Senate
19 May 1965

25th Parliament · 1st Session

  1. Senate
  2. 25th Parliament
  3. 1965

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

page 899

QUESTION

FRUIT FLY

Senator DRURY:
SOUTH AUSTRALIA

– Has the attention of the Minister in Charge of Commonwealth Activities in Education and Research been directed to a Press report appearing in the Adelaide “News” of 17th May that fruit flies have been wiped out on the Pacific island of Guam by a comparatively simple method of sterilisation? Will the Minister have an investigation made of this report to see whether it is correct and, if it is, whether it will be possible to introduce the method to Australia so that the fruit fly, which is causing great losses to the fruit industry, could be eliminated?

Senator GORTON:
Minister for Works · VICTORIA · LP

– The question is a very interesting one. Actually, the State Departments of Agriculture have responsibility for the eradication of fruit fly in their various areas and for the prevention of the spread of fruit fly across the borders. Nevertheless, the Commonwealth Scientific and Industrial Research Organisation carries out research, the results of which can be made available to the State Departments to assist them in this task. I shall ask the Organisation what is known about the report to which the honorable senator referred and what the Organisation can do about it.

page 899

QUESTION

REPATRIATION

Senator MORRIS:
QUEENSLAND

– Has the Minister for Repatriation seen an article in the “ CourierMail “ of 17th May, in which the honorable member for Lilley, Mr. Kevin Cairns, is reported as having said that the War Pensions Entitlement Appeal Tribunal which granted a war widow’s pension to Mrs. Barbara Partridge was “ under oath not to disclose any evidence placed before them “? Does the Minister feel disposed to comment on that statement?

Senator MCKELLAR:
Minister for Repatriation · NEW SOUTH WALES · CP

– In anticipation of this question, I had the following information prepared to present to the Senate: I have seen the newspaper report in question. Members of Appeal Tribunals are not required to take an oath not to disclose any of the evidence put before them but in practice, and very properly, they do not disclose details of evidence, much of which is necessarily of a personal and confidential nature. Considerable public interest was aroused in this case following Press reports, from which it could be inferred that Mrs. Partridge had been granted a war widow’s pension in circumstances under which a war pension would not be granted to other widows of ex-servicemen. The reports, which stated that her pension had been granted as a special act of grace, were incorrect. I repeat that they were incorrect. In fact, the grant had been made strictly in accordance with the provisions of the Repatriation Act and under normal procedures.

Mrs. Partridge claimed that her husband’s death was due to war service. Her claim was examined in the Department and, with all the available evidence, was referred to the State Repatriation Board for determination. The Repatriation Board disallowed the claim and the widow exercised her right under section 29 of the Repatriation Act to appeal to the Repatriation Commission, which disallowed the appeal. Thereupon Mrs. Partridge exercised her further right of appeal to a War Pensions Entitlement Appeal Tribunal, which allowed the appeal. Appeal tribunals are quasi-judicial bodies set up under the Repatriation Act as the final determining authorities for war pension claims. Her appeal was heard in accordance with the usual procedures and she was represented by an advocate.

Appeal Tribunals are not required to give reasons for their decisions and in practice do not do so. However, it should be appreciated that the Appeal Tribunal which decided this case had all the evidence before it, and it is proper to assume that it reached its decision on a careful assessment of that evidence and in accordance with the special provisions of the Act which require it to determine appeals with due regard to the benefit of the doubt and onus of proof. If the Appeal Tribunal was in any doubt about the cause of death, that doubt had to be resolved in favour of the appellant.

It should also be understood that in determining whether the death of an exserviceman is due to war service for purposes of the repatriation legislation, it is often necessary to look beyond the immediate cause of death and to determine whether that cause was itself contributed to by disabilities due to war service.

page 900

QUESTION

MEDICAL FEES

Senator BISHOP:
SOUTH AUSTRALIA

– I ask the Minister representing the Minister for Health whether it is a fact that there exists between the Australian Medical Association and the Government an agreement under which medical fees are stabilised and which is due to expire during May or June of this year. Will the Australian Medical Association, at its reported forthcoming conference, be in a position to fix and apply any new charges or is it obliged to consult with the Government in connection with any new schedule of fees?

Senator MCKELLAR:
CP

– I understand that the Australian Medical Association recently undertook an economic survey of the cost structure of medical practices. This was not a Government survey; it was arranged by the A.M.A. itself. I understand that the results of that survey will be considered by the Federal Assembly of the Association later this month. It would be premature to foreshadow any action that may be taken until the Association has considered the results of the survey.

page 900

QUESTION

SOUTH EAST ASIA TREATY ORGANISATION

Senator MARRIOTT:
TASMANIA

– My question is addressed to the Minister representing the Acting Minister for External Affairs. As there seems to be in Australia a general and dangerous ignorance of the terms of the South East Asia Treaty Organisation pact, will the Minister either make a statement in the Senate or ask his colleague to issue a Press statement setting out clearly Australia’s obligations and the benefits that accrue to Australia from its membership of the organisation?

Senator GORTON:
LP

– To the best of my knowledge, the actual terms of the South East Asia Treaty Organisation pact have already been discussed in the Senate and can be read in “ Current Notes “ and other publications of the Department of External Affairs. But as this discussion occurred some time ago, it may be of value to have the terms of the pact restated. Accordingly, I shall take up with the Acting Minister for External Affairs whether, and if so how, republication of the terms of the treaty should be effected.

page 900

QUESTION

SHIPPING

Senator MURPHY:
NEW SOUTH WALES

– I address a question to the Minister representing the Minister for Shipping and Transport. Is it not time that the Commonwealth Government moved in to remedy the failure of other public authorities and private interests to provide proper wharfs and cargo facilities at ports such as Sydney? As the Government, under its trade and commerce power, now regulates the use of manpower on the wharfs, will it consider regulating also the physical set up so as to eliminate the notorious inefficiency of our ports which impedes our foreign and interstate commerce?

Senator PALTRIDGE:
Minister for Defence · WESTERN AUSTRALIA · LP

– The honorable senator seeks the easiest solution that he can find to a problem which is exciting considerable comment, is causing inconvenience, and has done so for some time. But what he very conveniently overlooks is that not only is the conduct of ports a State responsibility but the ports, especially metropolitan ports such as Sydney, are a source of vast revenues for the State Governments. If the honorable senator were to examine the amount of revenue that has been received over a given number of years and compare it with the expenditure that the States have embarked upon in relation to port works, he might get a clearer picture of the situation. The Senate will know that in special circumstances, sometimes in the case of isolated ports and particularly where the port authorities were not themselves in possession of sufficient revenue to finance expansion, this Government has helped and helped very considerably for the purpose of stimulating exports.

As to the other part of the question regarding the assumption of financial responsibility for a port of the nature of Sydney, I can only suggest that the honorable senator should address it to the State Government of New South Wales. He should inquire particularly why the former Government of that State did nothing to improve port facilities over the last few years.

page 901

QUESTION

FLAX

Senator DRAKE-BROCKMAN:
WESTERN AUSTRALIA

– My question is directed to the Minister for Cus toms and Excise. Will the Minister briefly inform the Senate of the Government’s policy in regard to the flax industry in Australia? Is it the policy of the Government that all of Australia’s flax requirements in the future will be imported? Is the estimated cost of importing Australia’s flax requirements £800,000 per annum? Does the Minister agree that the encouragement of flax production in Australia could relieve this drain on our overseas balances?

Senator ANDERSON:
Minister for Customs and Excise · NEW SOUTH WALES · LP

– The question asked by the honorable senator relating to the flax industry follows somewhat the pattern of questions that have been raised in the Senate in the past. A reference was made to the Tariff Board in June of last year by the Minister for Trade and Industry. The Tariff Board presented its report in December last. The Board took evidence from the people in the industry and in its report it recommended that no assistance should be afforded to the production of flax in Australia. The decision was based on evidence from the industry. The Government accepted the finding of the Board. The report was tabled in the Senate on 24th March of this year. As to the supplementary part of the question asked by the honorable senator, I suggest that it could be more properly directed to the Minister for Trade and Industry because of the special responsibility that he and his Department have in this particular field.

page 901

QUESTION

NATURAL RESOURCES

Senator CAVANAGH:
SOUTH AUSTRALIA

– I ask a question of the Leader of the Government in the Senate. Has the Government received from the Federal Council of the Australian Country Party a request that the Government study ways to safeguard Australia’s mineral and other natural resources from undue external ownership? Has the Government done anything in the matter?

Senator PALTRIDGE:
LP

– It is not within my knowledge that the communication referred to has been received by the Government.

page 901

QUESTION

REPATRIATION

Senator WRIGHT:
TASMANIA

– I wish to ask a question of the Minister for Repatriation.

I express my thanks to the Minister for supplying me, in answer to a recent request, with figures showing the relative movement of the basic wage, on the one hand, and the total and permanent incapacity pension, on the other hand, during the last 20 years. I ask the Minister whether he has noted that the last time the basic wage and the T.P.I, pension were equal was in 1951, and that since that period a gap has developed between them. In 1951 they were almost equal in shillings per week - the basic wage was 176s. and the T.P.I, pension 175s. - but in 1964 the basic wage was 308s. and the T.P.I, pension 285s. Will the Minister, in association with the Treasurer, give special consideration to this matter when budgetary policy is being considered?

Senator MCKELLAR:
CP

– I have noted tha facts as stated by the honorable senator. They will be taken into consideration when this matter is determined within the next month or so.

page 901

QUESTION

COMPUTER SYSTEMS

Senator MCCLELLAND:
NEW SOUTH WALES

– My question is directed to the Leader of the Government in the Senate. Is the Minister aware that the Commonwealth Government has spent over £2 million on the installation of a computer system at the Government Printing Office in Canberra, with unitsestablished in each of the State capital cities, to expedite the book work of the Department of Health, the Taxation Branch and the Bureau of Census and Statistics? Is it also a fact that after the units were installed in the State capitals it was found that either because of faulty installation or technical defects they were unable to communicate with the central unit in Canberra and that to rectify the fault the sum of £600,000 was involved? As a large amount of taxpayers’ money is involved in this expenditure, will the Government call for a complete investigation into the matter and make a report to Parliament?

Senator PALTRIDGE:
LP

– I am aware, of course, that a number of Commonwealth departments are installing computers. This programme has been proceeding over a number of years. I am not aware of the particular case to which the honorable senator has referred and I am not aware that after installation and as a result of some fault it was found necessary to expend a further large amount to make the system operate. I will certainly be most interested to find out how accurate the honorable gentleman’s statement is.

page 902

QUESTION

BRANDY

Senator LAUGHT:
SOUTH AUSTRALIA

– I wish to ask the Minister for Customs and Excise a question relating to the commodity known as brandy. Can the Minister let me know the extent of the Australian production of brandy during the last four years and Australia’s consumption, exports and imports of brandy?

Senator ANDERSON:
LP

-Yes. Imports of brandy have increased over the past four years. An upward trend has also been reflected in the production, export and consumption of brandy. The figures that I have are quite comprehensive and with the concurrence of honorable senators I shall have them incorporated in “ Hansard “.

page 902

BRANDY

page 902

QUESTION

PARLIAMENT

Senator MARRIOTT:

– My question is directed to the Leader of the Government in the Senate. Is is a fact that, in order to give honorable senators the opportunity of debating adequately bills coming before the Senate, the Leader of the Government has arranged for the Senate to meet on at least two days more than was formerly intended?

Senator PALTRIDGE:
LP

– Yes. It is intended that the Senate will meet on Friday next, adjourning at about 5 o’clock in the afternoon, and will meet again on Monday at 2.30 p.m., continuing to sit until we discharge the business of the Senate.

page 902

QUESTION

UNEMPLOYMENT

(Question No. 416.)

Senator TANGNEY:
through Senator O’Byrne

asked the Minister representing the Minister for Labour and National Service, upon notice -

  1. Is it a fact that, in Western Australia, some 1,800 teenage girls are unable to obtain employment despite their having passed either the Junior or Leaving Certificate?
  2. Are only 100 clerical jobs available for men as against 514 applicants; and only 183 jobs for women as against 1,791 registered unemployed?
  3. Is it a fact that 2,646 jobs are available in the building and metal trades for skilled and semiskilled workmen and that these jobs are not suitable for teenagers?
  4. Is this State teenage unemployment part of an Australia-wide pattern? If so, can the Minister suggest a remedy for it?
Senator GORTON:
LP

– The Minister for Labour and National Service has supplied the following answers -

  1. There are no separate figures for teenagers, but at 26th February 1965 there were 1,799 females under the age of 21 registered for employment with the Commonwealth Employment Service in Western Australia. By 30th April the number had fallen to 1,133. No statistics are available on how many of these junior females had passed the Junior or Leaving Certificate, but a large proportion were seeking employment in occupations for which these qualifications are not normally required.
  2. The figures quoted by the honorable senator relate to juniors as well as to adults. The junior content is necessarily high early in the year, as this particular category, which includes professional, semi-professional, commercial, clerical and administrative occupations, is the one in which many school leavers, particularly girls, seek employment. In many instances applicants do not have qualifications which meet the standards set by employers.
  3. The figure quoted by the honorable senator is the total number of vacancies held by the Commonwealth Employment Service in Western Australia at 26th February 1965. It includes both males and females and covers all occupations. At 30th April there were 644 vacancies for males in the skilled building and metal trades, most of which were for tradesmen.
  4. No justification appears to exist for believing that there is a teenage unemployment problem in Australia. The only real problem of unemployment among young people relates to junior females, particularly in country areas. The Commonwealth Employment Service is doing all it can to place these girls. No ready solution by way of creation of additional jobs in the country suitable only for these girls is in sight and many parents are understandably reluctant to see their daughters leave home to go to the cities and other centres where there may be suitable jobs.

page 903

QUESTION

UNITED KINGDOM MIGRANTS

(Question No. 465.)

Senator MURPHY:

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

  1. Approximately how many persons of United

Kingdom citizenship are resident in Australia and are eligible for registration as Australian citizens, but have never applied for such registration?

  1. Approximately how many former United Kingdom citizens have become Australian citizens during the whole of the period from 1949 to date?
  2. How many applications for citizenship by United Kingdom citizens resident in Australia are pending?
Senator McKELLAR:
CP

– The Minister for Immigration has supplied the following information in answer to the honorable senator’s questions -

  1. It is estimated that about 535,000 citizens of the United Kingdom and colonies are residentially qualified but have not applied for Australian citizenship. It is believed that the principal reason for this is that British subjects in Australia experience no practical difficulties as compared with Australian citizens, other than that they are not entitled to an Australian passport.
  2. Between 26th January, 1949, and 31st December 1964, 12,545 citizens of the United Kingdom and colonics were granted certificates of registration as Australian citizens.
  3. Four hundred and forty-one applications for registration by citizens of the United Kingdom and colonies are pending.

page 903

QUESTION

ANZUS TREATY

(Question No. 484.)

Senator WRIGHT:

asked the Minister rep resenting the Acting Minister for External Affairs, upon notice -

Mas the United States of America any obligations by treaty towards Australia in the event of Australian troops becoming involved in Indonesian attacks in the course of that country’s so-called confrontation?

Senator GORTON:
LP

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

The view of the Australian Government in respect of obligations under ANZUS was set out in my statement to the House on 21st April 1964 and may be read in Parliamentary Debates, House of Representatives, volume 42, page 1280. As I also subsequently stated, that view was found entirely acceptable by the United States.

page 903

RADIOPHYSICS LABORATORY FOR THE COMMONWEALTH SCIENTIFIC AND INDUSTRIAL RESEARCH ORGANISATION AT EPPING, NEW SOUTH WALES

Report of Public Works Committee

Senator PROWSE:
Western Australia

–

I present the following report of the Parliamentary Standing Committee on Public Works -

Erection of a radiophysics laboratory for the Commonwealth Scientific and Industrial Research Organisation at Epping, New South Wales.

I ask for leave to make a statement in connection with the report.

The PRESIDENT:

– There being no objection, leave is granted.

Senator PROWSE:

– A summary of the recommendations and conclusions of the Committee arrived at after studying the evidence presented, is as follows -

  1. There is an urgent need not only to provide adequate laboratory and other accommodation and open space for the Division of Radiophysics, but to relieve the overcrowding problems of the National Standards Laboratory.
  2. The Committee recommends the reestablishment of the Division at Epping, New South Wales.
  3. The Committee supports the action being taken to acquire the remaining land which will give the site a continuous frontage on Pembroke and Vimiera Roads, Epping.
  4. The Committee recommends the construction of the buildings and services as proposed.
  5. The estimated cost of the proposed work is £800,000.

page 903

QUESTION

SYDNEY (KINGSFORD-SMITH) AIRPORT

Ministerial Statement

Senator HENTY:
Minister for Civil Aviation · Tasmania · LP

– by leave - My attention has been drawn to a letter from Captain P. J. R. Shields, Chairman of the Operations Group, Overseas Branch, Australian Federation of Air Pilots which was incorporated in “ Hansard “ by the honorable member for Mackellar (Mr. Wentworth) in the House of Representatives last night. In fact Mr. Wentworth referred the letter to me last September, I passed the matter over to the operational experts of the Department of Civil Aviation and a reply to the points raised by Captain Shields was sent to the honorable member for Mackellar on 30th October last. Mr. Wentworth has not questioned the reply in when he incorporated Captain Shields’s letter, in fairness he should also have given the reply. I am quite prepared to table the reply. I am quite prepared to table the reply if the Senate wishes.

I should like also to make two other observations on Captain Shields’s letter. Pilots have a statutory obligation to report any hazardous incident or circumstance that conies to their attention. The Department of Civil Aviation has not received any reports from the Australian Federation of Air Pilots or from individual pilots which support Captain Shields’s somewhat extravagant description of Sydney airport as a pilot’s nightmare in wet conditions. I might add that Captain Shields himself appeared before the Parliamentary Standing Committee on Public Works when it considered the proposal to extend the north-south runway at Sydney. He himself suggested that a runway length of 8,000 feet with a 500 feet stopway was suitable for safe international jet operations and said that this length would permit almost complete abolition of the noise nuisance in the surrounding residential areas. That is precisely what is being done at Sydney; the north-south runway is being extended to 8.000 feet with a 500 feet stopway. Certainly Qantas Empire Airways Ltd. has since introduced Boeing 707-338C jet aircraft which are heavier than the Boeing 707-1 38B. However, the existing and proposed runway lengths at Sydney will be sufficient to permit satisfactory payloads to be uplifted by this heavier type of aircraft. That is the position.

The existing runways, with the extension now under way, will be quite satisfactory for the operation of subsonic jet airliners. We know that further extensions will be needed for supersonic airliners. Quite frankly no-one knows yet with precision what length will be needed for the supersonic airliners which could be in airline service some time after 1971 or 1972. What we have done is to build the runways at both Sydney and Melbourne of sufficient strength to take supersonic airliners. When the length necessary for their oneration is determined, the Government will be in a position to decide the issue.

page 904

GENERAL AGREEMENT ON TARIFFS AND TRADE

Ministerial Statement

Senator HENTY:
Minister for Civil Aviation · Tasmania · LP

– by leave - My attention inform the Senate of certain recent developments in the General Agreement on Tariffs and Trade - or G.A.T.T. - and of the Government’s position in relation to those developments. The Government has taken two important decisions which my colleague, the Minister for Trade and Industry (Mr. McEwen) has announced in another place today. It has decided to introduce preferential rates of import duties for a range of products of particular export interest to the less developed countries. This will enable Australia to make a positive contribution towards overcoming the trade problems of these countries. It has decided also to accept new provisions of the Agreement designed to aid the trade of less developed countries, subject to a reservation which will fully preserve our right to continue our own policies of using the tariff to assist Australian development. Honorable senators will be aware that the Agreement was drawn up and negotiated immediately after the war. The objective was to get away front the extreme economic nationalism of the 1930’s and to create a new order for international trade. Australia subscribed to this objective. However the present Government parties - both in and out of office - have never been satisfied that the provisions actually written into the Agreement were adequate. It is a matter of history that G.A.T.T. has had only limited success in achieving its objective. Because it was motivated primarily by a desire to avoid a repetition of the sudden and sharp disruptions of international trade that characterised the pre-war period, the General Agreement was written around the pre-war experience of the major trading countries. It sought to reduce tariffs and to control the other protective measures that flourished in that period, such as important restrictions and exchange controls, state trading practices, bilateral arrangements and similar devices to establish closed markets. Its basic philosophy was that international trade should be free of measures which discriminated in favour of particular countries or groups of countries.

Its negotiators did not foresee, or make adequate provision for, the development of economic blocs among the major industrial powers. Nor did they foresee the extent to which the post-war affluence of those powers would allow them to support and subsidize their very high cost and uneconomic primary production. Similarly, they made no real provision for coming to grips with the trading problems of the world’s less developed and primary producing areas. In the result, G.A.T.T. has been able to bring about reasonably satisfactory conditions for international trade only for the industrial products of importance to the major powers. It has not yet brought about any significant improvement in the trade of its primary producing and less developed members.

This Government has repeatedly directed attention - both here and overseas - to these shortcomings in the Agreement’s provisions and achievements. Our dissatisfaction was behind the efforts made by this Government to revise the Agreement about 10 years ago and, following only limited success in securing improvements on that occasion, behind the Government’s support for the holding of the United Nations Conference on Trade and Development last year. However, I do not propose to elaborate today on our continuing dissatisfaction with G.A.T.T.’s failure up to this point to bring about acceptable conditions for trade in primary products, important though that failure is to this country. Instead, I want to direct the attention of the Senate to recent attempts in G.A.T.T. to tackle the equally important and equally urgent problems of the trade and development needs of the less developed countries of the world.

As originally drafted in 1947, the Agreement had very few provisions directed towards these problems. It seems to have been based on the premise that rules having equal application for all members would give all countries equal opportunities to secure the benefits of international trade. This is manifestly absurd. Countries are not equal; and equal opportunities for unequals do not result in equal benefits. Some consideration was given to this point when the Agreement was revised in 1954-55. The revision resulted in some limited relaxation of the general rules for the less developed countries. It also resulted in explicit recognition that countries such as Australia, whilst obviously not in the position of less developed countries, nevertheless needed greater flexibility than the major industrialised countries in regard to the use of tariffs. However, there was no significant change in the basic philosophy underlying G.A.T.T.

The less developed countries were, of course, far from satisfied with this halfhearted attempt to do something about their very real trade problems. As more and more of them achieved independence with their own voice in international affairs, they have in recent years been able to compel G.A.T.T. and other international organs to give more attention to their needs. One result was last year’s United Nations Conference on Trade and Development. Another has been the negotiation of a series of new articles for insertion in the General Agreement. These new articles have been incorporated in a protocol of amendment which has now been opened for acceptance by G.A.T.T. members.

In the negotiations leading up to the new articles, the less developed countries rightly stressed the need for arrangements that would help them to stand on their own feet and their need for access on reasonable terms to external markets, particularly the volume markets of the major industrial nations. Improved access to these markets is essential if these less developed countries are to have any prospect of financing the volume of imports which their development demands. The less developed countries laid particular stress on three specific objectives: Reduction and removal of tariffs and quantitative restrictions imposed on their exports; reduction and removal of high internal taxes maintained particularly by European countries on consumption of such products as tea, coffee and cocoa, which are of particular interest to the less developed countries; and preferential entry for their exports of manufactured products.

The first two of these objectives were directed mainly towards improvement in the conditions under which the less developed countries sell the products of their existing industries on world markets. The third was designed to enable them to export the products of new manufacturing industries, the establishment of which is essential to their overall development and improvement in their standards of living.

Australia gave full support to the general objectives of the less developed countries. Sharing, as we do, their problems of severely limited access to export markets for primary products and being ourselves comparatively new exporters of manufactures, we are only too well aware of the kind of obstacles which must be overcome before the countries concerned can achieve adequate and predictable returns from their exports to world markets. We live with the same problems as plague the efforts of the less developed countries to maintain and expand returns from traditional and limited export lines. We have recent and current experience of the problems of developing from a largely rural base, of establishing - viable secondary industries in a small domestic market, and of developing exports of the products of these industries in the face of strong and often vicious competition from the long established and large scale industries of the mature industrial economies. The fact that Australia has progressed further than the less developed countries along the road of development, and has already achieved a high standard of living, has not destroyed our understanding of the problems which beset these countries.

We therefore supported their general objectives and indicated our willingness to do as much as lies within our capacity to help them. However, we felt bound to maintain in respect of these new articles of G.A.T.T. what is recognised in the present Agreement - that there are significant differences between the economy of Australia and the economies of the mature industrial countries. We made it clear that, whilst we wanted to play our part in contributing to an expansion of the trade of the less developed countries, we could not be committed to obligations identical with those to be accepted by countries which already had highly developed industrial structures. Our own development needs and policies, and our responsibilities for the development of Papua and New Guinea, set limits on our ability to help the less developed countries in the particular ways they were seeking and which might well be the most appropriate ways for the mature industrial countries to categories. This proposition is, of course, included in the new articles provisions which would carry forward G.A.T.T. recognition that there are quite significant differences between the Australian economy and the economies of the industrial powers. We sought a provision which, whilst clearly not exonerating us from action to help the trade of the less developed countries, would enable us to do so without negating our policies on the use of the tariff to protect our own economic development, or our policies for the development of Papua and New Guinea. Our proposal was generally acceptable to the less developed countries themselves. However, it was rejected by a few of the more powerful industrial countries.

At the same time the major industrialised countries were themselves very cautious about accepting the commitments sought from them by the less developed countries. They insisted that the new provisions relating to tariffs and quantitative restrictions be so written as to accommodate their own particular difficulties with the demands of the less developed countries. They adopted the same stand in regard to fiscal charges. And some of the more important of them completely rejected the idea of preferences for the manufactured exports of the less developed countries, which we have all along been prepared to accept. In the result, the new articles make no change in the rigid G.A.T.T. embargo on new preferences. Since the volume markets of the major industrial countries were the prime target - indeed the main hope - of the less developed countries, the latter were obliged to settle for the best that they could obtain from those countries. The result is a series of rules tailored to the circumstances of the highly industrialised countries, and in no way recognising that Australia’s situation is not, in fact, identical with that of the highly industrialised countries. As I have said, the absence of such recognition was not due to opposition from the less developed countries.

Let us look at the new articles which have emerged from these negotiations. The key article, and the one that presents Australia with real difficulty, is Article XXXVII. It lays down two sets of rules. The first set applies to what are described as the developed countries and the second set, which reasonably enough is fairly nominal, applies to the less developed countries. In other words, the article is based on the premise that the countries of the world fall into two, and only two, economic categories. This proposition is, of course, completely contrary to real life. Under the new Article XXXVII the so called developed countries are to accept certain new commitments. The main ones are to accord high priority to the reduction and elimination of tariff and non-tariff barriers to products of actual or potential export interest to less developed countries; to refrain from increasing tariff and non-tariff barriers against such products; to take similar action in regard to fiscal charges on raw or processed primary products produced in the less developed countries. These three commitments are backed up by a further provision obligating a country to enter into consultations - really confrontations - in G.A.T.T. whenever it is unable to give full effect to them. As noted earlier, there is no provision for relaxing G.A.T.T. ban on new tariff preferences.

We can accept the commitment on fiscal charges. But, in the absence of any provision for new preferences, the effect of the provisions on tariffs would be to curtail severely our right to increase, or even to maintain, tariffs on any products that might be designated, now or in the future, as being of actual or potential export interest to the less developed countries. Because the range of products of export interest to the less developed countries has not been established, and indeed is not likely ever to be established in the sense of being made subject to any limits, this would involve contracting out of our right to use the tariff over large and quite undefined areas of Australian production. It would involve giving a blank cheque, in a situation in which we have no real knowledge of the extent to which such action might impinge upon our own development policies.

It might be argued that Australia would suffer no real detriment if we were to remove duties from imports from less developed countries, on the ground that Australian industries are not worthy of protection if they cannot compete with the industries of these countries. This ignores two things. It ignores, first, the fact that there is a number of products in which some less developed countries are highly competitive, not only with Australian industry but also with the much older and much larger industries of other countries. But more importantly, it ignores the continuing G.A.T.T. embargo on new preferences - an embargo which, as I have already noted certain highly industrialised countries have so far declined to amend. If we were to remove or reduce duties on imports from less developed countries, the provisions of G.A.T.T. would require us to remove or reduce also the duties on the same goods when imported from the industrialised countries. It would be those countries, rather than the less developed countries, which would receive the major benefit from duty reductions on this basis.

Quite obviously, duty reductions on this basis would expose Australian industries to the most damaging competition from the highly developed countries. Australian industrialisation has not yet reached the stage where our industries can compete on a free-trade basis with the long established, high volume industrial complexes of the major industrial powers. If it had, we would not have protective duties. To remove our protective duties in this situation would mean sacrificing much of what we have already achieved in the way of industrial development, and our hopes of further industrial development, with little or no benefit to the less developed countries.

This is the crux of our difficulties with the new G.A.T.T. provisions. To accept those provisions unreservedly would place in jeopardy our future development, and much of the development we have already achieved. It would also limit our ability to use the tariff for the benefit of Papua and New Guinea. The Government is not prepared to do this. It has therefore decided to make its acceptance of the new articles subject to a formal reservation. The effect of the reservation is to limit Australia’s obligations under the new articles to action that is consistent with our development needs and responsibilities. This does not mean that the Government is not prepared to contribute towards the solution of the urgent trade problems of the less developed countries. On the contrary, the Government is willing and anxious to help these countries to the limits of Australia’s capacity. This is made clear in the reservation.

Concurrently with its examination of the new G.A.T.T. provisions, the Government has indeed studied what can be done, consistent with our own needs and policies, to afford real and practical help to the less developed countries in their efforts to expand their export earnings. We have never been convinced that tariff reductions applicable to the industrialised countries as well as the less developed countries, as provided for in the new G.A.T.T. articles, will in fact do very much at all to improve the trade of the less developed countries. The relative competitive position of the less developed countries will not be improved by this means, lt would appear inevitable that the major part of the increase in trade flowing from across the board tariff cuts would accrue to those countries which already have vast industrial capacity. The Government has therefore consistently backed the less developed countries in their efforts to get for themselves preferential tariff reductions on their exports.

The first serious discussion of such preferences at ministerial level was at a meeting of Commonwealth Trade Ministers in London in May 1963. At that meeting Australia argued that the G.A.T.T. rules needed to be changed to allow tariff preferences for selected imports for less developed countries. We advocated this at a G.A.T.T. ministerial meeting a few weeks later, and again at the United Nations Conference on Trade and Development in 1964.

There are, of course, many practical difficulties in introducing new preferential trading arrangements for a group of countries large in number and difficult to define. After very careful examination of the whole question, the Government is satisfied that arrangements for preferences that will assist the less developed countries can be devised. Protection of domestic industry would not be impaired. The essential interests of existing exporters to the Australian market would not be jeopardised.

Having reached this conclusion, the Government has decided to make provision in [he Australian tariff for preferential duties on selected imports from less developed countries. This means that, for a range of products of particular export interest to less developed countries, imports into Australia from those countries will pay substantially lower rates of import duty than are payable on the same products when imported from developed countries. This will demonstrate by positive action Australia’s willingness to help overcome the trade problems of the less developed countries. It will also give a lead to other countries which may wish to use preferences to assist the less developed countries.

The Government sees these new preferences as a means of helping to offset the competitive disadvantages faced by the new industries of the less developed countries, and of putting them in a better position to compete with major industrial countries for a greater share of Australia’s import trade. Preferential duties established on this basis would not conflict with long standing Australian policy of protection for economic and efficient industry. With few exceptions, protective duties in the Australian tariff have been fixed on the basis of the competition offered by producers in the industrialised countries. They are therefore frequently higher than are needed to afford reasonable protection against the generally less competitive industries of the less developed countries. So long as duties are not reduced on the products in which less developed countries are already competitive in international markets, there would be no damage to efficient Australian industries.

The real barrier to the Government taking action along these lines has been the G.A.T.T. provisions on new preferences. The Government had hoped that these would be modified as a result of recent negotiations in G.A.T.T. and at the United Nations Conference on Trade and Development. However, the position of a few of the major industrial countries has so far prevented any change. Although the question is still being debated in G.A.T.T. and U.N.C.T.A.D., there is, as yet, no assurance that it will be possible to reach early international agreement on arrangements for giving preferences to selected exports of less developed countries.

The Government has therefore decided to seek a waiver - or dispensation - from the provisions of G.A.T.T. relating to preferences. The waiver would cover both an initial list of products on which we would introduce preferences as soon as the waiver was granted and additional products which might be added from time to time. The initial list has been selected after consultation with representatives of Australian industry and after careful examination of the list of products which less developed countries have indicated as being of special interest to them. From this list, the Government has selected certain products on which duties on imports from less developed countries can he reduced without serious detriment to Australian industry. In some cases, individual less developed countries which are already competitive would be excluded from the benefits of the preference; that is, imports from those countries would continue to be dutiable at existing most favoured nation rates. In addition, imports from less developed countries under the preferential rates would be subject to tariff quotas.

These tariff quotas are designed to serve two purposes. They will provide an additional safeguard for Australian industry and will ensure that the preferences do not disrupt or cause serious damage to the trade of third countries. The Government has been very conscious of both these points in formulating its proposals. It has therefore decided that the preferential rates should be subject to modification as producers in less developed countries become competitive. Accordingly, Australian industry will be free to seek to have the preferential rates reviewed under the procedures for inquiry and report laid down in the Tariff Board Act.

So far as third countries are concerned our approach to the Agreement will envisage the waiver containing provision for prior consultation with other interested supplier countries before introducing a preferential rate of duty. We will also propose to make regular reports to G.A.T.T. on developments under the waiver. These reports will provide an opportunity for countries whose trade may be significantly affected to secure reconsideration of particular preferences. If the circumstances justify it, such international reconsideration might lead to the conclusion that changes in the competitive situation of particular industries in particular less developed countries were such that the preferences enjoyed by these industries were no longer necessary, or perhaps were higher than needed, to offset the disabilities which affected their competitive position in world markets.

Throughout this statement, I have made frequent reference to the less developed countries. However, despite the great amount of debate that has taken place in international meetings on what should be done to assist the less developed countries, there has been little discussion, and no agreement, on which countries fall within this group. Since a system of preferential tariffs cannot be operated without designating the countries to receive preferences, the absence of international agreement as to which countries are less developed has posed a problem. The Government would, of course, prefer to adopt a generally agreed list. But in the circumstances that I have explained it has not been able to do this. It has therefore taken the countries which made up the caucus of less developed countries at the United Nations Conference on Trade and Development and has added Papua and New Guinea, and the British territories or former territories which already receive some preferences under the Australian tariff. This seems to us to be reasonable at this point of time. This question will come under discussion when G.A.T.T. considers our application for a waiver. This may well lead to the emergence of an agreed list of countries which can be regarded as being less developed for international trade purposes. In this event, the Government would certainly take into account the outcome of the G.A.T.T. deliberations.

The decisions of the Government which I have announced are important. They will enable Australia to play its part in giving practical help to the trade of the less developed countries thus aiding their growth and development. Our initiative in moving ahead on the important question of new preferences for these countries might well serve as a pattern for others in this field, thus compounding the trade benefits for the less developed countries. At the same time Australian industry, and Australia’s growth and development, will be safeguarded in a way which would not be possible were we to accept without reservation the new G.A.T.T. articles.

I now present the following papers for the information of the Senate -

General Agreement on Tariffs and Trade - Protocol amending the General Agreement, dated 8th February, 1965.

Terms of Australia’s acceptance of, and reservation to, the protocol amending the General Agreement.

Proposed Tariff Preference to Less-developed Countries.

List of Countries which will accompany Australia’s approach for a waiver from the General Agreement. and move -

That the Senate take note of the papers.

Debate (on motion by Senator McKenna) adjourned.

page 910

APPROPRIATION BILL (No. 3) 1964-65

Bill received from the House of Representatives.

Standing Orders suspended.

First Reading

Motion (by Senator Henty) proposed -

That the Bill be now read a first time.

Debate (on motion by Senator McKenna) adjourned.

page 910

APPROPRIATION (SPECIAL EXPENDITURE) BILL (No. 2) 1964-65

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator HENTY:
Minister for Civil Aviation · Tasmania · LP

– I move -

That the Bill be now read a second time.

The purpose of this Bill is to obtain parliamentary authority for additional expenditure in 1964-65 on certain items for which no provision was made in the Appropriation (Special Expenditure) Bill 1964-65. Of the total appropriation of £59,422 sought in the Bill, £50,000 is for bush fire relief in New South Wales, Victoria and South Australia. I comment the Bill to honorable senators.

Debate (on motion by Senator McKenna) adjourned.

page 910

SUPPLY BILL (No. 1) 1965-66

Bill received from the House of Representatives.

Standing Orders suspended.

First Reading

Motion (by Senator Henry) proposed -

That the Bill be now read a first time.

Debate (on motion by Senator McKenna) adjourned.

page 910

SUPPLY BILL (No. 2) 1965-66

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator HENTY:
Minister for Civil Aviation · Tasmania · LP

– I move -

That the Bill be now read a second time.

In my second reading speech on the Supply Bill (No. 1) 1965-66, I explain that appropriations for certain expenditures will henceforth be provided in a separate bill. Accordingly the purpose of this Bill is to seek appropriations totalling £95,026,000 for such expenditures during the first five months of 1965-66. The amount sought for capital works and services is £83,990,000 and is required in general for the orderly continuation of works programmes and £1,036,000 is for various payments to the States. An amount of £10,000,000 is sought for an advance to the Treasurer to make advances which will be recovered within the financial year, and to make moneys available to meet expenditures of the classes provided for in the Bill, particulars of which will afterwards be submitted to Parliament.

I commend the Bill to honorable senators.

Debate (on motion by Senator McKenna) adjourned.

page 910

CELLULOSE ACETATE FLAKE BOUNTY BILL 1965

Second Reading

Debate resumed from 13th May (vide page 824), on motion by Senator Anderson -

That the Bill be now read a second time.

Senator BENN:
Queensland

.- The purpose of this Bill is to provide for the payment of a bounty on cellulose acetate flake to the manufacturers of that commodity. The measure is somewhat similar to an Appropriation Bill because, when it is passed, the Department of the Treasury will be authorised to make a sum of money available to be expended on the payment of the bounty during a period of 12 months. It is customary, when dealing with bills of this nature, to ascertain the names of the beneficiaries under the legislation. In pursuing this matter in this instance we find that there is only one manufacturer of cellulose acetate flake in the Commonwealth, C.S.R. Chemicals Pty. Ltd., whose plant is at Rhodes, in New South Wales. It has been operating there in the manufacture of this commodity for approximately 10 years and, according to the investigations I have made, hrs achieved a high standard of efficiency. That, of course, is one of the things to be considered when dealing with the payment of a bounty.

It is well known that bounties are financed by the Treasury, which makes the money available from the Consolidated Revenue Fund. This Fund is built up by taxes and other charges that operate throughout the Commonwealth. The Treasury makes the required sum available to the Department of Customs and Excise, which organises the payment of bounty to the manufacturers. In this case, as I have said, there is only one company receiving the bounty - C.S.R. Chemicals Pty. Ltd. It is a company in which the Colonial Sugar Refining Co. Ltd. has a 60 per cent, shareholding, the balance of the shares being held by Distillers Co. Ltd. of London. It is, perhaps, appropriate that I should at this stage mention that C.S.R. Chemicals Pty. Ltd. is associated with the Australian National Power Alcohol Company Pty. Ltd. at Sarina, where ethyl alcohol is manufactured from molasses. I have been at the works at Sarina on several occasions when passing through and have seen the plant operating. Sarina, as is well known, is in the centre of a rich sugar cane producing locality, so it is indeed an easy matter for the Australian National Power Alcohol Company Pty. Ltd. to obtain quantities of molasses from which it can distil ethyl alcohol.

Certain questions arise in connection with this matter and we must investigate them. How is cellulose acetate made? The first step in the Australian process is the conversion of ethyl alcohol to acetic acid. The acetic acid is then converted to acetic anhydride. After this, the acetic anhydride is reacted with cellulose to produce flakes of cellulose acetate. The cellulose is manufactured from a wood which is imported from America, and from inquiries I have made it appears there is no wood in Australia which can be used for this purpose. That is a sad state of affairs.

We are manufacturing cellulose acid flake to avoid having to purchase it on the overseas market, but we find that one of the most important ingredients, the cellulose, is made from a wood imported from America. I think this matter should be referred to the Minister for National

Development who is in control of the Forestry and Timber Bureau. The Bureau employs highly ‘efficient officers and I feel that, if they gave some time to the consideration of the growing of suitable timbers in Australia to replace the timber now imported from America, they would succeed in that endeavour.

The manufacturing concern that purchases the cellulose acid flake is located very close to the point of production of the flake. It happens that Courtaulds (Aust.) Ltd. which operates in the Newcastle district, is the chief purchaser of this commodity, which it uses in the production of acetate rayon yarn. So, we have one company manufacturing cellulose acetate flake and passing it on to Courtaulds (Aust.) Ltd, which uses it in its manufacture. The Bill provides for a reduction in the bounty from 7d. to 6d. per lb. but at the same time it is proposed to increase the total amount to be paid over the year from £90,000 to £112,000. At this stage we are entitled to ask ourselves whether it is worthwhile for the Commonwealth Government to make £112,000 available for payment to one company for the purpose of manufacturing a commodity which is sold to another company nearby and used in its manufactures. Earlier today I listened to the Minister for Civil Aviation (Senator Henty) making a long statement about the complexities of international trade. I know that Australia has trade problems that are complex and almost impossible to solve. However I mention that only in passing.

Recently I read a statement that was made 104 years ago by a noted Australian writer on protection, Mr. David Syme. Years ago, protection and free trade were contentious subjects and people were divided on them. Some were in favour of protection while others strongly favoured free trade. Mr. David Syme took a broad view of the prospects for Australia’s secondary industries. He looked ahead and strongly advocated protection. He pointed out that the people came from European countries to a country which had few secondary industries. I suppose we have very few today compared with other countries. Nevertheless most of the secondary industries we have in Australia today were established with some assistance in the form of a bounty or tariff protection over a long period. Mr.

David Syme stated in his article in 1861 what Australia should do to get her balance before setting to work to achieve something. Then he stated -

Nevertheless that is what we do, when we wholly expose any effort on the part of our fellow-colonists here to localise any of those branches of industry to the overwhelming competition of the multitudinous inferior, low-priced (not cheap) articles, made of refuse material especially for the Australian market, with which we are inundated from the crowded factories and workshops of the outer world. By this system of naked competition, our manufacturers or mechanics are prevented from even making a beginning in the work of opening up new sources of industry amongst us. A ban is put upon the attempt from the very outset; and in a few short years hence, if this pre-arranged practice of national industrial abortion is continued amongst us, the people of Australia will be as utter strangers to all scientific skill and practical dexterity in the arts and manufactures of highly civilised nations as are the Bedouins of Barbary, or the Tartars of Central Asia. Is that a desirable result? ls it desirable that, instead of carrying with us the arts of advanced civilisation from the parent State in Europe to this remote land, we should purposely, and, as it were with “ malice aforethought “, upon quitting the shores of that parent State, cast behind us and abandon the knowledge and the practice of those great industrial arts, which have constituted and still constitute the sole ground-work of her characteristic pre-eminence in trade, commerce and wealth? Is it not on the contrary rather desirable that we should endeavour to perpetuate amongst us, in our new home, that civilising and enriching skill and trained industry which is part of our national inheritance, and that we should try rather to rival than to fall behind that European progress in the midst of which we ourselves were bred, and up to the tone of which it should be our ambition, as it is for our profit, to train our children in this far-off’ land’,

That was written 104 years ago but the sentiments expressed there and the rules which Mr. Syme outlined are still up to date and could well be used by us for another 100 years. It would be interesting if those who were alive then could look back and see the progress that Australia has made. The Australian Labour Party has always been a protectionist party. It has always recognised that the employment of the people would be left entirely to chance unless secondary industries flourished on a profitable basis throughout Australia. Secondary production has been achieved and alongside it progress has been made by science. In this connection I have some information which was published in the London “ Times “ on 3rd February 1965. It stated -

English Steel Corporation claims to have proved experimentally in its research laboratories a onestage process for producing high quality steel from scrap. The steel is suitable for tool and aircraft applications. The process employs non-consumable plasma electrodes giving significant savings in production time and costs compared with conventional electric arc systems.

Honorable senators will know that industries and sections of industries are constantly under review. Scientists are constantly working to see what new commodities can be produced and how industries can be operated more economically. I read recently of a new development which was reported in the “ Financial Times “ in February 1965 -

A new use for natural rubber as a substitute for steel in the manufacture of heavy machinery has been discovered by Italy, the Italian Trade Commissioner has said in Singapore. He claimed that the process caused rubber to harden to such an extent that it could be used as a substitute- for steel.

Compared with some of the highly industrialised countries, perhaps our manufacturing industries have reached only modest proportions, and we have to do our best to promote industrial growth. Scientific assistance is becoming more pronounced every day. We hope that the industry which is to receive a bounty under the terms of this Bill will expand and that there will be. greater use for its products. The significant point about the payment of the bounty is that the Courtauld people will not be compelled’ to import the product they need but will buy it from the company which will receive the bounty. For that reason, the Australian Labour Party does not oppose the Bill.

Senator ANDERSON:
Minister for Customs and Excise · New South Wales · LP

– I thank Senator Benn for his contribution to the debate and his statement that the Opposition will support the Bill. I congratulate him on the research he has made into this rather complex matter. According to my brief, tho information he gave about the basic product and its development was accurate.

In his general statements in relation to protection he made the point that gainful employment for our people was to be found in such a policy. He may be interested to know that in the organisation at Rhodes, New South Wales, where cellulose acetate flake is produced, some 340 people are employed. That is quite a considerable number of employees. The product is then made available to Courtaulds (Australia) Ltd., which is a big industrial undertaking at Raymond Terrace in the Newcastle area, where a vast number of people is employed.

Rayon grade cellulose acetate flake is used in the manufacture of cellulose acetate yarn, lt is produced in conjunction with other acetyl products using ethyl alcohol, a by-product of the sugar industry, as a raw material. Senator Benn referred to the use of timber. I would think that the degree to which it is used would hardly be a case for the development of local production of this kind of wood. Nevertheless, I will refer his comments to the Minister for National Development (Mr. Fairbairn) who administers the Forestry and Timber Bureau.

Following a Tariff Board inquiry it is fell that the payment of a bounty is a far more effective way to assist the industry than by the imposition of a tariff. Protective duties tend to lead to increased costs whereas a bounty has the effect of holding costs static. The bounty in being reduced from 7(1. per lb. to 6d. per lb., but the annual limit of bounty payable is being increased from £90,000 to £112,000.

The Bill extends the life of the bounty for a further period of three years from 1 9th March 1965. lt carries the normal delegation clauses which are common to all bounty bills because, as honorable senators will appreciate, in the payment of bounty to an industry speed is of the essence of the contract. The Minister for Customs and Excise, who administers the bounty bills, therefore has some powers of delegation. The bounty payments are subject to audit and check.

Senator Wright:

– How many companies will benefit from the Bill?

Senator ANDERSON:

– In this case, one.

Senator Wright:

– Which one?

Senator ANDERSON:

– C.S.R. Chemicals Pty. Ltd. of Rhodes, New South Wales. Although only one company is involved in the payment of bounty on this particular type of acetate flake, it is part of a big complex in this field.

Question resolved in the affirmative.

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

page 913

POULTRY INDUSTRY LEVY BILL 1965

Second Reading

Debate resumed from 13th May (vide page 828), on motion by Senator McKellar -

That the Bill be now read a second time.

The PRESIDENT:

– There being no objection, that course will be followed.

Senator O’BYRNE:
Tasmania

– The three Bills to which the Minister for Repatriation (Senator McKellar) has referred are the Poultry Industry Levy Bill, the Poultry Industry Levy Collection Bill and the Poultry Industry Assistance Bill. These Bills, particularly the main Bill - the Poultry Industry Levy Bill - are the result of a critical situation which has existed in the poultry industry for a considerable period. Because of the growing alarm felt by those associated with this industry at finding that the State legislation which covered the State egg boards was being bypassed, they formed what is known as the Council of Egg Marketing Authorities of Australia, referred to as C.E.M.A. The Council, finding that it had strong support from the States, approached the Minister for Primary Industry (Mr. Adermann) with a view to bringing about some degree of co-ordination in the poultry industry and some degree of stabilisation, which the overwhelming majority of producers realised was so necessary.

A lengthy process has had to be followed to get this legislation before the Parliament. Now it is welcomed by the people engaged in this industry which is a very important component in Australia’s economy. It may surprise some people to know that the poultry industry ranks fourth on the list of our primary industries. Wool, which is the greatest revenue earner of our primary industries, ranks first. Then comes wheat, our dairy industry and our poultry industry.

Senator Cormack:

– Does the honorable senator mean that it is fourth in terms of exports?

Senator O’BYRNE:

– In total production. Many people may be surprised to know that that is the position.

Senator Cormack:

– Where does meat rank?

Senator O’BYRNE:

– It comes after the poultry industry. The production of eggs in Australia is worth £70 million a year, which indicates the importance of the industry in our economy. This is perhaps the time to point out that the industry has not received any subsidy from the Commonwealth. Nor will it receive any subsidy after this Bill is passed and the Act becames law. The Commonwealth will administer the collection of the levy and will supervise, in a manner acceptable to C.E.M.A., the trust fund which will be built up as a result of this legislation.

The dairy industry receives a subsidy of £13.5 million a year and the wheat industry receives a subsidy of £10 million a year. For many years the woolgrowers said: “ We are able to stand on our own feet. We do not want any assistance from anyone.” Now they have realised that the only way in which they can stabilise their industry and meet the competition of synthetics is to set up an organisation and evolve a plan of promotion. This is now culminating in a strong move towards organised marketing. The wool industry is receiving from the Commonwealth each year £7i million towards costs of promotion.

The proposition I am putting on behalf of the poultry industry is directed towards establishing a measure of stability in that industry. It may surprise many people to learn that the poultry industry has been going through a very difficult and critical period. The Council of Egg Marketing Authorities, which comprises members of various egg boards and people who are actively associated with the poultry industry, has given very serious consideration to the state of the industry. It has issued very bleak reports about the industry’s future which point out strongly that there are people in the poultry industry who would like to take over local egg markets for themselves. The only protection that can be given against these people to the average poultry farmer is through an Australia wide organisation which will set up organised marketing.

Egg boards, as I said before, have been set up in the States. In each State, particularly the mainland States, groups, or even individuals, are prepared to bring about the disintegration of the poultry industry and particularly of egg marketing. The main weakness of the State Egg Boards appears to be the influence of section 92 of the Constitution. Some egg producers have found loopholes which allow them to evade the responsibilities of orderly marketing. The burden of the cost of administration and other costs associated with the industry is thrust upon their fellow poultry farmers. The position has deteriorated to the point where 30 per cent, of the total production of eggs is marketed by persons who are evading their responsibilities towards the stability of the industry. These people are using various methods that, in my view, are reprehensible. They are exploiting the provisions of the Constitution which make it possible for trade to flow interstate unimpeded and thus are able to avoid payment of State levies. When their eggs are transported interstate, the marketing arrangements of the body in the State to which they are taken are upset. The interstate sellers are able personally to canvass the various egg buying organisations such as chain stores and cafes. The prices of the local egg producers are undercut. The effect is cumulative because the local egg producers lose confidence in their own marketing authority. One of the most effective ways of creating chaos in an industry is to break down the confidence of producers in their organising authority.

From reports I have received in my home State of Tasmania and from other States, the only people opposing this measure are those who are hoping that by preventing it from becoming law, monopolisation of the poultry industry will be made possible. The big producers would push out the small producers and then be able to dictate the prices of eggs. That practice will not be tolerated by any Parliament and certainly should not be tolerated by people in the industry. The position has arisen because the burden is being carried by 70 per cent, of the egg producers who are supporting their State marketing authorities. They realise the advantages of equalisation of local egg prices and export prices for pulp. These people also realise that unless the industry is stabilised and markets created for the export surplus - or any surplus production - the industry can be destroyed.

Senator Cormack:

– What is the basic cause of the surplus?

Senator O’BYRNE:

– It can be traced back, first, to the application of science to egg production. A study of genetics has increased the productivity of hens. Feeding methods have been improved and other factors have brought about increased annual production of eggs. The seasonal variations in the production of eggs are well known. The average person wishes to have his breakfast egg throughout the year and the only way that a steady supply of fresh eggs may be maintained is by having sufficient hens to offset seasonal variations. As only a percentage of the hens lay during the off period, there must be sufficient hens laying to compensate for the decrease in production. In the flush time of the year when production is at its peak, the eggs for which markets cannot be found at home are pulped for export. Over the years the demand for Australian egg pulp has declined. The United Kingdom was traditionally a good market for our egg pulp, but production techniques have also been improved in the United Kingdom and other parts of Europe and as a consequence the egg producers there are now able to supply a greater proportion of the local markets with fresh eggs. Accordingly, the demand for our egg pulp has declined.

The poultry industry has suffered because of the lack of an Australia wide organisation and Commonwealth legislation for the industry. It has been subjected to the activities of individualistic selfish people who are prepared to allow their fellow producers to carry the burdens and responsibilities of establishing orderly marketing and stability in the industry. Under that umbrella they moved in and exploited the industry by interstate trading and by blatant fixing of their books. They made statutory declarations that their eggs were going interstate, whereas in fact they were going to local townships or to cities in the same State, being disposed of at prices below those which were sought by the egg marketing board. There was no supervision of quality, weight, presentation, or freshness. Those people are prepared to exploit such a situation. I stress the importance of the establishment in C.E.MA. of an instrumentality which will set the industry right.

Senator Cormack:

– Has C.E.M.A. backing by statute?

Senator O’BYRNE:

– No; it is a voluntary body, comprised of all the members of all the State egg marketing boards, who have been given the advice of senior marketing experts of the Department of Primary Industry and State Departments of Agriculture. A substantial majority of its membership consists of producers elected by their fellow producers. It is a most comprehensive organisation, which has the confidence of the industry. It has the confidence of all except the few opportunists and exploiters who have caused a crisis in the industry. I have letters from various people on the subject and I have read articles in various magazines. One can see the personal motives of people who are afraid of this legislation. They are afraid that it will succeed and that their days of opportunism will be numbered. The industry will enjoy great advantages when those people, who account for 30 per cent, of the production comply with this legislation.

Senator Morris:

– Does the honorable senator mean that they represent 30 per cent, of the production or 30 per cent, of the producers?

Senator O’BYRNE:

– Of production. I would not say they were 30 per cent, of the producers. Many of these people who are taking advantage of section 92 and of book fixing methods are very big producers. They would like to have the measure deferred or defeated. They are in the 10,000 20,000, 50,000, and even the 1 million bird class.

Senator TURNBULL:
TASMANIA · IND; AP from Aug. 1969; IND from Jan. 1970

– Steady on.

Senator O’BYRNE:

– That is true. The potential of some individual producers is 1 million birds. If smaller producers are forced out by higher costs, including levies, these people are ready to move in to dominate the industry. This measure gives us a chance to talk about these matters. Every industry in this country finds a need for some order, co-operation and coordination. As a matter of fact, a high level of all of these things is required. This is one of the few important industries that had not realised the truth of the saying: United we stand, divided we fall. This Commonwealth wide legislation depended on the approval of all States. The set up is very democratic. C.E.M.A. had to abide by its rule that unless all States agreed it could not proceed.

Senator Hannaford:

– Which was the one State that did not agree?

Senator O’BYRNE:

– South Australia, which after all does not account for a high proportion of egg production. I understand that it produces only Ti per cent.

Senator Cavanagh:

– There are a lot of hens there.

Senator O’BYRNE:

– Fortunately, they were moved out at the last election, and their cackling has ceased.

Senator Morris:

– The honorable senator has proceeded on a high plane until now.

Senator O’BYRNE:

– Yes, that was an uncalled for interjection. I thank the honorable senator. Tasmania approves of this legislation. We have achieved some measure of stability through the Tasmanian Egg Marketing Board. The Chairman of that Board, Mr. Patrick, is an avid supporter of this scheme.

Senator Cormack:

– “ Avid “ means greedy.

Senator O’BYRNE:

– It means enthusiastic, too. I can vouch for the fact that Mr. Patrick has at heart not only the interests of Tasmanian egg producers but also the interests of producers in the rest of Australia. The problem of South Australia’s veto and abstention from participation having been overcome with the elevation to the State treasury bench of an enlightened and intelligent government, we now have interstate co-operation. The Victorian Egg Marketing Board has been very co-operative with Tasmania. It has taken most of our surplus eggs in flush seasons and disposed of them in Victoria, even exporting its own egg pulp to the limited overseas market. It has used Tasmanian eggs within Victoria.

Senator Wright:

– Paying pulp prices.

Senator O’BYRNE:

– That is quite true. We have another fine industry in Tasmania, producing Ovaltine. I do not like to mention trade names, but this thriving industry just outside Devonport on the north west coast makes a product that is basically milk and eggs, the local products of Tasmania. It has co-operated very closely in bringing a measure of continuity and stability to the Tasmanian egg industry. Having consulted, through correspondence, with the Chairman of the Tasmanian Egg Marketing Board on these matters, I find that it is believed that great advantages can come to the industry and that as a consequence Tasmanian egg producers will share in the added stability, through the organisation set up to have this legislation introduced.

Senator Wright:

– Is there any guarantee of that in the legislation?

Senator O’BYRNE:

– The Minister, in his second reading speech, stated -

The Bill, together with the other two Bills I have mentioned previously, gives an important Australian industry the opportunity to stabilise itself.

The industry is being given the responsibility to stabilise itself. The Minister went on to say -

It places the affairs of the industry virtually in its own hands but does not involve the Commonwealth in any residual financial liability.

I cannot understand how honorable senators opposite can argue about the principle involved here. Time after time we have heard them insist that the Commonwealth should not intrude into the affairs of industry and that industry is capable of running its own affairs. Here, with great emphasis, the Minister has spelled out the policy. He said finally -

It is a measure devised by the industry for the industry and, if passed, its successful continuation rests wilh the industry.

Senator Cormack:

– How does the honorable senator think that the proposed restrictive trade practices legislation with affect it?

Senator O’BYRNE:

– If Senator Cormack can find anything more democratic than is envisaged in the Minister’s statement, I should like to know about it. The Minister’s statement reflects fairly democratic reasoning, and I compliment him upon adopting such famous democratic fundamentals in the legislation. The same comment can be made about the complementary Bills. The Commonwealth will merely be acting as the co-ordinator or as the keystone in the proposed structure.

Senator Wright:

– The imposition of a levy forms the basis of the legislation.

Senator O’BYRNE:

– The estimated cost of the levy is 7s. per hen per annum, or 3id. a fortnight. The fact that the industry is worth approximately £67 million to those who are engaged in it makes it a substantial part of our economy. Not only are the poultry farmers themselves involved, but also the primary producers whose byproducts are utilised. Those who produce meat meal, those who grow wheat, and those who produce pollard and bran, which are byproducts of the flourmilling industry, are involved. Also involved are the chemical companies and the equipment manufacturers, who have quite an interest in the prosperity and expansion of the industry.

Il has been said that this legislation is only the beginning of efforts that will be made to stabilise the industry and that we may look forward to the day when organised marketing and stabilisation of the industry are established facts. New problems will arise in the disposal overseas of our egg pulp. The Australian people are now eating fewer eggs than they have in the past. In 1945 the average Australian consumed 250 eggs a year but now he is consuming only about 210 a year. On the other hand, in the United States of America the average consumption per person is 350 eggs a year. That means to say that nearly every American has one egg every day.

Senator Wright:

– In processed or fresh form?

Senator O’BYRNE:

– In all formsscrambled, boiled, fried, and in omelettes.

Senator Ormonde:

– And double yoke eggs?

Senator O’BYRNE:

– Yes, and double yolk eggs. When considering the background to the legislation I was most interested to learn of the value of eggs in the human diet - the number of calories they contain and their energy giving qualities. The main aim of this legislation is to have the responsibility for keeping the industry on a. stable footing shared by all who participate in it. It is hoped that the levies that have been paid in the past will be reduced. Perhaps that is a matter for debate; but it stands to reason that, if the large proportion of eggs that are escaping the levy as a result of the employment of various subterfuges become subject to the levy and if every producer is brought in to share the responsibility, the costs will be spread more widely.

The legislation has been designed to ensure the organised marketing of eggs throughout Australia and overseas. It has been designed to deal with the disposal of surpluses and, above all, the promotion of the sale of eggs in their fresh form and in pulp. Most people are aware of the competition that is experienced by egg producers from breakfast food manufacturers who have employed a high level of publicity in order to sell their products. The producers of breakfast foods give away little gimmicks to children and promote television advertisements to show children that they will grow stronger if they consume their products. They have embarked upon a tremendously impressive campaign to get children to walk into self-service stores to choose their own breakfast foods. That has never been done in the egg industry, although I understand that in Victoria a little picture of Humpty Dumpty was printed on fresh eggs and that that resulted in considerable improvement in the sale of eggs. I know from experience gained in my own home just what a powerful impression a picture of Hempty Dumpty makes on a little child. A similar idea could be used by sales promoters within the poultry industry in order to bring back the average consumption of eggs to 250 per head. The promoters could even aspire to the sama level of consumption that exists in the United States of America.

We will be discussing this legislation in detail at the Committee stage. I have merely directed attention to some aspects of it. The reports and opinions of responsible people who are associated with the poultry industry indicate that if a degree of stability is not brought to it the producers will see only chaos facing them. A sum of £50,000 a year for a period of five years is considered to be all that is necessary to spend on promotion. I believe that, if the industry were to make a better impression on the consumers by supplying well graded and better quality eggs, and by employing other means of promotion, it would be put on its feet.. Various loopholes in existing legislation have been discovered by cunning operators within the sphere of authority of the State egg marketing boards. The existence of section 92 of the Constitution has enabled them to exploit the situation. With the closing of those loopholes we can at least see a ray of hope of the industry attaining its proper stature. Later, in the Committee stage, I shall have other contributions to make.

I have not dealt very much with the Poultry Industry Levy Collection Bill or with the Poultry Industry Assistance Bill. They are complementary to the Poultry Industry Levy Bill. We on this side of the chamber support the scheme because it is the basic policy of the Australian Labour Party to assist any industry which is attempting to organise itself and to improve itself by collective or organised self-help. We believe that such an industry also deserves the assistance of the Senate. I wish the measure a speedy passage through its remaining stages and I offer it my fullest support.

Senator CORMACK:
Victoria

.- I do not intend to discuss eggs to the extent that Senator O’Byrne has discussed them, or to the extent that they were discussed in another place. I want to say at the outset that I am in favour of orderly marketing as a principle, in exactly the same way as I am in favour of abolishing sin as a principle.

But there are many people who believe that it should not be abolished, and there are also many people who think that it is difficult to say what constitutes sin in various categories. Having made it clear that I am in favour of the principle of orderly marketing, I want to engage the interest of honorable senators on the constitutional problems that I find embedded in the three Bills. Therefore, it will be only incidental if I discuss the question of eggs.

In looking for the source and the fount of the concept of orderly marketing, I spent some interesting hours in the Parliamentary Library reading about the problems of board control in Russia, which I discovered only incidentally to other matters that I was examining. In Russia there is board control of produce within the Commissariat of Trade. For example, there are produce receiving boards. One of the great problems in Russia is not merely a shortage of produce, but the sheer incapacity of the produce receiving boards effectively to distribute the available produce. It is interesting to carry out research of this kind. In Australia from time to time we find a newspaper proprietor or editor sending a reporter to find out why the egg which he had for breakfast that morning was stale; or alternatively, after having heard his wife complaining that the price of eggs was to be increased to 3s. or 4s. a dozen, sending a reporter out to examine the Australian equivalent of the Russian receiving boards.

Invariably one will find in Russian newspapers, such as “ Izvestia “, that one of the fundamental problems in Russia is that produce receiving boards are not efficient. I suggest there is ample evidence in the past to indicate that, whatever the principles involved in orderly marketing, the boards that are constituted under the acts of parliament, whether State or Federal, have no test applied to them to determine whether or not they are efficient. I suggest that the three Bills that we are discussing at the present moment are an elaborate facade to circumvent section 92 of the Constitution. One of the Bills invokes section 96, which is the provision that enables the Commonwealth to make grants to the States on conditions and under such terms as the Commonwealth Parliament sees fit. The first Bill invokes section 96, under which the Commonwealth may make grants to the States, for assistance in the orderly marketing of eggs.

So far as I am qualified to say, this Parliament has power to pass such a measure. The Poultry Industry Assistance Bill sets out to devise methods by which taxes may be levied in order to provide the money to assist the States under section 96. The Poultry Industry Levy Collection Bill sets out the method, not only for the imposition of the tax, but also for the collection of the tax. I think that this matter has to be thoroughly understood by all honorable senators. The three Bills invoke section 96 of the Constitution. Two of them skirt around the provision of section 55 of the Constitution, which relates to the raising of money by taxation. This matter fills me with a little surprise, not because I oppose the orderly marketing of eggs, but because I feel that when you begin to devise a sort of legal chicanery in order to set up a circumstance of government, as these three Bills set out to do, it is as inevitable as that night must fall that you get very close to the edge of illegality.

Senator Prowse:

– Is the honorable senator supporting the Bill or opposing it?

Senator CORMACK:

– I am doing what the honorable senator should do - that is, examining the legalistic background of the

Bills. When the time comes for him to speak, if he makes a proper senatorial examination of the Bills be will be doing a service to the Parliament instead of to his party. I want to bring these points strictly before the Senate. It is the proper function of the Senate to decide whether or not the Bills are unconstitutional. One of the functions of the High Court of Australia is to determine from time to time whether the Parliament has exceeded its authority. I do not know whether it has exceeded its authority in regards to the device that has been used in order to circumvent section 92, and therefore to empower the State egg marketing authorities to avoid section 92.

The Minister for Primary Industry (Mr. Adermann) at the end of the second reading debate in another place, I thought gave a deep sigh and said he was sorry that section 92 existed because if it did not exist it would make his job of devising schemes for orderly marketing so much more easy to carry out. Obviously, that indicated that he had Ohe whole problem connected with section 92 in his mind. I do not want to embark on this line of argument any further. I wish to draw the attention of the Senate to two or three other matters that have given me some surprise. First, I refer to the methods by which section 92 can be circumvented in a perfectly legal way. lt is perfectly proper for each State to pass legislation referring power to the Commonwealth Parliament to make laws. But in this instance no attempt has been made to refer power to the Commonwealth Parliament. Of course, it is possible - although governments do not like it - to conduct a referendum in order to embody in the Commonwealth Parliament power to control an industry. But it is curious that the States have not referred such power to the Commonwealth Parliament, thus providing the means by which this particular industry might have orderly marketing arrangements.

Senator Morris:

– Would it be practicable for a State government to refer powers to the Commonwealth Government on one aspect of primary production and not on other aspects?

Senator CORMACK:

– The States did this in relation to the barley industry. The Australian barley industry is governed by a

Commonwealth act which stabilises it and constitutes the Australian Barley Board. That was done by common reference by each State to the Commonwealth.

Senator Webster:

– Is there anything in this Bill which restricts interstate trade in any way?

Senator CORMACK:

– By implication it restricts interstate trade because it imposes a levy of 7s. a hen when there are 20 or more hens. The effect of the levy will be to inhibit, as Senator O’Byrne mentioned-

Senator O’Byrne:

– It inhibits the “ lurk “ man.

Senator CORMACK:

– Whatever word the honorable senator used, it inhibits people from moving eggs from one place to another. It is correct, as an honorable senator has interjected, that this equalises prices.

Senator Webster:

– The producer can still sell interstate.

Senator CORMACK:

– That is so. He can still sell interstate at a loss. There is no question about that. All I am saying is that this is an elaborate method of getting round section 92 of the Constitution. That is all it is. On whether this action is constitutional or not, it is not for me to proffer an opinion. I suppose it will be tested outside this Parliament. All I am saying is that I draw the attention of honorable senators to the fact that this is a legal device to circumvent section 92 of the Constitution and it is being done in order to achieve this system of stabilisation proposed in these three Bills.

The next thing that worries me in regard to these three Bills is not that there is a Council of Egg Marketing Authorities of Australia drawn from the various egg boards in each State. What worries me is this: When we set up the Australian Meat Board we provided it with an instrument to enable it to operate. But in this instance we find ourselves in a situation where an ad hoc committee called the Council of Egg Marketing Authorities of Australia, constituted by representatives of each egg marketing authority with no statutory position either in the States or the Commonwealth, will become the official adviser to the Minister for Primary Industry to enable this system of stabilisation to be enforced. It is my belief that, in a situation of this nature, at least there should be a statutory requirement as to who shall be the constituents of the Council of Egg Marketing Authorities. I said this to the Chairman of the existing Council of Egg Marketing Authorities. My conversations with him are personal and it is therefore not for me to elaborate on them except to say that I consider that in view of the vast sums of money which it is proposed to raise, and in view of the position of the Council of Egg Marketing Authorities - a non-statutory body - as embodied in this Bill at least upon the subsequent presentation to the Parliament of legislation that affects orderly egg marketing this position should be examined. It is true, of course, that the advice the Council tenders to the Minister may be authoritative but it is not final. The Minister is not bound to accept the advice. I think, to that extent. Parliament is safeguarded in the way the Bills are devised at the present moment. 1 turn now to another subject. I was glad to see that in another place honorable members put an upper limit on the amount of the levy that could be imposed by these Boards. I now come to a matter which does disturb me. We have before us a Bill which proposes to place an excise tax on laying hens. I believe it to be an excise tax and I am reinforced in that opinion by the advice of an eminent counsel which I sought before I spoke on these matters. The power to collect and hand over this excise tax is given to the State instrumentalities known as Egg Boards but the Commonwealth has the responsibility of imposing the tax. Then this Bill to which I am now directing the attention of honorable senators - A Bill for an Act Relating to the Collection of Levy under the Poultry Industry Levy Act 1965 - states -

  1. – (1.) For better securing the payment of levy, the Commonwealth may enter into an arrangement with a State with respect to the collection of levy in that State, on behalf of the Commonwealth, by the State Egg Board for that State.

It then goes on and states - (2.) Without prejudice to the generality of the last preceding sub-section, an arrangement under that sub-section with a State may provide for-

The word used is “ may “ - a permissive word. Then, in clause 5. - (2.) (d), it states -

  1. . the inspection and audit of the accounts and records kept by the State Egg Board with respect to amounts of levy collected by the Board.

This Bill proposes that a tax be imposed by the Commonwealth. Clause 6 of the Bill then sets out the means of collecting this tax. lt will not be collected by a Commonwealth instrumentality. It will be collected by agencies of the various States under varying legislation in each State. There is no provision in this Bill to enable the official of the Commonwealth who is responsible to Parliament, the Auditor-General, to audit the accounts of these instrumentalities of the States. It is true that the practice in these matters, where there is a marriage of powers between the Commonwealth and the States, is for the Commonwealth Auditor-General to accept the certificate of the State Auditor-General. But, in the circumstances in which it is proposed to ask Parliament to sustain these Bills as presented to us in the Senate at the moment, it is my opinion that this should not be a permissive clause providing that tha Auditor-General of the Commonwealth may enter into consultation with the States. I think it is proper that Parliament on this occasion, because of the circumstances involved, should invoke a mandatory word and say that the Auditor-General of the Commonwealth shall enter into arrangements. By doing that we will satisfy the Auditor-General and, perhaps, satisfy the Parliament.

It is all very well in principle to set up boards. But the character and quality of this particular board or system by which board control of the production and distribution of eggs in Australia will take place, is not, in essence, as stated by Senator O’Byrne. He said that this was an industry which would tax itself in order to obtain necessary revenues. In essence, it is not that at all. These Bills provide for a tax to be imposed upon the industry. The egg marketing authorities, in fixing their prices - of course they will be a price fixing agency - will then pass this tax on to the consumer. Therefore it will be a consumer paid tax. This leads me to this point to which I draw the attention of honorable senators: The character and quality in all these boards is such as to obtain from the consumer or the taxpayer the capital by which the orderly marketing system can be set up. In the second place, the character and quality associated with all boards is such that they do not imoose any test as to their own internal efficiency - the test of profitability.

It is a curious thing to note as one examines the problem in relation to distribution system in Russia that that country has made a great new discovery. No doubt in the book of the national biography of Russia it will be claimed in future years, in the re-write system that they have, that this is a Communist or a Socialist discovery; but the great new discovery that they have made is that they have to apply to their own boards and commissariats concerned with distribution the test of profitability. They have had to establish profit and loss accounts. Nowhere in these Bills is there any indication whatsoever, that I can discover, that the test of profitability is to be applied to these boards. That is a matter which disturbs me.

Finally, I am disturbed about some of the powers that the Minister proposes to give to himself. The cat seems to have been partially let out of the bag by the honorable member for Wilmot in another place who has some deep space communication system, by virtue of his private office, which I do not have. I understand that, constitutionally, the Commonwealth cannot make grants of assistance to the States in terms that are disparate. It cannot favour one State against another. During the debate on these measures in another place, the honorable member for Braddon (Mr. Davies) spoke of the problems of Tasmania- a State which I gather has big problems not only in regard to eggs. He quoted a minute of the meeting of the Technical Sub-Committee of the Council of Egg Marketing Authorities of Australia, held at the Belvedere Hotel in Sydney, on Wednesday, 11th March 1964. The minute reads -

In reply to a question by Mr. Fairbairn as to what reimbursement Tasmania could expect to receive from the levy having regard to the fact that Tasmania is not normally an exporting State, Mr. Giles-

I take it that Mr. Giles is from the Department of Primary Industry - made reference to Paragraph 3 of the explanatory sheet to indicate that the Minister may authorise the payment of fund money to the States in such amounts as he determines after taking into account recommendations by C.E.M.A.

In other words, although the principal Bill derives its authority from section 96 of the Constitution, which authorises the making of grants of assistance to the States, the quotation that I have read from “Hansard” indicates that the Minister proposes, once the Poultry Industry Trust Fund is set up, to make grants to the States in accordance with what he conceives to be the requirements.

Senator O’Byrne:

– Acting on the advice of C.E.M.A.

Senator CORMACK:

– He is not obliged to act on the advice of the C.E.M.A. He may act on the advice of C.E.M.A. At page 1165 of the “Hansard” to which I have already referred, the honorable member for Wilmot (Mr. Duthie) is reported as having quoted a letter from Mr. Patrick, a Tasmanian representative on C.E.M.A., which, in part, reads as follows -

This agreement was again unanimously confirmed by all States at the meeting held this week on April 28, and in view of the varying conditions in the States it was again agreed that it was not advisable to actually put this in the Bill itself; -

That refers to the words relating to the distribution of the levy -

Tasmania would stand to get better treatment under the “ Gentlemen’s Agreement “ than under a compulsory legal point.

This Parliament is not here to endorse gentlemen’s agreements made behind closed doors. There cannot be what is delightfully called a gentlemen’s agreement in regard to public moneys, raised by taxation and disbursed by a Minister acting by regulation. These are not State Egg Board moneys; they are public moneys. It is alarming to find that disbursement will be made, under ministerial hand, of money raised by taxes authorised by the Commonwealth Parliament, collected by the State Egg Boards, passed into a trust fund, and disbursed so as to favour one State as against another by the simple device of the Minister, on advice preferred to him under a gentlemen’s agreement, deciding that one State should get more than another. It is on those constitutional points that I have addressed myself to these three Bills, and I commend them to the Senate.

Senator WRIGHT:
Tasmania

– We are now discussing three Bills. One of them is to regulate the collection of a levy on the poultry industry; another is to grant financial assistance to the States to assist the poultry industry, and the third is to make a levy in respect of hens kept for commercial purposes. Senator Cormack - quite properly in one sense - has described this collection of Bills as a facade to circumvent section 92 of the Constitution. But in another sense, as the High Court of Australia has held, they are three Bills which take this form to demonstrate an occasion for the co-operative exercise by the States and the Commonwealth of their constitutional powers.

Except for one point that I will mention later, this scheme has, in my view, received the approval of a decision of the High Court. Notwithstanding that, I feel greatly indebted to Senator Cormack for the reference he made to our responsibility as members of this Parliament in dealing with this matter. I refuse to accept the viewpoint of the Opposition spokesman, Senator O’Byrne, who seems to think that it is all right for a collection of people such as the Council of Egg Marketing Authorities of Australia, which is an associated body of the Egg Boards of the six States, to approach the Minister for Primary Industry (Mr. Adermann) and say: “ We have a scheme.” The honorable senator goes further and says: “ It is an orderly marketing scheme “. He expects the Federal Parliament to adopt that scheme. To my way of thinking that is a thoroughly debased idea of the responsibility of this Parliament, because the powers invoked by these Bills depend upon our judgment as to whether they should be exercised.

The fundamental thing about this legislation is that it proposes that a levy not exceeding 10s. per laying hen per year should be made by regulation. We are asked to approve the imposition of this tax on the owners of hens. In Tasmania, where a State Egg Board has been constituted, people who keep 50 hens or more are required to make contributions to that Board. The contribution is about 8s. per hen per year, of which 4s. is absorbed in administrative expenses and 4s. is absorbed in losses sustained in the disposal of the surplus product. This proposal to impose a Commonwealth wide levy of 7s. per hen per year will not relieve Tasmanian poultry farmers of the whole of their 8s. State levy. It will, at best, relieve them of half that amount, so that, on the present expectations, they will be liable for a combined State and Commonwealth levy of lis. per hen per year. When I point out that the average net profit on a laying hen is about £1 per year net, I believe that members of this Parliament will agree that if the Australian community is to be taxed, it has the right to be consulted. We should examine the acceptability of the present proposal on a proper constitutional and parliamentary basis.

I am not here with any idea of putting before the Parliament the economic notions underlying a scheme such as this. If it had come to me 20 years ago, when I was unpersuaded of the merits of orderly marketing, I would have fought the proposal tooth and nail. But I believe the experience of orderly marketing has been such as to demonstrate to producers and growers throughout Australia the inherent defects that come from the lack of incentive to which Senator Cormack referred. We have had wheat harvests riddled by mice and weevil. We have had all sorts of inefficiency in potato marketing through State boards and so on. But in the past ten years there has developed in orderly marketing boards a greater sense of know-how and efficiency. This eradicates a great many difficulties but never arrives at the stage of private enterprise efficiency so as to give to the people represented by the boards the yield that a private company or a co-operative company gives to its shareholders. That is the very essence of human nature. Notwithstanding that, I am persuaded for the most part that many of the industries in Australia could benefit from organised marketing.

I heard Senator Cormack say rather abruptly in reply to Senator Prowse that a remark emanated from the spirit of the Liberal Party rather than from the Constitution. I am one of those people who join a political party because they believe in it. When I find people in this Parliament diverging from the principles laid down by the party, I diverge from them. That is why I frequently - but not as frequently as the newspapers imply - find myself in the company of the Opposition. One thing which must be borne in mind, without disparaging those who activate the government of the Liberal Party in this place at present, is that they are not infallible; at any rate, not every one of them is. Therefore, we can always have a difference of opinion but usually it derives from a basis of difference of interpretation. Here, however, in the matter of organised marketing we have a specific principle that has been adopted by the Liberal Party to the effect that organised marketing schemes for industries will be supported if they are initiated by the industry and are approved by it.

Senator Hannaford:

– That applies only to primary industries.

Senator WRIGHT:

– I am speaking now of primary industries, because so far as I understand this matter both the hens and the eggs are part of primary industry. The Liberal Party stands for the principle that those who operate and own the industry should be consulted as to the terms and conditions upon which it shall be organised. I am sufficiently a democrat to know that the small man in the industry as well as the large man, according to his proper measure of representation, is entitled to be consulted. I also remind Senator O’Byrne who spoke about democracy that the only proper method of consultation with an industry such as this is through the vote of the individual producer. That is entirely different from the voice that has brought this scheme before the Parliament - the voice of the Council of Egg Marketing Authorities representing the six State boards.

Senator Ormonde:

– Which represent the growers.

Senator WRIGHT:

– That is just the lie I want to nail. I use the term that will be most descriptive without any reproach to Senator Ormonde in whom we have great confidence. These marketing boards do not represent the egg industry for two reasons. First, in many States no vote was ever taken on their constitution. As honorable senators know, State marketing legislation requires too great a majority to achieve the disestablishment of a board. Until a board begins to operate, there are many people as easy going as I who will not go to the trouble to organise opposition against the Government which wants to set up an egg marketing board. Therefore, those responsible get the establishment of a board, so to speak, by stealth and by the easy going confidence that many of us have. Rather than have our short lives wasted by participation in trouble, we accept what is coming. The State egg marketing boards get established in that way and to disestablish them, you need a very big majority.

The second point is this: In Tasmania - simply to use that State as an illustration, and I hope some note will be taken of it - the people who contribute to organised egg marketing are producers with a yard of 50 hens or more. Now, by just one majestic Canberra stride we propose to impose a levy on a federal basis on producers who have 20 hens or more. I claim that these people are entitled to be consulted if we are going to create an organised marketing scheme on the basis of federal taxation with a levy which means as much as 7s. a hen a year to be imposed on every owner of 20 or more hens.

I am here to yield as much advantage as possible to those who have commercial interests in the poultry industry; but I hope to be rejected as a member of Parliament if I ever desert the cause of the small producer when it comes to a matter of imposing increased taxes on him. I insist that he has a right to vote whether he is prepared to accept this scheme or not. On this basis, Senator O’Byrne’s proposition is completely belied. The egg industry has not asked for this scheme; the organised boards in control of the industry have asked for it. If anybody is prepared to take a vote of those producers throughout Australia who are to be taxed, I shall be as happy as anybody else to accept the verdict if they vote by a majority for such a scheme. But if they do not vote for it, nobody has a right to impose on their industry a levy of which they disapprove. That is Liberal policy.

From time to time in this Parliament we recall that both the principal political parties in 1956 constituted a committee which worked with great assistance from many constitutional channels throughout the country. It also had some high level advice provided by the Government itself. The purpose was to work out a proper system on a constitutional basis for, among other things, orderly marketing in Australia. There were six members of the Australian Labour Party on that committee. They were the present Leader of the Opposition in the Senate (Senator McKenna) and the Deputy Leader of the Opposition (Senator Kennelly), Mr. Arthur Calwell, the late Mr. E. J. Ward, Mr. Pollard from Victoria and Mr. Gough Whitlam. Realising that the difficulty of applying section 92 to a modern approach to organised marketing, undreamed of when section 92 was framed, did not outweigh its advantages, the Committee which comprised representatives of all parties in the Parliament, including the Leaders of the Australian Labour Party, recommended as follows -

  1. The Parliament should have power to make laws for the submission to a poll of primary producers of proposed plans for the organised marketing of primary products.
  2. For the purpose of submitting a proposed plan to producers, the Parliament should be authorised to make such laws as it deems necessary in connection with the holding of a poll, including laws determining who is a primary producer, eligibility to vote, and the number of votes which a producer should have.
  3. If three-fifths of the votes cast at a poll by the producers of a primary product are in favour of a proposed marketing plan for that product, the Parliament should have power to make laws to give effect to the plan free from the operation of section 92 of the Constitution, but otherwise subject to the Constitution.
  4. For the purposes of the power, a primary product should include any product directly produced or derived from a primary product which the Parliament deems to be a primary product.

We are not concerned with the difficulties of clause 4.I have directed the attention of the Senate to that decision of the Committee because we all should recognise the ascendant position of section 92 in the Australian Constitution. It was one of the fundamental provisions, almost as vital as a pre-condition to Federation as the primary condition that the States should have equal representation in the Seriate. But after over 60 years of experience of the Constitution, the geographical entity represented by Australia has become integrated into one economic unit, and where there is a desire to organise a primary industry on an Australia-wide basis we want a supple, straightforward, uncompromised method of doing so without the necessity of going through all the complexities of this facade, as Senator Cormack called it. For this reason we recommend that the Commonwealth Parliament should have power to make laws for the submission to a poll of primary producers of proposed plans for organised marketing. Then, if three-fifths of the votes cast are in favour of the plan, we recommend that the Parliament should have power to make laws to give effect to the plan, free from the operation of section 92 of the Constitution.

I do not wish to urge too much upon the Senate the acceptance of the essential merits of the Committee, the composition of which I have mentioned. I want to be quite fair about this. The Senate can bring to its acceptance of the report as much prejudice as it wishes because I claim to have had a fair share in the way in which the recommendation was framed. However, when the recommendation is taken in conjunction with the Liberal Party’s policy, which insists that before we impose a levy on an industry for its own organisation the plan must be initiated and then approved by the industry - that is, the individual producers in the industry - it can be seen that there is very little justification these days for introducing an organised marketing scheme on the basis on which these Bills have been introduced, unless a poll of the producers is taken.

Sitting suspended from 5.45 to 8 p.m.

Senator WRIGHT:

– At the suspension of the sitting I had reminded the Senate that it is the policy of the Australian Liberal Party to support organised marketing, if the proposal for organised marketing is initiated and approved by the industry. I had reminded the Senate that the Joint Committee on Constitutional Review, which comprised representatives of the three main parties in this Parliament, recommended that there be included in the Federal Constitution provision to enable the Parliament to provide for a poll of producers in any industry. If the poll results in a 60 per cent, vote in favour of establishment of orderly marketing, the proposal should have Federal endorsement. I now remind the Senate of a debate concerning another industry in which I participated less than two years ago. I refer to the debate on the wool industry. At that time I invoked the examples of New Zealand practice and Liberal Party policy for the purpose of affirming the view that it is Parliament’s right to impose taxation by way of levy to raise funds to establish organised marketing in an industry only if the industry is consulted.

It is interesting to examine the “ Hansard “ reports of that debate and to find there the many and various transitory arguments that were called in aid to prove that the proposal was not acceptable. I remind honorable senators present tonight that two years of subsequent experience has convinced everybody associated with the proposal in the wool industry that it would be dangerous to establish any form of organised marketing except with the support of a vote of the wool growers. If that procedure is good enough for the wool growers, it is good enough for the owners of hens. As honorable senators should be aware, under the legislation before us it is proposed to impose on the owner of hens exceeding 20 in number a levy of 7s. a hen annually. I believe that levy should be imposed only if the industry, on a vote of each individual producer, approves of the proposal.

Mr. President, one facet of the proposed scheme has particular application to Tasmania. The dimensions of the poultry industry in Tasmania are not enormous. Tasmania does not enter upon the export market in large measure. We are not in reality an exporting State. But the levy to be imposed upon Tasmanian poultry owners is the same as that to be imposed upon poultry owners in every other State. In view of the enormous potential of the larger States to expand their activities in the poultry industry, I see danger in still further dwarfing the Tasmanian poultry industry by the imposition of a levy uniformly over the industry throughout Australia. There is no guarantee that the Tasmanian producers will obtain equalisation with the other States.

Senator O’Byrne:

– The Tasmanian producers will obtain protection against dumping from Victoria which has cost them ls. 6d. a dozen in the past.

Senator WRIGHT:

– That factor must be taken into account and I have not neglected that it is possible under section 92 of the Constitution for a large egg producer on the mainland to try to dump a big consignment of eggs in Tasmania if he thinks that the prices there will advantage him.

Senator Cormack:

– Why not use the word “ sell “ instead of “ dump “?

Senator WRIGHT:

– I did not wish to use three sentences to convey the meaning contained in one four-letter word - if I may join the literary class for a moment and use a four-letter word, but on my own level.

I did not neglect to consult the representatives of the poultry industry in Tasmania before speaking in this debate. They have assured me that their marketing devices have been equal to any dumping excursion. They have quickly undercut the prices of producers attempting to dump their products in Tasmania and shown them that it was not profitable to repeat the consignments. Senator O’Byrne is again attempting to interject. He may think that there are a few clucking hens that will cluck more loudly because of his advocacy of this Bill, but I am putting forward a few matters for consideration on the parliamentary plane. I have pointed out that the Tasmanian producers will have to submit to a uniform levy. But there is nothing to say that they will receive a uniform share of equalisation.

Senator Cormack referred indirectly to clause 6 of the Poultry Industry Assistance Bill which states -

The Minister- that is the Federal Minister - may from time to time authorise the payment to a State, by way of financial assistance, of such amount or amounts as he determines after taking into account any recommendations made to him by the Council.

That is the Council of Egg Marketing Authorities. I have received a letter dated 19th April from the Secretary of the Tasmanian Commercial Poultry Producers Association which requests me to ensure that the legislation should clearly state that any unused proportion of the levy should be refunded to Tasmania. I understand that subsequent consultations by C.E.M.A. induced the industry to rely upon what Senator Cormack appropriately referred to as a gentleman’s agreement. To me that seems to be a very insubstantial and unsatisfactory basis upon which to construct a legislative scheme for orderly marketing. In my view that would not be sufficient reason for objecting to the scheme, and I point it out only as a deficiency.

I would support the proposed scheme if it had the support of a majority of producers in the Australian poultry industry voting at a poll. Until that poll is conducted and results in a majority in favour of the proposal I believe that I am not authorised to inflict upon the poultry producers of Tasmania an annual levy of 7s. a hen. When Senator Cormack said that he believed that financial assistance under section 96 should not be disparate as between the States, I took leave to suggest that that was not necessarily so, because individual grants by way of financial assistance may be made under section 66. As this would come under a law or regulation of trade or commerce, it would be provided for under section 99, which reads -

The Commonwealth shall not by any law or regulation of trade, commerce or revenue, give preference to one State or any part thereof over another State or any part thereof.

It is questionable whether or not, if we passed legislation giving the Minister a complete discretion as to the amounts that he should distribute by way of financial assistance, we thereby would contravene section 99. I just make that observation in deference to the very thoughtful remarks of Senator Cormack. I approve of orderly marketing but I will not, on my own responsibility, be a party to creating it unless the individual producers in the industry vote for the establishment of the scheme.

Senator MORRIS:
Queensland

.- Right at the outset I want to say that I am as much in favour of this Bill as Senator O’Byrne expressed himself to be. I am in favour of it because it so happens that prior to my coming here the Queensland Government gave me the responsibility of making an investigation into this industry, and this I did pretty thoroughly some years ago. My mind might not be clear on every point of that examination but at least it is clear on many. I most strongly support the legislation and I believe that the Queensland producers support it just as strongly as I do. But I also agree that whatever legislation comes before this Parliament or any other Parliament it should be examined critically. I have listened with very great interest to the critical examination that has been made of the Bill by my two colleagues on this side of the Senate. I shall comment in a few minutes on some of the things that they said.

First, I should like to give a very quick historical review of this industry. I remind honorable senators that some 45 years ago there were no egg boards at all in existence in Australia. The egg producers were individualists, and they marketed their eggs as best they could, frequently to some of the large merchants, and they were subject to very great fluctuations in the incomes which they received. As we all know, this industry is subject to periods of glut and periods of shortage. When eggs were in very short supply, the producers did not do too badly at all, but when the season of glut came their returns were very uneconomic. The producers were individually so small that they could not find export markets for their surpluses during the glut season. It was at that stage a most unsatisfactory industry. As a result, some producers went out of the industry, but others came in, because this is an industry which is reasonably easy for people to enter. Many people of very moderate means, wanting to be individualists and their own bosses, go into poultry farming. Those who found it possible to carry on did so. Year by year many went out of the industry and others came in to replace them.

I am speaking of the industry in Queensland rather than in other States, because I know the Queensland situation best. Round about 1924 the Queensland producers approached the Government and asked for the establishment in Queensland of an egg marketing board. They believed that this would help the industry. The Government of the day - it was not a government of my own persuasion - agreed and so the Queensland Egg Marketing Board - there are now two boards - was formed at the request of the individual producers. From the date of that formation the economy of the industry improved, although it was not perhaps a very wealthy industry. Fluctuations were ironed out, because very quickly the new Board was able, because of its strength, to tap the markets overseas. A much more stable period followed the formation of the Board. At that point the egg boards were exporting not egg pulp but egg in shell, for which they had a very good market.

When World War II commenced, it triggered quite a lot of changes in the egg industry in Queensland. As we all know, during the war many troops were stationed in Queensland and the egg industry was an even better industry economically for those who were in it. There was a greater demand for the eggs that were produced and this was a very healthy diet for those people who were engaged in the industry. The war changed the picture. We all know that during World War II Great Britain was forced to step up .production in all sections of primary industry within its shores. This was done to a remarkable degree in most primary industries. The poultry industry was one of these. There was an enormous increase in the number of birds which were kept for the production of eggs in England. As the war finished, this began to have a more and more marked effect on the Queensland producer. The price that the Queensland Egg Board could get in England fell away very badly.

The Board went to no end of trouble to find markets in the East and in all other parts of the world. Its export trade changed from egg in shell to egg pulp, which to the best of my knowledge has never been as economically satisfactory as eggs in shell; but this was the only outlet and therefore it had to be taken. The price that was obtainable overseas declined and it became necessary for the Queensland Egg Board to step up what it called its equalisation plan, which was evolved so that the losses that occurred in selling overseas were balanced by a tax, called an equalisation levy, on the producer. That levy grew from, I think, 4d. to 6d., and finally to 9d. a dozen. It became a very heavy burden on the producer. As is inevitable with human nature, the producers looked around to see how they could avoid paying this heavy equalisation charge. Quite a number discovered that they could sell to shops and consumers direct and so avoid paying the levy. The more eggs that were sold outside the Egg Board the smaller was the amount of money that was available to the Board to equalise losses overseas with profits on sales at home. So a bad position became even worse.

Senator O’Byrne said that approximately 30 per cent, of the eggs that are consumed in Australia do not go through an egg board. Therefore, the producers of those eggs are getting the benefit of all the pork that is being done by the egg boards in their equalisation measures, but they are paying nothing for it. The producers who are prepared to market their eggs through the boards are carrying on their backs those who do not forward their product to the boards. This is literally the situation. It is for that reason that I believe a new method of marketing must be found. I can think of no better method than that which is wrapped up in the legislation now before us. I repeat that it is the only method that I can think of and that people who are in the industry can think of that will be fair. All producers will pay their share of the contribution to offset losses. The lot of those who have been carrying the heat and burden of the day will be easier and those who have not been paying will be drawn within the ambit of the scheme.

The producers in Queensland were paying not only an equalisation levy of up to 9d. a dozen but also the administrative costs of the Egg Board itself. I should not like it to be accepted that the egg boards are inefficient. Indeed, 1 take quite the opposite view. I know of my own knowledge that the Queensland Egg Board is very efficient. It has been very efficient in its efforts to obtain overseas markets. It has done something else that we should not forget: It has built up the quality of eggs that go on to the market. I amplify that statement by saying that there is in existence a system of inspection whereby every egg that comes to the Board - there are huge numbers of them - is individually inspected. It may not generally be known that a freshly laid egg is not necessarily a good egg. Quite frequently producers find that for some reason which I cannot explain eggs within 24 hours are of very poor quality. The Board’s inspection machinery reveals this defect, and such eggs are rejected. That procedure has resulted in raising the quality of eggs placed on the market.

As in every industry, some of the producers are careless. Some producers allow their eggs to remain in the sun for a long time or do not get them into the egg board within the necessary time. This results in a reduction of quality. As I indicated a moment ago, the machinery in operation at the egg boards detects this reduction in quality quite easily and the eggs of the producer in question are downgraded. The producer is advised of the reason. Any man who is trying to make a living in any industry will, upon being given a warning of this kind, step up the quality of his product as far as he is able. It will be seen that the egg boards are serving a very useful purpose. I believe that all producers in Queensland would be very unhappy about even considering a return to the conditions that used to obtain.

I come now to a certain comment by Senator Cormack. I cannot recite the honorable senator’s exact words, but he made a comment to the effect that this legislation was nothing less than a device to evade section 92 of the Constitution. I cannot agree with him. It is not a device to evade section 92. I repeat that this legislation is a device to make all producers pay their share towards the recovery of losses, which are inevitable during times of surplus, on sales overseas. The honorable senator commented also on the possibility of the States referring their powers to the Commonwealth and of enabling legislation of a different kind to be introduced to overcome the problem confronting the industry. It may be possible to do that; I do not know. But I do know that when I was active in this sphere some years ago it was not possible to do so, because the States would not agree to it.

Senator Wright:

– The power, even if referred by all six States, would still be subject to section 92.

Senator MORRIS:

– I am merely trying to give a layman’s answer to the matter raised by Senator Cormack, and I am grateful to Senator Wright for the support that he has offered. Senator Cormack spoke also about the levy being, to a degree, an excise tax. I am afraid that I cannot comment on that aspect of the matter. I have no doubt that that aspect will be examined by others perhaps later in this debate or at the committee stage. The honorable senator also said that possibly the Commonwealth had exceeded its authority. I suppose that is a matter that could be argued, and possibly it will be argued in places other than this. Consequently, I do not propose to comment upon it at this stage.

There are two comments that I would like to make in relation to the remarks of Senator Wright. He said that the proposed scheme will have a damaging effect on the economics of the industry. Of course, I agree that the circumstances in Tasmania are different from those in the mainland States. What Senator Wright said may be pertinent and perfectly true so far as Tasmania is concerned, but it is certainly not true of the mainland States. I shall try to illustrate that point. No person can remain in an industry unless he runs his business economically. This applies very definitely in the poultry industry. The poultry farmer will not survive if he carries a lot of passengers in his flock. Therefore, it is extremely important that he should cull and cull well. If he does that, he can expect to get in the vicinity of 20 dozen eggs per year from each bird. Admittedly, that is a fairly high objective, but many poultry farmers are achieving it. I believe that the efficient producer can get production of something like that number. So, I shall take that figure of 20 dozen.

Senator Wood:

– That is 240 eggs per bird per year?

Senator MORRIS:

– Yes, and it is by no means unattainable. That statement can be proved by reference to the reports that are issued by the egg boards. I could elaborate on this point, but it would take a great deal of time. The way in which it is achieved is by the use of cages, the checking of the production of each bird, the elimination of birds which do not reach this standard, feeding the birds with a special type of food, and even going to the extent, as many poultry farmers do, of having electric light installed throughout the sheds. By means of a time clock the electric light comes on during the night and fools the birds - I suppose that is the only- way I can put it - into producing more eggs than they would if the long hours of darkness were uninterrupted.

By taking that figure of 20 dozen eggs per bird per year and working on a uniform price of 5s. per dozen, the value of the eggs produced by each bird per year would be £5. Under the present system, an equalisation tax of 9d. per dozen eggs is imposed and administration expenses amount to 3d. or 4d. a dozen, making a total deduction of an amount between ls. and ls. 3d. per dozen. But if we assume that it is only ls. a dozen, this means that under the present scheme each bird produces eggs to the value of £4 per year. From this amount the cost of feed has to be deducted. Under the proposed legislation the poultry farmer will have to pay. a levy of 7s. per bird. Therefore, he will be 13s. per bird per year better off under the new proposal than he was under the old scheme. I do not say that this position obtains in Tasmania because the poultry farmers in that State operate under different circumstances. Having listened to the most interesting contribution of Senator Wright, I came to the conclusion that it is highly likely that this legislation will not hurt Tasmania, but could bc the inspiration for a great development of the industry in that State.

I now wish to say a few words about the opinion of those people who are engaged in the industry. The egg boards were set up at the request of the producers. In all the mainland States but one, provision exists whereby a very small number of producers - I would not like to say for certain how many, but 1 think it is in the vicinity of 50 - can, if they so desire, ask their State government to conduct a poll of the registered producers in their area on the question of whether they want their egg board to continue. If they vote against it, the egg board ceases to exist. So there is an instrument available at all times by which the producers can abolish the board. Of course, if the board was abolished this legislation would have no effect. Although there has not been a poll of the producers in relation to this legislation, the producers at all times may have the legislation cancelled by following the procedure I have mentioned.

There are several other aspects of (he industry that I would like to mention, but I am afraid that time will not permit me to do so. At the beginning of my speech 1 said I know that the producers in Queensland support the proposed scheme. I have here two telegrams which I received from Queensland indicating their support of the scheme. I have no doubt that the producers in Queensland and in the other States are in favour of it. They, can abolish the legislation with great simplicity. From the figures I have given it can be seen that the egg producer will be financially better off as a result of the legislation. Consequently, I am strongly in favour of it.

Senator LILLICO:
Tasmania

– I rise to speak briefly about some of the provisions contained in these three measures very largely because reference has been made to what has been described as the peculiar situation that could arise in Tasmania if the legislation comes into force. I was interested in what Senator Cormack said. He criticised the machinery of the measures. He said that the legislation is more or less a roundabout attempt to inhibit section 92 of the Constitution. I am not going to argue that point at all. Senator Cormack referred to a communication which had been received from Mr. Patrick, the Chairman of the Tasmanian Egg Marketing Board, in which reference was made to a gentleman’s agreement. Perhaps it was unfortunate that that expression was used. The constitution under which the Egg Marketing Board operates was drawn up by the Australian Agricultural Council. Had Senator Cormack read more of the letter he would have seen this passage -

It is pointed out that Tasmania has ample security in that it has 1 vote out of 6 and this one vole could veto the whole Bill should it not he satisfied wilh ils treatment. Other Slates, throughout all negotiations, have been more than willing to meet our small Slate’s requirements; Victoria in particular has for some time taken our surplus pulp and sold it on their local market as our pulp cannot be exported owing to lack of pasturisation. lt would appear that under the constitution by virtue of which this Board will operate there is a definite power of veto. If the State of Tasmania is not satisfied with any disbursement or any decision made in regard to it, I take it that it has power of its own volition to veto that decision.

Senator Wright:

– Is it not part of the constitution that one vote out of six vetoes?

Senator LILLICO:

– I understand the position is that, under the constitution drawn up by the Australian Agricultural Council, one vote out of six can veto such a decision. The chairman of the Tasmanian Egg Marketing Board, Mr. Patrick, had something to say about the Tasmanian position which is very illuminating indeed. I am of the opinion that egg marketing in the Commonwealth has reached the crossroads. Apparently there are so many people avoiding contributions to egg boards that it would appear to be difficult in the future for some of these boards to carry on, particularly the Tasmanian Egg Board, according to a communication I received. The sole objective of this legislation, I believe, is to bring stability to another section of primary industry - the same stability that is enjoyed by many people in other walks of life. That is the focal point of the legislation. I cannot see where the position can improve under existing conditions. Mr. Patrick said -

Almost 50 per cent, of the local market for pulp has been undercut and lost to interstate traders. This means that the excess pulp has now to be offered for export, and it is only through the good offices of the Victorian Board that the pulp can be disposed of at all. After paying freightto Victoria, and also pasturisation costs, the net return is around1s. per lb., which corresponds to1s. per dozen for eggs.

He exposed the very critical position in which the Tasmanian Board finds itself and said -

The Board’s sales have been drastically reduced by producers undercutting the Board’s price, and this has a snowball effect.

A further problem has now arisen in that recently interstate eggs from Victoria have been on the Tasmanian market at a price of1s. 3d. per dozen below the Board price. These eggs are handled by people with the avowed intention of breaking the Board and Producers in this State. They can be sold so cheaply - referring to the importations into Tasmania - because: -

They are surplus in any case.

This next point is the condition which this Bill attempts to remedy -

  1. They are sold by producers who have evaded the legitimate charges made by the Victorian Board.

That is just another way of dodging the contribution which I believe all producers must pay if there is to be stability in the egg marketing industry. Mr. Patrick continued -

  1. They operate under Section 92 of the Constitution.
  2. They are “ ungraded “ and sell only on price. The Board has recently acquired some of these eggs and they graded out as follows: -

Of 150 dozen tested over 120 dozen were substandard. This constitutes a fraud on the general public, and is also a pure food hazard.

I do not know whether that situation is permanent and continuing so far as egg marketing in Tasmania is concerned. If it is, it seems to me that if producers on the mainland - and this is happening all over the Commonwealth - can be made to pay the levy, as the producers who are trying to achieve stabilisation pay the levy, then certainly the position must improve so far as marketing is concerned.

I recall that years ago the same difficulty arose in regard to the dairy industry. At that time the trouble occurred with those farmers who made up their butter and sold it to the retailer thereby escaping the levy that was used for equalisation purposes. A scheme was proposed and put into operation for a time whereby those farmers were compelled to put a threepenny stamp on every pound of butter they sold. In that way they contributed to the equalisation fund. It was claimed then that the producers who were avoiding the equalisation levy, which was conferring such a benefit on the Australian butter market, were tending to hamstring the scheme and would eventually drag it down. There was tremendous contention at that time when these people were compelled to put that threepenny stamp on their butter. I am not saying that that scheme was right but it did indicate the view taken of this avoidance of the levy which was due and necessary to achieve some stability in the industry.

I noticed a statement made in another place by Mr. Whitlam, instancing the wholesale avoidance of the payment of this levy which is to be made to try to achieve some stability. If avoidance occurs it seems to me we have either to wipe the whole idea or else tighten it up in order to achieve real stability.

Reference has been made to producers having the right to say whether they approve of this scheme or not. I was rather intrigued when Senator Wright read a passage from the report of the Constitutional Review Com. mittee which was set up three years ago, perhaps, and which comprised prominent members of this Parliament. In formulating a proposed marketing scheme, the Committee arrived at the conclusion that it would be necessary to have a three-fifths majority before a scheme could be put into operation.

Senator McClelland:

– The Government has done nothing about that report.

Senator LILLICO:

– I am not speaking of what the Government did. I am speaking of the way in which the minds of these prominent Commonwealth parliamentarians worked. They thought, as I did, that threefifths was a fair and reasonable majority. It indicated that the people concerned, who wanted the body to be efficient, thought there should be more than a bare majority. My mind goes back to 1945, because threefifths was the figure arrived at by the Tasmanian Legislative Council - which some people regard as a most reactionary body - in regard to the setting up of boards under the Marketing of Primary Products Act, 1945. I understand that the Tasmanian Egg Board operates under the Tasmanian

Egg Marketing Act, 1957, which took its electoral provisions holus-bolus from the 1945 Marketing of Primary Products Act. The producers were given the right to set up a board. They were given the right to draw up a petition containing a certain number of names and to forward it to the responsible authorities. I understand that that procedure was not followed in this instance, but the point is that this Board operates under a democratic constitution. Its members are elected at biennial elections. It can be dispensed with by the producers. The producers can demand a poll and, if the poll is carried by the same three-fifths majority as was agreed to by the Constitutional Review Committee, the Board goes out of existence.

It seems to me that if the producers in Tasmania are satisfied with the operations of this Board - I believe a similar position applies in all the other States, except South Australia - then three-fifths is the obvious figure to use in order to demand a poll and have a vote taken. I feel perfectly certain that if the Tasmanian egg producers felt that they were being victimised by the operation of this legislation and were not receiving fair and just treatment, the required threefifths majority would be forthcoming. Having said that, I feel that I must support this measure. Again I say that as one who has experienced violent fluctuations in the marketing of primary produce - fluctuations which do no good to the producer, the consumer or anyone else but, in fact, do a lot of harm - I feel that I must support this measure. Probably it is not perfect and will need adjustment. Undoubtedly the controlling of the marketing of eggs in the Commonwealth is exceedingly difficult. I know that the people concerned in my own State are conscientious and dedicated men and in view of the evidence furnished to us regarding the chaotic position that applies in the marketing of eggs in Tasmania, I cannot fail to support the Bill. The producers have all the necessary machinery in their hands if they wish to exercise their rights.

Senator PROWSE:
Western Australia

– I had not intended to speak on this measure, but in view of the fact that I have received telegrams supporting the legislation from representatives of the industry in Western Australia and have not received one word of opposition to it from any individual producer in that State, I think it is reasonable to conclude that the Western Australian producers are in favour of it. At this hour I intend to speak very briefly. I support the Bill. I am in agreement with the Government in bringing this legislation forward at the request of representatives of the egg industry. I believe the legislation to be the result of a careful study of the best methods of achieving stability in the industry, and I think it is in the best interests both of the consumers and the producers.

It has been said that the legislation is an elaborate facade to overcome the difficulties arising from section 92 of the Constitution. I think it would ‘be equally true to say that devices have had to be constructed to overcome similar difficulties in the way of other organised marketing projects. The surrendering of State powers, for instance, could be described as a facade to overcome section 92, and while that provision remains in the Constitution - the Prime Minister (Sir Robert Menzies) seems to think think there is very little hope of removing it by way of referendum - I prefer finding devices to get around it to adopting what seems to me to be a facade of support for organised marketing while raising every possible difficulty against its achievement.

If primary production is to survive as something more than a peasant industry, it has to adopt modern techniques of marketing, organisation and production. Secondary industry and commerce have long since adopted various practices even beyond the range of any legislative action. Because of their fragmentation and dispersion around the country, primary producers are forced to rely upon statutory authority for achieving what secondary industry is able to achieve without it. I, therefore, support the egg industry in what I consider is long overdue action in the interests of stability in egg marketing.

Senator MCKELLAR:
Minister for Repatriation · New South Wales · CP

– in reply - Mr. Deputy President, I would like, first of all, to thank the Opposition for its support of this measure. I wish also to say to Senator O’Byrne, who led for the Opposition in this debate, that I appreciated his grasp of this legislation. I turn now to some of the queries that have been raised by honorable senators on this side of the chamber. I turn, firstly, to Senator Cormack who queried the legality of this legislation. I would like to point out that this measure has been under study for quite a long while - for the last few months, at any rate - and I have no doubt that its legality would have been considered fully and completely. In this respect also I think we can draw some comfort from the length of time taken by the debate on this measure in another place. I point out too, that if there is some doubt about the legality of the legislation - I have not any doubt at all about it - that question will be settled very speedily by some of the parties who are not in agreement with it.

In the marketing of primary produce this is not a lone measure. We have also the dairy industry equalisation scheme, the Wheat Industry Stabilation Fund, the wool levy and meat levy legislation and also the Barley Board, which I understand is a statutory body.

I appreciate the interest of Senator Cormack in this Bill because I know that he has a great regard for the functions of the Senate. I am in accord with him there and with his desire to see that the legislation enacted by the Senate is in accordance with the duty we all owe to the Parliament as legislators and to Australia generally. The honorable senator had some qualms about the fact that collections levied by the States as agents for the Commonwealth were not subject to Commonwealth audit. I remind him that in this case we are following the usual procedure. Moneys collected within a State by the State authorities are subject to audit by the State Auditor-General. When these moneys are collected by the States from the egg producers they will be forwarded to the Commonwealth and will then come under the jurisdiction, in an accounting sense, of the Commonwealth AuditorGeneral.

Much emphasis has been placed, wrongly I think, on the levy that is to be imposed. In this first year of the operation of the scheme, the levy will not be higher than 7s. The Minister for Primary Industry (Mr. Adermann) has given an undertaking that it will be 7s. in the first year and after that it will not be higher than 10s. This levy is not really new although it is to be given a new name. It replaces the amount col lected by the State egg marketing boards from growers to cover losses experienced on exports. Figuratively, it is a rose by another name.

I come now to the so-called gentleman’s agreement. As has been pointed out by an honorable senator, this was not the description given to it by the Minister; it is a description that was applied to the scheme by a member of the Opposition when speaking to the Bill. So I think we can forget about it. Senator Cormack was concerned about the disbursement of this levy. The disbursement will be made only after consultation with the Council of Egg Marketing Authorities which represents all the egg marketing organisations in Australia. The Minister will not come into the picture except that recommendations will be made to him by the boards. As I understand the arrangement, the six State boards will have an equal say and they will make a decision on the disbursement.

This is where Tasmania comes into the picture. Tasmania has certain disabilities in this connection which are not common to the other States. This is where the gentleman’s agreement comes in too because these disabilities are recognised by C.E.M.A. and no doubt all the other State boards, as well as the Tasmanian board, will see that Tasmania gets a fair share of the disbursement. As Senator Lillico has pointed out, if Tasmania is not satisfied with the arrangement and pulls out that will upset the apple cart.

Senator Wright mentioned that this proposal was in accord with the policy of the Government. When primary producer organisations request a marketing scheme, it is the policy of the Government to assist if the request comes from a recognised organisation representing the majority of those in the industry concerned. If there is any doubt about the request for orderly marketing, a poll is held. In this case, an approach was made to the Government by all the State egg marketing boards and the Government formed the opinion that they represented the majority of the producers. We must remember that this has not been a flourishing industry. Apparently it was approaching stagnation and unless something fairly radical and new was done, the industry was faced with chaos. Indeed, from what one can gather it was approaching ruin. The

State egg marketing boards were in a position to know the condition of their industry and after having a good look at it they made a request to the Government for a stabilisation scheme.

Reference has been made to the fact that Tasmanian producers will pay altogether Ils. a year for each hen because of a local levy that will be added to the levy of 7s. What is this levy? When all is said and done, it is a payment by the producers to stabilise their own industry. It is not money that will be paid out and not yield a return. By assisting their own industry, obviously the producers will be assisting themselves. One disadvantage of the existing set up has been the fact that about 50 per cent, of the growers have been selling outside the egg boards. This has caused chaos in the industry.

One honorable senator suggested that the minimum limit of 20 hens on which a producer will pay the levy came from Canberra. It did not come from Canberra. The limit was set at 20 hens because the industry asked for it. A comparison was made with the wool reserve price plan. I point out that that was a new scheme and therefore it is in a different category. The egg marketing plan is not new. I have mentioned the funds that have been raised in the past. I remind honorable senators that the fund has been in operation in all States since 1946 and in Queensland and New South Wales from 1926 or 1927.

Senator O’Byrne:

– You can withdraw wool from sale but you cannot hold eggs because they go bad.

Senator MCKELLAR:

– That is correct. Senator Morris referred to the way in which the boards have been set up. There is no need to comment on that point. Senator Lillico correctly said that one vote in six could upset the scheme. Senator Prowse also made a contribution. It was mentioned correctly by Senator O’Byrne that the industry is worth about £67 million a year including £2.5 million in export income. This is quite a tidy sum particularly at a time when our export income is declining. Over the past few weeks there has been some discussion about law by regulation. This process gives the Parliament the right to disallow regulations if it sees fit.

Reverting again to Tasmania, I remind the Senate that each year 40 to 50 tons of egg pulp from Tasmania is marketed in Victoria. I want to emphasise that in future Tasmania will be paid the equalised price and I repeat that Tasmania’s special circumstances will be taken into consideration by C.E.M.A.

I do not recall any mention of the amount that will be raised by the levy but it is expected to be about £3.5 million. If the yield is greater than that, I imagine that in the following year the levy will not need to be 7s. but a lesser amount so there is nothing to be feared there. This amount has been raised in the past by the egg marketing boards. Reference has been made to the fact that all States except one have the right to petition for a poll of the producers. New South Wales has the right to petition for a poll of producers within three months of the setting up of the new egg board every three years.

Reference will probably be made in Committee to the broiler section of the industry. This has been examined. Normally broilers are slaughtered before the birds reach the age of six months and so that section of the trade is protected so far as this scheme is concerned.

At this stage I should like to emphasise that the levy will not be passed on to the consumers. The money will be raised from the industry as it has been in the past. This is not an extra tax on the industry. A smaller amount of money is being collected but it will be spread over a greater number of producers because as I have said 50 per cent, of the producers have not been contributing to the funds in the past. I think that is all I need say at this time. I thank the Senate for giving the Bill a speedy passage through the second reading stage.

Question resolved in the affirmative.

Bill read a second time.

In Committee.

The Bill.

Bill agreed to.

Bill reported without requests.

Adoption of Report.

Motion (by Senator McKellar) proposed -

That the report be adopted.

Senator WRIGHT:
Tasmania

– I regret that it is necessary for me to move for recommittal of the Bill. I wish to discuss the form of clause 9 of the Poultry Industry Levy Bill which, I understand, is the one with which we are dealing. I move -

That the Bill be recommitted.

Question resolved in the affirmative.

In Committee.

Recommital.

The Bill.

Senator WRIGHT:
Tasmania

.- I wish to direct the Committee’s attention to clause 9 of the Poultry Industry Levy Bill which is in these terms -

  1. – (1.) An authorized person may, by instrument in writing, direct that any hens that, at any time while the instrument remains in force, are in the possession or control of a person but of which that person is not the owner shall, for the purposes of this Act, be deemed to be owned by that person, and the direction has effect accordingly. (2.) In this section, “ authorized person “ means the ‘Minister or a person authorized in writing by him to give directions under this section.

That means that after the levy has been imposed upon the owner of the hens it is within the competence of the Minister, or a person authorised by him, to give a direction in any individual case that Jones, not Smith, is the owner of the hens. That transference of the levy is to be made by an instrument in writing by a person authorised by the Minister.

I understand that some poultry farmers have a great number of birds and the imposition of this levy will involve a considerable amount of money, but whether the amount is small or large it is an essential principle in my book that you select either the person who is in possession of the hens or the owner of the hens and then, according to the law, require him to pay the levy. In this instance power is being taken by a person authorised by the Minister to say, simply by an instrument in writing, that Smith is not the person liable for the levy but that Jones is, despite the fact that the person who is to be subjected to the levy may not be the legal owner. I shall repeat the relevant portion of the clause. It is in these terms -

An authorised person may, by instrument in writing, direct that any hens that, at any time while the instrument remains in force, are in the possession or control of a person but of which that person is not the owner shall, for the purposes of this Act, be deemed to be owned by that person. . . .

I suggest to the Committee that this clause violates a fundamental rule of any taxation law, namely, that legislation should clearly state the person who is to pay the levy. If you wish to transfer the liability from the owner, in the case of a particular yard of birds, to one whom the authorised agent of the Minister states shall be deemed to be the owner, it is inappropriate to do so by instrument in writing over which neither House of Parliament has any control. It is an arbitrary bureaucratic way of transferring liability from one proper taxpayer to another, and is the kind of clause which I hope this Committee will not accept.

Senator WOOD:
Queensland

.- I am very pleased that Senator Wright has brought this matter forward. There appears to me to be a definite trend developing in the legislation coming before this House in which we find the edict of the Minister or someone whom he chooses rising paramount to this Parliament. To my mind it is an indication that the people who draft this legislation, or the members of the civil service acting behind them, are determined to see that they, and not this Parliament, will have the power. We do not need to be very intelligent to know what goes on. Quite frequently members of the civil service have stated that they do not like Parliament being the controller of legislation in this country.

As Chairman of the Regulations and Ordinances Committee I am aware that certain sections of the civil service are very resentful of the vigilance of that Committee which supervises the regulations and ordinances issued by the various Ministers and their departments. It is, therefore, very important that this Parliament should be vigilant to see that the rights of ‘Parliament are protected and are kept paramount to anything else in this country. Only two or three weeks ago we had before us the Housing Loans Insurance Bill. I spoke in the same tenor on that occasion when we found an attempt to get around the necessity of having regulations expressed in the Bill. The Senate amended the Bill and sent it to another place. It was returned to us, but the Senate did not support the amendment that it had made.

Senator Hannaford:

– The honorable senator will not get any support from the other side of the chamber on this occasion.

Senator WOOD:

– I am not concerned with whether 1 get support from the other side or from this side of the chamber. We very seldom get support from the Government side although it is a standing committee. If it were not for members of the Regulations and Ordinances Committee from the other side of the chamber, it could not act as a standing committee of Parliament. I do not expect honorable senators to rush in to support my view, although I strongly support the rights of the Parliament. I believe that Parliament is the focal point of democracy. Honorable senators should be protectors of the interests of Parliament and should ensure that the country is run by Parliament. Honorable senators should not try to tell me about this matter. I know that members of the civil service resent the vigilance exercised by the Regulations and Ordinances Committee which is charged with the duty of ensuring that Parliament runs the country, and not the civil service.

Senator Wright has pointed out ; and I support him - that the edicts of the Minister or someone appointed by him do not come before Parliament. Parliament has no authority in those matters. While this may not be a very important point, as I have mentioned on previous occasions, principles are involved. The rights of Parliament are being eaten away. If the Senate is not vigilant the trend will become more and more evident. It has been stated quite openly by members of the civil service that the procedure proposed would be used more often if it were not for the alertness of the Regulations and Ordinances Committee. Senator Anderson is attempting to interject. I know that we have never received his support.

Senator Anderson:

– I do not like accusations being made against people unjustifiably. The honorable senator has made a bald statement which takes away people’s characters.

Senator WOOD:

– I do not think that the Senate Standing Orders Committee has once received the support of the Minister. But whenever a former Leader of the Government in the Senate wished to comment upon the good work being done by the Senate, always he first referred to the work of the Regulations and Ordinances Committee. Very seldom has the Government supported that Committee. The Government takes the credit for the work it does but does not support it.

I have noticed a trend developing in legislation. The powers of Parliament are being eaten away and the Regulations and Ordinances Committee is circumvented, which is the wish of certain people. Unless members of this Parliament are vigilant, they will find that before very long there is not much democracy left here. I therefore support very strongly the point brought forward by Senator Wright. I make no apology for standing for the rights of Parliament.

Senator ANDERSON:
Minister for Customs and Excise · New South Wales · LP

– Senator Wood is entitled to express his point of view, which he does in a forthright manner. I do not object to the honorable senator expressing his main argument as he did, but I do object to his repeated assertions that public servants have said certain things. To me that is a false basis for his argument. It is the old story that “ they say “. It has no substance. We are not told which public servant has made the statement. I believe it is wrong for Senator Wood to base an argument on the assertion that he knows public servants do not want Parliament to rule; that they want bureaucracy to rule. That is a very weak argument. I do not criticise the other points raised by Senator Wood as he is quite entitled to raise them.

Senator CAVANAGH:
South Australia

– The attitudes adopted by honorable senators on this occasion should be considered in relation to those taken during the debate on the Housing Loans Insurance Bill. On that occasion the Opposition supported an amendment moved by Senator Wright and the Bill was referred back to the House of Representatives. When the Bill was returned to the Senate, the Opposition, with the support of Senator Wood, maintained a consistent attitude, but the measure was discussed, I think, in the absence of Senator Wright on that occasion. The Opposition must consider now its attitude to what appears to be an amendment very similar in principle to that moved by Senator Wright during the debate on the Housing Loans Insurance Bill. Is it the same in principle? That is what concerns the Opposition.

During the debate on the Housing Loans Insurance Bill much attention was devoted to the clause relating to the class of person to be classified as an approved lender. The

Opposition held the view that Parliament should have the right to decide on the class of persons to be included in the category of approved lenders. I take it that on this occasion the point of contention is the method of determining the owner of hens. The legislation before us contains the provision that the owner should be determined by an instrument in writing and not by regulation. I am not sure that a regulation could appropriately apply in this instance because it appears to me that the question would have to be decided by an inspector. For the purposes of this legislation, someone has to determine who is the owner. It seems that an inspector would need to visit the farm and say: “I am determining that you are the owner “. Irrespective of the vigilance of Parliament through the regulations, 1 am not certain that this is an instance to which the regulations may be applied.

Our difficulty in discussing the provisions of the Housing Loans Insurance Bill lay in the method of deciding on the approved class of lender. It seemed to the Opposition that the regulations could properly be applied to solve that difficulty. But in the matter we are discussing, it does not seem appropriate that the owner of a poultry farm may be determined by regulation. Is there to be a regulation which states that the foremen of poultry farms are to be accepted as the owners? [t could well be that difficulty would arise in relation to a poultry farm conducted by a family. Would the mother or one of the daughters or someone living in the nearest house be declared the owner?

The problem is one which normally would be solved upon inspection. An inspector has to decide certain things on the spot and the problem is not strictly comparable with the difficulty of deciding who are approved classes of lenders in accordance with the provisions of the Housing Loans Insurance Bill.

Senator WOOD (Queensland [9.29]. - I am interested in the point raised by Senator Cavanagh. I am unable to find in the legislation provision for redress by any person who is wrongly designated after the Minister or someone authorised by him’ has issued a decree as to ownership. The matter does not come before Parliament. If the decision were made according to a regulation, it would come before Parliament and be the subject of debate. It is possible that the regulation would be disallowed. As the legislation stands, it gives authority to a person whose identity is unknown. That authority may be wrongly used and the victim of the error has no redress whatever.

Senator O’BYRNE:
Tasmania

.- I think that Senator Wood is extending his argument on the authority of Parliament and the importance of bringing regulations into Parliament for discussion. The simple fact is that somewhere along the line owners of more than 20 hens who are avoiding the provisions of this legislation will have to be brought into line. They will have to be told that they must pay the levy. If persons say: “ This is not my responsibility. It is the responsibility of someone else who is not present “, the Minister or his agent will designate the person who is the owner. The provision reads-

An authorised person may, by instrument in writing, direct that any hens that, at any tunc while the instrument remains in force, are in the possession or control of a person but of which that person is not the owner shall, for the purposes of this Act, be deemed to be owned by that person, and the direction has effect accordingly.

I cannot understand Senator Wood’s attitude in wanting such a simple thing as this to be brought before the Parliament. For the purposes of this legislation the man in possession of the poultry will be the owner. Of what use would it be to bring this matter before the Parliament? If the hens we re at Wangaratta or somewhere in the Mallee, how would we know who was the owner? How would it be possible to define by regulation who was the owner of the hens? This is entirely different from the cases that have been raised previously. I have always supported Senator Wood’s argument that certain matters should be brought before the Parliament, but it would be most impractical for such a matter as this to come before the Parliament by way of regulation. There is no parallel.

Senator WRIGHT:
Tasmania

.- This debate has produced clarification of the position. I think there is merit in the viewpoints submitted by both Senator Cavanagh and Senator O’Byrne, but they do not dispose of the fundamental verity on which Senator Wood’s argument and my argument are based. I remind Senator

Cavanagh (hat in the Housing Loans Insurance Bill we were dealing with a class of persons who would be benefited by the legislation. Here we are dealing with persons who are designated as persons to pay a levy. The imposition of taxation, as distinct from acceptance of a benefit, has always been jealously guarded by the Parliament as its essential duty to define, and it is the right of the individual taxpayer to have himself defined in the legislation so that he will know who he is. The position is not that this is a case appropriate to regulation; it is a case appropriate to definition in the legislation itself. Clause 7 states -

Levy imposed by this Act in respect of a hen is payable by the owner of the hen.

My point - and the principle underlying Senator Wood’s point - is that if we are to say, in a case where the owner of the hens cannot be ascertained, that the levy shall be imposed upon the person in control of the hens, the principle would not be denied, because that represents the Parliament’s point of view. Liability may in the course of one year amount to £1,000, but even if it is only £10 the principle is just as important from my point of view. However, it will be possible for an officer in the office of Minister X to transfer the liability from the real owner to a person whom the official conclusively designates as the owner, by an instrument in writing which is secret until it is produced in a court of law. It is this sort of edict, coming from an official office, against which individuals have no right to be heard in protest, that erodes the very principle upon which parliamentary democracy is founded - the principle that if a taxation measure is being passed it is for the Parliament to define the person who is to be the taxpayer, the person upon whom the levy is made. That is the principle upon which my request was based.

Senator MCKELLAR:
Minister for Repatriation · New South Wales · CP

.- The objections fall into two categories. There is objection to the fact that the person in possession or control of the hens will have to pay the levy. Surely that is only commonsense. There may be a lot of hens on a property. When the inspector comes along, he will be told: “ They belong to so and so. They do not belong to me. They are only over here.” I do not know whether hens, like sheep, are put on agistment. This is a commonsense provision. After all, the provision will be known to those persons who have hens in their possession. They will know that if they are in possession of 1,000 hens, they will be liable for the levy on 1,000 hens, whether they own them or not. Surely we do not need anything plainer than that. Unless there is some provision similar to this, there will be avoidance of the levy.

The second objection is as to the direction by au authorised person by instrument in writing. Clause 7b (2.) reads -

In this section, “ authorised person “ means the Minister or a person authorised in writing by him to give directions under this section.

I am told that the person authorised by the Minister will be the Chairman or General Manager of the State Egg Board, who will be acting with full authority of the Board. This man will not be a civil servant. Surely that disposes of both of the objections that have been raised.

Senator WRIGHT:
Tasmania

.- Leaving that point, and regarding it as closed from my point of view, I wish to say a few words on clause 8 of the Bill. Sub-clause (1.) reads -

Levy is not imposed on hens included in a prescribed class of hens.

Senator Cavanagh will be very interested to know that here we are dealing with a class of hens, as we were dealing with a class of lenders under the Housing Loans Insurance Bill. Whenever power is taken to discriminate as between classes, it is a matter of importance. One feature of human nature is that we all will bear a burden much more willingly if we find that it is equally borne by our fellows; but discrimination at the instance of any executive officer is, to the true British and Australian character, a matter of resentment. Here it is properly put forward that exemption from the levy will apply to a class of hens that is prescribed, that is, indicated by regulation. If we as a Senate do not approve of it, we can disallow it. I simply mention that by way of preface. I ask the Minister to indicate to me why this clause is included in the Bill and what class of hens, if any, is in mind as being fit for exemption from the levy by regulation.

Senator McKELLAR:
Minister for Repatriation · New South Wales · CP

– Hens that may be diseased or kept for show purposes, for instance, would come under this provision.

Bill reported without requests; report adopted.

Third Reading

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

page 938

POULTRY INDUSTRY LEVY COLLECTION BILL 1965

Second Reading

Debate resumed from 13th May (vide page 828), on motion by Senator McKellar -

That the Bill be now read a second time.

Senator O’BYRNE:
Tasmania

As the name implies, this Bill prescribes the machinery that is to be set up for the collection of the levy that will be imposed under the Poultry Industry Levy Bill 1965. The Opposition wishes the measure a speedy passage.

Question resolved in the affirmative.

Bill read a second time.

In Committee.

The Bill.

Senator WRIGHT:
Tasmania

.- I direct attention to clause 2. I have already circulated an amendment, but I propose to alter it slightly. I now move -

Leave out all words after “ shall “, insert “ not come into operation unless and until after it has been approved at a poll of owners of hens, conducted by the Chief Electoral Officer in accordance with the regulations “.

I have adopted that form in deference to the Standing Orders. I do not intend to consume the time of the Committee by restating the arguments that I advanced in support of the proposal that it is proper that legislation of this sort should be preceded by a poll of the individual producers. Honorable senators heard what I had to say in regard to that matter at the second reading stage. I simply submit the amendment now for consideration.

Senator Henty:

– Does that apply to producers with more than 20 hens?

Senator WRIGHT:

– There will be difficulties until we have regulations which prescribe the way in which these polls are to take place. My purpose is clearly to have some recognition given to everybody who is required to pay the levy - that is, to every owner of a yard of more than 20 hens.

Amendment negatived.

Bill agreed to.

Bill reported without amendment; report adopted.

Third Reading

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

page 938

POULTRY INDUSTRY ASSISTANCE BILL 1965

Second Reading

Debate resumed from 13th May (vide page 829), on motion by Senator McKellar-

That the Bill be now read a second time.

Senator O’BYRNE:
Tasmania

This Bill is complementary to the measures that have just been passed. It relates to the creation of a Poultry Industry Trust Fund and provides for the payment into this Fund of amounts collected under the Poultry Industry Levy Collection Bill 1965. As the Minister for Repatriation (Senator McKellar) said in his second reading speech, the Bill is supported by the State Governments and the poultry industry and is part of legislation that is designed to stabilise the Australian poultry industry and to fulfil a need that has been evident for many years. The Opposition supports the measure.

Question resolved in the affirmative.

Bill read a second time.

In Committee.

The Bill.

Senator WRIGHT:
Tasmania

.- I wish to refer to a provision of the Bill as a result of a comment that fell from the lips of Senator Cormack at the second reading stage and to which I also referred atthat stage. It relates to the distribution of the moneys that will be yielded by this levy. Clause 6 (1.) provides -

The Minister may from time to time authorise the payment to a State, by way of financial assistance, of such amount or amounts as he determines after taking into account any recommendations made to him by the Council.

Senator Cormack said that the Minister will have to take into account the recommendation of the Council of Egg Marketing Authorities but that he will not be bound by it. This raises the question as to the constitution of the Council. This is an extraparliamentary body, the constitution of which has not been brought to my notice. Senator Lillico stated this evening that the Council is so constituted that every resoluion - and I take it every recommendation under this section - has to be unanimous. I just rise to seek from the Minister an explicit confirmation of that statement.

Senator MCKELLAR:
Minister for Repatriation · New South Wales · CP

– I mentioned this matter in my reply at the second reading stage. The position is as stated by Senator Lillico. The decision must be a unanimous decision of the representatives of the six boards. The constitution of those boards was clearly indicated during the course of the second reading debate.

Bill agreed to.

Bill reported without amendment; report adopted.

Third Reading

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

page 939

APPROPRIATION BILL (No. 3) 1964-65

First Reading

Debate resumed (vide page 910).

Senator WEBSTER:
Victoria

Mr. President, I thank God that I have had the opportunity to take a seat in this chamber. The untimely death of the Honorable Harrie Wade created a Senate vacancy for the filling of which the members of both Houses of the Parliament of Victoria unanimously thought fit to support my entry to the Federal Parliament. I greatly regret that the Honorable Harrie Wade is still not a member of the Senate. His passing created distress in the hearts and minds of members of both Houses of this Parliament. Few men have given more of their ability and energy to the advancement of the lot of their fellows. Harrie worked unceasingly and with great credit to himself in his public and private vocations. As a Minister of the Crown he held the esteem of all who knew him. In his capacity as a Minister, first as Minister for Air and later as Minister for Health, he gained the appreciation of many people who perhaps could not know him in a personal capacity but certainly knew of him through his work. Mr. President, I have met no one who has had other than a kind word for Senator Harrie Wade. His friendship and his fame were spread far in all States. He was an outstanding man. Elevation to high rank and office did not change him’ from being approachable and considerate at all times. His passing is regretted but his work in this chamber is a monument to his life.

The great Australian Country Party officially sponsored my nomination for the Senate. I speak in high terms of the policy of that political party. It is one which, for about 50 years, has had consistent representation in State and Commonwealth Parliaments in Australia. It can rightly be said that no political’ party in Australia has had greater success in the pursuance of its policies, which have been of national importance and directed to the benefit of all sections of the community, than has the Country Party. Its policy is aimed at maintaining a free enterprise community with the minimum of control, in which the government directs its energies towards maintaining a system whereby work and ability are rewarded and one is free to succeed in the field of one’s choice, whether it be in the field of spiritual success, or the achievement of honour or riches - a community where a person is suitably compensated in the field in which he puts forth his endeavours. I pray that we shall retain in this country a system whereby freedom of the individual is paramount. There have been only three Federal leaders in my party. - Sir Earle Page, Sir Arthur Fadden and Mr. John McEwen. The success of the Country Party owes much to the outstanding example and service to this country of those men.

The State from which I come has made a great contribution to the growth of this nation. Victoria is smaller than most other States. Its area of approximately 88,000 square miles is about 3 per cent, of the total area of Australia. Development in that State has been such that over 30 per cent, of Australia’s population resides there. It provides a natural increase in population of some 37,000 people per annum. Victoria has a unique record for past development but its present development is being seriously threatened due to the inequitable system of tax reimbursement from the Commonwealth. Victorians make sound contributions by way of taxes to the Commonwealth. Individuals in Victoria pay some £745 million a year in taxes and companies in that State contribute over £346 million a year. In total, Victoria provides nearly one-third of the Commonwealth’s income but on the present basis the State receives the lowest amount per head of any State from reimbursements by the Commonwealth. The total recovery of tax will be in the vicinity of 78 per cent, compared with about 85 per cent, for a neighbouring State. Whether it be individually, or on the basis of general revenue grants or grants for specific purposes, Victorians fare badly.

I would like to tell honorable senators of the contribution made by my State to Australia’s total production. Australia has been built upon the great primary industries and, in my view, the future prosperity of this country is tied closely to its productivity in this field. I want to point out that the wheat farming community in Victoria has consistently increased ils yield. Today the average State yield is 24.5 bushels per acre compared with an Australian average of 19.9 bushels per acre. Victoria contributes over 300 million lb. of greasy wool, or 20 per cent, of Australia’s production, from the 3 per cent, of Australia’s area that it embraces. Dairy production in Victoria is well known. It is an outstanding achievement. Dairy farmers there have maintained an unbroken record of increased production over many years. As far as milk, butter and cheese are concerned, Victoria produces as much of those products as do any three of the other States. It produces over 100.000 tons of butter of the totalAustralia production of 200,000 tons, and it produces 50 per cent, of Australia’s cheese. Farmers in Victoria produce as much mutton as is produced in any two of the other leading States. It has a great record in this respect. The Senate has just dealt with Bills relating to the poultry industry. Production by this industry in Victoria is extremely high. Per head of population, production in Victoria is of greater net value than in any other State. I could also refer to the citrus and dried fruit industries. In every avenue, Victorians can justly be proud of their achievements and contributions to the welfare of Australia.

The use of modern methods and scientific advances and the application of ingenuity on the part of the producers has been of the utmost importance if these fields. The leadership which Victorians have had from industrious governments has been a contributing factor not only to the success of that State but also to the success of Australias development, lt is achievements of this kind which are of great importance in making Australia the Commonwealth that it is. 1 have referred to the industrious governments of Victoria. All political parlies can claim credit in this respect, Mr. President, because the Liberal Party, the Australian Labour Party and the Australian Country Party have governed the State at various times in their own right. Indeed, the Country Party governed Victoria for 10 of the most vital years of its development. But it is because of the things that successive Victorian Governments considered essential to development that the State is in the position of being under-provided for financially today. All the effort made by former governments and by the present Government to maintain consistent yields in many areas of endeavour is as lost in view of the present day refunds to my State. I would like to instance one field of endeavour. In areas that were once not thought fit for production, irrigation has brought about almost unbelievable trans-formation. Victoria has achieved much of its productivity in many primary industries by investing in irrigation projects and other works. The returns from this investment immediately go to the Commonwealth by way of taxation. In short, from a business angle, the State invests in capital works and the profit goes to the Commonwealth. Victoria has been an outstanding example. It has surpassed the other States in the volume of work it has carried out and the volume of money it has expended in this way. The Commonwealth would do well, in the future, to provide all the head works for irrigation in all States. This is not a new idea; I heard it propounded many years ago by the late Sir Earle Page. If the Commonwealth had then taken the line he suggested and increased the return of money to itself through increased production, my State would not be in the position it is in today.

Victoria has consistently expended money on developmental works and I plead for an increase in the Commonwealth reimbursement to my State. Victorians are currently paying £22 per head per annum in State taxation alone, as against an Australian average of £20 4s. They pay £23 million to the Commonwealth annually in petrol tax and receive, in return, only £11 million. Victorians believe in assisting development in the other States and nobody can hold this against them. This has been demonstrated by Victoria’s payment, in the last five years of over £100 million out of its taxpayers’ pockets, towards the development of the other States of the Commonwealth.

Surely wisdom must prevail here. Through its Premier Victoria has asked the Commonwealth for a return of from £5 million to £10 million to satisfy the requirements of its own State works. Surely this is a conservative request and I ask the senior Ministers of the Government to pay attention to this most urgent problem. This question will be decided by the Government within the next two weeks, and I ask that some thought be given to Victoria’s present dire need. The emphasis that Victoria has placed on the need for irrigation began at a time when the States collected their own income tax. Of course investment in capital works was a wise move at that stage because it returned money to the States themselves. Today the States get no allowance in their tax reimbursement grants from the Commonwealth for this emphasis on rural expenditure.

I have been involved in a variety of industries in my time and the timber industry and the great building industry of Australia, together with allied industries, have been my main interest. I suggest that the extent of Australia’s timber resources 20 years hence will mark either wise encouragement or insufficient stimulation of the timber industry. I congratulate the Federal Government on having planted some 462,000 acres of softwoods in Australia. Private industry has planted some 165,000 acres of softwoods during past years. But these areas are insufficient for this country’s future requirements. In total, Australia has planted only approximately 34,600 acres of hardwoods. This is entirely insufficient and a shortage will be felt in the not too distant future - particularly a shortage of hardwood. I believe that a tax incentive scheme needs to be devised by the Government. In particular there is a need for some method whereby the fruits of labour in planting timber for the future are not, after 30 years, taxed in total in the year of harvesting. A taxation averaging scheme is necessary. I have mentioned the building industry. 1 am proud of Victoria’s achievement in having the highest home ownership percentage of any State in the Commonwealth. Further than that, Victoria has the honour of having the highest home ownership figure of any country in the world, and that is something of which past and present governments of that State can be justly proud. Seventy five per cent, of home occupiers in Victoria are home owners, compared with 61.9 per cent, in America and 38.1 per cent, in Great Britain.

I have found by experience that the building industry is the most accurate barometer of industrial growth and prosperity in the community. It is also the industry that is most sensitive to the flow of public finance. I congratulate this Parliament on the passing of the recent legislation setting up the Commonwealth Housing Loans Insurance Corporation. I am confident that the flow of money for housing purposes will be greatly accelerated throughout Australia by that legislation. Honorable senators may or may not be aware that no industry reflects the pulse of the country’s industrial economy more accurately than does the building industry. We should have a ready realisation of the impact on the national economy of satisfactory returns to primary industry, and a ready concern for the maintenance of a high level of activity in the building industry because these are the most important factors contributing towards a stable economy. We are very reliant on prosperity in the building industry for prosperity in all the trades that service this industry.

Another matter in which I have been most interested in the last few years is the introduction of television to this country. It is many years since modern communications came to Australia in the form of radio and telephones but 1 have seen the advent of television as a means of mass communication. I believe that television has had a far greater influence on our way of” life than any of the older means of communication. Like most other Australians, I am aware of the results that can flow from the improper use of television stations. Ownership of television station licences, allied with ownership of newspapers and radio stations, could be dangerous if these means of mass communication should fall into the wrong hands. I congratulate the Government on the introduction in another place of legislation to tighten control of the ownership of television stations. The Government should be congratulated also on the way it has spread the benefits of television to rural areas and the standards it has maintained in television programmes.

The most important aspects of television on its introduction were ownership of licences, and the establishment of the industry on a basis which the then Postmaster-General assured us would present a truly Australian image. The presentation of an Australian image in our television programme production is something in which we have failed rather dismally. Television programme production could be a multi-million pound industry in Australia and could save us millions of pounds in overseas exchange. Indeed, it could also be the source of considerable export earnings; but these results have not been achieved so far. No local industry could have survived the competition that the Australian television programme production industry has had to contend with. No primary industry would survive; indeed, it would not be countenanced for one minute. No basic industry, such as the timber industry for example, could survive the competition that faces the television production industry in Australia.

Some Asian countries market timber in Australia but they are paying either 80 per cent, or 100 per cent, on their original market value. Indeed some products handled by my own company pay a duty of 150 per cent, and this puts them on a very competitive basis. By anti-dumping legislation we stop products from flooding the local market and bringing an Australian industry to its knees. Under legislation recently passed by this Senate, protection is given to man made fibres produced in Australia. But what happens with the film industry? We have a capacity in Australia to produce all the films required not only for our own benefit but also for export as has been demonstrated. Let us consider the popular half hour and one hour films which are shown on television. This matter has been discussed at great length in the past. The Australian industry faces competition from series of one hour films such as “The Alfred Hitchcock Hour”. In the United States of America originally these cost 152,000 dollars or more than £75,000 an hour to produce. “ Rawhide “ cost 141,000 dollars an hour to produce in the United States. The “ Ed Sullivan Show” cost 150,000 dollars an hour and “The Virginians” 180,000 dollars an hour. The average cost of these one hour shows, reached after a survey of 20 shows, was 145,000 dollars an hour. These shows produced in the United States for about £75,000 an hour are finally sold on the Australian market for about £2,000 an hour. A high quality show can be produced in Australia for approximately £6,000 an hour but this industry is not protected.

No businessman could require his advertising people to enter into an agreement under which he would bypass high quality shows costing £2,000 an hour to contribute to a local production costing £6,000 an hour. But something must be done to encourage this industry. Members of this Parliament must feel rather ashamed that this industry has been allowed to lapse when we have the potential for successful development. I know that the Postmaster-General (Mr. Hulme) has his heart and soul in this matter and would like to see a revival of the Australian television and film industry. I hope that we will see some benefits flowing to the industry in the future. When the Broadcasting and Television Act came before the Parliament it was intended that Australian television programmes should have a large content of Australian productions but this will not be achieved unless we have an efficient Australian industry. I appeal to honorable senators to encourage development in this field.

I congratulate the Senate on the report of the Select Committee on the Encouragement of Australian Productions for Television which was tabled many months ago. I regret that the findings of the Committee were not stated more concisely and that action has not been taken on some of the recommendations. I direct the attention of the Government to this most important industry and regret that the Australian Broadcasting Control Board has been weak in its requirements on the Australian content of programmes. I am pleased to be assured that something along these lines will be done in future. I know that the recommendations of the Select Committee will be taken into account.

In the past few weeks the Senate has discussed education at some length. An important matter associated with education is the need facing Australia to achieve a wider-‘distribution of the population from the densely populated cities to other areas. We are informed that unless we change our attitude, by the end of this century more than half the population of Australia will be concentrated in Melbourne and Sydney. This would be disastrous. I think we could assist in the education of future generations if we provided money to ensure that every child in secondary schools who had attained 15 or 16 years could go on a tour of every State of Australia. Provision would be made for the children to go to Perth to see the wonderful development in Western Australia and then north to the Ord River. These children should visit the wonderful Northern Territory. From an international point of view we would bc wise if we enabled children of that age to go to Papua and New Guinea. They would thus be shown what potentialities lay in their hands and what they should do for the future. I congratulate the Government on the valuable contribution it has made to education by providing funds in recent years. It seems obvious that in the future the Commonwealth Government will be called upon to play an even more important part in education. Travel by children throughout Australia would give them a brighter image of the Commonwealth and widen their horizons. They would see what is happening in other States and the opportunities that exist there. I am sure that development leading to decentralisation will take place through coming generations.

I have a great love and affection for Great Britain and the Commonwealth of Nations, and I regret that they do not have a stronger role in the world today. I hope that the Commonwealth of Nations will be drawn more closely together. Australia has played an important role in the past and will be called upon to do so again. I believe that we could much better face many of the problems of defence with which we are confronted today if we were a mors united Commonwealth.

Although my love for Britain is deep I would ally myself with any proposal that an Australian should be appointed to represent the Queen in the high office of GovernorGeneral of . Australia. Irrespective of whether I come from Victoria or from any other State of the Commonwealth I know of no better man for the position than Lord Casey of Berwick. I hope that he will be considered for the appointment because he would be a worthy representative of the Queen in Australia.

I again pay tribute to my predecessor, the late Harrie Wade. I pray that I may be able to emulate his example in this Senate.

Senator SIM:
Western Australia

– Like Senator Webster, I regret very much the circumstances under which I entered this House. Senator Vincent, my predecessor, was an old and valued friend, a person who was recognised as having made a notable contribution to this Parliament and to the public life of Australia. His untimely death was deeply regretted by us all.

I express my appreciation to the Leader of the Opposition (Senator McKenna) and the members of his party for their courtesy in forgoing their right to speak first in this debate on the Appropriation Bill to enable Senator Webster and me to make our maiden speeches. This illustrates that although we all fight hard for our beliefs there exist among honorable senators on both sides of the chamber many courtesies and friendships. Since entering this House I have received from Senator McKenna and members of his party, as well as from my colleagues on this side, many courtesies and a friendship which I deeply appreciate. I do not know whether we work on the principle that we must live together lest, should the worst come to the worst, we hang together, but in any case, courtesy and friendship are among the things that make life in this Parliament worth while.

Tonight I propose to express some views on Papua and New Guinea. At the outset, let me say that I appreciate the opportunity to speak on this subject. In the years that 1 spent there during the war, and particularly during my service with the Pacific Islands Regiment, I developed a very deep interest in the Territory and its people. Therefore, I welcomed the opportunity to revisit the Territory recently as a member of the parliamentary delegation for Anzac Day. This enabled me to renew, in a small way, my association with the people of the Territory, to discuss with them directly, through a knowledge of pidgin English - a limited but nevertheless a very expressive language - and with officers of the Administration, the future of the country, to see at first hand some of the remarkable development that has taken place, and to appreciate the problems that lay ahead.

I returned from the Territory far more confident of the future than I had been before my visit. In discussions with the natives I was able to confirm the strong expression of opinion presented to the United Nations Mission that the people there realise that they are not yet ready for self government and desire the Australian Administration to remain to lead them towards this goal. I think their attitude is best expressed in the statement of a native at Madang. When one of the members of the United Nations Mission constantly referred to self government, this native walked the length of the hall and, speaking in pidgin English for some 400 of his people - I will translate it into Australian - said: “ Australia came here and planted a seed. It has now grown to a tall straight tree and is about to blossom “. After a short pause he went on: “ We do not want any insects to destroy this tree “. Similar views were expressed by many unsophisticated natives throughout the Territory.

There is little doubt that today we hold the goodwill of the people of New Guinea. While not attempting to predict the unpredictable, I am confident that provided we push ahead with education, economic development and training the people to accept responsibility, we need not fear for the future. In this respect the local government councils are providing a wonderful training ground in government. I had the opportunity to meet at Madang the executives of one of the oldest and strongest local government councils.

It is interesting to know that in the Madang area alone there are seven such councils. One of them, the Ambenob council, has within its area a population of 12,500 people, and its revenue totals some £15,000. The seven councils embrace about 60,000 people in their districts. It is expected that in the coming year another 25,000 people will be brought under local government councils. Their total revenue at present is £47,000. When meeting these people and discussing with them the problems confronting their councils one could not help being impressed with the sense of responsibility with which they are facing their problems. After meeting them and hearing their views I came away with the strong feeling that the future of this country, particularly when you have regard to some of the younger people who are now coming forward, will eventually be in good hands.

The Government’s endorsement of the five year programme proposed by the mission or the International Bank for Reconstruction and Development is, I think, art assurance that the objectives to which we are pledged will have a reasonable prospect of success. I propose to deal more specifically with the report of that mission at a later stage. Before doing so I intend to refer to several matters which should be aired and in which T should like to make my position clear.

In these days, anything that smacks of colonialism is regarded by some Australians as being rather dirty. There are some who seem to have feelings of guilt about our presence in Papua and New Guinea. 1 cannot share those feelings. We are there by right. We have accepted the responsibility of leading the people of the Territory to self government and independence. I can do no better than to repeat the words of the former Minister for Territories, the Honorable Paul Hasluck, whose enlightened policies have laid a firm foundation for the future of the Territory. Speaking at Port Moresby on 1st September 1962, he dealt with the historical aspect of our presence in Papua and New Guinea. He then went on to say -

There is thus no dispute nor is there any ground for dispute, on the Australian authority in these two Territories.

Do not let us or anyone else forget that we have our rights. We do not have to be either offensive or unfriendly when we insist on our own rights. We do not have to be apologetic. It is proper that we should declare our rights and maintain them.

I subscribe to those views. I do not wish to be at all controversial but I must refer to the habit of some Australians to go to New Guinea and express views which, in my opinion, render a great disservice to the Territory and cause grave feelings of insecurity among many officers of the Administration and among investors and others.

Very many people set a date by which they believe independence should be given. Some people have expressed the view that unless we give independence quickly, we will be kicked out of the Territory. Such statements, made very often with the authority of responsible positions, show a strange lack of knowledge of the Territory, in my view and, I am confident, of the wishes of the people. The lack of security created - and this was expressed to us on many occasions by senior Administration officers - is causing the loss of young and able officers who are not renewing their contracts. This can have only a nullifying effect on the recruitment of new officers. The importance of this aspect is underlined in the Minister’s statement. He said -

Moreover, economic development over the next few years will require a substantial increase in the number of administrative, professional, technical and managerial personnel both in the Public Service and in private enterprise. Much is being done to accelerate the education and training of native people in the necessary skills. This process will take time and meanwhile to achieve the required progress in the immediate future there will need to be a concentrated effort in recruiting increased numbers of professional and technical personnel from Australia for service in the Territory. . . about 2,000 more officers will be needed from outside the Territory, including about 500 qualified agricultural, livestock and forestry officers and 500 teachers for Administration secondary schools.

This is a gigantic task. In my view, formed after speaking to Administration officers and after discussions with native leaders, a minimum of 10 to 15 years is required to lead the people to self-government without problems of a grave and embarrassing nature developing.

One of the essentials of self-government is national unity. The lessons of the Congo and the problems of Nigeria and other African countries should not be lost on us. There is no sense of national unity in New Guinea. There is loyalty to tribes and an age long distrust and even hatred of other tribes and groups. Danger exists in New Guinea because there is no sense of unity or affinity between New Guineans and Papuans or between one tribe and another. This point was made very clear to us in discussions with native leaders and was confirmed by Administration officers. The great hope is that education will break down these barriers and that the generation now benefiting from the education programme will provide leaders who possess a sense of national unity. It was most encouraging to hear from present day native leaders in New Guinea - the older generation - that they believed such leaders would emerge. They said: “ While we do not accept Papuans, we believe that our children will and then we will become one nation “.

I turn now to the Mission’s proposals for economic development. Few would quarrel wilh the recommendation that priority should be given to primary industries. This, of course, is true of all underdeveloped countries, as it was true of Australia. I am not so sure that the specific programme recommended - particularly its references to coconuts and cocoa - is on firm ground. I would like to be assured that the Mission made an investigation of long term world marketing trends for these products. Cocoa, for example, is already in over-production throughout the world and grave marketing difficulties have resulted. I hope that the Government will give close study to individual industries before recommending increased production. Uneconomic development would have most serious consequences.

The Mission’s report is on firmer ground in relation to the cattle industry and forestry. I support the view that there is a future for both of these industries. It has been said that a tenfold increase in cattle numbers in 10 years is possible. I believe that result can be attained. I was most impressed by the research being undertaken at the research station near Kanantu in the Eastern Highlands. The progress being made in the introduction of tropical legumes and grasses is impressive. The estimated carrying capacity of large areas of the Territory is one beast to the acre, which is equally impressive. However, I stress that a great deal more research is required. I hope that provision is made for an intensification of research, not only into tropical legumes and pastures, but also into cattle types. Most of us who are aware of the work being done in Queensland on zebu cattle and their crosses in hot tropical climates believe that there may be a future for this breed in New Guinea. I do not doubt that there is a close liaison between the work being done in tropical Queensland and in New Guinea. Whatever is done, there is always a need to adapt to local conditions. Before leaving the subject of the cattle industry and agriculture generally, I wish to say that I would like some assurance that the Government has in mind the need for trained extension officers in this field. I am aware that recently an agricultural college was opened near Rabaul. This is a very valuable start in training the natives.

The Currie Commission did not recommend the early establishment of a faculty of agriculture at the proposed university. I have an open mind on this question. Perhaps it is wise to wait because of the shortage of people with the education necessary to enter upon such a course. It may be preferable to send them to Australian universities for training at present. However, there is a need to train the natives in tropical agriculture and I hope that that is being borne in mind. Perhaps the proposed university in Townsville will provide such a course and the post-graduate training which is necessary. I believe that the industry will not face a bright future unless there are first class advisers who understand the agricultural problems and can advise on the production of cattle and of agricultural products in the Territory. Already natives are producing about 50 per cent, of the coffee crop. Although complaints have been made about the poor quality of the coffee produced, great difficulty is experienced in getting the message over to the natives and in advising them of better methods by which to produce the crop. It seems to me that this matter should have an urgent priority.

I had the opportunity to see exciting progress being made at Bulolo in the development of softwood forests. I was impressed by the method of planting forests. It is confidently expected that the trees will reach full development in 25 to 30 years, whereas in Australia 40 years is required. It is also expected that a correspondingly shorter period will be necessary before thinning out takes place. Indeed, thinning out is being undertaken now. The clearing and planting of new forests is being conducted on a gigantic scale and reflects great credit upon those persons responsible. In addition to the sawmill and plywood factories there are plans, I was informed, for a pulp industry. This emphasises the great importance of forestry in the development of the Territory. Not only is there a high ratio of employment in the forestry industry, but it leads to the development of other industries with a relatively high labour content. Avenues of employment are opened for the increasing number of natives being trained. Opportunities are created for the local people to acquire special skills, lt was very encouraging to note the number of natives operating intricate machines, not only in the sawmill and the plywood factory, but also in the cigarette factory at Madang. We were told that the natives very quickly acquired the necessary skills.

The Mission proposed various measures for the development of secondary industries. I believe this must be a very long term development which will require an education system to be built up so that the local people can acquire the skills required. I am happy to note that the Government supports the Mission’s view that high priority must be given to education at all levels. Indeed, I would go further and say that education must have the highest priority. I had the opportunity to visit primary and secondary schools and a teachers’ training college, and I pay a tribute to the work being done by both Australian and native teachers and to the keenness to learn of children of all ages. This was really impressive. After seeing the willingness of the young people to learn, it was not surprising to be told that the degree of absenteeism is very low - much lower, I believe, than in many Australian schools.

In my view, the key to our success in New Guinea lies in education. This is recognised by the older generation of the natives, who frequently express the view that it is the children of today who will provide the leaders in an independent New Guinea and that the granting of self government will depend on the availability of sufficient educated leaders. Whether we can move faster in education is difficult to say, but these figures are very impressive: From 1958 to 1963 the number of Administration schools advanced i rom. 276 to 449 and the number of mission schools from 309 to 1,444. The number of teachers increased from 726 to 1,571 and the number of pupils from 28,549 to 112,459. There are also 790 native students engaged in teacher training. I urge the Government to move with all possible speed, without lowering the standards.

The success of economic development and education - indeed, the very success of our policy - depends on Australians working in the Territory. In this respect I hope that before very long these people will be guaranteed some security in the unlikely event of the worst happening. Otherwise, I can see some dangers ahead. It is very necessary to ensure that Australians who go into the Territory are of the highest quality. Simple acts of arrogance by Australians could undo much of the magnificent work that is being done by Administration officers. I trust that the Department is constantly reminding people responsible both in government departments and in private enterprise of the need for great care in the selection and recruitment of persons to go to the Territory.

I should like to say a word or two on defence. There is today a concern - I think a natural concern - about Indonesia’s intentions. I make one point to my good friend, the Minister for Defence (Senator Paltridge). The best soldiers to defend New Guinea in the type of warfare that would happen in the Territory are the New Guineans themselves. I hope that the Pacific Islands Regiment will be extended. I saw it on parade and it is an excellent body of men. I was proud that at one time I had served with them. Whether they are better than when I served with them, I do not know, but they certainly were very impressive. Having been with them, I believe that in guerrilla warfare they would be admirably suited to defend the Territory.

In my view, we have the goodwill of the people of New Guinea and we must maintain it. They frequently expressed appreciation of what was being done for them by Australia. I hold strongly the view that it would be dangerous to name a date for independence. We should move steadily forward, never giving any doubt of our will to grant independence or of our sincerity.

We should try to stay one jump ahead. I would fail if I did not make clear my admiration for the work being done by officers of the Administration. If New Guinea escapes the miseries that independence has brought to so many countries, a debt will be due to these men, especially the officers in the field. Flexibility of policy is necessary. 1 believe that we have that, and we must maintain it.

Before concluding, I should like to make a brief reference to two matters in which I have always had a great interest and about which the Senate will no doubt hear me speak more in the future. One is agricultural research. I was very gratified to note that in the Martin Report there was a recommendation for an advisory body to be established to co-ordinate all research in Australia. I for one have been very concerned for a long time at the strong evidence existing that there is in Australia a wasteful duplication of research amongst our many research organisations. I would hope that the section dealing with agriculture will be able to bring about closer co-ordination of research. Magnificent work has been done, but evidence of jealousies and refusal to exchange research findings of organisations are too prevalent for us to be entirely satisfied that all that could be done is being done.

I make a brief reference also to extension services. It is of little use for our research officers to find new means of developing pastures and stocking, &c, unless we have advisers who are capable of advising on the practical application of this research to farming practices, lt is no secret that we in Australia are lagging far behind in our extension services. I do not think that this reflects very much credit on many of those who have been responsible for this matter over the years. Not only do we lag behind in numbers because of the lack of attraction to this work but also we sadly lag in training for this very specialised field. I could best illustrate this by saying that in Western Australia, which leads Australia in the development of farm management services, out of 40-odd services which have been established, only two Australians have been found suitable for this work. The remainder have been recruited from New Zealand, the United Kingdom and other overseas countries. ine simple fact is that Australians do not possess the knowledge or training for this very specialised field. Quite frankly, I think that this is a pretty disgraceful state of affairs. I and others have taken a move fairly recently for the establishment of a post graduate course in farm management extension within the University of Western Australia. We have done this because this university is particularly well equipped to handle this type of post graduate training. We have been most disappointed at the reaction from our State Government to the recommendations, and I take great hope in the fact that the Minister for Primary Industry (Mr. Adermann) has now indicated that he will discuss this matter with State Ministers at an early opportunity. I stress this because I believe that this type of training is essential. The University of Western Australia has received from all over Australia and from overseas inquiries as to where such a course is available. When we consider that today we have many farm management clubs in Western Australia which are unable to obtain advisers as the supply of skilled staff from overseas is drying up and that soon we will have to take the second best, it can be seen that the position is fairly serious. I merely mention this matter and make a plea that this objective bc supported from all sides of the Parliament. I have no doubt that in future I shall have more to say about it.

Finally, may I thank the Senate for the courtesy that it has extended to me.

Senator CANT:
Western Australia

– First, I congratulate Senator Webster and Senator Sim on the speeches that, they have made tonight. I am sure that all of those who heard them will go away with the feeling that in future we shall hear more of them. As they progress and gain more confidence in themselves and this place, we shall be very pleased to hear them again. I was particularly interested to hear Senator Webster’s reference to television. I assure him that he expressed the views of members of the Senate select committee on television when he said that he hoped the Government would take action on at least some of the matters that were brought to the notice of the Senate. Senator Sim made some rather enlightened comments about Papua and New Guinea and presented in a very concise manner some of the problems hat confront the Territory. The fact that a man who has been through the Territory before is able to renew acquaintance with it and to come back and inform the Senate in the manner in which the honorable senator has done shows that trips which members of the Parliament have the advantage of making at times do pay off in the long run. Mr. President, I ask for leave to continue my remarks at a later stage.

Leave granted; debate adjourned.

page 948

JURY EXEMPTION BILL 196S

Assent reported.

page 948

INTERNATIONAL MONETARY AGREEMENTS BILL 1965

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator HENTY:
Minister for Civil Aviation · Tasmania · LP

– I move -

That the Bill be now read a second time.

The purpose of this Bill is to obtain the approval of Parliament for an increase of 1.00 million dollars in Australia’s quota in the International Monetary Fund. The International Monetary Agreements Act of 1947, which authorised Australia’s membership of the Fund, already provides sufficient legal authority for the Government to take the steps necessary to secure this increase in Australia’s quota. Nevertheless, in view of the importance of this transaction and of the work of the International Monetary Fund in the field of international finance, the Government felt it desirable to introduce specific legislation and so give Parliament an opportunity to discuss these matters-

The proposed increase in Australia’s quota is part of a wider proposal by the Fund for a general increase in the quotas of all Fund members and for special additional increases in the quotas of some members. At the annual meeting of the Board of Governors of the Fund held in Tokyo last year, which the Treasurer (Mr. Harold Holt) attended as Governor for Australia, it was decided to request the Executive Directors to consider the question of increasing the quotas of members and to submit an appropriate proposal. The Directors’ report was submitted to Governors in February and it contained two recommendations: First, that the quotas of all members should be increased by 25 per cent, and secondly, that there should be additional increases in the quotas of sixteen members. These recommendations were adopted by the Board of Governors and it now remains for each member to determine whether it wishes cO accept the proposed increase in its own quota. As Governor for Australia, the Treasurer voted for Australia in favour of the recommendations and it is now proposed that Australia should accept the increase of 25 per cent, in its own quota. For further details of the proposals, I would refer honorable senators to the Executive Directors’ report, which has been circulated. I should perhaps point out that the proposed special increases in the quotas of sixteen members are intended to bring their quotas into line with those of other comparable countries. Australia obtained a special increase of this kind in I960 and there were no grounds for a further special increase on this occasion.

As honorable senators are aware, the Fund has played an important role during the post-war period in promoting the orderly working of the international monetary system and thereby facilitating the expansion of world trade. The Fund is perhaps best known for the assistance it provides to members experiencing temporary balance of payments difficulties. By making such assistance available, the Fund has made it easier for members to move towards solutions of their payments problems without disrupting their internal economies or imposing unnecessary restrictions on international trade and payments.

The Fund’s assistance is available to all members. In Australia’s case, we have approached the Fund on three occasions - the most recent occasion being in 1961 - and secured drawings totalling 225 million dollars which were subsequently repaid. Honorable senators will remember that quite recently for the first time we played a creditor role in the Fund by making available Australian currency to the value of 25 million dollars for use in drawings by India. Other drawings of particular interest to us as a large holder of sterling have been those made by the United Kingdom at times when sterling has been under strain.

Late in .1964, for example, the United Kingdom obtained assistance from the Fund to the extent of 1,000 million dollars and last week the Fund approved a further drawing of 1.400 million dollars. The Fund has also been providing some assistance in recent times to the United States. As the reserve currencies play an important role in international trade and payments, it is clearly desirable that a body such as the Fund should have sufficient resources to provide the massive support that can at times be needed to prevent a serious situation developing in the world monetary system. An increase in the Fund’s resources would be particularly timely in present circumstances because, with the measures now being taken by the United Kingdom and the United States to eliminate their balance of payments deficits, we cannot expect the supply of international liquidity to continue to be augmented on the substantial scale of recent years by the large amounts of sterling and dollars which other countries have been adding to their reserves.

Honorable senators will note that the Directors’ report says - . . in a world in which income and trade have expanded rapidly and are expected to do so, the need for the type of liquidity provided by the Fund, like the need for international liquidity ;n general, may be expected to grow. A reasonable increase in quotas would increase the Fund’s resources relative to the calls that are likely to be made upon them and enhance confidence in the Fund’s ability to meet all justifiable requests for drawings.

There seems little doubt that if the Fund ls to continue to carry out its responsibilities in the field of international liquidity, there must be a growth in the resources available to it. The last general increase in quotas took place in 1959 when quotas were increased from 9 billion dollars to 13.5 billion dollars. As a result of subsequent special increases in the quotas of some individual countries, total quotas stand at present at 15.8 billion dollars. The latest proposals would increase quotas to 21. billion dollars. This may seem a large increase, but demands on the Fund are also growing rapidly.

I now turn to the proposed increase in Australia’s quota from 400 million dollars to 500 million dollars. In accordance with the Articles of Agreement of the Fund, 25 per cent, of the increase - 25 million dollars or about £A11 million - would be payable in gold and the balance of about £A33 million would be lodged with the Reserve Bank, as a depository of the Fund, in the form of a non-negotiable non-interest bearing security. I do not think that there can be any doubt about the advantages to Australia of the proposed increase. On occasions when we have obtained finance from’ the Fund in the past, this assistance has been very useful in helping us to overcome balance of payments difficulties. As our balance of payments is subject to quite marked fluctuations, similar occasions will doubtless arise in the future. With a quota of 500 million dollars our drawing rights, or second-line reserves, would amount to 625 million dollars as compared with drawing rights of 500 million dollars under our present quota. As the Australian currency we provided for the recent Indian drawings adds an equivalent amount of 25 million dollars to our drawing rights, our total second-line reserves, at present 525 million dollars, would stand at 650 million dollars or £A290 million when the new quota is obtained.I commend the Bill to honorable senators.

Debate (on motion by SenatorBishop) adjourned.

page 950

ADJOURNMENT

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

That the Senate do now adjourn.

Question resolved in the affirmative.

Senate adjourned at 11 p.m.

Cite as: Australia, Senate, Debates, 19 May 1965, viewed 22 October 2017, <http://historichansard.net/senate/1965/19650519_senate_25_s28/>.

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