate on previous occasions; I merely say that particular reference has not been incorporated in the legislation.

The bill gives us an opportunity not only to pay tribute to the work of Qantas, but also to appreciate the extent to which it has advanced compared with other airline operators in the world. I have here a table that appeared in the “ Economist “ of 23rd November, 1963, and with the concurrence of the Senate I incorporate it in “ Hansard “.

It will bc seen that, on the basis of profit or loss as a proportion of revenue, Qantas is the second best operator in the world. The British Overseas Airways Corporation, unfortunately, Tims at a loss. The relevant figure is minus 10.5. The figure for Qantas is plus 7.9. The most successful operator, on the basis of profit or loss as a proportion of revenue, is Pan-American Airways. If honorable senators examine the table they will see that Qantas has an extremely good record and is holding its own in relation to the other airlines of the world. That is why wc feel that it ought to be assisted at this stage, lt may well be thought to be a model which can be emulated in other fields of enterprise.

To return to the crux of the matter, the view of the Opposition is that the Government is unnecessarily looking abroad for funds. It is unnecessary to labour the method of financing the transaction that is being adopted. We say that it should be financed out of internal revenue and that there is no point in running overseas to subject the market to another loan to Australia. I support the amendment that has been moved by Senator O’Byrne.

Senator MATTNER (South Australia) 14.10]. - I support the bill and oppose the amendment. Senator Cohen has convinced me by his argument that the amendment is quite wrong. I was delighted to hear the justifiable praise that Senator Cohen bestowed upon Qantas Empire Airways Limited. He stated that Qantas was efficient, that it had made a profit, knew how to run its business and was worthy of the support of the Government. The Government is not borrowing this money for itself. The Government, at the instigation of Qantas, is to be the guarantor for the loan. If Qantas - and I am not doubting it for a moment - has shown such keen business acumen, has made a profit and has earned dollars, then I ask Senator Cohen and other honorable senators opposite: Why should we interfere with the work of this grand company? Why should we dictate the manner in which it borrows money? 1 think that Senator Cohen fell into an error when he spoke about our overseas reserves. After listening to the honorable senator one would think that the overseas reserves belong to the Government. That is not so. The Government cannot touch them. Senator Cohen knows that to be so, as do all the other honorable senators on the Opposition side of the chamber, but they will not admit it. The honorable senator is putting to the public that the Commonwealth Government has overseas reserves worth £800,000,000. An honorable senator opposite says that the reserves are an Australian economic asset. I ask: Who owns them? Does the Government own them? The answer is, “ No “. The Government cannot draw on the reserves because they belong to individuals. The sooner honorable senators opposite acknowledge in this chamber that the Government cannot spend the reserves the better it will be.

There are one or two interesting points that I want to make in relation to the proposed loan. In the days of Labour rule Mr. Lang borrowed money in America at a brokerage rate of between 5 and 6 per cent. There are still honorable senators in this chamber who subscribed to the slogan “ Lang is right “. But under this bill the brokerage rate is only one-half of 1 per cent. Does not that indicate faith in Qantas and the Australian Government? The bill provides for the Government, on behalf of Qantas, to borrow £11,200,000 from America for the purchase of three Boeing 707-338C jet aircraft and equipment. Delivery is to be made between February and September of next year. It is interesting to note that in May, 1963, the Commonwealth guaranteed a loan of £4,000,000 for Qantas Empire Airways Limited and £4,900,000 on behalf of Trans-Australia Airlines.

Qantas will be required to meet all charges as they become due.’ So, as I said earlier, the Commonwealth is acting only as a guarantor. Before guaranteeing any business, we must be satisfied that that business is sound. I do not believe for a moment that the Opposition has any doubt about the reliability of the Qantas organization. Only a few moments ago Senator Cohen reminded us about the success of the airline. The Government is quite justified in acting as guarantor to the company.

Senator Cohen:

– The Government is a direct party to the agreement.

Senator MATTNER:

– As a guarantor. I imagine that Senator Cohen is as conversan r as I am with the responsibilities that i est upon a guarantor. I repeat that one ae:s as a guarantor only if one believes that the company or person guaranteed is worthy of such consideration. I do not expect for one moment - 1 am sure the Opposition is of the same opinion - that this loan raising will lead to any charge being made on the nation’s revenue.

The raising of this loan gives us entree to the American market. I imagine that dollars are in rather short supply. Qantas Empire Airways Limited, through its earnings, will be able to repay a great deal of this loan in dollars. Senator Cohen said that he did not believe in our putting ourselves in pawn to capitalism. Nor do I. Unless a loan could be repaid and a profit returned, I would not consider agreeing to it. Qantas will be able not only to repay this loan but also to make a profit on the deal. This bill will give us greater drawing power overseas. The flow of American dollars into Australia in investment enables us to borrow in the United States of America without any net loss to the Australian currency. As far as the flow of American capital is concerned, we will be profiting on the deal. We will be afforded access to the American market to buy some of the machinery and plant that we need for primary production.

We note that since 1956 Australia has borrowed 85,400,000 dollars to purchase aircraft, of which 69,400,000 dollars has been for Qantas Empire Airways Limited and 1 6,000,000 dollars for Trans-Australian Airlines. A considerable number of repayments have been made in both cases. Qantas has met its obligations on time. The terms and conditions of the loan we are now considering have been approved by the Australian Loan Council. That is important, because the Loan Council has an important influence ~«i the borrowing and distribution of capital in Australia.

I have been interested to note in the schedule to the bill the terms of repayment and the times at which the interest will fall due. This loan is being made available at the lowest possible cost. The terms of repayment are favorable to Australia. With the extra money that will now be made available, Qantas should go from strength to strength. I support the bill but oppose the amendment.

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

[4.22]. - I apologize for the absence from the chamber of my colleague, the Minister for Civil Aviation (Senator Paltridge), who is in charge of this bill. I shall do my best to conclude the debate on his behalf. As I understand the trend of the debate, the Opposition really supports the transaction but it has taken advantage of this opportunity to deliver a glancing blow at the Government’s policy on overseas borrowing. I propose to confine my remarks to that topic.

Whilst a lot can be said for and against obtaining funds overseas, the circumstances surrounding the loan we are now considering are the least favorable in which to advance the cause which has been espoused by the Opposition. The borrowing of funds overseas in these circumstances is open to less criticism than is any other overseas borrowing. To borrow overseas for the purchase of aircraft is normal procedure. Aircraft become obsolescent rather quickly, and the terms of repayment generally correspond to the life of the aircraft. These are self-contained transactions. Qantas Empire Airways Limited earns a substantial amount of overseas exchange. So overseas borrowings by Qantas are almost selfliquidating. They are repaid from the company’s earnings. Having regard to the fact that this loan will be liquidated over the life of the asset that will be purchased and to the fact that the interest rate will be a little less than 5 per cent., the borrowing is being made on extremely favorable terms. It will be a most favorable borrowing, whether viewed philosophically or as a practical financial proposition. It is all very well to say that the transaction should be financed from revenue or from internal loan raisings, but we must remember that the States have a say in the volume and disposition of internal loan raisings. I put it to the Opposition that it would be difficult to argue a case before the Australian Loan Council that an internal loan should be raised in Australia for the purchase of these aircraft when the States know that the necessary amount could be borrowed overseas upon such favorable terms. It is all very well to have this philosophical approach, but I do not notice that it is so much in evidence in State Labour parties. 1 have noticed that State Premiers are just as happy to go overseas looking for funds for their States as are other politicians.

The general point was taken that there was no need to borrow overseas because at present our overseas balances are strong.

With all the strength of argument I can command I say that that is a very wrong approach to this matter. It is very wrong to look at this problem in isolation and say that we should not borrow from overseas at present because our overseas balances are strong. If there is one characteristic of the Australian economy which should always be borne in mind by those in positions of responsibility, it is the way in which our overseas balances fluctuate. Australia must always aim at increasing its export income if it is going to have the funds within Australia to carry out the development policies to which we all subscribe. We are dependent so much for our overseas balances, and our overseas earnings, upon our primary products being sold at world parity prices, and upon seasonal conditions, that it would be a basic error of judgment to pay over-much attention to the state of our overseas balances at the moment. They are strong at present. We have a generation in Australia which has not known a drought. We have a great responsibility to keep our overseas balances at as high a level as we can. Never let us rest content with the strength and height of our overseas balances, but let us always keep improving them so that we have a large insurance fund to meet contingencies that might arise in the future.

The alternative suggested in the amendment is that we finance this transaction out of revenue. If this principle is taken too far it could amount to a counsel of despair. There is so much to be done in Australia and so many demands for finance in so many directions, that to give way easily to a temptation to pay for what has to be done out of revenue instead of out of loan money, is inherently wrong and unsound. One of the great advantages that we have in Australia, and one of the basic reasons for the rate of progress of Australian development has been our ability to maintain taxation at a reasonable level. Our rate of taxation in Australia compares favorably - if that word can apply to any description of taxation - with that of any other country, and that is a great advantage to Australia, not only from a financial point of view, but in maintaining a spirit of incentive and a desire to do the things that need to be done.

It is always easy to say that the Government should provide funds to do this and to do that but the size of the pool is not unlimited. When you say that the Government should provide funds to do this you mean, in effect, that the Government should provide funds to do this at the expense of doing that. It is a question of priorities all the time and we must achieve what we can within the resources available to us. We cannot do all the things that we all want to do within the limits of the resources available to us. In my opinion, the greatest task that confronts any democratic government is to maintain a rate of progress without the overstretching of resources which leads to inflation. I do not claim to be an expert on this particular bill. I have taken it up at short notice on behalf of my colleague, but it does seem to me that it is an extremely sound transaction to borrow overseas at favourable interest rates for a project which will liquidate the liability during the life of the asset.

Amendment negatived.

Original question resolved in the affirmative.

Bill read a second time.

In committee:

The bill.

Senator WRIGHT:
Tasmania

.- I rise to take note of only one matter. I refer to clause 8 of the bill which states that the Consolidated Revenue Fund is appropriated. I am pleased to notice that the bill deals with matters other than appropriation, taking the view that this is a bill which comes within section 54 of the Constitution. That is to say it proposes a law that appropriates revenue or money otherwise than for the ordinary annual services of the Government. I make that observation, not having completely despaired that during my time in Parliament I shall, one day, get an answer to question No.1 on the notice-paper to which my observation relates.

Senator COHEN:
Victoria

.- Can the Minister answer the question I asked as to why there has been an alteration in the usual practice so far as the form of the agreement is concerned, and in the recital in the clause of the bill itself?

Senator Sir WILLIAM SPOONER (New South Wales - Vice-President of the Executive Council and Minister for National

Development) [4.33]. - I apologize to Senator Cohen for not answering his question. I had a note to answer it but in the heat and excitement of my peroration I omitted to do so. I am told by my advisers that there is a simple explanation. The lenders under this agreement are a different set of lenders from those in the previous agreement. A different group of people is lending the money. The agreement was prepared in draft by the people lending the money and was submitted to the operator. This was the form in which the new group prepared the draft agreement and the Commonwealth accepted it. The Commonwealth thought that, on the whole it provided a greater advantage than the previous form. Under this draft the Commonwealth itself has more come-and-go than it had under the previous agreement.

Senator Cohen:

– Because the lenders apparently did not want to insist on the particular aircraft?

Senator Sir WILLIAM SPOONER:

– I am told that there was no practical point at issue. This was just the way the agreement came out.

Bill agreed to.

Bill reported without amendment; report adopted.

Third Reading

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

page 892

FOREIGN AFFAIRS COMMITTEE

Message received from the House of representatives intimating that it had agreed to the following resolution in connexion with the Foreign Affairs Committee: -

That Mr. Aston, Mr. Chipp, Mr. England, Mr. Failes, Mr. Howson, Mr. Jess and Mr. Turner be members of the Joint Committee on Foreign Affairs.

That, until such time as the six remaining vacancies for members of the House of Representatives on this committee are filled by members of the Opposition, Mr. Falkinder, Mr. J. M. Fraser, Mr. Haworth, Mr. Holten, Mr. Hughes and Mr. Kelly be members of the committee.

Sitting suspended from 4.37 to 4.45 p.m.

page 892

MEAT INDUSTRY BILL 1964

Message received from the House of Representatives intimating it had agreed to the amendment made by the Senate in this bill.

page 893

LIVE-STOCK SLAUGHTER LEVY BILL 1964

Bill returned from the House of Representatives with a message intimating that it had made the amendments requested by the Senate in this bill.

Third Reading

Bill (on motion by Senator Wade) read a third time.

page 893

TARIFF BOARD

Senator Sir WILLIAM SPOONER (New

South Wales - Vice-President of the Executive Council and Minister for National Development). - I present reports by the Tariff Board on the following subjects: -

Dictating Machines.

Polyethylene.

Shrimps, prawns, shrimp meat and prawn meat.

page 893

QUESTION

SOCIAL SERVICES

(Question No. 96.)

Senator McCLELLAND:

asked the Minis ter representing the Minister for Repatriation, upon notice -

  1. Is it a fact that, when an increase of 10s. per week was made last year to the pension of a married totally and permanently incapacitated pensioner, because the maximum permissible income under the means test was not likewise increased, the amount of service pension that a totally and permanently incapacitated pensioner and his wife are entitled to was reduced by 10s. per week, thus meaning no increase at all in the rate of payment to a totally and permanently incapacitated pensioner and his dependent wife?
  2. If this is so, will the Minister take steps to see that this anomaly is rectified so as to give the married totally and permanently incapacitated pensioner the real rate of payment to which he is more than entitled?
Senator Sir WILLIAM SPOONER:

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

  1. All those receiving war pensions at the total and permanent incapacity rate (24,738 at June last) received the full 10s. per week war pension increase provided in the 1963-64 Budget. Of these, only some 6,000 were affected as dual pensioners in the manner indicated by the honorable senator.
  2. There is no anomaly in regard to these dual pensions nor is there any deprivation of pension to which married totally and permanently incapacitated pensioners are entitled. In 1955 this Government removed the earlier restriction which prevented a totally and permanently incapacitated pensioner from receiving, in addition to his war pension, a means test pension, that is a social services age or invalid or repatriation service pension. This resulted in a significant proportion of married totally and permanently incapacitated pensioners and their wives becoming eligible for the additional pension. It is not anomalous or unreasonable that war pension should be included as income in determining eligibility for a means test pension. A married totally and permanently incapacitated pensioner and his wife, without other means, now receive £17 10s. per week in war pension and service pension.

Senate adjourned at 4.48 p.m., until Tuesday, 5th May, at 3 p.m.

Cite as: Australia, Senate, Debates, 23 April 1964, viewed 22 October 2017, <http://historichansard.net/senate/1964/19640423_senate_25_s25/>.

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