Senate
20 May 1965

25th Parliament · 1st Session



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

page 951

QUESTION

MEAT

Senator BENN:
QUEENSLAND

– Is the Minister representing the Minister for Trade and Industry aware that the licence held by the Central Queensland Meat Export Company Pty. Ltd., Rockhampton, was suspended this week, causing the company to cease killing cattle for export to the United Kingdom and the United States of America? Has the Minister been informed that the employment of approximately 1,000 people may be adversely affected as a result of the suspension? Can he indicate when the licence will be restored?

Senator HENTY:
Minister for Civil Aviation · TASMANIA · LP

– I am not aware of the reasons for the licence being suspended but I presume the abattoir does not measure up to the health regulations governing meat for export. Therefore, it would be a matter for the company to ensure that it conformed to these regulations as early as possible. If that is the reason for the licence being suspended I would say that it would be restored as soon as the abattoir conformed to the regulations which have been laid down in relation to meat for export.

page 951

QUESTION

FINANCE

Senator FITZGERALD:
NEW SOUTH WALES

– I direct my question to the Minister representing the Treasurer, ls there any truth in the statement that our overseas reserves are likely to fall by at least £170 million in the current financial year due to the collapse of prices of primary exports, the high level of imports and the slowing down of portfolio investment from overseas as a result of the imposition of the equalisation tax in the United States of- America? What steps does the Government intend to take to safeguard the Australian economy against the many problems that will inevitably arise unless these dangerous trends in our economy are rectified immediately?

Senator HENTY:
LP

– The Government is fully aware of the reduction of some £170 million in our overseas reserves. I think we should keep in mind and in proper perspective the fact that our overseas reserves were at an all time record when the decline commenced. The position is under careful scrutiny. Only last night I introduced into the Senate a bill by which an additional 100 million dollars will be added to our second line reserves in the International Monetary Fund. This will make an additional 25 million dollars available for us to draw upon. There is no need for panic at this stage. Over the years Australia has been subject to a series of fluctuations in wool prices which make such a great difference to our export income, but that condition arises only seasonally. I can assure the honorable senator that the Government is not as concerned about the position at this stage as he appears to be. I see no reason for panic. The Government is keeping the matter well in hand.

page 951

QUESTION

ROADS

Senator BREEN:
VICTORIA

– I preface my question to the Minister representing the Minister for Shipping and Transport by reminding him that the Commonwealth Government contributes £150,000 annually to the Australian Road Safety Council, which is using every means within its power to lessen and prevent the appalling loss of life and injuries caused week after week through accidents on Australian roads. As the importance of the preventive effect of driver education courses is recognised, can the Minister inform the Senate whether the financial resources of the Australian Road Safety Council are sufficient to cover research into investigations being made in other countries regarding the subject material of driver educational programmes and into experiments such as that described in a recent report of a study lasting twelve months in Ohio, in the United States of America, to record and assess drivers’ road behaviour and reactions? Can the Minister also inform us whether further encouragement can be given by the Commonwealth Government to developing in Australia an effective system of driver training?

Senator PALTRIDGE:
Minister for Defence · WESTERN AUSTRALIA · LP

– The Commonwealth Government does, of course, support the road safety movement to the extent referred to by the honorable senator. I cannot say off hand what researches or inquiries are undertaken by the various components of the safety research organisation. In each State there is an independent body, supported by its State Government and also supported, if not financially at least in the provision of suitable personnel, by a State department and by private enterprise. Indeed, in many respects this is quite a remarkable example of cooperation. However, I am not aware of the precise extent of the research that is being carried out.

I recall that some years ago at least one of the components of the Australian Road Safety Council undertook an inquiry similar to the inquiry conducted in Ohio, in the United States of America, although not on the same scale. Certain towns were designed as safety first towns for a period, if ! remember correctly, of two or three months. A close watch was kept on the traffic patterns and behaviour and the accident rates in those towns. The results were made available, as I remember, to all road safety organisations throughout the Commonwealth. I. think my best course is to ask the Minister for Shipping and Transport, Mr. Freeth, to give me a more complete answer as to present activities.

I do not think I can offer the honorable senator any encouragement in respect of driver training. The training and licensing of drivers and the setting of standards are matters which are peculiarly within the functions of the States. Over the years an attempt has been made to reach standards both for traffic and driving. Notwithstanding that attempt, this is a matter for State determination in isolation.

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QUESTION

BIOLOGICAL RESEARCH

Senator MURPHY:
NEW SOUTH WALES

– I ask the Minister in Charge of Commonwealth Activities in Education and Research whether he is aware that scientists from the Soviet Union have been carrying out a survey of biological resources in Australian coastal waters and have recently published some of the results obtained. Those results are now available in Australia. Does the Minister agree that Australia should conduct its own marine biological resources survey? Will the Government consider including for this purpose in the next Budget a great increase in the estimates of the Division of Fisheries and Oceanography of the Commonwealth ‘ Scientific and Industrial

Research Organisation? Alternatively would it consider the establishment of an institute of oceanography? Otherwise are we not going to be in the position where we shall have to ask Moscow what our resources are?

Senator GORTON:
Minister for Works · VICTORIA · LP

– The honorable senator has been a member of this Senate long enough to know that matters of policy are not a proper subject for question time, and that applies even more to questions on what the next Budget is likely to contain.

page 952

QUESTION

INTERNATIONAL AFFAIRS

Senator HANNAN:
VICTORIA

– I direct a question to the Minister representing the Minister for External Affairs. Has the Minister’s attention been drawn to the boycott placed upon the United States warship “Vancouver “ by the Victorian Branch of the Seamen’s Union on Wednesday of last week when it was visiting Melbourne on a goodwill visit for the Coral Sea celebrations? Did this ban result in the Royal Australian Navy being called out to help berth the vessel and was the act of the Seamen’s Union described by the United States ship’s captain as an “ inconvenience “? Has the Minister seen the statement issued by the secretary of the Victorian Branch of the Seamen’s Union, one B. Nolan, “ that the men decided on the boycott to protest against the use of American and Australian troops in Vietnam “? Is this boycott not an attempt at the arrogant abrogation of this Parliament’s right to direct the nation’s foreign policy and a gross insult to our most powerful ally? Is this secretary, Mr. B. Nolan, identical with B. Nolan, a member of the Victorian State Executive of the Australian Labour Party, and if so is he eligible for selection as one of the Australian Labour Party’s Victorian contributions to the 36 faceless men? Will the Minister give the Senate an assurance that the Government will brook no interference whatever with the transport of Australian troops sent overseas and it will tolerate no treacherous or treasonable interference by anyone with the supply of arms, munitions and stores for Australian troops who will be manning the front line of our defence in Vietnam?

Senator GORTON:
LP

– I did notice a report in the Press to the effect that the American ship “ Vancouver “ was denied assistance by tugs to berth in Melbourne and that having been denied that assistance, the ship had to proceed to berth under its own power.

I do not know whether assistance from the Royal Australian Navy was also required, lt. might have been, but I gathered that the ship actually was berthed by its own complement and considerable inconvenience was caused to the ship and the master of the ship by this action. I also noticed a reported statement attributed to Mr. B. Nolan to which the honorable senator has referred. The reported statement was along the lines mentioned by the honorable senator. My own reaction is that industrial action to enforce a political viewpoint in which the majority of the people do not believe and which the Parlament of the nation does not support has no place in the running of a democratic country. 1 understand that this gentleman is a member of the Victorian State Executive of the Australian Labour Party and therefore is one of those few who are eligible to be appointed or elected to the outside body which controls the A.L.P. and to which the honorable senator has referred as the 36 faceless men. In reply to the last part of the honorable senator’s question: Yes, the Government will see to it that Australians who are fighting abroad for Australia will receive without let or hindrance the support to which they are entitled.

page 953

QUESTION

VIETNAM

Senator BISHOP:
SOUTH AUSTRALIA

– I direct a question to the Leader of the Government in the Senate. Is the Minister in a position to comment further or give any information on peace discussions in relation to South Vietnam in view of reports in the Press today that the bombing of targets in North Vietnam has recommenced?

Senator PALTRIDGE:
LP

– No, I am not at the moment in a position to add anything to what has been said about the situation in South Vietnam.

page 953

QUESTION

WOMEN’S SERVICES

Senator BUTTFIELD:
SOUTH AUSTRALIA

– I direct a question to the Minister for Defence. Can the Minister tell me whether any consideration has been given to sending members of the women’s Services overseas? If so is there any likelihood that any members of the women’s Services will go to play their part in defending Australia overseas?

Senator O’Byrne:

– The Government will have to pay them properly if they go.

Senator PALTRIDGE:
LP

– The honorable senator who has interjected will no doubt get great comfort from the fact that adjusted rales of pay for members of the women’s Services have been announced. The rates will be 75 per cent, of the basic wage. They will be 66 per cent, of the margin. They will, in fact, be at a far greater rate than was ever paid to the women’s Services by a Labour government, and the adjustments will be retrospective.

Having said that, I turn to the question asked by Senator Buttfield. The Government, of course, has a very high regard for the women’s Services and for the job that they do. As to whether members of those Services should be sent overseas at this time is not a matter for consideration. The nature of the operations which are being conducted overseas require the employment only of male members of the Services.

page 953

QUESTION

TREATMENT OF CIRCULATORY DISEASES

Senator CAVANAGH:
SOUTH AUSTRALIA

– I direct a question to the Minister representing the Acting Minister for Immigration, although it could concern the Minister representing the Minister for Health. Has Dr. Ramsay, the medical officer attached to the Migration Office in Germany, received recent correspondence from Dr. Moller, of Kassel, West Germany, stating that it was not reasonable to expect the Max Planck Institute to give a report on oxygen therapy methods for the treatment of circulatory diseases as performed by Dr. Moller as the Institute had never investigated this method of treatment? This is the Institute from which the Minister for Health sought a report in connection with this matter. Does this correspondence include the names of two additional South Australians who have been successfully treated by Dr. Moller for circulatory diseases? Will the Minister make a copy of the correspondence available to the Senate?

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

– I will bring the question to the notice of the Minister for Health and let the honorable senator have a reply.

page 953

QUESTION

SOCIAL SERVICES

Senator COHEN:
VICTORIA

– My question is addressed to the Minister representing the Minister for Social Services. Is the Minister aware that many age and invalid pensioners are experiencing hardship by being deprived of entitlements under the pensioner medical service because they have an income of £2 a week or more although they may still be eligible for a full pension if they have an income of £3 10s. a week? Is it not lime that this unfair and indefensible restriction was removed from the pension scheme? Will the Minister give proper consideration this year to having this serious anomaly rectified in the coming Budget?

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

– Let me say at the outset that the present Minister for Social Services, and indeed every Minister for Social Services, gives proper regard to all the problems within his administration. I do not think it is fair for the honorable senator to suggest that this is other than the fact. The remainder of the question clearly involves a matter of policy, and I will bring it to the attention of the Minister for Social Services.

page 954

NUCLEAR EXPLOSION BV COMMUNIST CHINA

Senator WRIGHT:
TASMANIA

– 1 ask the Minister representing the Acting Minister for External Affairs whether or not the Government is in receipt of any information concerning the nuclear explosion in Communist China last week and whether the Minister will give to the Senate his present assessment of the significance of this explosion from the point of view of Australian Pacific defence.

Senator GORTON:
LP

– I think an assessment of the significance of something as important as the matter to which the honorable senator refers would necessarily be the subject of a statement of some length. Therefore, I will bring the honorable senator’s question to the notice of the Acting Minister for External Affairs to see whether he believes that such a statement should be made.

page 954

QUESTION

LITERARY CENSORSHIP

Senator MCCLELLAND:
NEW SOUTH WALES

– I direct a question to the Minister for Customs and Excise. Is the Minister correctly reported as having said that the Federal Government has removed the ban on the import into Australia of the book “The Trial of Lady Chatterley “? If so, does this indicate a general relaxation of Government policy regarding censorship or has this action been taken in connection with this book because of its recent publication in Australia? May the public confidently expect that a number of other banned books will be released from censorship in the near future?

Senator ANDERSON:
LP

– It is true that yesterday I made a statement in relation to two books. 1 announced the release of “ Quest for Love “ by David Holbrook and “ The Trial of Lady Chatterley “ by C. H. Rolph. Imported copies of these books may now be made available for general distribution. In March last I was asked to review the prohibition on the book “ Quest for Love “ and I agreed to do so. I was at that time re-examining the 1961 prohibition on the book “ The Trial of Lady Chatterley “. It has now been decided to release both of these books. I might add that “ Quest for Love “ was referred to the Commonwealth Literature Censorship Board and that “ The Trial of Lady Chatterley “ had previously been referred to the Appeal Censorship Board.

Regarding the general question of literary censorship I do not think that any interpretation can be placed on the release of these books. From time to time it has been the practice to review books which over the years have been on the banned list. Indeed, during the term of office of my predecessor the Literature Censorship Board did quite a big job in reviewing some of the books that had been banned from as far back as the I920’s. I think it is proper for me to say that fluctuations occur in community attitudes and that these must of necessity have an effect on general censorship policy. My predecessor illustrated this thinking when he introduced a system of reviews, the last of which was held in 1963. I intend to continue this practice and am at this moment considering the holding of such a review in the near future. The review will take some time to conduct because it will place heavy demands upon the Literature Censorship Board. I intend in the course of that review to refer to the Board a number of books which, in the light of the comments that I have already made, I think need to be reviewed.

page 954

QUESTION

TREATMENT OF CIRCULATORY DISEASES

Senator CAVANAGH:

– I wish to ask the Minister representing the Minister for Health a further question. Will the Minister inquire into the system of oxygen therapy for the treatment of circulatory diseases now being used at the Royal Melbourne Hospital and ascertain whether it is the same as or similar to the treatment used by Dr. Moller of Kassel, West Germany? Will the Minister seek to obtain a report on the results of the treatment administered by the Royal Melbourne Hospital?

Senator McKELLAR:
CP

– Again, I shall direct the attention of the Minister for Health to the question and ask him to let the honorable senator have a reply.

page 955

QUESTION

DEFENCE SERVICES

(Question No. 398.)

Senator McCLELLAND:

asked the Minister for Defence, upon notice -

  1. How many persons made application to join the Army, Navy and Air Force last calendar year?
  2. What was the total number accepted?
  3. What was the total number rejected on (a) medical (b) educational and (c) unsatisfactory civil record grounds?
  4. How many applications were not proceeded with or followed up by the Department?
Senator PALTRIDGE:
LP

– The answers are as follows- -

page 955

QUESTION

NATIONAL MATERIALS HANDLING BUREAU

(Question No. 456.)

Senator MURPHY:

asked the Minister representing the Minister for National Development, upon notice -

  1. When did the Government constitute the National Materials Handling Bureau referred to in the Budget of August 1963?
  2. When was its establishment approved by the Public Service Board?
  3. What is the establishment?
  4. When did it begin to function?
  5. How much has it cost to date?
  6. Whathas the Bureau done to carry out its intended functions of expanding existing research, advisory and administrative services to cater for industry as well as the armed Services and Government departments?
Senator PALTRIDGE:
LP

– The Minister for National Development has provided the following answers - 1, 2 and 4. Immediately following the Government’s decision of August 1963 steps were taken by my Department to set up the National Materials Handling Bureau.

The Bureau took over the small number ofstaff and the facilities and activities of the then existing Materials Handling Branch.

Additional staff positions for the Bureau were approved by the Public Service Board in July 1964.

  1. The cost of operating the Bureau from 1st August 1964 to 3 1st March 1965 has been largely salaries and wages, totalling £9,992.
  2. A technical study of the handling of bales of wool, which is expected to take 12 months, has been initiated and is now about half complete.

A reconnaissance survey is in progress prior to carrying out a full examination of the handling of some types of canned fruits.

Work has commenced on determining optimum sizes for containers and packs for fresh fruit and vegetables.

Developmental work, testing and the preparation of specifications for unit loads of munitions has been continued.

Approximately ISO inquiries from government departments and industry have been dealt with since July 1964. Subjects have included international and national standards; uniform materials handling techniques and procedures; refrigeration and packaging; modular packaging; wool handling practices; and the design and use of freight containers.

The Federal Advisory Committee on Materials Handling has met on two occasions in Sydney and mct in Canberra with the Minister for National Development on Monday, 10th May 1965.

page 956

QUESTION

DISABLED PERSONS

(Question No. 463.)

Senator BISHOP:

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

  1. Did the Department of Labour and National Service and the Bureau of Census and Statistics assist in the compilation of the Treasury Information Bulletin entitled “ Projections of the Work Force, 1963-76”?
  2. Why was no special estimate made of a potential work force component, viz., that of disabled persons, although population and married women’s participation trends were examined?
  3. ls it a fact that no special employment register of disabled persons is kept by any of the regional branches of the Department of Labour and National Service, that re-employment of such persons is the subject of routine assistance by the Department, and that no planned or specialist service is available to employers and Government departments?
  4. Will the Minister consider setting up a special register of disabled persons with associated services in order that these persons might bc recruited into industry on the specific tasks in which they arc competent and that co-operative action be requested from employers generally?
  5. Will the Government also consider to what extent the means test applying to these persons might be modified to encourage their increasing activity in productive employment?
Senator GORTON:
LP

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

  1. The honorable senator will have noticed from the Treasury Information Bulletin Supplement to which he refers that my Department co-operated wilh the Departments of the Treasury and Immigration and the Bureau of Census and Statistics in a work force projection prepared for the Committee of Economic Inquiry in December 1963. My Department was consulted in the preparation of the revised projections published in the supplement.
  2. The projections were based on material drawn from the censuses of 1954 and 1961. Since no information in respect of personal disabilities was sought in either of these two censuses, no data was available on which to estimate the work force component represented by disabled persons.
  3. No. Far from rendering only routine assistance, the Commonwealth Employment Service has for many years been actively engaged in providing a specialist service to facilitate the employment of handicapped persons. To this end it maintains a close liaison with employers, government departments, voluntary organisations, hospitals, institutions and medical practitioners interested in rehabilitation. In each capital city the Professional Services Office, staffed with vocational guidance officers and specially trained employment officers, provides expert assistance and guidance to the selected employment officers in District Employment Offices who ‘have special responsibilities in relation to the employment of handicapped persons.
  4. 1 am not in favour of setting up a special register of disabled persons. This would only emphasise the negative aspects of handicaps. The Commonwealth Employment Service adopts the positive altitude of seeking suitable employment in terms of the skills and abilities that a handicapped person possesses, and assesses his employment prospects as an individual rather than- as a member of a group who suffer a particular kind of disability. The service will continue to maintain a keen interest in this extremely important field.
  5. This refers to a matter of Government policy.

page 956

QUESTION

DIPLOMA IN EXPORT

(Question No. 469.)

Senator BREEN:

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

In view of the necessity to develop ways and means of expanding Australia’s export trade, is the Department of Trade and Industry aware of a two year course for a Diploma in Export which it is reported is being undertaken by 30 students at the University of New South Wales, or has this course been initiated solely by that University?

Senator HENTY:
LP

– The Minister for Trade and Industry has supplied the following answer -

The Department of Trade and Industry is aware of a two year course for a Diploma in Export currently being undertaken by 30 students in Sydney. The course was initiated by the New South Wales Division of the Australian Institute of Export. The Victorian Division of the Institute has conducted a similar course in Melbourne for some years. The aims of the Australian Institute of Export are fully supported by the Department of Trade and Industry. In both Sydney and Melbourne, the Department’s Regional Director is a member of the State Executive Council of the Institute. The University of New South Wales assists the New South Wales Division by making its premises available for the running of the course and by providing lecturing assistance where required.

page 957

QUESTION

NATIONAL SERVICE TRAINEES

(Question No. 474.)

Senator CANT:
WESTERN AUSTRALIA

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

  1. Has the Premier of Western Australia stated that in that State the metal and electrical trades have almost ten vacancies for each job applicant and the building and construction trades have almost six vacancies for each applicant?
  2. In view of this shortage of skilled tradesmen is it the intention of the Government to call-up for National Service training tradesmen in these industries who have had their call-up deferred pending the completion of their apprenticeship training?
Senator GORTON:
LP

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

  1. The Premier of Western Australia was reported in the Western Australian Press to have made that statement.
  2. In my second reading speech on the National Service Bill last year I made it quite clear that the Army has a need, not only for additional manpower as such, but for a wide range of skills and qualifications among its members. To meet this need, the national service scheme was designed to enable the call-up of a wide cross-section of the community which would be fully representative of these occupational skills. The Government decided therefore that it would be in the best interests of the country and of the individual registrant to grant deferment of service to apprentices while serving their apprenticeship. Thus apprentices who are granted deferment of service will, on attaining tradesmen status, be liable for service.

page 957

QUESTION

IMMIGRATION

(Question No. 477.)

Senator TANGNEY:
through Senator O’Byrne

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

  1. Is it a fact that the Employers Federation of Western Australia has put forward a proposal to bring committed labour from overseas, i.e., an offer to pay return fares conditional on satisfactory work?
  2. Can the Minister assure the Senate that all workers recruited overseas will be approved by the Department of Immigration in the same way as ordinary migrants, before they come here, so that if they break their contracts or complete them there would be no hindrance to their staying and obtaining employment elsewhere in this country?
Senator ANDERSON:
LP

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

  1. The Employers Federation of Western Australia has discussed with the Minister for Immigration the possibility of recruitment of labour over seas to meet serious labour shortages under arrangements which could provide for the employer to pay the fares of the workers to Australia and to pay return fares if required upon completion of an agreed period of employment. The discussions envisaged the entry of workers who could be permitted to stay permanently if they wished.
  2. All non-British people seeking to enter Australia are required to undergo screening prescribed by the Department of Immigration before being granted visas. When a stay of under one year is involved, the full screening applicable to settlers is not always considered necessary but is required when the possibility is strong that permission to stay indefinitely may be sought and granted. Pending consideration of detailed proposals, it is not possible to be more specific. In any event, entry of overseas workers under arrangements of the kind envisaged would, of course, be authorized only where Australians with the qualifications required are not available and where it is clear that conditions of employment here will be in accordance with Australian rates of pay and conditions.

page 957

GOVERNMENT BUSINESS

Precedence

Motion (by Senator Paltridge) agreed to -

That Government Business take precedence of general business after 8 p.m. this sitting.

page 957

SPECIAL ADJOURNMENT

Motion (by Senator Paltridge) agreed to -

That the Senate, at its rising, adjourn till tomorrow at 1 1 a.m.

page 957

STATES GRANTS (PETROLEUM PRODUCTS) BILL 1965

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

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

– I move -

That the Bill bc now read a second time.

The purpose of this Bill is to provide for payments to be made to the States as the first leg of the plan to provide subsidy on the distribution of petroleum products in country areas. In his 1963 policy speech, the Prime Minister (Sir Robert Menzies) undertook to do something about the burden placed upon rural costs by the higher prices of petroleum products in the more remote areas. He proposed that we should bring it about that the normal price of these products would nowhere in Australia be more than 4d. a gallon above the level of capital city prices. He went on to say that the Government would put this proposal into effect by arrangement with the petrol companies, and by arranging with the States, for the Commonwealth to make grants to the States, under section 96 of the Constitution, to enable them to pay the appropriate compensation to those companies. Accordingly, this Bill provides for grants to be made to the States to enable them to subsidise sales of certain petroleum products by oil companies and some other distributors in country areas.

The second leg of the plan to give effect to the proposal will be appropriate State legislation under which the States, subject to a number of safeguards, will pass on these moneys to the distributors. State Governments have indicated that they will introduce their legislation as soon as practicable, and the subsidy scheme will come into effect shortly after this legislation has been passed. It is hoped that the subsidy will be in operation throughout Australia by 1st October.

As has already been announced, the subsidy will apply to motor spirit, power kerosene, automotive distillate, aviation gasoline and aviation turbine fuel. The purpose of the subsidy is the reduction of transport costs to country people and country industry, and the five products to be covered are those which are directly employed in transport. Other petroleum products are not significantly used in transport in the country, and their inclusion would result in a heavy administrative load without compensating benefit to the country dweller and country industry generally. The subsidy will apply to the five products for whatever purposes they are used. The products will be identified by the normal product specifications now in use. In cases where there may be doubt as to whether the technical specifications of a particular petroleum product are sufficiently similar to one of the five products eligible for subsidy, the Bill provides that the Minister for Customs and Excise will have power to determine whether a product is an eligible product.

The broad outline of the plan to reduce the price of the five products in country areas is that payments are to be made to the States to enable the States to sub sidise sales of the eligible products by oil companies and certain direct purchase agents. The sales to be subsidised are, in general, those made at country locations which on 30th June 1964 were recognised distribution points and at which the wholesale price was more than 4d. above the wholesale price in the relevant capital city, or, to adopt the term used by the oil industry in referring to the increase in wholesale prices as the distance from seaboard terminals increases, at which the differential was more than 4d. Thirtieth June 1964 is a date shortly before the main features of the subsidy proposals became generally known. The rates of subsidy in respect of these locations will be based on the differentials ruling there on 31st December 1964. Between 30th June 1964 and 3 1st December 1964 some corrections were made to differentials, of which it is desirable that the subsidy rates should take account.

To illustrate how the subsidy will operate let me take a particular example. The town of Bourke, New South Wales, was a recognised distribution point at 30th June 1964 and the differential at that date was more than 4d. above Sydney, that is, the wholesale price was more than 4d. above the Sydney wholesale price. It follows that sales by an oil company to agents, garages, primary producers and other wholesale customers in Bourke will be subsidised by the New South Wales Government using moneys provided by the Commonwealth under this Bill. The extent of the subsidy payable will be determined by the differential at Bourke on 31st December 1964 which was lOd. per gallon for motor spirit. The subsidy payable will be 6d. per gallon, with the result that the wholesale price of motor spirit in Bourke will be 6d. cheaper and will be 4d. above the Sydney wholesale price.

The rates of subsidy payable are set out in a Schedule, which the Bill provides shall be gazetted. Copies of this Schedule, as it will be gazetted, have been distributed with the Bill. Honorable senators will see that the Schedule sets out rates of subsidy per gallon for each of the five eligible products in respect of some 5,000 locations. As I have said, the locations contained in the Schedule are in general those distribution centres which were recognised by the oil industry at 30th June 1964, that is. were recognised before the outline of the scheme was made known. However, in addition to locations recognised as distribution centres at 30th June last, it was decided after consultation with the State Governments and the oil companies to include in the Schedule some further locations which were de facto distribution points at the 30th June but had not been officially recognised.

Under clause 6 of the Bill, the Commonwealth Minister concerned with the administration of the subsidy, who will be the Minister for Customs and Excise, will have a discretion to add to the Schedule additional distribution centres and to determine rates of payment in respect of sales at those centres if he is satisfied that a new centre of distribution has been established. He will also have authority to add a new centre to the Schedule, and to determine a rate for it, or to vary the rate provided for a centre already in the Schedule, where he is satisfied that this action is justified by circumstances which existed on 30th June or 31st December 1964. This is a reserve power to correct anomalies that may be discovered hereafter in the Schedule. Except as specifically provided in clause 6, the Schedule, once gazetted, cannot be amended by the Minister.

While the effect of the subsidy will be to reduce the wholesale price of eligible products for all the locations in the Schedule to no more than 4d. above the relevant capital city price, it should be noted that there are differences between the various capital city wholesale prices. The 4d. per gallon difference will apply separately in each State and there will be some small variations in the prices of the same products in country areas from State to State. The wholesale price of motor spirit to resellers in each State capital and the retail prices operating there are given in a table which, with the concurrence of honorable senators, f now incorporate in “ Hansard “.

The subsidy is concerned with the reduction of wholesale prices and through them of retail prices. The Government has closely examined the possibility of covering retail prices directly, but found this impracticable because of the variability of resellers’ margins in those States which do not have price fixing laws. In most country places it will not matter that we are dealing directly with wholesale rather than retail prices, because resellers’ margins are for the most part the same as those in the city. There are, however, places, especially in Western Australia and the Northern

Territory, where country resellers’ margins exceed capital city margins by varying amounts. Indeed, in some small centres resellers’ margins vary within the same township. In such cases the result will be that, if the retailer decides to retain his higher margin, the retail price may still be more than 4d. above the capital city retail price, although of course reduced by the amount of the subsidy paid.

The price structure of the oil industry provides for special wholesale prices to certain classes of consumers, for example, primary producers. local government authorities, and industry consumers. These consumers will receive the full benefit of the subsidy. That is to say, just as the intention :.s that the price to the ordinary consumer in any country area will generally not exceed by more than 4d. the price to the ordinary capital city consumer, so the price to * consumer in a country area receiving a special wholesale price will be not more than 4d. above the price that would be charged to a similar consumer in the city. Thus the same subsidy will be payable on a country sale at the special wholesale price as on an ordinary country sale and the same advantage as hitherto may still be extended by the industry to the country customer receiving a special wholesale price over the ordinary country customer.

The rates of subsidy, as they are set out in the Schedule, will not be varied to take account of day to day changes in marketing costs or other circumstances. It is the Government’s hope that increases in railway freights, road taxes or other distribution costs of the petroleum products will be avoided as far as possible. The Government recognises, however, that if there are general increase in freight or other distribution costs, it may be inevitable that such increases will apply also to the petroleum products. If there are changes in the distribution costs of petroleum products, the result could be wholesale prices for these products in some or all country locations which were more, or less, than 4d. above capital city prices. The Government does however propose to make a general review of the rates of subsidy three years after the subsidy comes into operation; and we have in fact given a firm assurance to this effect to the State Governments.

The machinery of the Bill has been designed to permit quite flexible arrangements to be made between the Commonwealth and the States as to the mechanics of operating the subsidy. The Bill provides for the grant of financial assistance to a State of amounts equal to amounts expended by the State in making payments to distributors, provided that those payments are made in accordance with a scheme formulated by the Minister for Customs and Excise in relation to that State.

The approved scheme will in fact represent an arrangement between the Commonwealth and each State which will set out the machinery by which the objective of reduced prices of eligible products in country areas will be achieved. The scheme, or arrangement, for each State will not come into operation until State legislation providing for payments to be made to distributors is in force. The main features which the scheme must contain are set out in clause 5 of the Bill.

The scheme will provide for the registration with the Commonwealth Minister of oil companies as subsidisable distributors. It will be a condition of registration that the company will enter into a written agreement with the Commonwealth and State whereby the company undertakes that the full benefit of all subsidy paid to it in respect of any sale of a petroleum product shall be fully passed on by it. It will be obliged to ensure that the country wholesale price at which it makes each subsidised sale takes the amount of the subsidy fully into account.

Direct purchase agents may also be registered. These agents are independent businesses which buy petroleum products from the oil compaines, either in a country centre or in the city for carriage by themselves, and deliver those products to their own customers. They may sell some of them in areas where the wholesale price is higher than that applicable in their main area of operations. Direct purchase agents will be registered on the recommendation of the oil company concerned and on their entering an undertaking to pass on the subsidy they receive. Such agents will be entitled to be paid appropriate subsidy, but only in respect of sales made by them in a locality of higher subsidy rate than that operative in the locality in which the sale to them by their principal company was effected.

The scheme will also provide that claims for subsidy may be made only by registered persons and must specify the gallonage of each product sold in each subsidy area. The subsidy area need not necessarily be an area within the State concerned but it must be an area to which distribution is made from within that State. To illustrate, parts of the Riverina come within the oil companies* Victorian marketing area and claims may be made on the Victorian Treasury in respect of sales by the companies in those parts.

Officers of the Department of Customs and Excise in each State will receive copies of claims made to the State for subsidy and, authorised by State legislation, will check the claims and then certify to the State Treasury the amount payable on such claims. The State Treasury would then pay the sum indicated.

I have elaborated on the nature of the scheme to be formulated by the Minister so thin honorable senators will perceive how our proposals will be administered. The Bill also contains a number of machinery provisions of the kind normally incorporated in measures providing for financial assistance to the States. These include provision for submission by the States to the Treasurer of certificates of the amounts paid by the Slates as subsidy, provision for the making of advance payments to the States and provision for adjustment of overpayments to the States. The Commonwealth has also undertaken, in clause 12 of the Bill, to indemnify the States against certain costs that might be incurred by them arising out of their co-operation with the Commonwealth in putting the plan into effect. Finally, I would mention that provision is made for the conversion to decimal currency of the rates of subsidy set out in the Schedule.

I will touch briefly on the nature of the State legislation. It has been agreed by State Ministers that the State legislation will provide for the payment by the State to persons who are registered distributors of amounts ascertained in accordance with the scheme. Other provisions will relate to the appointment of the authorised officers, who will be officers of the Department of Customs and Excise, to examine and certify claims by registered distributors, the powers of authorised officers to inspect accounts of registered distributors, the protection of authorised officers in the performance of their duties and the provision of penalties for false returns.

So far I have described the operation of the subsidy in relation to the States. As the device of State grants is not applicable to the Northern Territory, separate legislative treatment will be necessary to bring the Territory within the plan. It is expected that an ordinance to provide for payment to distributors in the Territory will be introduced into the Northern Territory

Legislative Council. I have already mentioned the differences between the various capital city wholesale prices, and the effect of these differences on the results of the subsidy plan. Now, there is a particular problem of subsidy rates in the Northern Territory. Oil industry practice is to base all differentials in the Territory on the wholesale price in Sydney. In Darwin, the differential for motor spirit has been set at lid., that is. the cost of motor spirit in Darwin is Hd. above that charged to tha same class of consumer in Sydney.

If subsidy payable in the Territory were to be tied to differentials based on Darwin, and did not follow the present practice of the differentials being based on Sydney, the wholesale prices in the Territory would need to be more than 4d. above Darwin - that is to say, 5id. above Sydney - before subsidy would be payable. The effect of this would be that the wholesale price in the remoter parts of the Territory would be Hd. dearer than in the remote parts of, for example, New South Wales.

To avoid this situation, the Government proposes that the rates of subsidy for the Northern Territory shall be based on Sydney wholesale prices and the schedule makes provision for rates of subsidy accordingly. The effect will be that at the Territory locations set out in the schedule, the wholesale price will be 4d. above the Sydney wholesale price.

No legislation of the Australian Capital Territory will be required to apply the subsidy to this Territory. In accordance with the normal pattern of distribution of petroleum products to the Territory from New South Wales, subsidy on sales made to the Territory will be paid by the New South Wales Treasury. The rates of subsidy will be related to the Sydney wholesale price.

There is one aspect of the operation of the subsidy plan that I have put before the Senate in which it seems that it may, initially at least, fall short of what the Government would wish to achieve. This is the extent to which the subsidy covers outback properties, by which I mean pastoral properties situated in the more remote regions of the continent. A number of these properties were covered by differentials established by the industry, and these are fully covered by subsidy rates set out in the Schedule. Others, however, were not so recognised and are not established distribution centres. These will enjoy the benefit of subsidy, in effect, only to the nearest recognised distribution point. The Government would hope that as the subsidy arrangements are worked out in practice, it may prove possible for arrangements to be made which will fully and equitably meet the special position of these remote properties.

We have put it to the oil companies that we are prepared to provide for these properties within the subsidy plan if we were satisfied that a company had made the property an agent by contractual agreement, the agent had undertaken to supply products to the public and the company had undertaken to invoice supplies to the agent at a delivered price. The companies, however, have expressed themselves as unwilling to meet these conditions, on the grounds of the costs involved in setting up such agencies and the distribution and market disorganisation that they felt would result. But the Bill before the Senate provides for the inclusion of new centres of distribution in the Schedule and it will be open to any company to initiate arrangements with an outback property to have it admitted as such a centre. However, with the commencement of the subsidy plan the wholesale price at all outback distribution points contained in the Schedule will be no more than 4d. above the relevant capital city wholesale price and all outback properties will continue to enjoy primary producers’ prices related to these distribution points.

The proposals that I have put before the Senate have been arrived at with the considerable co-operation of the State Governments and the oil companies, and after a good deal of work by the companies in providing information not otherwise available to the Commonwealth. It has taken much patient negotiation to devise a plan which is workable, which safeguards the Commonwealth’s interests and which could be supported by the States and by the oil companies. I should like to say something particularly about the relationship of the oil industry to this subsidy plan. The industry has nothing, at any rate directly, to gain from this subsidy - nor for that matter has it anything to lose. It is right that I should express my appreciation of the co-operation and help that departments have had from the industry in the working out of the subsidy plan.

Each State has agreed to introduce the necessary State legislation, which I expect will be done as soon as practicable. Meanwhile, the oil companies will adapt their accounting arrangements to fit in with the plan. As I have mentioned, the commencement date should not be later than 1st October. It is expected that this measure will cost about £6 million in a full year. As a result of this expenditure we shall achieve a most useful practical measure towards decentralisation - by moderating in one important respect the burden of transport costs on people living in the more remote areas and on the industries that they pursue there. I commend the Bill to the Senate.

Debate (on motion by Senator Kennelly) adjourned.

page 962

APPROPRIATION BILL (No. 3) 1964-65

First Reading

Debate resumed (vide page 948), on motion by Senator Henty -

That the Bill be now read a first time.

Senator CANT:
Western Australia

– I shall take the opportunity during this debate to bring to the notice of the Senate something that I regard as somewhat of a scandal in Australia. I refer to the rape of Australian mineral resources throughout the country, with particular reference to iron ore. I think we all are aware that large deposits of iron ore have been discovered since the Government in 1960 lifted the embargo on the export of iron ore. Prior to the lifting of the embargo all iron ore, with the exception of that owned by the Broken Hill Pty. Co. Ltd., leases for which had already been granted, was reserved to the States. For this reason iron ore was not a commodity that was sought by individual prospectors or by companies seeking to invest. I think it can correctly be stated that most of the deposits of iron ore were known and had not been evaluated. Upon the lifting of the embargo the Government of Western Australia threw open the whole of the State for examination by prospectors and made available large reserves to various people and companies. The result is that big deposits of iron ore have been registered. lt is estimated that the deposits of high grade ore run into many thousands of millions of tons. The deposits of ore of all grades would be very much greater still. In fact, it is not known exactly how much ore there is in Western Australia and in other paris of Australia. I shall refer later to the deposits in the Constance Range and in the Savage River area in Tasmania. Contracts are being sought by an overseas company for the purchase of iron ore in the Northern Territory. There are many thousands of tons of lower grade ore in Western Australia much of which can be brought to export grade by a system of pelletising and many more thousands of tons can be brought to export grade by means of beneficiation. I am not trying to show that Australia in the foreseeable future will be short of iron ore to carry on industry to the extent that the Australian Government or private enterprise organisations would wish.

High grade ore is generally considered to be ore which has an iron content of more than 60 per cent. Ore that is suitable for pelletising generally has an iron content of between 50 per cent, and 60 per cent. Ore of lower grades has to be beneficiated to render it suitable for blast furnaces. To illustrate the size of the ore bodies in Australia I propose to refer to only one, and that is not the largest. I shall refer to the deposit owned and controlled by Hamersley Iron Pty. Ltd. at Mount Tom Price. That is only one part of the huge reserves which the company controls. In fact it controls reserves in an area of 2,700 square miles. The proven ore with an iron content of 64 per cent, at Mount Tom Price, amounts to 226.8 million tons, and there are 29.4 million tons of lower grade ore with an iron content of between 50 per cent, and 60 per cent. I emphasise that that is the amount of proven ore. It is known that that quantity of ore is there. If we consider the inferred deposits in this area, the quantity of ore becomes very much greater. The inferred deposits of high grade ore at Mount Tom Price amount to 610 million tons and the lower grade ore to 84 million tons. The quantity of ore of all grades in the reserve of 2,700 square miles, is estimated to be 100,000 million tons. There is a large proven deposit at Mount

Newman, and at Mount Whaleback the proven deposit of high grade ore is 245 million tons.

Hamersley Iron Pty. Ltd. has a firm contract to export to Japan 65.5 million tons of high grade ore. The company is at present negotiating to sell to Japan 56 million tons of pelletised ore. The price per ton is difficult to ascertain because the published information refers only to the price for the total amount of ore that is to be shipped. The price for the 65.5 million tons to be exported by the company will be £280 million. The ore body is to be developed in four stages. The first stage will involve a complete evaluation of the ore body which has not yet been completed. The work is proceeding. The second stage will involve the construction of the facilities necessary to export the ore which will be quite extensive. They will include the construction of a port, the construction of a town at the port, the construction of a town at the mine or open cut and the construction of a standard gauge railway. Some 500 or 600 miles of standard gauge railway will be constructed in association with the working of the ore bodies in the Pilbara area. The third stage in respect of which the company is at present endeavouring to reach an agreement concerns the export of processed or pelletised ore. The fourth stage of development will be the construction of an integrated steel plant wilh a capacity of not less than one million tons per annum. The agreement to develop this ore body runs over a period of 25 years.

Much has been made of the amount of money that will be invested to bring this project to completion. The amount estimated to be expended - indeed, agreed upon between the company and the Western Australian Government - is £78 million. I emphasise that the fourth part of the project, that is the establishment of an integrated steel plant with a capacity of one million tons per annum, will not come into operation until 25 years from the date of obtaining the export contract and the commencement of the export of the ore. Expenditure on the integrated steel plant will amount to approximately £40 million. So over the next 25 years investment by this company in Western Australia will amount to £38 million, or a little more than £H million a year.

A similar agreement has been entered into with the Mount Newman Iron Ore Co. to develop the deposit at Mount Whaleback. The company has entered into an agreement to sell to Japan 100 million tons of high grade ore. At this point of time no attempt has been made by the Mount Newman Company to sell any of the secondary processed ores. The proven quantity of high grade ore in the Mount Whaleback deposit is 245 million tons. To give some idea of the value of this ore, I point out that its world market price is approximately £4 5s. a ton. Some of the ore in Western Australia has been sold for £4 5s. a ton and some for £4 7s. 8d., but we make take £4 5s. as being a rough average. If we take a line through the inferred ores at Mount Tom Price and have a look at those at Mount Newman, it can safely be assumed that the quantity of high grade ore and lower grade ore at Mount Whaleback would be very much in excess of the 245 million tons I have mentioned.

An agreement has been entered into with Mount Goldsworthy Mining Associates, which has contracted to sell to Japan 16.5 million tons of high grade ore. This company is committed only to develop the ore body in three stages. The first stage is to make a complete evaluation of the deposits. Then will come the export of high grade ore, and then the secondary processing of lower grade ore. These three companies propose to establish separate ports for the export of ore. Hamersley Iron Pty. Ltd. and Mount Goldsworthy Associates will each establish a port at Port Hedland three miles apart. Surely one port would be sufficient to serve both interests. The Mount Newman company proposes to establish a port at King Bay. Estimated expenditure in connection with the Mount Newman undertaking is £78 million, with £40 million being reserved for the establishment after 25 years of an integrated steel plant. Estimated expenditure on the development of the Mount Goldsworthy deposit and the port facilities is £23 million.

The Cleveland Cliffs company, the iron company that is acting in association with the Mitsui Trading Co., has contracted to sell 71.4 million tons of pelletised ore. This company is developing a deposit of lower grade ore on the Robe River, and it will construct a railway from Mount Edith to

Preston Point. The secondary processing plant will employ a comparatively large number of workers. It must be realised that most of the work performed at the Mount Newman, Hamersley and Mount Goldsworthy projects will be done with heavy earth moving equipment. They will be virtually big quarries, and the labour force will be very small. Automatic equipment at the ports will not engage a great amount of labour. However, it is estimated that secondary processing on the Robe River will employ approximately 500 men. Estimated expenditure upon the development of this project, including the port and railway, is £56 million.

Further south and out from Geraldton, a consortium has entered into a contract to sell to the Japanese 5.1 million tons of high grade ore from Tallering Peak and Koolanooka Hills. The amount invested in the development of these two ore bodies is not known to me. lt will not be very great, because most of the port development work will be carried out by the State Government and the ore will be transported by road. The value of the contract is estimated to be £29 million.

The estimated value of all this ore that has been sold is £1,169 million. I forgot to mention that the secondary processed ore on the Robe River has been sold for approximately £5 9s. 6d. a ton, the total price being £391 million for 71.4 million tons. But £1,169 million is far from being the value of the ore bodies that have been reserved to the various overseas companies. I emphasise the words “ overseas companies “. Later I shall attempt to give some idea as to how these companies are held and what is Australia’s interest in them. But the value of the assets that have been handed to these overseas companies runs into many thousands of millions of pounds, not just the sum of £1,169 million that I have mentioned and which is the value only of the very small quantity of ore that they presently have. It is confidently estimated that in the very near future Australia will become the major source of ore supply to the Japanese steel industry. The Japanese steel industry’s contracts with other countries are running out and they are transferring the trade to Australia because of the high grade ore available here and the shorter distance of transport. Considering the value of the ore which is to be exported and the value of the asset that the State has just given away for, in effect, a peppercorn rental - and from which the Commonwealth of Australia will benefit very little - it is interesting to see how these reserves arc held.

Hamersley Iron Pty. Ltd. consists of Conzinc Riotinto of Australia Ltd. commonly known as C.R.A. and it holds 60 per cent, of the equity in the deposits, the other 40 per cent, being owned by Kaiser Steel. There is a small Australian shareholding in these deposits. The Australian shareholding in Con Rio, as it is commonly termed, is 10 per cent., and so is 10 per cent, of Conzinc Riotinto’s 60 per cent, equity in the huge asset of iron ore at Mount Tom Price. The consortium to develop Tallering Peak and the Koolanooka Hills deposit is Western Mining Corporation Ltd., which has an Australian shareholding, the Cleveland Cliffs Iron Company of Ohio and the Home State Mining Company of California, in equal shares; so that whatever the Australian shareholding in Western Mining Corporation Ltd. is, it is only that much of one-third equity in Tallering Peak. Mount Goldsworthy Mining Associates consists of the Cyprus Mines Corporation of California, the Utah Construction and Mining Company of California and Consolidated Goldfields (Australia) Pty. Ltd., which is substantially an English company, although 1 noticed recently that it is placing some shares on the Australian market. The Mount Newman Iron Ore Company consists of American Metals Incorporated, 50 per cent, and the Colonial Sugar Refining Company Ltd. 50 per cent. I noticed recently that through this shareholding the Mount Newman company is attempting to raise development capital on the Australian market. The Robe River deposits will be developed by the Cleveland Cliffs Iron Company of Ohio with a 65 per cent, interest and the Mitsui Trading Company of Japan with a 35 per cent, interest.

There is another fairly large deposit of iron ore some 140 miles north of Perth, at Mount Gibson. It contains approximately 50 million tons of ore, and because it is owned by Japanese interests it is difficult to know what are the negotiations for the sale of this ore, since those concerned do not have to tender or reach an agreement. The only agreement - if and when they decide to export - will be the agreement for the development of this deposit between the com pany and the Western Australian Government. It has not yet reached this stage.

If the Australian shareholding in all of these deposits is analysed we find that it runs out at between 13 per cent, and 15 per cent, and that the other 85 per cent, or 87 per cent, of these huge deposits of ore is owned and/or controlled by overseas interests. Obviously the profits from the sale of the ore Irom these deposits will go to overseas shareholders. I notice, too, that the Cleveland Cliffs company proposes to raise money on the Australian market to develop its mine, but this is to be done by way of loan and not by way of equity holding. Of course this is not satisfactory - at least to the Opposition. We are of the opinion that there should be a rather large Australian equity in all these things. As I said earlier, the whole investment in the development of these ore bodies will amount to about £200 million, but £80 million of it is not expendable for another 25 years, if it is ever spent. I say that, despite the fact that these companies have entered into agreements with the Government of Western Australia and I think I say it on fairly firm grounds. This ore is situated in semidesert country, where there are no fuel supplies. There is no coking coal at all in the State of Western Australia and the ore will have to be transported to a place where there is coking coal and high grade limestone, or the flux and coal will have to be brought to the north of Western Australia.

That is the first reason why I say that the fourth part of the project is unlikely to proceed. Australia has developed over the years with one steel industry. Broken Hill Pty. Co. Ltd. has a monopoly and also holds very large deposits of iron ore in various parts of Australia. Is it likely that, having had B.H.P. in a particularly reserved position, with a monopoly, over all these years, within the foreseeable future - within 25 years - we will have another two steel industries? I think it is quite unlikely, although I believe that B.H.P. was somewhat worried about it only a few weeks ago. As I said earlier. Hamersley Iron Pty. Ltd. is presently negotiating with Japan for the sale of pelletised ore, which is the third step in the development of its Mount Tom Price deposits. At the time when Hamersley Iron put the proposition to the Japanese buyers, B.H.P., which controls some large deposits of lower grade iron ore in the Pilbara area, also sought to sell pelletised ore to Japan. This was a designed move by B.H.P. to prevent Hamersley Iron fulfilling the third step in the development of its project.

If there were a second steel industry in Australia and Hamersley Iron Pty. Ltd. were able to complete the third step, the B.H.P. company would feel the blast furnace on the back of its neck. This has not come about because the secondary processed ore sold to Japan has come from Cleveland Cliffs and from the Robe River. This has given the B.H.P. company a breathing spell. It is now negotiating to sell a quantity of pelletised iron ore to Japan, intending to use the lower grade ore from South Australia. This is designed to retard the completion of the projects with the Mount Newman and Hamersley holdings, so that the B.H.P. company will still retain its monopoly.

Of course, the B.H.P. company has not been very honest with Australia in respect of its monopoly of the Australian steel industry. I shall refer to that later on. In considering the amount of money that will be expended on the development of these projects we must look again at the B.H.P. company, because most of the materials that will be used in the development of the railway lines and ports will be fabricated steel. The B.H.P. company has not been able to provide the requirements of the companies. Hamersley Iron Pty. Ltd. has only recently let to Japan a contract to provide 37,000 tons of steel rails and ties for its standard gauge railway line to Mount Tom Price. The same position will apply to Mount Newman, Cleveland Cliffs, and Mount Goldsworthy. Fabricated steel, of course, will be required for the construction of the jetties at the ports. This, too, will come from overseas. Rather large contracts are to be let. They are advertised throughout the world. Let us consider who will gain from the substantial contracts that are going to overseas firms. The labour content will be Australian but the profits under the contracts will go to overseas companies. Most of the work on the leases, except in the case of Cleveland Cliffs, will be done with heavy earth moving equipment, which is being imported from overseas. The unloading of this heavy equipment at the port of Fremantle for use by Hamersley Iron Pty. Ltd., which is the undertaking moving most quickly, has been publicised on television and in the Press. Expenditure on this equipment will go overseas and the profits on it will go to overseas manufacturers.

I think it can safely be assumed that out of the amount of £120 million that will be expended within the next 25 years in the development of these projects, the amount accruing to the Australian people will be approximately 65 per cent. The rest will go out of Australia by way of profits on contracts and for the supply of materials and equipment. It is interesting to note what Australia will get out of it apart from expenditure on materials obtained in Australia, the amount expended on labour, and the taxation revenue received by the Commonwealth. This ore is to be exported under royalty contracts. A quantity of 5.1 million tons from Tallering Peak and Koolanooka Hills will attract a royalty of 4s. 6d. a ton. The royalty payable on the Mount Newman, Mount Goldsworthy and Hamersley Iron production will be 7± per cent., with a minimum of 6s. a ton. The 71.4 million tons of secondary processed ore from Cleveland Cliffs on the Robe River will attract a royalty of ls. a ton. I have not gone into the totals, except in the case of Cleveland Cliffs, in respect of which the value of the contract is £391 million. The amount exported will be 71.4 million tons at £5 9s. 6d. a ton, on which the royalty accruing to the Western Australian Government will be £3 million.

At the end of the war the Japanese steel industry was almost non-existent. Today it is the third largest producer in the world, despite the fact that it has to import the great bulk of its raw materials, iron ore and coal, from Australia. We have very large resources of these raw materials and there are very large deposits of high grade limestone in the Pilbara area, which the B.H.P. company intends to use eventually in its Kwinana steel plant. With all of these resources, we are an importer of steel. This is brought about by the conservative attitude of the B.H.P. company, which estimates what Australia’s future requirements will be and bases its expansion programme on these estimates, which have always been, by accident or design, lower than requirements. Every year we have had to import steel from various places, including Japan. The B.H.P. company proposes, when its Kwinana steel rolling mill comes into operation, to export 300,000 tons of pig iron annually to

Japan. This will be fabricated into steel there and probably exported back to Australia. This is a tertiary development into which the B.H.P. company proposes to enter. The pig iron will go to Japan for completion of processing.

I can see no reason why the Australian industry should not have been expanded and even now should not be expanded to use the raw resources that are available in this country. Instead, Japan has become a major steel producing country and is providing employment for thousands of workers. Australia should be that steel producing country. Australia should not be selling its raw resources to overseas companies. Australia should not be exporting ore to Japan. Australia should be employing thousands of workers in this industry instead of the very small number required to develop the local projects.

The fact that in the post-war period Japan, without Taw resources, has been able to elevate itself to the position of the third largest steel producer in the world while Australia is importing steel is an indictment of B.H.P. Tt is time that the Commonwealth Government stepped into the field and developed some of our raw resources in the interests of Australia. The funds which would be used in developing these resources would be only a book entry on credit in a bank account and would be operated on for only a short time. The Hamersley organisation has stated already that it will be receiving returns from the sale of ore by 1967 and that portion of those returns will be reinvested for the development of the project. There is no reason why the Commonwealth Government, through the Commonwealth Bank, could not create similar credits for the development of our iron ore resources.

I do not regard as a sufficient answer any statement that this is a State matter and something over which the Commonwealth has no control. The Commonwealth Government can do whatever it wants to do by agreement with the States and the granting of funds under section 96 of the Constitution. That poses no problem. The Commonwealth Government, of course, can force agreement with the States if it has a mind to do so. It has complete control of export licensing and can say to the States at any time: “ Sufficient of the raw resources of this country have been contracted to go overseas. Export licences for any further quantities will not be granted. We will reserve the resources for a second steel industry in Australia”. I think that is the logical step for the Commonwealth Government to take so that Australia will benefit from its own raw resources. We have no excuse for not being self sufficient in steel production. That we are not self sufficient has been brought about only by a lack of initiative on the part of private enterprise. Private enterprise, apart from B.H.P., is not prepared to invest in the steel industry.

I did not want to discuss balance of payments problems but I think it worth mentioning that the Treasurer (Mr. Harold Holt) went to the United States a few weeks ago to inquire about the restriction on the export of dollars from that country. After reading the statement that he made on his return I came to the conclusion that he was not very successful in his mission. Unfortunately, Australia cannot ask America to continue to invest in Australia and then place restrictions upon the investment. In other words, Australia cannot say to America, “ We want you to invest 200 million dollars in Australia this year but you will have to allow 30 per cent., 40 per cent, or 50 per cent, of equity to Australian private enterprise “. We have accepted investment under any conditions which have been imposed. If we were to place a restriction on it - I think the day when we could place a restriction on it has gone - the investment would not come here unless it wanted to. For many years the Australian Labour Party has urged Australian equity shareholding. The Leader of the Country Party, Mr. McEwen, has been disturbed for the past three or four years about the lack of Australian equity in Australian industries. Recently the Prime Minister (Sir Robert Menzies) said that he was somewhat disturbed about it.

Sitting suspended from 1.2.46 to 2.15 p.m.

Senator CANT:

– At the suspension of the sitting I had given what I believe to be one reason why there will not be any further Australian equity in the companies that have been granted the large assets of iron ore deposits in Western Australia. 1 believe there is another reason, connected with our balance of payments position, lt would cost huge amounts of money now to buy an equity shareholding of substantial proportions in this industry. It would cause a rather large outflow of money from Australia and would react against a favorable balance of payments position.

I have pointed out that there has been a big sell-out of Australia’s iron ore resources, much of the blame for which can be laid at the door of the Western Australian Government. Part of the blame can also be laid at the door of private enterprise, particularly B.H.P. I suggest that the position may be rectified by the Commonwealth Government’s stepping in and ensuring that whatever resources are left, will be retained for the use of Australians and the benefit of the Australian economy. Without doubt Australia would benefit from a second steel industry. Private interprise is unwilling to establish it and in my view it thus becomes a national issue. The Commonwealth Government should provide the funds through section 96 of the Constitution so that a second steel industry may be established.

J now direct the attention of the Senate to other mineral resources which are being disposed of against the interests of the Australian people. Honorable senators are aware of the desperate attempts being made by the Commonwealth Government to find a resettlement area for the people of Nauru as the phosphate deposits of that island are being worked out. Because the land cannot provide an alternative livelihood for the Nauruans, urgent attempts are being made to find another place for them to live. Desperate attempts are also being made in Australia to find phosphate resources. Quite recently the Western Australian Government threw open certain areas of land in that State as prospecting areas for phosphate. Eight companies have applied for reserves to prospect and each company is owned or controlled overseas. Reserves totalling in area 20,542 square miles have been granted to the applicant companies. If phosphate deposits are found, they will be owned and controlled by overseas interests. Phosphate is vital to primary industry upon which we depend to earn our overseas balances. Surely a government placing first the interests of Australia would not repeat the mistake that was made with respect to iron ore, but would attempt to establish in the industry an Australian equity sufficiently large to control the prices of the commodities being sold to primary producers. This desirable result has not been obtained to date.

An area rich in mineral resources lies in the north west of Western Australia, above the Pilbara district and in what might be termed the Kimberleys area, north of the 20th parallel. Recently this area was thrown open to be prospected for various minerals and, in particular, for copper. It is known that lead, zinc and gold are in the area. Travellers by ship along the coast of this region can see the green tinges of copper on the sides of the hills surrounding the ports. This large area of land has been granted as a prospecting area to the Freeport Sulphur Co. of America, Consolidated Mines Selection Co. of London and Westfield Minerals Ltd. of Canada. Obviously if minerals in any workable quantity are found in the area, the three companies 1 have named - all working as one company - will own and control them.

A large United States company has an interest in copper found at Yuendumu in the Northern Territory. Conzinc Riotinto of Australia Ltd. is producing copper at Rum Jungle in the Northern Territory. The mineral resources at Mount Isa are substantially owned by the American Mining and Smelting Co. An American company has bought the Whim Creek copper mines in Western Australia and a Canadian company is interested in a high grade copper show 15 miles north of Cooma in New South Wales. Apart from Cobar and Mount Morgan, the known copper resources of Australia are wholly or partially owned by the overseas companies to which I have referred. It is interesting that the Whim Creek copper lode is the last known large lode of soluble copper in Australia. This is a very valuable trace element in fertiliser. As I have shown, another basic raw material needed by Australia is being sold out to overseas companies.

I think the Minister will appreciate that the Savage River iron ore deposits in Tasmania no longer belong to Australia. Investments will be made to develop the area and the ore will be pelletised for shipment overseas. The funds to be invested will be provided by Picklands Mather of the United States and Mitsubishi Shoji of Japan.

Senator Henty:

– Who arranged that?

Senator CANT:

– The Tasmania-! Government would make the arrangement, because the resources are in that State. But it does not represent such a rape of raw materials as has been arranged by the Liberal Government of Western Australia.

Senator Henty:

– The Labour Government of Tasmania.

Senator CANT:

– Yes, and it is a Liberal Government of Western Australia. I did not want to enter into politics because we are debating a national issue which should not be confined to the narrow limits of the interests of the States. These raw resources belong to Australia and not to any particular part of it. Before the embargo on the export of iron was lifted the iron ore deposits were in fact reserved to the States. Since the embargo was lifted they have been given away and eroded.

Let us consider the situation in relation to bauxite. Deposits in the Darling Ranges in Western Australia are estimated to amount to 3,000 million tons and this is under the control of Alcoa of Australia Pty. Ltd. Western Mining Corporation Ltd. has a 20 per cent, interest in these deposits. As 1 have said, there is a small Australian shareholding in Western Mining Corporation Ltd. Admittedly the bauxite from the Darling Range is being treated in Australia. The first stage - the process which reduces the bauxite to alumina - is reached in Western Australia and the alumina is then shipped to Geelong in Victoria where it is eventually turned into aluminium. Nevertheless, the bauxite from the Darling Ranges is substantially owned and controlled by overseas interests.

The bauxite deposits at Weipa in Queensland are foreign owned - by Comalco Industries Pty. Ltd. The bauxite at Gove in the Northern Territory is still in the melting pot, so to speak. Several propositions are before the Commonwealth Government to take over these deposits. One proposition provides for a 50 per cent, interest in the deposits for a French company and a 50 per cent, interest for the Colonial Sugar Refining Co. Ltd. Broken Hill Pty. Co. Ltd. also has an application for the Gove deposits in association with an overseas company. So, substantially, the bulk of the bauxite deposits in Australia are owned and controlled overseas with the exception of the Gove deposits and it is likely that Broken Hill

Pty. Co. Ltd. or Colonial Sugar Refining Co. Ltd. will get the resources at Gove.

One of the largest deposits of iron ore in Australia is in the Constance Range in Queensland, but this ore is of somewhat lower value than that in South Australia and Western Australia. Broken Hill Pty. Co. Ltd. had an option on it for some time but eventually, after higher grade ores were found in Western Australia, the company did not exercise the option. Now a large overseas mining corporation is interested in it.

Mount Isa Mines Ltd., an American mining and smelting company, is interested in investigating lead and zinc deposits in the Northern Territory, on the MacArthur River. Adelaide Steamship Co. Ltd., which is not an Australian company although there is some Australian shareholding in it, is developing a large salt works at Shark Bay in Western Australia. The product of the salt works will be shipped to Japan, lt is estimated that shipments will total 600,000 tons a year. Again, this mineral industry is not under the control of Australian interests but is controlled by overseas companies.

Most of the tin resources in Australia are under overseas ownership or control mainly through Consolidated Goldfields (Australia) Pty. Ltd. and Aberfoyle Tin N.L. and the subsidiaries of these companies. This applies also to the mineral sands in Australia and particularly the titanium deposits in Western Australia.

Oil exploration in Australia is 85 per cent, foreign owned or controlled. This is a vital matter, because the Minister for National Development (Mr. Fairbairn) stated a few days ago that we would have only 10 weeks’ supply of oil in Australia if our overseas supplies were cut off. Despite this, the exploration for, and production of, oil in Australia are 85 per cent, owned and controlled overseas. The refining and distribution of oil in Australia is 95 per cent, owned and controlled overseas. Even this is not the full story of the way that the resources of raw materials in Australia have been abandoned by Australian governments, both State and Federal.

Senator Cormack:

– Where would the honorable senator suggest we get the capital to do all these things?

Senator CANT:

– We have had capital before when we have required it. We built the Trans-continental railway without capital and we could do the same again if it became necessary.

Senator Cormack:

– The capital of the oil refineries alone would amount to £300 million.

Senator CANT:

– That is so. But we had the basis of an oil refining industry when we had the Commonwealth Oil Refineries Ltd. We sold out to what was then the Anglo-Iranian Oil Co. which later became

  1. P. (Kwinana) Pty. Ltd. The basis of an industry was there but one of the first things this Government did after it was elected to office in 1949 was to dispose of
  2. O.R. At least that company had provided something for us to build upon. 1 know that large amounts of capital are needed to develop these resources but that does not mean that we have to lose control of them to attract the interest of other countries. Other countries have not done so. They have retained an equity in their raw resources. But this Government and the State Governments - I do not lay all the blame at the door of this Government - have all been so hungry for overseas investment that they have been taking money from overseas at whatever price it would come here. As a result, we are in a difficult position with our balances in the United Kingdom. We have certain overseas balances which, although they are held in sterling, might not be available to us when we want them. Now we are almost down on our knees begging people to invest in Australia. Any success that the Treasurer (Mr. Harold Holt) achieved by his recent visit to the United States of America will only postpone the evil day. The day will arrive when Australia will have to produce the capital to develop its own resources and that time could be not very far off. We were given a warning two or three years ago of the action that the U.S.A. would take, when that country introduced the interest equalisation tax. That gave us fair warning that the money market in the U.S.A. would close up. The Government took no notice and went along relying on money coming in. Then when President Johnson announced that American overseas balances were getting out of hand and that he had to close down, we had to go down on our hands and knees to ask the Americans to continue their investments in Australia.

It is not certain yet that all the money required for the development of the ore projects in Western Australia will be forthcoming from the United States. It is said that some of them will be developed, but there are two considerations here. President Johnson has said that Australia will not be affected by the decision to act on American overseas balances. Nevertheless, overseas investment in Australia will not continue, or at least it will not continue in the volume we have known.

The American administration has said that American investment in Japan should be limited to 100 million dollars per year. If we look at this subject properly, we will find that because our main resources have been given to American companies we will require American finance to develop them just as the Japanese people will require American finance to be able -to buy them. This is the position that we are getting into. We are just disposing of the valuable assets - the heritage - of this nation for practically nothing at all. I think that this Government, State Governments and private enterprise stand indicted because of the actions they have taken.

Senator WRIGHT:
Tasmania

Mr. President, Senator Cant has exercised his undoubted liberty to deal with any subject of public importance whether relevant or irrelevant to the Bill now before the Senate. Whilst there is much in his speech that one would instinctively and firmly repudiate, nevertheless he has concentrated the attention of the Senate on a subject which is of the utmost immediate importance - that is to say, a broad assessment of our policy in relation to mineral resources. Having regard to the very great change in that policy that was entered upon some three or four years ago, it is most appropriate in my view that the Senate has given attention to the matter for the purpose of assessing just what the trend in this policy means to the country. I for my part express my appreciation of the fact that many of Senator Cant’s references to the economic considerations of the mineral industry and the condition of its exports are matters of real national importance.

I wish to speak to the Senate upon another matter which is, I believe, of importance, and to which we should give continuing attention. This is the subject of income tax. I am one of those people who feel that we have a very great job to do here and that, in fact, keeping up with the affairs that come before the Senate is an impossible task unless one limits oneself to a special set of subjects. Any LiberalCountry Party member of the Senate - any member of the Senate at all - realises the impact that income taxation makes upon the lives of every individual and upon the nation. It has within it, great political strengths that we should consider and reassess from time to time in order to gauge the political drift. This afternoon I mean to confine my remarks to a very restricted field because one of the manoeuvres of those who seek to divorce this Parliament from responsibility in this field has been to encumber it with matters that give rise to great confusion and complexity in a multitude of issues.

I believe that one can extract from the income tax law one or two items that stand’ out as demanding attention, and to which we can devote our attention from time to time when Parliament is sitting. Honorable senators will recall that the Government on 3rd December 1959 constituted a Committee under the chairmanship of no less an authority than Mr. Justice Ligertwood to review the income taxation legislation of the Commonwealth with a view to simplification. That Committee sat until June 1961. Its report was then tabled in Parliament. So startling were some of the disclosures made by that Committee as to current practices of evasion of taxation with consequent loss of legitimate revenue that the Committee itself urged that many of its recommendations should be enacted into law with effect from the date of the publication of the report. The Treasurer (Mr. Harold Holt), when tabling the report in another place, announced that that recommendation would be given effect.

Notwithstanding that announcement, no legislation was submitted to Parliament until more than three years after that date, namely in October or November 1964. The Bill that was then introduced was of such a startling character that, on the admission of the Minister who introduced it the consideration that could be given to it was completely inadequate. It was introduced in the failing days of the session, with an election imminent, and the finishing day for Parliament imperative. “ Hansard “ shows that insufficient time could be given to the terms of the Bill. When we discussed in this place the appointment of a select committee to deal with this report, pointed reference was made to this question by my colleague, Senator Laught, who said that the Treasurer had given an undertaking to re-examine this legislation and to bring in any corrective legislation needed in the current sessional period of the Parliament. It is quite obvious that we are not to get any such legislation.

In two respects the legislation that we did get in November last was certainly not in accordance with Mr. Justice Ligertwood’s report. It is to these two respects that I wish to direct attention this afternoon and say that, so far from restricting or curtailing evasion in one respect, the legislation of last November gave a basis for its continuance. I refer to the question that was discussed by Mr. Justice Ligertwood on the subject of improvements made in leases. Mr. Justice Ligertwood pointed out that, by the device of interlocked companies, a parent company, after going to the Registrar and creating a subsidiary company, could obtain a lease of land from its own subsidiary company. If the parent company erected a building worth £250,000 on the property without the written consent of the subsidiary, and then the parent company assigned- the lease to another subsidiary company the taxation position was this: The parent company received a deduction of the whole cost of the building, which was £250,000, and neither of the subsidiary companies was assessed on the value of improvements, because of the particular provisions in the legislation at that time. That Mr. President, is an entirely artificial situation which is created by these provisions in the income tax act and which give an altogether false advantage as between a parent company and its two subsidiary companies. By a manipulation of the legislation in that respect the complex of the three companies gets a deduction from income tax of the whole cost of that new building. I should think that, compared with the incidence of taxation on ordinary people an advantage of that kind would have demanded attention by the Minister responsible for the administration of the income tax laws long before Mr. Justice Ligertwood pointed it out.

I know that it will be said in relation to my advocacy of reform in income tax legislation that a legal nigger is in the woodpile

Anyone who is interested in the genuineness of my advocacy in this matter should know that if such a proposition had been submitted to me before the Ligertwood Committee’s report was published I would have said, “ Complete nonsense. A device of that sort will immediately be struck down under section 260 of the Act “. 1 point out that section 260 of the Income Tax and Social Services Contribution Assessment Act provides that -

Every contract, agreement, or arrangement made or entered into, orally or in writing, whether before or after the commencement of this Act, shall so far as it has or purports to have the purpose or effect of in any way, directly or indirectly - “(a) Altering the incidence of any income tax;

relieving any person from liability to pay any income tax or make any return;

defeating, evading, or avoiding any duty or liability imposed on any person by this Act; or

preventing the operation of this Act in any respect, be absolutely void, as against the Commissioner. . .

Senator Webster:

– That means that you cannot take any step at all under that Act to reduce the incidence of taxation, does it?

Senator WRIGHT:

– I am obliged to Senator Webster for his interjection, but J dispute the suggestion in it. However, it would occupy a disproportionate part of the time at my disposal to argue the question. I am merely pointing out that section 260 of the Act would enable any purposeful Commissioner of Taxation and the responsible Minister of the day immediately to challenge that practice and, if the court ruled against the challenge, to bring in specific legislation to prevent companies by means of a device, from getting for themselves and their subsidiaries an advantage under the income tax legislation.

I wish to mention a second instance which Mr. Justice Ligertwood gave of what [ consider to be a monstrous evasion of the income tax legislation. He put forward the example of the owner of an undeveloped city block consenting to an investor erecting a building to cost £1 million on the block. The owner grants the investor a 98-year lease of the building at an appropriate ground rent. The investor proceeds to sublet the building to tenants and the building reverts to the owner at the expiration of the lease. The report states -

The taxation position is that - (a) The investor gets a deduction of the cost of the building spread over the term of the lease . . . (b) The owner is assessable on instalments of the value of the building at the end of the 98 year lease . . . However, the value at the end of 98 years may be expected to be negligible. Had a similar building been erected on freehold property, the investor would not have been allowed any part of the cost of the erection as an allowable deduction from his assessable income.

I should have thought that those were two of the most startling disclosures made in the Ligertwood Committee’s report. Mr. Justice Ligertwood realised that when he gave publicity to these matters it would give to anybody who was venturesome enough to take a risk on such schemes for income tax evasion the opportunity to do so.

Notwithstanding that it was announced that loopholes for evasion would be created as from the date of the publication of the report, the legislation of last November did not stop arrangements that were made under those two heads for the continued deduction throughout the terms of the leases so long as the leases were granted or arrangements were made for them to be granted before October 1964. So, we have the situation that if those arrangements had been made before October 1964 - not even before June 1961 - all those people who were in the know during suspension of the consideration of this matter and took the risk that the Treasurer’s declaration of June 1961 would not be given legislative effect were enabled to continue to have that glaring advantage so long as they had arranged their leases or had entered into agreements before October 1964. That was achieved by a subtle method of draftsmanship in the November legislation. Instead of amending the provisions that enabled these loopholes to be created, the legislation simply provided that the provisions should not apply to leases that were arranged after a certain date or which were agreed to be arranged after that date.

In June 1961 , when the Ligertwood Committee made its report. It stated -

  1. . we are informed that the adverse effect on the revenue is already very substantial, and as the practices are increasing the revenue aspects are becoming increasingly serious.

I have information that the revenue involved in the continued deductibility of these sums from the proportionate part of the yearly capital cost of buildings runs into millions of pounds. I believe that it is completely inequitable that some people should be able to have exemption for their transactions after October 1964 if those transactions were arranged before that date. In my view, that makes it all the more imperative that the legislation of last October be subjected to early review.

The next matter to which I want to refer concerns the extraordinary proposition that the legislation of last November, without any previous public announcement, wrote into the income tax legislation exemption from income tax on premiums paid on the arrangement of a lease. Half a century ago there was authority for the viewpoint that if you arranged a capital sum as the price of granting a lease, that was capital. But that viewpoint was rejected by Australian income tax legislation in 1936. As many sections of the community which have criticised the legislation of last November have pointed out, the acceptance of a premium is indistinguishable from the acceptance of rent. The viewpoint that a premium should be regarded as a revenue item has been accepted throughout the country in many cases where it has been necessary to ascertain the annual value of a property for the purpose of assessing rates. It would be quite absurd, would it not, to say, in relation to a big city building that is subject to a tenancy of ten years and which is let to the XY Company for £50,000 a year and in respect of which £100,000 is paid for the leasehold, that that sum of £100.000 should be exempt from taxation and that tax should be levied only on the rent?

But as many sections of the community have pointed out, that is the position. It is making a very great impact on the commercial community, particularly on sections such as the brewery trade. We know that breweries collect licensed houses and then, as part of their outlet for their product, let those licensed houses to licensees. Until 20 years ago it was a common practice, when giving a lease, to say to the lessee: “ You may have a five year lease upon payment of a premium of £10,000 and rent of £5,000 a year “.

Senator Henty:

– That would be a good hotel.

Senator WRIGHT:

– Those figures are insignificant when we think of what has happened in relation to some hotels. They certainly are not inflated as applied to some Tasmanian hotels. They would be of quite small magnitude when we think of some metropolitan hotels on the mainland. It is not my practice to exaggerate an argument intentionally. Really I prefer to understate the case. In relation to this matter, I am appealing to reason and equity.

Senator O’Byrne:

– A local hotel keeper in my own town was offered £100,000 a few weeks ago for a suburban hotel.

Senator WRIGHT:

– Was that for the freehold or leasehold?

Senator O’Byrne:

– That was for the freehold.

Senator WRIGHT:

– I am speaking of the premium that is paid upon the granting of a lease. The principle is the same whether the premium be £1,000 or £100,000. The accepted view in relation to municipal rating and in relation to the levying of income tax since 1936 has been to treat the premium paid as equivalent to rent. Exemption of the premium can give the brewery interests a tremendous advantage. The notion that the tenant is in a commercial position to take that advantage into account and to meet the brewery on equal terms is just illusory.

Another aspect of the matter arises in the application of this principle to New South Wales, where I believe premiums are paid lawfully in relation to some controlled premises even though the increasing of rent is forbidden. 1 am relying here not upon any legal knowledge but simply upon submissions that I have received from sections of the commercial community or which I have read. It is of the utmost absurdity that premiums paid in Sydney and elsewhere in New South Wales should be distinguishable from rent for the purposes of the income tax legislation. I submit that it is not satisfactory to the Parliament for it to be said that premiums are exempt and that the tenant knows when he agrees to pay a premium that the payment is not deductible for taxation purposes. It is for that reason that I call attention to specific anomalies introduced by the November legislation and which, in the one case, continued to allow the advantage of evasion and, in the other, opened up for the first time a new loophole for the evasion of taxation.

I now proceed to another aspect of the matter which concerns me very greatly. I refer to the degree to which the Treasurer (Mr. Harold Holt) was conscious of having introduced into the income tax legislation last November provision for the exercise of discretion by the Commissioner of Taxation as a means of resolving doubts about tax liability. The Treasurer sought to excuse his action by repeatedly reminding us that any decision that the Commissioner made in the exercise of his discretion was subject to review by a Taxation Board of Review, lt is quite alarming to think that liability to income tax should be dependent upon the discretion of the Commissioner. I submit that it is a cardinal rule of our society that, as between the Treasury and the taxpayer, the liability of the taxpayer should be governed by a rule of law which is capable of determination by an independent tribunal - a court of justice. It is because of the security and independence of the courts of justice that our system of British justice has attracted so much credit.

Early in this century we developed the notion that courts of law were old fashioned and that people could get more speedy and less expensive determination by resorting to administrative tribunals. Those tribunals operated under various procedures. Some of the tribunals were secret, some did not give the parties an opportunity to be heard, and some had trappings similar to those of the traditional courts of justice. But there came a time when the British mind was alerted to the danger of this system by the writings of Lord Hewitt, who drew attention to what he described as a new despotism. Since then the English Parliament has had a committee that has worked on the subject and which has come forward with certain safeguards relating to administrative tribunal decisions.

This is a very vexed question. 1 do not deny the utility of administrative tribunals in some respects, but when they thoroughly undermine and displace the courts of law you have a bureaucratic community that is intolerable to anybody who rejoices in freedom and independence. The Commissioner of Taxation works in his own office and there is no requirement for him to give notice to any party, even to make submissions. There is no requirement for him actually to hear any party. Although that is not true of a Board of Review, I submit that you cannot justly place upon the shoulders of all taxpayers in Australia the responsibility of taking the time and going to the expense of bringing their accountants, advisers and members of their family to Canberra, together with their books of account, to prove to the Commissioner the reasonableness of this or that. I mention the reasonableness of items in superannuation schemes, the reasonableness of provisions that apply the 10s. in th £1 rule to family trusts; the questions that affect the decision of the Commissioner as to whether or not a partner, by virtue not of a document but of the way in which the partnership is operated, has real control over his income. In all those cases, if the Commissioner does not exercise his discretion favourably to the taxpayer there is a penalty rate of tax amounting to 10s. in the £1. That, of itself, should be sufficient to remind the Senate that there is no validity whatever in the argument that this discretion should go to the Commissioner in favour of exemption. To impose a penalty rate and then give an officer discretion to exempt is the worst form of arbitrary taxation. It is reminiscent of the Star Chamber.

I raise this matter, not in the hope that I will get any solution to it during today’s debate but in order to keep it alive, because it is my purpose to invite the Senate, at an early date, to constitute a committee of its own members - and there are in the chamber those who will be quite competent to maintain a continuing interest in this legislation - to see that there are proper provisions to maintain equity in the income tax legislation, because there is nothing so distasteful, in regard to revenue and taxation as to find that A can be exempted by the discretion of an official while B can have the full blast of 10s. in the £1 levied on his family trust, partnership or superannuation fund. I speak with fortification, because not only have various sections of the community spoken in this vein but also I saw, with great pleasure, a reference in this morning’s “ Sydney Morning Herald “ to a gathering of the Associated Chambers of Commerce or some other commercial organisation having its annual convention in Brisbane, where Mr. Orr, I think, very cogently put forward a proper principle as the basis of taxation. I wish the Senate to consider what the Editor of the “Australian Law Journal” said in the issue of 31st March 1965, in reference to the November taxation law amendment. He said -

The result is the most flagrant possible rejection of the proper principles for framing taxation measures.

Then, after referring to the availability of an appeal to a Board of Review, he said -

This provides little satisfaction for anyone. Not for the Boards because their course, also, is uncharted and their lists are already overfull;-

I am informed that the average waiting time to appear before these Boards of Review today is two years. He continued - not to the Commissioner because he will not be able to follow a consistent policy, and certainly not to the taxpayer because it will still be all a lottery so far as he is concerned. The amendments in question are bad in principle and unsatisfactory as an expedient and should be reviewed immediately.

It is in that sense that I rise in my place today, almost at the end of this session when it is apparent that no amendment of the legislation is to be put before us at this time by the Government. I do so with a view to having a continuing interest maintained in this, which I believe is a glaring challenge to everybody who, believing in equitable principles of taxation, wishes to eradicate from the taxation system fraud, corruption and any injustice to taxpayers.

Senator MCCLELLAND:
New South Wales

– I take advantage of the debate on this Bill to raise a number of important questions affecting the lives and wellbeing of Australians generally. Before dealing with these aspects might I say that last night we had the privilege of listening to two maiden speeches from senators very recently arrived in this chamber. One is Senator Webster, from Victoria, the other is Senator Sim from Western Australia. Their speeches were indeed interesting and stimulating, and although I and my colleagues on this side of the House might disagree with their political persuasions we congratulate them on their very fine speeches and on the obvious sincerity of their words. There is no doubt that both Senator Webster and Senator Sim will contribute much to the deliberations which take place in this chamber. They have taken the places of two men who were nationally prominent in the political life of this nation, the late Senator Harrie Wade and the late Senator Vincent. I am sure that each of these gentlemen who spoke last night for the first time in this chamber will worthily emulate his predecessor in the political life of Australia.

Senator Wright has posed some interesting matters for the attention of the Executive and the attention of this Parliament. 1 think it would be well for the Parliament to give the utmost consideration to the establishment of a select committee to inquire into and report upon the taxation laws. If other honorable senators have the same experience as I have in the months of June, July and August they will know that one is constantly approached in that period about this, that or the other problem relating to the taxation laws and taxation problems and anomalies. As Senator Wright said, the act to which he referred was passed in the closing hours of last session and could well have received greater attention from all members of this Parliament than it did. Senator Wright spoke principally of the taxation laws as they affect companies, but they should also be looked at so far as they affect the ordinary people of the Australian community.

I ask, for instance, whether the deductions for wives and children are sufficiently high, having regard to the cost of living today. Bearing in mind the increased medical fees and heavy dental expenditure incurred by Australian workers who care for themselves, their wives and their families are deductions for medical and dental expenses sufficiently high? Having regard to the great demand in Australia todav for increased education, is the allowance for education expenses sufficiently high? Another query is: Why should the business man be allowed to have a large expense allowance while the worker is not allowed to claim deductions for fares paid in travelling to and from work? These are only some of the things which could well be the subject of an investigation by this Parliament. Indeed, while I am speaking on this aspect of taxation I might mention that just recently I gleaned the information that income tax forms in New Zealand have been cut down from 3,000 to 500 words and that the Commissioner of Inland Revenue in New Zealand - the equivalent of our Commissioner of Taxation - claims that these forms are the simplest tax forms in the world. I understand that there are small red forms for wage and salary earners or superannuitants with no outside income above £30; green forms for the same class of people who wish to claim exemption; black forms for those with outside income over £30; and a special simplified brown form for elderly or disabled people.

This is something which the Parliament could well examine. The Commissioner of Inland Revenue lays down an important principle. He says: “If we can give a taxpayer a rebate, we give it “. He says, further, that his staff is encouraged to make liberal interpretations of taxation laws and that, so far as New Zealand is concerned, the old idea that the taxpayer is always wrong is out. Senator Wright has, to his credit, raised a very important matter. I think it would be well for the Government to consider the establishment of a Senate select committee to inquire into taxation generally.

I should like to bring to the attention of the Senate a large number of very important bills that are being pushed through the Parliament in the last week of the present sessional period. From the point of view of parliamentary procedure and a healthy democratic society, this method of considering legislation is just not good enough. Criticism of the Government in this regard does not lie only with the members of the Opposition in this place and in another place. A reading of the “ Hansard “ report of proceedings of the House of Representatives shows that the honorable member for Mackellar (Mr. Wentworth) and the honorable member for Lyne (Mr. Lucock) are only two who have voiced criticism in another place in relation to this very important matter. In this chamber, Senator Wright himself voted with the Opposition against a Government proposal that it be allowed to introduce new business after 10.30 p.m. I have heard it said that some 30 bills are to be considered and debated in the course of the next few days. Many of them are important legislative proposals.

One need instance only the proposed amendments to the Broadcasting and Television Act and the Commonwealth Electoral Act, as well as the States Grants (Petroleum Products) Bill and the States Grants (Science Laboratories) Bill. These are only some of the important matters that are to be debated; there are many others. One cannot do justice to legislation by a mere cursory examination of these matters. 1 plead with the Executive, in the interests of this Parliament and this nation, to prepare the legislative programmes with greater particularity in future sessions of the Parliament and not to push bills through as if we were merely feeding material into a sausage machine. Let us treat every piece of legisla tion as an important and integral part of the development of Australia and a healthy democratic society. Let the Government see that we are given time to discuss and consider fully every piece of legislation that is presented.

I wish to direct the attention of the Senate also to the delays involved in the answering by Ministers of questions that are placed on the notice paper. There are some 25 members of the Ministry at present, and only five of them are in this chamber. Naturally, one cannot expect the five Ministers in this chamber to be fully aware of the ramifications of government associated with portfolios the holders of which they represent in this chamber. While at question time one might wish to direct a question on housing or national development, for instance, one appreciates that the answer is not readily available from the Minister in this chamber who represents the appropriate Minister. Therefore, for the sake of expedition, one places such questions on the notice paper, but the mere placing of a question on the notice paper should not be made an excuse for any Minister to ignore the right to an answer.

On the notice paper for today, I see that there is a question dated 23rd March, another dated 24th March, and a number dated 25th March and 31st March. Some two months ago those questions were placed on the notice paper. I suggest that the answers to some of them could be given with comparative ease, but now in the closing days of this sessional period questions placed on the notice paper early in the period remain ignored. Today I received from the Minister for Defence (Senator Paltridge) an answer to a question I placed on the notice paper on 25th March, with reference to the number of persons who had applied to join the Services in the last calendar year, 1964. The answer shows that 11,267 applied to join the Army, 7,854 applied to join the Royal Australian Navy and 8,016 applied to join the Air Force. Of those applicants, 2,950 were accepted by the Army, 2,222 were accepted by the Navy and 2,207 were accepted by the Air Force. On educational grounds, 1,301 were rejected by the Army, 2,266 were rejected by the Navy, and 570 were rejected by the Air Force. On medical grounds, 1,511 were rejected by the Army, 795 were rejected by the Navy, and 997 were rejected by the

Air Force. These figures make one wonder what really goes on in relation to recruitment for the armed forces.

  1. do not wish to labour this aspect at this stage. What I wish to point out is that the request for this information was placed on the notice paper on 25th March, and the answer was not supplied till 19th May. 1 imagine that this information would be obtainable fairly easily from the records of the Department of Defence and it could well have been in possession of the Parliament when consideration was being given a week or two ago to amendments of the Defence Act. Question time and questions on notice are a most important part of parliamentary procedure. Back bench members of the Parliament are entitled to greater consideration in the receipt of early answers to questions on important matters.

I wish to make some reference to the failure of the Government to establish the Commonwealth Bureau of Roads. Honorable senators will remember that on 15th September last year the Government introduced into this chamber a bill styled Commonwealth Bureau of Roads Bill 1964. That was some eight months ago. We were told at that time that the nation would benefit from a thoroughgoing survey and appraisal of the existing road system and of foreseeable road requirements.

The Minister also said when the Bill was introduced that transport costs make up a substantial part of total production costs and that road transport now represents the largest element in the land carriage of goods and people in this nation. Expenditure on roads comprises approximately one quarter of all public works expenditure in Australia and, naturally, its impact on economic conditions is very significant.

With these things in view, and because of the great and growing responsibilities of the Commonwealth in providing finance for the construction and maintenance of roads, the Government decided that a Commonwealth Bureau of Roads should be established. As I have said, legislation was introduced into this Parliament on 15th September 1 964. On 1 2th May, a few days ago, I was amazed to receive a reply from the Minister for Shipping and Transport to a question relating to this matter which 1 had placed on the notice paper at the beginning of this sessional period. The reply was to the effect that while the Government is eager to have the proposed Bureau operating, at the present time it is engaged in searching for a suitable person to appoint as chairman and that as soon as this appointment is made it will proceed without delay to establish the Bureau.

The legislation was introduced eight months ago; the legislation was enacted eight months ago and now, eight months after the legislation was brought down, considered and debated we have the amazing admission by the Minister for Shipping and Transport that the Government is still searching for a suitable person to occupy the position of chairman of the proposed Bureau. Surely there are sufficient people in this country with the necessary qualifications to administer this important responsibility. For instance, there are prominent citizens, reputable citizens and capable citizens associated with automobile organisations throughout Australia. There are expert officers available in the transport departments of the States and no doubt there are suitable people available within the Commonwealth Public Service. I am sure that if this matter were viewed as one of national importance - perhaps of national emergency - a suitable appointee would soon be found. In his reply to me the Minister said that as soon as the appointment was made the Government would proceed without delay to establish the Bureau, but when one appreciates that the organisation contemplated under the legislation consists of a chairman and two part time members one can see that not much is really entailed in its establishment.

The Treasurer (Mr. Harold Holt) also had something to say about this matter. At the Premiers’ Conference on 12th March 1964 the Treasurer is reported as having said -

We intend to push on with its early establishment -

He was referring to the Commonwealth Bureau of Roads - because we feel (hat it has a big and urgent job to do and the sooner it gets launched on this task the better it will be.

One would gain the impression from that statement that the Government appreciated that the problem of roads was of the highest priority, not only from the developmental point of view, not only from the point of view of Australia’s gross national product, to which we often hear economists refer, but also from the very important and significant aspect of defence.

Bearing in mind that 75 per cent, of all freight and passenger traffic in the nation is carried by road transport and that the estimated loss to the nation caused by the lack of roads and by hold ups as a result of traffic congestion is about £1 million a day, I decided to place my question on the notice paper as I wondered what the Government was doing about this matter. I have already read the Minister’s reply to my question. That certainly indicates that the Government is acting either with a great deal of lethargy or without any feeling of responsibility. I remind Ministers and Government supporters that this type of inertia, this type of lethargy, this type of inactivity are eventually responsible for the downfall of governments. The problems of roads and of transport generally have to be tackled, and tackled effectively, on a national basis. It certainly convinces no-one, least of all those involved in the industry, for the Minister to say that the Government is searching for a suitable person to appoint as chairman.

On the aspect of transport generally, I was rather amused last Monday night to see a photograph in one of the Sydney metropolitian dailies of the new Minister for Transport in New South Wales boarding a Government bus at Central railway station in Sydney to travel to his office in Martin Place. This is good public relations and for the time being may go over well with the ordinary member of the Australian community; but the mere catching of a bus and travelling with ordinary citizens certainly will not overcome the enormous transport problems that exist not only in New South Wales but also throughout Australia.

Senator Branson:

– But it is the best way to learn first hand, is it not?

Senator MCCLELLAND:

– It may be the best way to learn first hand, but he has been travelling in this way for very many years and the fact that he travels in this way for one day, now that he is a Minister, would not change the view that he has formed during the time he was an ordinary member of tha community.

The one thing needed to overcome this problem is finance. I am sure that before transport hold ups are removed, before there are enough buses and trains for all travellers to be accommodated comfortably and before there are enough vehicles available for the transportation, at a reasonable price, of all of our freight, the Commonwealth Government will have to give assistance to the States. In the first place, there is the petrol tax collected by the Commonwealth. According to figures issued by the Australian Automobile Association last year, some £20 million of the total annual petrol tax collection under the provisions of the Commonwealth Aid Roads Act is retained in Federal Consolidated Revenue. This amount should be made available to the States as early as possible for use in road construction and maintenance.

Then there is the large number of Commonwealth vehicles operating on roads within the States, and which have been constructed by the States, in respect of which the Commonwealth does not pay the States any motor registration fees. In an answer provided on 28th April, the Minister for the Interior (Mr. Anthony) stated that the number of Commonwealth owned vehicles operating within New South Wales for which the Commonwealth does not pay registration fees to the States is 9,952; in Victoria it is 6,947; in Queensland 3,714; in South Australia 5,300; in Western Australia 2,015; and in Tasmania 1,034. In New South Wales, the State I have the honour to represent in this Parliament, almost 10,000 Commonwealth owned vehicles are operating on roads constructed by the State authorities and for those vehicles the Commonwealth pays no registration fees. If the registration fee for each vehicle were about £20, the additional registration fees which could be made available to the State for road construction would be about £200,000.

I turn now to consider pay-roll tax levied on State instrumentalities. In this respect the Commonwealth has collected from the Railways Departments in each of the States pay-roll tax-

Senator Wright:

– Was not that item the subject of specific bargaining when the last reimbursement agreement was made with the States?

Senator MCCLELLAND:

– I am not aware whether that is so. The Minister has said only that the Commonwealth does not pay any registration fees for its motor vehicles to the States. If what the honorable senator is suggesting is correct, surely the Minister would have said so in his reply to my question.

Senator Henty:

– He would expect the honorable senator to know that.

Senator MCCLELLAND:

– The Government expects the Opposition to know a lot of things, but when we seek information, the Government does not want to give it. The argument cuts both ways. Naturally, pay-roll tax is not paid by the Commonwealth Railways. In the last four financial years, over £5 million in pay-roll tax was paid by the New South Wales Department of Railways. This large sum could well be made available to the New South Wales Railways Department to acquire rolling stock and for the greater development of the railways throughout the State. The same is true of the Railways Departments in all States.

Military vehicles also operate within the boundaries of the States. Although these vehicles use the State highways, nothing is paid on their behalf for the maintenance of those highways. In the decade from now to 1975 enormous growth is expected but in respect of roads and transport generally the Commonwealth Government is only scratching the surface of the problems confronting the nation. That is particularly true in the general field of communications. In an excellent publication of the National Association of Australian State Road Authorities in 1963 it was estimated that within the next decade the population will increase by about 2i million, the number of vehicles using the roads will increase by about 2,100,000, fuel consumption will increase correspondingly and the number of vehicle miles travelled will rise from 26i million to about 50 million. I urge the Government to devote close attention to this problem when preparing the next Budget. If the problems which will arise as the result of the increases I have stated are not faced up to now and tackled adequately on a national basis, rather than on the basis of a bit here and a bit there, they will become insurmountable.

Senator AYLETT:
Tasmania

– I wish to commence what may be my last speech here by congratulating two new senators - Senator Webster and Senator Sim - on their maiden speeches. I do not doubt for a moment that my colleagues took particular notice of their potential. I am sure that the honorable senators will be an acquisition to the Government’s ranks.

Usually when I rise to speak it is in the interests of justice for a section of the community. I shall refer to three subjects which I claim are vital in the interests of justice and the well being of Australian citizens. First I shall refer to aerodromes, secondly to payments to chiropractors as taxation deductions, and thirdly to the unorthodox tactics of barristers and solicitors, present company excluded.

I took particular notice of the recent statement on aerodromes by the Minister for Civil Aviation (Senator Henty). He said that approximately £32 million is to be spent on aerodromes at Melbourne and Sydney. I wish to refer to the aerodromes at Canberra and Coolangatta which could aptly be described, because of the airport buildings, as two dog kennels. Canberra, as the National Capital, is visited by dignitaries from all parts of the world. Most of them receive their first impression of Canberra at the aerodrome. If a visitor from overseas arrives at the Canberra airport when Parliament has risen and the airport facilities are overcrowded, he does not receive a very good impression. The situation is similar at Coolangatta, which is the busiest, or one of the busiest, tourist aerodromes in Australia. It serves the Gold Coast, which possibly is the greatest tourist resort in Australia. The population of the City of Gold Coast is comparable with that of Canberra; it is greater than that of Launceston, where the Minister lives.

It is well known that every taxpayer in Australia pays into Consolidated Revenue for the support of aerodromes at the capital cities. Each taxpayer must pay into Consolidated Revenue his share towards the cost of aerodromes at capital cities. If I remember correctly, the Minister stated that the construction of a new aerodrome at Canberra will cost between £5 million and £6 million. When it is built, it will not be before time. The Minister for Civil Aviation has been very reticent about what is proposed for the Coolangatta aerodrome but he has given me a little information. In a private conversation with me the Minister said he did not know where the people of the Gold Coast got the idea that the Department would bring the Coolangatta aerodrome up to Electra standard. However, in answer to a question I asked upon notice the Minister stated -

The proposed development at Canberra is concerned with the terminal building and terminal area. The proposed development at Coolangatta is the lengthening of the runway to take aircraft such as the Electra and the domestic jets. 1 take it, therefore, that the airport will be developed to take Electra aircraft. But there was nothing in the Minister’s reply about buildings at the Coolangatta airport. As taxpayers, we are helping to pay for the development of aerodromes throughout Australia. If they are not paying their way we have to meet the expense through taxation. I object strongly to the Government’s policy in trying to force the Gold Coast City Council to take over the responsibility for the Coolangatta airport. The Gold Coast is a comparatively small part of the area served by the Coolangatta airport. The airport also serves the north eastern part of New South Wales and the south eastern districts of Queensland. Areas controlled by councils other than the Gold Coast City Council are equally served by Coolangatta airport.

As I have said, the Minister is reticent about this, but apparently he is trying to force responsibility for the Coolangatta airport onto the Gold Coast City Council. Every taxpayer on the Gold Coast pays into Consolidated Revenue, from which funds are found to build and maintain airports throughout Australia, including those in the capital cities. The people on the Gold Coast pay their share towards these costs. But if the Gold Coast City Council has to take over the Coolangatta airport and pay all the expenses connected with it, inevitably the time will arrive when the Gold Coast City Council will have to strike a special rate on its ratepayers. As a ratepayer and a taxpayer I strongly object to paying twice for the one aerodrome. This is unjust and completely out of balance. It is undemocratic.

I can only surmise, from what I can glean from aldermen and others on the Gold Coast who should know, that if the Government is successful in persuading or forcing the Gold Coast City Council to take over the airport the Council will be responsible for any extensions. The present terminal building can be described only as a dog kennel. Once we had fair seating accommodation there, but some official of the Department of Civil Aviation took away the seats and replaced them with half the seating accommodation that had been there before. Once when I was sick I had either to sit on the floor or fall down. I have seen sick women and crippled women in the same plight. These amenities in this dog kennel of a building at Coolangatta airport are still the same.

In this jet age no-one can tell what the requirements will be in ten years time along the Gold Coast, which is developing so quickly. On the basis of the developments that have taken place over the last ten years the City of Gold Coast will require airport facilities equal to those of any city of its size in Australia. We come back to this point: If the Coolangatta airport is to be developed, will the Commonwealth Government be responsible or will the Gold Coast City Council have to find the cash? The City Council would find the task impossible. It would have to go on the loan market to find the money. If it had to pay for the upkeep of the airport as well it would still have to go on the loan market, and to meet the resulting charges it would have to strike a special rate.

I ask the Minister for Civil Aviation: What is the difference between the Launceston airport and the Coolangatta airport? I know that the Launceston airport is important, as it serves the City of Launceston and a large area around it. Millions of pounds have been spent on the Launceston airport and another million is to be spent. Is the Minister asking the Launceston City Council - Senator Turnbull is the Mayor of Launceston - to take over the Launceston airport? Of course he is not. Is the Government asking the city council of Melbourne, Sydney, Brisbane or any other place to take over the local airport? Of course not. Then why is the Minister trying to force the Gold Coast City Council to take over the Coolangatta airport which, if not very important today, will become important in the future?

Some say the Gold Coast City Council will get the landing fees. I know something about landing fees because I was a supporter of the Government which imposed them and we know that they were never paid. This proposal is not right, fair or just. Can the Minister refute this or has he put something different before the Gold Coast City Council? If he has put a proposition to the City Council and suggested that it can make money from it, why has he not put a similar proposition before the Launceston City Council or the civic authorities of Melbourne. Brisbane and Sydney? Why not let them take over their airports? If such a proposition is not payable or logical as applied to Sydney and Melbourne or any other place, why is it a logical proposition for the Gold Coast City Council to take over the Coolangatta airport? On the information I have now, I can see no justification for the Gold Coast City Council bending to the pressure that has been put on it by the Government. lt is said by prominent citizens on the Gold Coast that if they do not accept the Government’s proposition no more money will be spent on the airport. I have told them that that is utter nonsense, lt would mean blackmailing the Gold Coast City Council. Personally I do not think this is the case. 1 think the people have the wrong slant on this matter. I do not think any government worth its salt would see an airport like the Coolangatta airport developed to its present stage and, when it needs further development, wipe it off because the City Council v/ould not take it over. If the City Council does take over the airport and run it, will the Department of Civil Aviation leave ils engineers and other qualified men there? The Gold Coast City Council has no engineers for this work. The engineers it has try to make water run uphill. When they find it will not run uphill they have to pull up the kerbs and put them down again. That is the extent of the knowledge of the Gold Coast City Council engineers. We would require a better service for an airport where aircraft are operating and lives arc at stake.

I ask the Government to treat the City of Gold Coast as it treats other cities throughout Australia and to give the same consideration to the ratepayers and taxpayers there as it does to the ratepayers and taxpayers in other parts of Australia. Unless the Minister can come forward with some logical proposition he should also expect the city councils and shire councils ali over Australia to take over local aerodromes. If it is fair for one it is fair for the other. There is not any doubt that there is a catch in this somewhere. Therefore, because I am suspicious of the catch, I wish to expose it and express my views on it before such a thing happens.

The next question with which 1 would like to deal in more detail again relates to a matter where taxpayers are hit because of the present legislation and because certain qualified men in this country cannot receive proper recognition from the present Government, and have never received this recognition from any past government, for the services they are rendering. I refer to the work of chiropractors. I do not think there is any doubt that their work is evident in the Senate because 1 think all honorable senators have seen me from time to time trying to get in and out of this chamber sometimes on one leg and sometimes hobbling on the other leg. I have writhed in pain in my seat for quite a few years. 1 went to members of the medical profession as late as last August and I paid them over £50 to try to find a way to ease my pain. The last information the medical profession could give me was that the pain would occur from time to time but that I would have to learn to live with it. The medical practitioners said that when the pain became more intense they could help to ease it. I was not satisfied with that diagnosis because once before my life had been given away by the medical profession and I was told that 1 was dying. I refused to die. I do not always agree with the medical profession and co-operate with the members of it especially when they leave me to die and I am not ready to die. I did not cooperate with them on this occasion although I generally do. T thought I would seek further advice.

In making these remarks about the medical profession, I do not want to include members of the medical profession in Canberra because I have found in this city some of the highest qualified doctors I have known anywhere. I have every faith in them as far as their knowledge goes. But in coming to the subject of chiropractors, I am dealing with something entirely different again. It is a well known fact that members of the medical profession are not in love with chiropractors and do not work hand in hand with them. I can receive deductions from my taxation for the fees that I paid to members of the medical profession to try to put me on my feet so that I could make a speech whether honorable senators liked it or not. Some honorable senators might like this speech; others might not. However, I cannot receive any tax deduction for fees that I pay to the very men who have put me back on my feet and relieved me of years and years of suffering and, indeed, untold pain. I do not think that is quite fair. The position is that if members of the medical profession treat me I can receive a tax deduction in respect of their fee, but I cannot receive a deduction in respect of payments I make to chiropractors for treatment.

Chiropractors are doing a great job throughout Australia for the general public. But chiropractors are like members of the medical profession. Some are very good, and some are not so good. The reason why some chiropractors are not so good is that there is nowhere in Australia where they can be trained. I suppose the reason why some members of the medical profession in Australia are not so good is that they are not keen to keep themselves up to date and to put their minds to their work. However, what some members of the medical profession have to say about chiropractors might apply to some of the members of the medical profession themselves much more aptly than it could apply to chiropractors. The chiropractor is at a definite disadvantage with respect to some medical practitioners.

Senator Dittmer:

– Is the honorable senator speaking of trained chiropractors?

Senator AYLETT:

– Members of the medical profession can bury their mistakes. A chiropractor can never bury his mistake. While a doctor can do so, a chiropractor cannot bury his mistake.

Senator Dittmer:

– What about doctors like myself who do not make mistakes and so do not have to bury their mistakes?

Senator AYLETT:

– Present company excluded.

A royal commission was set up in Western Australia in the latter part of 1959 or the early part of i960 to inquire into the provisions of the Natural Therapists Bill, which related to chiropractors. That royal commission took a great deal of evidence and went into great detail regarding this subject. I have the report of the royal commission here. It may be worth while for some honorable senators to hear sections of this report. The royal commission consisted of the Honorable J. T. Tonkin, Dr.

  1. G. Henn, Mr. W. A. Manning, Mr. J. J. Brady and the proposer of the motion for the appointment of this commission, Mr.
  2. N. Guthrie. The royal commission took extensive evidence. There are pages and pages of it. The first thing that the royal commission had to establish was the definition. of “chiropractic”. The definition given was - “ Chiropractic “ means the system of palpating and adjusting the articulations of the human spinal column by hand only, for the relief of nerve pressure.

Let me say wilh all respect to the medical profession, that I have been totally paralysed, with the exception of my head, for some considerable time and have lain in bed that way. But no medical officer ever tried to find out whether there was anything wrong with my spine or any trouble with the joints of my spine that might have caused a cutting off of the nervous system resulting in my paralysis. I agree that a lumbar puncture was taken to see whether I had any diseased fluid in my spine. But I was clear there. Nevertheless, no medical officer tried to see whether anything else was displaced in my spine. Therefore, my trouble could have been caused through a displacement in my spine. It could have been caused by other things. However, I have recovered from my complaint gradually, although I was never completely over it until quite recently. The royal commission, in its report, stated what it found in connection with chiropractors. At page 12 I find the following passage in regard to chiropractors -

The evidence quite clearly discloses that to a considerable extent the types of injuries and ailments which are treated by chiropractors are also treated by orthopae lie surgeons and physiotherapists working together. It is the conclusion of the Commission, however, that it would be wrong to assume that an orthopaedic surgeon solely undertakes all the types of treatment and manipulation undertaken by a chiropractor.

Therefore, orthopaedic surgeons, other medical men and physiotherapists do not undertake these other treatments which are left to the chiropractor. The opportunity is left for the chiropractor to come in and to do the job which is left by the medical profession.

I find that the royal commission also reported -

There was considerable evidence that a large number of the public does avail itself of the services of chiropractors for spinal injuries and complaints; and it seemed reasonably clear that, in the main, the public received satisfactory results from such services. It is significant that the Medical Board has never seen fit to prosecute a chiropractor who purely practices the art of chiropractic.

The report states that there was only one case of a chiropractor having been reported by a medical man, and that there was no prosecution in that case. The royal commission also found that at no time did the medical profession complain about the work of chiropractors. The report states, on the other hand, that chiropractors are not in accord with the medical profession except in rare occasions. It is only on rare occasions that a medical man will suggest that a patient see a chiropractor.

I contend that when a medical man suggests that a patient should see a chiropractor the patient should be able to claim the fees paid to the chiropractor as deductions from income tax. The report of the royal commission states -

There was evidence on one of the Board’s files of a complaint against one chiropractor; and the complaint was made by a legally qualified medical practitioner. But it referred to treatment beyond the normal scope of chiropractic. It is noteworthy, however, that the Board does not appear to have followed the matter up.

The royal commission had other interesting comments to make in support of chiropractors. For instance, it said -

On the evidence given to the Commission it would appear that harm, likely to be suffered by the patients from the activities of chiropractors, is comparatively slight. However, it must be observed (as will appear later in this report) that there are two classes of chiropractors practising in Western Australia.

That is a point which I wish to emphasise. It is probably correct to say that there are two classes of chiropractors practising in all States of Australia. The report continued -

In this particular chapter the Commission is only dealing with the reasonably qualified chiropractors and not with persons (who may have little or no training) who assert that they are qualified to practice the art of chiropractic.

There is no place in Australia where a person may be trained as a chiropractor. At no university is there a professor who is qualified to teach the skill or the art of chiropractic. If there were, members of the medical profession would be able to acquire a full knowledge of the subject and there would be no necessity to have chiropractors. But if the medical profession is not prepared to go ins the details of this matter there is wide cope for chiropractors to endeavour to help people suffering from certain disabilities. There are in Australia chiropractors who have gone to the United States of America at their own expense and taken a course in chiropractic. I may say that the United States is the nearest country to Australia where such a course may be taken. Those who have gone there and have returned to Australia have been repaid tenfold, not only financially but also by the gratitude that has been expressed by the patients they have treated.

In Australia, the health laws vary from State to State. It is difficult for a chiropractor to manipulate joints into place if he is not certain of the location of the displacement. In some States chiropractors are not allowed to take X-ray pictures. They must rely on guesswork or their fingers to locate the site of the dislocation, and therefore the patient is likely to suffer. A chiropractor with very little or no experience certainly could knock a patient about, and probably his treatment would be harmful. There are some chiropractors who are in this category, but there are also others who have a great knowledge of their work.

In New South Wales chiropractors are allowed to take X-rays, but that is not so in Queensland. The chiropractors in that State must rely on guesswork if they have no magic in their fingers. If chiropractors were permitted to take X-ray pictures that would help considerably in their work. I was fortunate enough to go to a good chiropractor. He said, “ I want to take an X-ray before I touch you.” After he took the X-ray he was able to show me what was wrong and what the correct position of the bones should be. He went to work on me and that is why I am able to make this speech today. Had I not gone to the chiropractor I would not now be capable either physically or mentally of standing here and making this speech. Therefore, I have a lot for which to thank chiropractors.

Something needs to be done in Australia to provide an opportunity for persons to train as chiropractors. We also need to sift the chaff from the oats, as it were, because there are good chiropractors and there are others who are not so good, just as there are good medical practitioners and not s° good ones. The chiropractors who are not as good as they might be should be sorted out. lt is not possible to remove medical practitioners who are not good because they have their degrees, but chiropractors have no such degrees to fall back on. There are in Australia hundreds of thousands of people suffering from displaced joints who do not know that they could be cured by chiropractors. If you go to the surgery of a well known chiropractor, Mr. President, you find people waiting there from the time that the surgery opens in the morning until it closes at night. I doubt whether you would find a patient who did not speak in the highest terms of the results that the chiropractor had been able to achieve in his case.

I am not alone in speaking highly of the work of chiropractors. The royal commission in Western Australia also did so in its findings. The Commissioner of Public Health in Western Australia referred to them in very favourable terms. Therefore, it is not necessary to rely only on my word. The royal commission in Western Australia has examined every possible avenue to evaluate the work of chiropractors. The results of their investigations show that this work is of great benefit to the general public. They are of the opinion that chiropractors should be registered. They point to the lack of facilities in Australia for training in this field. Chiropractors are not permitted to advertise in the newspapers. In fact, their channels for advertising are restricted. For the most part they must rely on recommendations passed by one patient to another. Surely, since it is legal for a man to practise as a chiropractor and to operate on patients with his hands, it is reasonable to suggest that the Government should allow the patients to deduct from their income tax the fees paid to the chiropractors. After all, the work of the chiropractors is saving the Government a considerable amount of money. Probably I would still have lived for another 10 or 20 years and could have continued to draw expensive drugs from the chemists’ shops and the Government would have paid for them. I could have continued going to the doctors from time to time and could have gone into hospital. I could have drawn on the hospital and medical benefit funds and again the Government would have had to pay. Thousands of people in Australia are doing that. It is costing the Government millions of pounds.

These gentlemen to whom I have referred and who are properly qualified could save the Government millions of pounds, but the Government will not allow a patient to deduct the miserable few pounds that he spends on treatment to make him well. I can see no justice in the Government’s attitude. Any one of us could be placed in the position of having to pay doctors hundreds of pounds and of having to go into hospital for 1 3 weeks, and the Government would have to pay a subsidy. But still, I repeat, the Government will not allow a patient to deduct any fees he pays to a chiropractor. Many people are saved the expense of going to doctors and into hospital as a result of the treatment of chiropractors, yet chiropractors are not recognised by the Government for taxation purposes. The Government is quite wrong in not allowing their fees to be deducted for taxation purposes.

The Government is wrong, moreover, in not making available in Australia facilities for medical practitioners who so desire to gain a knowledge of this form of treatment or for prospective chiropractors to obtain proper training just as they can in America. Even if it cost a few hundreds of thousands of pounds - it would cost that - to bring out qualified men from America or other parts of the world and to establish them in universities or elsewhere to train others, the Government would be saved millions of pounds in the long run. Moreover, afflicted members of the general public would be provided with relief from untold suffering. Sufferers of arthritis go to medical practitioners and are told: “ There is nothing more we can do at this stage. We will ease the pain when you come back to us.” Now when I am resting I do not suffer any pain. Previously I was suffering untold pain, and probably I would be suffering unbearable pain today if it were not for the treatment I have received from chiropractors. In all fairness and justice the Government should recognise the fact that in Australia there are such people who are saving it hundreds of thousands of pounds and that, if there were sufficient of these people to meet the needs of the community, it would be saved millions of pounds. Much more relief could be afforded to those who suffer if the Government were to do something on the lines I have suggested.

To do what I have suggested would serve another purpose at the same time; it would sort out the chaff from the oats amongst the chiropractors who are already practising. Quite frankly, some are not qualified to practise. I went to one who definitely was not qualified to practise. Another gentleman to whom I went - Mr. O. J. Martin of Martin Place in Sydney - is doing a great job. He is the man who brought me back to health and put me on my feet. From the time he opens his surgery in the morning until he closes at night there is a string of people waiting for treatment. Any one of those people could tell of the great benefit he has derived from his treatment. I believe that I have made out a good case for the deduction of chiropractors’ fees for taxation purposes. Those fees are not liable to deduction at the present time. When I say that they are not liable, I am using the words of the Treasurer in his reply to a question that I asked him.

There is one other matter which, in the interests of the general public, I should like to mention. I refer to the roguery, thieving and robbery that is practised by some members of the legal profession, particularly in Queensland. I could name these people, and I can prove my case. If honorable senators liked to bear with me, I could name them; but I shall not do so because somebody might have me called before the bar of the Senate. I could even present a prima facie case of conspiracy amongst them to defraud their clients. I know that that is a very grave statement to make. Nevertheless, I speak in the interests of justice. Some members of the legal profession set themselves out openly to rob their clients. I have noted some objections to the showing of the Ned Kelly film. I think it would be a great thing if it were taken up to Queensland and shown. It would show certain members of the legal profession in Queensland what a gentleman Ned Kelly was compared with them. That is a statement of fact.

If honorable senators want me to name these men, I will name them. I do not include all members of the legal profession, because some are most outstanding and achieve what they set out to achieve. I know of one honorable senator who is most outstanding in this sphere. He sits on the Government side. I am positive that if he went into a court and conducted a case, everything he had would be put into it. He would not deliberately give the wrong advice and thieve. When asked to put in a defence he would not put up a brummy defence or put up no defence at all. He would not deliberately tell a client that he had a good case for £1,000 damages and finish up, after he had won on a highly technical point, by not claiming damages. That happened in one case. The judge asked: “ What damages are you claiming? “ The lawyer said: “ None “. The judge then awarded some of the costs against the plaintiff. Instead of getting, say, £1,000 in damages he got a bill for about £300. I know of another case where the wrong advice was given. A brummy defence was put in purposely to enable a case for costs to be worked up. Ned Kelly would be a gentleman beside a man who did that sort of thing.

Let me give the Senate another illustration of this sort of thing. Thi’s case involves the mere transfer of a property. The purchaser wanted his solicitor to handle the business for him and the sellers wanted their solicitor to watch their interests. The purchaser agreed to pay all expenses. The purchaser’s solicitor did everything; he paid the stamp duty, did all the transferring and passed over the cheque. All that the other side did was to get the transfer signed. When the purchaser received the account, including the transfer fee, stamp duty and so on, it amounted to something in the vicinity of £25 or £26, and when the bill for the watching brief on behalf of the sellers was received it was for a similar amount. This man asked the other side’s solicitor to itemise his account. He did so, and put it up to £50-odd. The purchaser did not like this and went to see the vendors about the high fee of the solicitor they had engaged to watch their interests, but found that the vendors had also received a bill, which was for 17 guineas. The purchaser then asked the sellers to give him a receipt in full for the payment of the solicitor who had watched their interests. They agreed and, on receiving a cheque from the purchaser, gave him a receipt for 17 guineas. The legal firm is still waiting for its £50-odd. If that sort of thing is not daylight robbery I do not know what is. I could give the names of the parties concerned in this case, lt is nothing less than daylight robbery to charge both parties for the same work - get 17 guineas from the sellers for watching their interests and at the same time try to get £50-odd from the purchaser for watching the same interests. What is the difference between robbing someone in that way and robbing him at gunpoint?

Senator Wright:

– Has the honorable senator referred the matter to the disciplinary committee of the Law Society of Queensland?

Senator AYLETT:

– I asked a solicitor what would happen should those concerned write to the Secretary of the Law Society and he said that it would not make any difference. They are all in it.

Senator Wright:

– That is just silly.

Senator AYLETT:

– I am sorry, Senator, but that was the reply.

Senator Hannaford:

– Was the honorable senator personally concerned in any of these transactions?

Senator AYLETT:

– If I could not speak from experience I would not speak at all. When I speak from experience I am sure of my facts and I am prepared to back them up at any stage. Senator Hannaford asked whether I was concerned in this matter.

Senator Hannaford:

– I said “ personally “.

Senator AYLETT:

– Yes, I was personally concerned and that is why I am so sure of my facts. When lawyers look for suckers they sometimes find them. When you trust and engage a legal man you expect him to give you his honest opinion and to watch your interests. You do not expect him to set out to rob you of every penny and produce no results. That, in plain fact, is what some members of the legal profession in Queensland are doing. I could name them.

Senator Henty:

– I am not asking for any names.

Senator AYLETT:

– If you want to call me before the Bar of the Senate to prove my statement I can prove it. Therefore I speak in all sincerity, because I hate to see people openly and deliberately robbed. I think the Ned Kelly film should be shown in Queensland to show some of these people there who call themselves gentlemen what a gentleman Ned Kelly was when compared with them. I have raised this matter in the hope that the Law Society of Queensland will read my remarks. If it does not like them I will be happy to meet members of that society and give them the details.

Anyone who wanted to break this ring in Queensland - the position may be the same in other States - would have to pay about £1,000 down to engage a barrister to try to break the ring. You have either to put up with this treatment or engage a barrister, at a cost of about £1,000, to plead your case in Queensland. That is how members of the legal fraternity have the position sewn up in Queensland and they know it is sewn up in that manner. When a lawyer’s bill is received and the taxing officer takes £150 off it, does not that prove that the lawyer was trying to rob the client of that sum? What is the difference between taking money out of a till - for which one would face a criminal charge - and taking money in this manner? That is what some members of the legal fraternity in Queensland are doing. If a person thinks he is being being robbed by a solicitor it costs another £50 to get justice and, in addition, he may have to pay the expenses of the man who is trying to rob him when that man comes to watch his interests before the taxing officer. The expense builds up and to save perhaps £150 by having an account taxed may cost the client another £50. The party overcharging may not have to pay his expenses and the judge may order the party whose account was overcharged to pay the expense involved. That is open daylight robbery of the worst degree by men whom people should be able to look up to and upon whom the general public have to rely. It would not be so bad if people did not have to rely on men of this nature. Men are as crooked as a corkscrew when they do things like that, but it is what is done by some members of the legal fraternity in Queensland.

I am pleased to say that I did not find this so in other States. The first thing some members of the legal fraternity in Queensland do is to see how much they can tack on to their accounts, and they are not the slightest bit interested in whether they win, lose or draw the case. If you get an adverse decision in a case and want to appeal, to whom are you to appeal? If you appeal and the other side has nothing you are only involving yourself in further costs and may have to pay another £1,000 in costs. If people open their mouths about what is going on and name the persons concerned they may be sued for libel. If I spoke outside this chamber and named the people to whom I have referred I would be sued for libel straight away, but if I named them here I could not be sued. However, I have spared them that, although they are as crooked as corkscrews.

Senator Benn:

– Why does not the honorable senator name them?

Senator AYLETT:

– If the legal fraternity asks me to do so I will name them. This time they have struck someone who has never been afraid to speak in the interests of justice to the public. I was elected for that purpose and in the whole 27 years I have been here I have not been ashamed to go on fighting in the interests of justice. There may be some members of the legal fraternity listening to my speech - people who have influence with the legal fraternity in Queensland - who might try to do something to end the untold suffering and robbery imposed on the general public by some members - I do not say all of them - of the legal fraternity.

This will be the last time that I shall speak in the Senate unless somebody takes me up on what I have said, in which case I shall reply, because I still have some trump cards up my sleeve; I have never believed in producing all of them at once. Before departing after 27 years in the Senate, I should like to express my sincere thanks to the President, particularly for his tolerance towards me during my sickness and at various other times. I express my thanks also to the Clerk of the Senate and all of his staff for their assistance. I thank the cleaners, the attendants, the refreshment room staff, the staff at the bar, and all other members of the staff of the House, who have always been very helpful and courteous to me. I have had the greatest of courtesy from everyone, from the cleaners to the President. They have all been very helpful and I am greatly indebted to them.

I should also like to thank my colleagues for carrying me on their backs during one or two periods when I was very sick. I am grateful for the consideration that has been given to me by Government supporters.

I should like to express special thanks to two senators. One is my leader, Senator McKenna, and the other is the former Leader of the Government in the Senate, Senator Sir William Spooner. I shall never forget the courtesy shown to me by Sir William Spooner, especially on one occasion. He helped me considerably when I badly needed it. I think it was his courtesy and assistance that enabled me to stop a malicious, foul barrage that was being hurled against me at that time. I shall always be indebted to him for that. I thank my own colleagues for their assistance and good fellowship. I thank Government supporters for their courtesy and good fellowship. I leave a Senate with debaters of very high quality on both sides, who will be of benefit to the country. I shall watch the future progress of the Senate with great interest.

Senator BENN:
Queensland

.- We have listened to a very interesting speech from Senator Aylett. It was one of those fighting speeches such as he has given in the Senate in the years that have passed. We shall miss him considerably in the future. I can remember very well that eight, nine or ten years ago, when we were dealing with contentious subjects, if Senator Aylett got out into the passage one could say: “ Look out, he is taking his coat off and it will not be very long before he is throwing punches “. He will be missed from the Senate. These days we have not men with dynamite in them on this side of the chamber. On the other side honorable senators have become more conservative. I was about to say that they were more conservative than ladies, until I saw Senator Breen over there.

In about five or six weeks the current financial year will have ended. Then we shall be able to read in the Press how the Government’s financial measures and proposals adopted approximately eleven months ago have turned out. In the Budget speech delivered in August last, the Treasurer (Mr. Harold Holt) announced that the Government expected to collect £133.5 million in customs duties. I feel sure that that sum will be collected during the current fiscal year, because statistics show that more goods are being imported than were imported last year. Taking a walk around retail shops in capital cities, one notices that goods are coming in from all countries, including shoddy goods. Perhaps many of these commodities could be made to a much better quality by manufacturers in the Commonwealth. Only quite recently I referred to a blanket made in Poland from man made fibres, which was being sold in a shop which also stocked for sale high quality Australian made woollen blankets. The increased customs charges on tobacco products, which were announced last year in the Budget, will help to maintain or increase the buoyancy of customs revenue.

The Government announced that it would collect £318 million in excise. The level of employment in the community has been fairly high. There has been very little unemployment. Therefore, I feel sure, the goods which attract excise have sold in greater volume during the past eleven months. Alcoholic liquors, tobacco, cigarettes and petrol attract excise. We know that there has been no diminution in the sale of these goods. A record number of new cars has been put on the market. This would tend to increase the sale of petrol and swell excise revenue.

Eleven months ago the Government announced that it expected to collect £1.78 million in sales tax. To ensure that this estimate would not be far wrong, it increased the sales tax on private motor cars from221/2 per cent, to 25 per cent. The figures that have been released from time to time suggest, that the Government’s target will be achieved. There has been no change in sales tax on household requirements, furniture, furnishings and some foodstuffs.

I mention these matters now because in about two months we shall be dealing with the new Budget. It will be interesting then to compare what the Government proposes to do next financial year with what it has done this financial year. Last year the Government said that this year it would collect £745.6 million in income tax which would be £109 million more than it collected last financial year. To make sure that it would do so it removed the 5 per cent, rebate on income tax payable by individuals, but I am very doubtful whether it will achieve its expectation - for various reasons.

It will be remembered that last year sugar was sold on the world market for up to £106 a ton. At present it is being sold on the world market for £35 a ton with the result that the income tax payable by some individuals will be considerably less this year than it was last year. Wool prices have dropped. Perhaps the quantity produced is less than it was last year or perhaps it is the same. Nevertheless, the wool market has not been as buoyant this year as it was last year. There has been a drought for six or seven months and I am sure that the incomes of many individuals have shrunk a good deal during the last six months. This year there are more wage earners on the labour market and there was a basic wage increase during the year, so the amount of income tax which the Government will collect from that source will increase, but I am doubtful whether the total income tax collection will reach the Government’s estimate of £745.6 million.

Let me deal now with companies. Last year, it will be remembered, the Government increased the rate of company tax by 6d. in the £1. It said that it expected to collect £346 million from this source. What is the present financial situation of many companies in Australia? If we examine in the Library the reports of the share markets we will find that in the United States of America shares are buoyant but, although the United States economy is very similar to the Australian economy, share prices in Australia have dropped. According to the United Kingdom Press shares in Britain have held their ground. Market prices now are much the same as they were three or even six months ago notwithstanding that the United Kingdom Government has set out to nationalise the steel industry and notwithstanding that it has stated that it will do other things which, in ordinary circumstances, could cause share prices to fall.

A study of share prices in Australia reveals that prices quoted for leading companies are lower than they have been for two or three years. One may ask: “ Why does this situation exist? Are the companies not making the profits that they made previously?” If they do not earn the profits this year that they earned last year and in previous years, the amount which the Commonwealth will collect in taxation will be considerably less than its expected collection.

I believe that pay-roll tax collections will just about hold their ground. The Government expects to collect this year something like £75 million, which is £6.7 million more than it collected last year. This is a tax of which no-one speaks well, of which no-one speaks in kindly terms. No employer, no employee, in fact no-one who has any knowledge of taxation speaks in glowing terms of the pay-roll tax. Although a. company may show a loss on the year’s operations, it must pay the same rate of tax as do companies which are operating at a profit. Honorable senators will remember that in the last Budget a reduction in payroll tax was offered to manufacturers and exporters as an incentive to them to increase exports.

Another revenue producing unit in the Commonwealth is the Post Office. We were told last year that the Post Office was expected to provide revenue of £185.5 million, which was £20 million more than it provided last year. I believe that the Government will be successful in collecting this amount. It has ensured success by increasing telephone rentals, the cost of installing a telephone, the television viewer’s licence fee and television station licence fees. The Post Office is an indispensable unit. We must avail ourselves daily of the service that it offers. Therefore, its revenue will be up to expectations.

We were told last year that in 1963-64 the value of our exports reached £1,374 million, which was £309 million more than was earned in the previous year. Our receipts from abroad exceeded outgoings and our overseas reserves increased by £228 million to a total of £854 million. Government members then commenced to pat themselves on the back and to say: “ What clever men we are”. They pointed to the sum of £854 million which was represented as our overseas balance. They said it was the highest amount ever held overseas. But they did not tell the whole story. They did not say how much was included in the form of foreign investment in Australia. They tried to represent the £854 million as the trading balance of the Commonwealth, something which had accumulated over a number of years.

It was a pleasure to members of the Government last financial year to point to the £854 million, but that amount gradually has been reduced month by month. This year the fall will total about £174 million. The balance will have to be preserved in some way or Australia will face a financial crisis. The inflow of funds from overseas has helped Australia considerably. The possibility of that inflow decreasing so disturbed the Treasurer that he went to the United States of America to interview financial authorities there. If American investment in Australia is curtailed, impeded or considerably diminished, it will not be very long before Australia will be feeling the strain. Will the Government produce a surplus or a deficit at the end of this financial year? I will come to that question in a few moments.

Senator Henty:

– I thought the honorable senator was about to tell us.

Senator BENN:

– I shall, in a few moments. I told the Government at this time last year that revenues would increase and in a few moments I shall predict the result in this financial year. This year £5 million is to be spent on oil search. To me that appears to be a very small sum for this purpose. Australia is producing more oil every day. We live in the oil era. Greater efforts must be made to discover more oilfields in the Commonwealth. When we can produce 50 per cent, of our oil requirements, our overseas trading will be assisted considerably. At present we pay annually over £150 million for imports of oil and every week our consumption is increasing. More vehicles are using the roads and more diesel electric motors are being operated by the Railways Departments.

I turn now to examine primary production. The markets are not bright. The wool market is far from good. There is no guarantee that the prices paid for wool will be buoyant in future. This week in Brisbane the first sale was conducted under the new tobacco stabilisation scheme. The first sale was quite satisfactory but after that lower prices were paid and less tobacco was sold each day. The problem at present facing Queensland tobacco growers is the sale of their produce at an economic price.

Meat is an important export commodity. One of the biggest export meatworks in the Commonwealth - at Lakes Creek - is partially closed. It is permitted to kill for local requirements but not to kill for export.

Already 570 men have been laid off and it is not known for how long production will be restricted.

Senator Henty:

– Why is the meatworks closed?

Senator BENN:

– It operates under a licence granted by the Department of Primary Industry. That Department suspended the licence. The meatworks at Lakes Creek is being reconstructed because of the alterations insisted upon by some of the States in the United States of America. It is hoped to get the changes made in a short time so that the meatworks can proceed with its export programme. It appears that the United States is interfering with our domestic life and that we have no option but to accept., the interference. The alterations being made to meatworks are one example. The United States authorities are insisting upon standards that were not required by the United Kingdom, one of the best buyers of our meat.

A few months ago the Commonwealth Government decided to increase the proportion of local tobacco to be used in the manufacture of cigarettes to 50 per cent., I think. That move, of course, is helpful to the tobacco growing industry in Queensland and the other States. When the news of the increase was received in the United States, the tobacco growers there were very concerned that their exports to Australia would decrease.

Drought has had a very serious effect upon primary industries. The dairying industry has been badly affected. It is problematical whether dairy farmers are receiving any income because they have had a very bad time. They must meet their feed bills and all the other costs that are incurred during a drought period.

The Government will not achieve this year a financial result as good as that obtained last financial year. It was anticipated that last financial year a deficit would result, but a very substantial surplus was achieved. The result will not be so good this year and I think that has become obvious to the Government. Some time ago I asked the Leader of the Government in the Senate (Senator Paltridge) whether the Government would give consideration to appointing a Minister for Papua and New Guinea and to requiring him to live in Port Moresby or Rabaul when the Federal

Parliament was not sitting. I think the Minister interpreted my question as an attack upon the present Minister for Territories (Mr. Barnes). It is proposed to spend about £300 million in Papua and New Guinea in the next eight or nine years. The manner in which the money is to be spent will be decided by the Administrator. To me that seems idiotic. I cannot understand the Government not accepting my suggestion. It does not. matter how good an Administrator is. The money to be spent is the people’s money. It comes out of the Commonwealth Treasury and is supplied to the Administrator of Papua and New Guinea to be spent in any way he decides. The Minister is either in Canberra or at Warwick in Queensland.

Senator Hannaford:

– What about his Department?

Senator BENN:

His Department is here in Canberra. I do not wish to speak disparagingly of a secretary of any department, but basically he is a clerk. He is trained as a clerk and he is relying upon reports coming through to him from Papua and New Guinea. If honorable senators think that is satisfactory, and that money should be spent in that way, they will not take any notice of me; but I believe we should have a minister in Papua and New Guinea to go around and see how the money is being spent and what is being achieved by the expenditure. The Territory is too far removed to have an administrator only. The Administrator is an efficient gentleman but it is not fair to him to require him to control expenditure of that amount of money so far away from the seat of government in Canberra. Similar administration is not done that way in any other country.

Senator Branson:

– How would such a Minister hold his electorate?

Senator BENN:

– How does the Minister for External Affairs hold his electorate now?

Senator Branson:

– He spends a lot of time in it.

Senator BENN:

– And he spends a lot of time out of it. For that matter, how does the Prime Minister (Sir Robert Menzies) manage with his electorate? He lives in Canberra.

Senator Branson:

– That is slightly different.

Senator BENN:

– The circumstances are not any different. Such an appointment would be appreciated by the Minister’s electors. They would recognise his responsibilities and make full allowance for them. On the other hand, a senator could be made Minister for Papua and New Guinea. That would overcome the electoral problem. If you want good administration relative to the amount of money that is spent you must get a Minister who will reside in the Territory. Although the expenditure of the Commonwealth is increasing and the responsibilities are growing from day to day the Government seems to be afraid to increase the number of Ministers. Perhaps it thinks it should not have another Minister. But if the Government realised fully the volume of expenditure and of revenue that has to be collected and the services that have to be given to the people of the Commonwealth it would not be so hesitant about appointing another Minister.

I shall give the Government my advice and I will not charge a fee for it. Another Minister should be appointed and a number of sub-departments should come under his portfolio. One would be the Canberra abattoir, which is now controlled by the Department of Health. If it is to operate efficiently it should be a responsibility of a Minister. The new Minister should also control the Commonwealth Health Laboratories. Another of his responsibilities would be the News and Information Bureau, which is now within the Department of the Interior. The Bureau can produce television programmes. Think of the work it could do in that connection along the coast of Queensland and the Australian coast generally as well as inland. The films would have a high market value and we could show more films in other countries.

The new Minister should also include tourism among his responsibilities. At present the Government is doing nothing about tourism. In Canberra, Lake Burley Griffin is a new centre of attraction. We have one of the greatest tourist assets in Australia in the Snowy Mountains project, but that is treated as a local matter. We have trade commissioners in practically every country who could act as our agents. The Department of External Affairs has embassies in many countries and the embassy officers could also act ex officio as agencies of a tourist department. 1 believe that national radio and television facilities should be taken from the administration of the Postmaster-General’s Department and be placed under the control of the new Minister whose appointment I have suggested. To sum up, the new Minister could administer the Canberra abattoir, the Commonwealth Health Laboratories, the News and Information Bureau, tourism and the work that is done now by the Australian Broadcasting Commission. It is nonsensical to have the A.B.C. continually functioning as a commission aloof from the Government. The Government has to find the funds for the Commission and requires all the revenue the Commission attracts. The A.B.C. is claimed to be an independent body and would like to be accepted as such, but at election times it does not appear to be so independent. I would terminate this state of affairs and have the facilities of the A.B.C. put under the direct control of a Minister.

Recently I asked a question about the use of atomic power for peaceful purposes and I used the words “ underground explosion “. I had in mind at the time the use of atomic power to excavate water holes in the dry areas of western Queensland by underground explosion. I understand that atomic power can be used for that purpose without creating any fallout. The explosion causes the sides and bottom of the crater to be sealed as it occurs. I thought these explosions might be utilised in the Barcoo and Thomson and other river districts of Queensland to provide a means of conserving huge quantities of the water which now runs to waste in Lake Eyre.

Senator Cormack:

– The Australian Atomic Energy Commission has a study group working on this now.

Senator BENN:

– The Commission had one for several years, and a group went overseas to study what was being done in the United States of America. I mentioned that on a previous occasion. It comprised a group of scientists and when they returned to Australia they furnished a report to an international scientific body but nothing has been put before any Commonwealth department.

Senator Branson:

– The head of Operation Plowshare came to Australia.

Senator BENN:

– Yes, but he went back to California.

Senator Branson:

– He spoke to the Atomic Energy Commission.

Senator BENN:

– Yes, he spoke to the Commission. But who paid the expenses of the group that went to study this and other types of explosions in California? They were paid by the people of Australia and we as a Parliament are entitled to some information on the matter. Neither Senator Branson nor anybody else has seen any document on this subject tabled in the Parliament, and if you try to get a report you find it is difficult to get one. After I had asked the question to which I have referred I saw a report in a Sydney afternoon newspaper. It was very similar to the reply I would have been given, and as I was not satisfied I saw the Minister for the Interior (Mr. Anthony). Good fortune came my way. The Secretary of the Department of the Interior was with him at the time. I said I did not want an answer to that question, but I would be happy if the Minister would prepare a statement and have it read in the Senate so . that we would all know what could be done.

We all know that there is a hindrance to the use of atomic power for any purpose. It cannot be used without the permission of a certain international authority. But I have been informed that atomic explosions can be made in such a way that no fallout at all is created. If that is so, one has only to know Queensland’s conditions to realise the possibilities of creating water conservation schemes at a low cost where water is required. Such projects could even be carried to such an extent that the water conserved could be used for irrigation purposes, and instead of losing 2 million or 3 million sheep in a drought we could save that number.

Senator Branson:

– We have the same circumstances on the Gascoyne River in Western Australia. Such a scheme could be used there.

Senator BENN:

– The layout of the honorable senator’s State is much the same as western Queensland except that our lands are far richer than anything the honorable senator has in Western Australia.

Senator Branson:

– I will not comment on that.

Senator BENN:

– I read the other day that the Department of Civil Aviation pro poses to dredge Botany Bay in such a way that the runway at Mascot airport to be used for the new jet aircraft will extend into the Bay. My mind went back to an incident that occurred a few years ago and I thought: “Well, it is time that the Department of Civil Aviation got right out of Mascot altogether “. The Department has never done anything right there. It has been the Department’s very unlucky ground. Perhaps the Department could leave the airport for domestic flights. I think that international flights should get right away from Mascot before the city develops further.

It would be 15 years ago - it might even be longer - when the Commonwealth Department of Works, I think it was, ordered three reconditioned submarine engines in the United Kingdom. Just how the engines were ordered was never clear to me. I think it was done through the office of the Australian High Commissioner in London. At that time, the Department was really starting to make Mascot an airport and it wanted the three submarine engines for the purpose of pumping sand out of Botany Bay on to the reclaimed swamp. The official overseas got a quote for the reconditioning of the engines. A mistake was made, because later, when the work was in progress here with improvised equipment and when the old fashioned steam engines that were fired with wood were being used - those engines were doing a good job pumping the sand out of Botany Bay into the Mascot area - an account arrived for the sum of £63,000. If my memory serves me correctly, that was the amount. That account was for the reconditioning of the submarine engines. The account was examined very carefully. The Department divided the amount by three and said that the cost per engine was not so high after all. Later, the Department received two more accounts, and then found that the original account for £63,000 was for one engine only.

Senator Morris:

– When was this?

Senator BENN:

– It was 15 or 16 years ago. I have a very retentive memory for these things especially when I fly through Mascot so frequently. I never go through Mascot without wondering whether I could have a peep at the three submarine engines.

Senator Branson:

– The Department did receive the submarine engines?

Senator BENN:

– That is the story. Do not ask me. I will tell the sequence of events in my way. The Department received the account, which it had to pay. The submarine engines arrived when the work was completed at Mascot and they were never used for the purpose for which they were bought.

This is just a little story, but it was one incident associated with the development of Mascot as an airport. Now the Department of Civil Aviation is to construct a runway out into Botany Bay. I think that the Department would be inclined to forsake the area altogether and find another place it could develop as an international airport.

Senator Cormack:

– Tullamarine would bc the obvious place.

Senator BENN:

– Well, that would be right. As this is the National Parliament, we should be nationally minded. I heard Senator Webster ask the Minister for Civil Aviation (Senator Henty) a question as to the number of Melbourne residents who use Sydney as an international airport. The Minister got out of the question in a very subtle way. He said he did not know. He said records had never been kept. But how easy it would be to keep a record. Everybody who goes overseas has a visa, and it would take only a fraction of a second to ascertain that person’s place of residence. So, Senator Webster, if that information is worth having, it can be ascertained.

Brisbane has an airport. I have discussed this matter with the Minister for Civil Aviation before. Brisbane airport has quite strong runways. I have always assured myself of that fact by asking the Minister about their quality or standard. I have always been told that the runways are good. The people of Brisbane are tolerant. They are a stoic body of citizens. They are noted for their stoicism and their tolerance.

Senator Anderson:

– Yes, according to Senator Aylett.

Senator BENN:

Senator. Aylett is not a Queenslander, although we are proud to have him as a resident on the Gold Coast at the present time. We have buildings of an igloo type at Brisbane airport. I will say this: The facilities provided for the public are of a higher standard than those which are provided at Sydney, Melbourne or Adelaide. I will not say Perth because that would be wrong. These igloo type buildings are good, and they are comfortable. There is nothing wrong with them - that is, the interior of the buildings. But the exterior of them does not make a pleasing picture.

If honorable senators do not mind, I will tell them a little story about this matter. When I get in a plane to fly from Sydney to Brisbane, if the passenger sitting beside me appears to be a visitor from overseas, I usually ask that person whether he or she would like the window seat. I am assuming, for the purpose of this story, that I have been allotted the window seat. Usually the person is glad to have the opportunity to ride in the window seat so that he or she can see the coastal scenery. It is a very beautiful flight between Sydney and Newcastle and, if the plane continues along the coast, there is much to be seen. One day, I got into the plane at Mascot, and I asked the gentleman next to me whether he would like to have the window seat. He assured me that he would. So I saw that he had a comfortable seat by the window. He put his face to the window and never took it away until we were well past Newcastle. He said to me that it was worth while coming all the way from the Clyde to have a look at the scenery along the coast, Sydney and its bridge, and the other items of interest there. We had a conversation and I found that he was employed as a shipwright on the Clyde. He was visiting Australia and going to Brisbane for a certain purpose.

We had a chat about various things until we arrived near Brisbane. Again he put his eyes to the window and looked out. He turned to me and said; “ What are those little galvanised iron roofs that I see down in the backyards of the residences? “ I politely told him. I told him that Brisbane was not wholly sewered. I told him what those little sanitary boxes contained. He asked me, “Are they air conditioned or refrigerated?” I told him the truth and he was horrified. He said, “ I never heard of that before. There was nothing like that back on the Clyde.” We alighted from the aircraft and while we were making our way across the tarmac I said to him, “ What do you think of our terminal building? “ He looked at me and said, “ It is quite good enough for any capital that has all those iron roofs in the backyards.” I have always agreed more or less with that viewpoint. There are in Brisbane other things to attend to besides erecting a beautiful airport terminal.

I would like to see the airport building at Brisbane as beautiful as that at Hong Kong, but I know that the people of the Commonwealth have to go through a pioneering period. They have to be patient. If the people of Brisbane are patient, at some time in the future there will be a beautiful building appropriate to the airport and to the city. Perth has a very good airport terminal. I wondered why it was so good. Then somebody told me that Senator Paltridge was once Minister for Civil Aviation and I was supposed to connect that fact in some way with the good airport building. I do not propose to say any more, Mr. President. In 41 days’ time we will perhaps be more enlightened concerning the financial situation of the Commonwealth.

Senator HENTY:
Minister for Civil Aviation · Tasmania · LP

– in reply - We have roamed over a number of subjects during this debate. I have taken note of most of the subjects that have been raised and I would like honorable senators to know that even if I do refer to them they will certainly be recorded by the Department of the Treasury. I wish to reply to some of the points that have been raised and particularly to the matter of taxation and the Ligertwood Committee’s report to which Senator Wright referred. I must say that I like the delightful way in which he makes legal questions appear so simple. As a member of a Cabinet committee which has spent many days on this subject, in company with the best qualified technicians that we have, I can assure the honorable senator that we have not found this facet of taxation nearly as simple as he appears to think it is. I would not like the Senate to think that we have not given long and earnest consideration to the proposals made in the legislation, nor would I like the Senate to think that we would introduce the legislation without first having explored exhaustively every avenue open to us.

It is not simple to write into the very complex taxation legislation a simple definition to cover avoidance of taxation in every set of circumstances. We tried to do that. Over and over again we tried to get a precise definition to meet a particular set of circumstances. When we had a definition on the table and our legal advisers felt that it was legally watertight and a sound and simple exposition in the circumstances, the taxation people would say: “ Well, what about this situation? If two or three companies did such and such a thing what would happen?” We would have to say: “ Yes, it does not cover that. Certainly there is a gateway there.” They would say: “ And what about this position?” And we would have to say: “Yes, there is a gateway there “. That happened time after time when we were trying to arrive at definitions to cover this very complex matter of taxation.

Senator Wright said that section 260 of the Income Tax and Social Services Contribution Assessment Act could be used to meet the position. That is not what our legal advisers have told us. They have had some very sorry experiences with section 260 and they do not regard it in the blithe and happy spirit in which Senator Wright appears to see it. In fact, I should say that if we were to use that section as a waddy, one of the first to rise to his feet in the Senate and complain would be the honorable senator. If the section were to be used as he suggests it would be the most arbitrary use of it.

I say to the Senate that this has not been an easy matter to deal with. In common with every other member of the Cabinet committee I hate the idea of taxation laws which provide for discretions if there is any other way out. But we have had conferences with a number of the most expert and able bodies and in discussions on these matters they have said: “ We cannot provide you with an answer that does not leave a multitude of gateways through which the shrewd boys may pass or which does not do harm in genuine cases or destroy many small sections of the community. People would be hurt if you made a precise and detailed attack on one facet.” That is the problem we came up against after spending many hours on this matter with the best technical advisers we could find. I say to Senator Wright that if he can come blithely into the Senate and put forward solutions to these problems we will use them with the greatest of pleasure provided that they are sound, because that is the kind of advice we are really looking for.

The honorable senator spoke of leases. The general effect of the amended income tax law is that capital sums paid for leases will be neither assessable income of the recipient nor allowable tax deductions for the purchasers. What does that mean? It means that we have gone back to the old position where such a sum is regarded as capital. It is a capital increment and not taxable. Certainly we shall lose the taxation on that sum, but at the same time we shall not lose the taxation which was deductible in the hands of the man who bought the lease. The one almost balances the other. This is a very complex field in which the best brains of a number of professors - and I do not say that they should not be employed in this field - set out legally to avoid the incidence of taxation. It has been the experience of taxation authorities over the years that no matter how precise are the provisions that are written into this very complex legislation, openings will be found by shrewd persons. It is either that or hurting people who in the opinion of the Commissioner of Taxation should not be hurt. So these discretions are provided. I believe that the discretions will make for a greater measure of justice in the long run. As I have said, we have not been able to find a precise definition and therefore we have not been able to employ one.

We have had a great deal of assistance in this matter from competent outside bodies. I have had a long personal correspondence with a very keen and interested solicitor in this field. He said to me at the end of the correspondence which extended over two or three months: “ I have objected to this principle. I still loathe it but I must say to you in honesty that I am darned if I can devise one which will fit the circumstances better than the system of discretions.” The guide lines which will be given in the public information bulletins and which I think are very worthwhile, will assist in overcoming the problems. They will not overcome all the problems, of course. There will be cases which will be heard by boards of review. I thank Senator Wright for raising the point that the boards of review take two years to deal with matters. That is far too long. In my view we should consider setting up more boards of review so that matters may be dealt with more expeditiously. I do not want the honorable senator to think that I have overlooked that point.

The position regarding leases is that a premium paid will be regarded as a capital gain. It will not be taxable iri the hands of the recipient nor will it be an allowable tax deduction for the person who pays it. Honorable senators will understand full well that the market place will settle this sort of thing because, as I have said, no longer will the premium be allowable as a deduction to the person who pays it. He will not be able to pay £10,000 believing that £5,000 will come back to him in the form of a tax deduction, and the other man will receive it as a capital gain. I believe that lease premiums will gradually disappear from the field of commerce, or that at least their number will be very limited. There are already signs that that is happening in the commercial world.

I have worked on this problem for many weeks. Some of my colleagues worked on it for 12 months before me; I joined the Cabinet committee only a few months ago. Having studied the problem, I am not silly enough to believe that there will not be cases in which companies will believe that they have been singled out for unfair treatment. Of course there will be anomalies. It is because we have had to make a long study of the advice that has been given to us by outside bodies that we have not yet been able to prepare legislation for the consideration of the Parliament. We tried earnestly to have it prepared, but it will not be ready until the next session, the Senate will then have an opportunity to consider the amendments. I should not like anybody to think that this is an easy problem to solve. Would that we could implement section 260, as Senator Wright suggests. If only that could be done our problems would be solved, but our legal advice is that it does not apply in many cases.

It was stated that in New South Wales a premium was paid prior to 1957 under the pegged rent rules. The New South Wales rules were altered in December 1946. Now the landlord and the tenant may agree upon the rent an dno premium need be paid. The tenant is able to claim his rent as a deduction and the landlord is taxed on it. Senator Wright has interested himself in many other facets of the taxation law. Indeed, he blows a breath of fresh air through it whenever he rises to speak on the subject. I do not criticise his keen interest in this field. Perhaps it is because his capacity is so much greater than ours that he treats the various problems as being easy of solution. I am not competent to reply to many of the points he has raised, and I do not propose to do so. I repeat that the amending legislation will be introduced in the next session.

Senator Aylett referred to the Coolangatta airport. I should not like him to think for a moment that we are trying to force any council to take over an airport. Admittedly, we have a local government ownership scheme which is designed to enable us to stretch as far as we can the limited amount of money that the 1 1 million people of Australia are able to provide. We encourage local government authorities, even in areas where airports may not be a payable proposition for years, to assist us in the provision of airport facilities. Tomorrow I am going to Winton, which is in the far west of Queensland, to open a new airport. I agree with Senator Benn when he says that the airport at Brisbane is a first class airport from the viewpoint of navigation. I agree with him when he says that the facilities they have there are good. But I point out that we have had to spend money in other areas of Queensland, too, because it is a highly decentralised State. In the north there are the great cities of Townsville, Mackay and Cairns. Indeed, we are now spending £600,000 on the runways at the Cairns airport.

To come back to the Coolangatta airport, we told the council in question that we would like it to study the local ownership scheme. We said that we were prepared to bring the airport up to Electra standard before we handed it over by spending £390,000 on it, the sum of £320,000 to be spent on the runways and £70,000 on the pavement. We have offered the council ownership of the airport. Under this proposal we would find forever afterwards half the cost of the maintenance of the airport and the council would be entitled to levy whatever charges it liked. It would be entitled to the revenue derived from any kind of concession it liked to put on the airport.

Senator Cavanagh:

– It would get this money from Senator Aylett.

Senator HENTY:

– Having known Senator Aylett for a long time, I am sure he would not mind paying a little extra to provide a good airport in the area in which he is now interested. I must say that I was sorry to hear him, as a Tasmanian, say that we had done certain things for Launceston. Has he forgotten so soon the place that has returned him to this House for 27 years, and is he now prepared to run down the Launceston airport in favour of the Coolangatta airport? The Launceston airport is the sixth biggest airport in the Commonwealth. Launceston has had to put up with two little huts for years and years.

Senator Aylett:

– We moved those huts when we were in office. What is wrong with the Minister?

Senator HENTY:

– You did?

Senator Aylett:

– Yes.

Senator HENTY:

– The terminal, which is occupied by both the major airlines, is quite insufficient for the passengers and freight that move through that airport. I repeat that Launceston is the sixth largest airport in Australia and that for years it has had to put up with the kind of facilities that I have mentioned. It is entitled to have spent on it the money that is being spent at the present time. There is only one other matter I want to mention. I think every honorable senator is pleased to see Senator Aylett back here in much better health. He lays the credit for this at the door of a chiropractor. That is all right. I like the way in which he fought for this profession. I could not help but smile at the fact that he sought assistance for members of this profession so that the fees he had been charged could be deducted on his income tax return.

Senator Aylett:

– And on the return of everybody else.

Senator HENTY:

– Of course. How that will help the chiropractors I have not yet worked out. I merely mention that in passing. Senator Aylett’s point is well made. I am sure that the Senate is delighted to see the honorable senator back here again in such good health and with fighting spirit. I have often seen him fighting in the passageway, as Senator Benn has described it, for something in which he believed.

Question resolved in the affirmative.

Bill read a first time.

Sitting suspended from 5.46 to 8 p.m.

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 and of the associated Appropriation (Special Expenditure) Bill is to obtain Parliamentary authority for certain expenditure for which provision was not made in the Appropriation Bills 1964-65. The various items contained in this Bill can be considered in Committee, and f propose at this stage to refer only to the major provisions.

Further appropriations totalling £13.6 million are required for ordinary departmental services, but because of savings under other appropriations it is estimated thai the actual expenditure will not exceed the Budget provision of £321.2 million by more than £9.5 million. The additional appropriations include £2,925,000 for salaries, £1.937,000 for administrative expenses, £3,750,000 for the emergency gift of wheat to India, £2,476,000 for the expanded British migration programme, £534,000 for salary increases for the staff of the Australian National University, £394,000 for telephone rental concessions to pensioners and £368,000 for the Commonwealth scholarship scheme.

For capital works and services there is an additional requirement of £7,790,000 although after allowing for savings in other appropriations the total expenditure is not expected to exceed the Budget estimate of £201.5 million by more than £2.5 million. An amount of £3,000,000 is included in this provision for the Postmaster-General’s Department to cover mainly the increased price of copper and lead. Also included in the Bill is an amount of £2,150,000 for expenditure under the Snowy Mountains Hydro-electric Power Act. The Budget provided for an estimated expenditure of £21,650,000 in 1964-65, of which £.10,750,000 was to be financed from the Loan Fund and £10,900,000 from the Consolidated Revenue Fund. The overall estimate has increased by £1,200,000 to £22,850,000 due to the accelerated progress of major contract works. It is also necessary to reallocate the total expenditure between the funds for this financial year because of the change in the timing of the Authority’s payments to contractors in June. This switch involves a further Consolidated Revenue Fund appropriation of £950,000. Additional appropriations amounting to £1,234,000 are sought for the civil works programme, whilst £490,000 is required for loans for housing in the Australian Capital Territory.

Additional appropriations totalling £16.2 million are sought for the Service departments mainly to implement the expanded defence programme announced by the Government last year. However, as a result of savings under other appropriations it is anticipated that the Budget provision of £296.8 million will be exceeded by only £8.7 million, making an estimated total expenditure of £305.5 million on defence services for the year compared with expenditure of £260.5 million for 1963-64.

Under business undertakings an amount of £2.6 million, excluding capital works and services, is sought, but savings of £900,000 in other appropriations are expected. £1,855,000 is required for the PostmasterGeneral’s Department, mainly to cover increases in salaries and £420,000 for the Australian Broadcasting Commission for increased operational costs and salaries.

An amount of £683,000 is sought for the Territories, which includes £370,000 for the Northern Territory and £294,000 for the Australian Capital Territory. The major requirement for the Australian Capital Territory is £172,000 for payment to the Department of Education in New South Wales, which is responsible for the provision of staff in that Territory. Because of savings in other appropriations it is estimated that the Budget provision of £46.9 million will be exceeded by only about £200,000.

When the Budget was prepared it was estimated that receipts of the Consolidated Revenue Fund would exceed expenditures from that Fund by £65.2 million. Accordingly, provision was made in the Budget for the payment of this amount to the Loan Consolidation and Investment Reserve whence it would be available to supplement loan proceeds available for State works and housing programmes and to finance other Commonwealth commitments such as redemptions of debt. At this stage it appears likely that, on the one hand, receipts of the Consolidated Revenue Fund could exceed expenditures from the Fund by more than the £65.2 million originally estimated; but, on the other hand, receipts from public loans will be smaller and redemptions of debt greater than expected when the Budget was introduced. An additional appropriation is therefore sought for payment to the Loan Consolidation and Investment Reserve of an amount up to £85 million over and above the £65.2 million provided for in the

Budget. There are still many elements of uncertainty as to the outcome of Consolidated Revenue Fund transactions for the year and this additional authority should be sufficient to meet all contingencies. It would provide against the most favorable outcome of Consolidated Revenue Fund transactions which could at present be envisaged but should not be taken as meaning that an improvement of this magnitude is expected. I commend the Bill to honorable senators.

Senator McKENNA:
Tasmania

.- I propose to offer only a few brief comments on the Bill. The Minister for Civil Aviation (Senator Henty) detailed to the Senate amounts totalling £126,074,000, which are to be appropriated under this Bill for the ordinary annual services of the Government in 1964-65. He gave us the detail but did not tell us the overall effect that the transactions are likely to have upon the Consolidated Revenue Fund, so I worked it out for myself on the figures supplied. 1 will put my findings on record. The Minister’s speech indicated that, in the matter of departmental services, expenditure will increase by £13.6 million but that it is expected that there will be savings, on other heads, of £9.5 million. Under the heading of capital works and services the Bill provides for increased expenditure of £7.790 million, but the Minister said there will be savings on other items of £2.5 million. In the Service departments there will be additional expenditure of £16.2 million and savings of £8.7 million. On business undertakings there will be additional expenditure of £2.6 million and an anticipated saving of £1.7 million. There will be additional expenditure of only £.7 million on Territories and savings of £.2 million. Then there is additional expenditure, under Treasury, of £85 million for the Loan Consolidation and Investment Reserve account. By adding together the figures that the Minister gave I reached a total of £125.9 million. That is a little short of the £126.074 million to be appropriated, but I well realise that the difference may have been lost in the calculation by fractional amounts. Taking the figures mentioned in the Bill, the measure authorises the expenditure of an additional £126.074 million and the anticipated savings on other items, not dealt with in the Bill, will amount to some £22.6 million. So it would seem that the net effect on the Consolidated

Revenue Fund will be to increase expenditure to the tune of £103.474 million. It is not unusual to have these variations, because life is not static and new needs develop. Quite a number of the items the Minister referred to are matters which have arisen suddenly during the currency of the year. A feature of the Minister’s speech and of the appropriation that appealed to me was the indication of the surplus revenue anticipated. At the time when the Budget was before us it was thought that some £65.2 million would be available for transfer to the Loan Consolidation and Investment Reserve. The Minister’s speech has now indicated that revenue is likely to exceed that amount by a fairly considerable sum.

The Bill proposes the very important step of appropriating, in advance of anticipated need, another £85 million from Consolidated Revenue, to be transferred to the Loan Consolidation and Investment Reserve. That indicates that Consolidated Revenue will exceed the anticipations of the Government by an appreciable sum. At the same time, we are told that the loan proceeds have not realised anticipations, that there will be a considerable fall in them, and that Consolidated Revenue will have to find up to about £85 million to bridge the gap.

I do not want to go into all the uncertainties of the question of how the Budget will come out on 30th June, but from the little that the Minister has said it would appear that the outstanding features of the Budget will be a very substantial increase in revenue and, owing to a falling off in loan proceeds, a decline in loan moneys, the decline having to be made up by the provision of additional revenue from the Consolidated Revenue Fund. I lingered rather long over the last sentence of the Minister’s speech, which reads -

It would provide -

He was referring to the additional authority to transfer £85 million from Consolidated Revenue to the Loan Consolidation and Investment Reserve - against the most favorable outcome of Consolidated Revenue Fund transactions which could at present be envisaged but should not be taken as meaning that an improvement of this magnitude is expected.

Certainly I had to ponder that for a considerable period. My interpretation - I trust that the Minister will express his view of it - is that the taking of £85 million extra out of revenue is in anticipation of the Government’s greatest hopes for increased revenue being received, but we must not take it that the increase will be as high as that - it may be less - and if we now transfer the £85 million we may finish with a deficit on the year. I was rather intrigued with the way in which the proposition was framed and I had to reduce it to express terms of pounds, shillings and pence so that it might penetrate duly.

We do not oppose the Bill. We support it with pleasure.

Question resolved in the affirmative.

Bill read a second time.

In Committee.

The Bill.

Senator WRIGHT:
Tasmania

.- 1 refrained from speaking on the motion for the second reading of this Bill. It is one of the more important bills that come before us, and it proposes the appropriation of £126 million, a great amount of money. One would be beset with feelings of futility if he were even to consider, in the time allowed in the parliamentary programme, discussing the impact of even one section of the proposed expenditure on national finance. So I content myself with taking as a test one detail - Division No. 318 - Electoral Branch, subdivision 4, item 01. Under the heading “ Other Services “ is an item designated by the caption “ University of Tasmania - Grant for research into Senate electoral arrangements “. I was intrigued, indeed, when I noticed in February of this year an announcement by the Minister for the Interior (Mr. Anthony) that he had arranged to make available to the University of Tasmania an annual grant of £5,000 for three years so that a designated scholar - designated by the Minister, if you pleases - might undertake what is called research. Into what? Senate electoral arrangements.

When I wrote to the Minister to alert him to my interest in the matter, he advised me that following a petition to the Court of Disputed Returns in relation to the Senate election of last year there was considerable public and Press criticism about the complexities of the Senate system. He stated that he had been concerned for some time at the very high informal vote in Senate elections. He wrote -

I felt there was a need for a detailed study to be made into several aspects of our electoral procedures. After discussing the matter -

With whom? with the Commonwealth Electoral Officer and the Department of the Treasury, it was decided -

By whom? I assume, by the Minister - that the Commonwealth Government would provide a grant of £5,000 per annum during the next three years to the University of Tasmania to enable certain research to be undertaken.

By nature I may be easy going, but I have never heard impertinence to equal it. It will be recalled that on 9th August 1962, as reported at page 89 of “ Hansard “, the Senate, after an election, dealt with the very subject, and a motion was proposed by the Deputy Leader of the Opposition (Senator Kennelly) that we constitute a committee of our own members to make an inquiry which, of course, would have been of a preliminary nature. In the course of such an inquiry the committee would have been quite at liberty to call evidence and in making the usual purposeful and complete inquiry which the Senate is accustomed to make, it would have had the experience and pleasure of hearing evidence from all sorts of scholars in the electoral field, the constitutional field and the parliamentary field.

At the instigation of the leaders of the Government of the day, that motion was defeated by the Senate. Yet we have a Minister, without reference to anybody in the Senate so far as I know, taking it on himself, after discussions with the Chief Electoral Officer and the Department of the Treasury, not merely to arrange to appropriate £5,000 a year for three years but also to do what is completely offensive to any objective purpose of scholarship, namely, to designate the scholar who should undertake the research. In that respect, he wrote to me, stating -

The research will be carried out by Mr. George Howatt, M.A., former American Fulbright Scholar, who has already carried out several research projects in Australia, including studies of the HareClark system of voting in the Tasmanian Government. You may recall that a report dealing with the problem of resolving deadlocks between the Senate and the House of Representatives was prepared by Mr. Howatt for the Commonwealth Government and this was tabled in the House of Representatives and the Senate last year.

Well do I remember that that report was tabled in this chamber. That report was given study by some members of this House. It recommended a principle for resolving deadlocks in the Senate which, in effect, gave the Government of the day, returned recently from an election, the right to add one vote for every State it won although the Constitution provided that each State should have an equal ten votes in the Senate irrespective of population.

I can understand now the concern with which the more populous States - New South Wales and Victoria - look upon the position that a State like New South Wales with three million people and Tasmania, with a population of 350,000 exercise the same numerical vote in the Senate. I can well understand consideration being given to the proposition I have mentioned but a little reflection on the Constitution will convince anybody that the fundamental basis upon which this Senate was constituted is one of the links of parliamentary government in this Federation. Otherwise there would have been no Federation. The idea that the party which receives the greatest number of votes to give it executive control in the lower House and gains the Government should thereby be given an additional quota of votes for ascendancy in this chamber, and so dislocate the complete equality and uniformity of votes which the Constitution accorded the States, is a piece of asininity which offends every element of intellectual understanding of the Constitution and every sentiment of fairness.

The Minister has provided that the scholar who has put himself on record as the author of that constitutional monstrosity is to be paid a fee of £5,000 a year for three years to undertake research into matters which are essential to the very machinery by which we exercise our parliamentary representation. Any honorable senator who is not jealous of maintaining perfect faith with the Constitution on a proper constitutional basis would not be here.

Senator Branson:

– Does the honorable senator know how much that report cost the Government?

Senator WRIGHT:

– No. When the gentleman in question was preparing that report he was on a Fulbright scholarship from America. He obtruded that report upon the attention of the Federal Parliament after many visits here. In his preface to the report the Minister for the Interior, Mr. Anthony, stated -

As it was felt that the proposed research would be of interest to Parliament, my Department agreed to make limited facilities available to Mr. Howatt and undertook to arrange for the printing of this report.

Without being definite, it is my understanding that the facilities that we then afforded were the meeting of the cost of printing the report. In view of the vote of the Senate in August 1962 it is a complete affront to this House for the Minister to arrange for this research without first having some consultation with the Senate and making some submission to the Senate for its approval of the research. In view of the report to which I have referred briefly - I regard it as a constitutional monstrosity - I have no confidence whatever that this scholar designated by the Minister will produce, at an expense to this Parliament of £15,000, any report in which we can have the slightest confidence or in which we can place the slightest reliance.

I proceed, therefore, to a rather complex constitutional problem. I find that this item is included in a bill for the appropriation of funds for ordinary annual services. This raises a very delicate position. Although some degree of humour is evidenced when I say that I am a person of restraint, I am prepared, without prejudice to any constitutional involvement, to move for the deferment of the item. I have regard to the fact that the item is included in this Bill for the appropriation of funds for ordinary annual services and that this is the first occasion after two years on which the Government has submitted to us these Appropriation Bills with a fair measure of recognition that we are entitled to have the proper items included in the Bill for the appropriation of funds for other than ordinary annual services, thus giving some recognition of the Senate’s proper right of amendment.

I shall test the opinion of the Senate simply upon the rather neutral motion which I have foreshadowed. I will be content if the item is deferred until tomorrow. I take that action with a view to avoiding any involvement in these constitutional complexities, having regard to the nature of the Bill. I do it also to afford the Ministry an opportunity to discuss this matter although, adopting my usual course, which has not been reciprocated, I regret to say, in recent events, I have long since advised the Ministers concerned of my objection to this item. If the item is deferred and the Bill is stood over until tomorrow, that will indicate our alertness. The Minister then may be prepared to withdraw the item rather than have the Bill rejected.

If the Senate is willing to support my objection to the item on the grounds that I have put, we will then determine whether we treat the item as amendable, notwithstanding that in the printed form it is in a bill for the appropriation of funds for ordinary annual services. My proposition is that the Government Printer having printed that cannot preclude the Senate from amending any item as to which the vote is not truly for ordinary annual services. But I want to avoid that situation, because I recognise that we have come to some basis of understanding that I do not wish to disturb at the outset. I mention these matters only in the hope that the Ministry will understand my complete purpose of not disturbing that situation. For that reason I have adopted the form that I have indicated.

Without prejudice to the propriety of the form of the item from the constitutional point of view - I refer specifically to Division No. 318, sub-division 4, item 01 - I propose to move that the item be deferred.

THE CHAIRMAN (Senator DrakeBrockman). - I remind the honorable senator that we are debating the Bill as a whole. He would have to move that the whole Bill be deferred.

Senator WRIGHT:

– In that sense, the Senate understanding that at the moment I am pinpointing my objection upon this item alone, I will do so.

The CHAIRMAN:

– I further remind the honorable senator that I will then have to ask for leave to report progress if the motion is carried.

Senator WRIGHT:

– Of course. I move -

That the Bill be deferred.

Senator HENTY:
Minister for Civil Aviation · Tasmania · LP

.- I really think that Senator Wright has directed attention to something which is in the course of alteration in the system which we have adopted. We expected that an error might be made by the incorrect inclusion of an item in a Bill. After considerable discussion we have arrived at a system which we hope to make perfect. The honorable senator has selected an item which perhaps should be included in an amendable bill as a new service. The Bill before us is simply an interim measure between the last Budget and the next Budget. I believe that the item selected by the honorable senator will appear in the principal appropriation bill as a new service. After a long period of discussion in which quite an amount has been achieved by the Senate, I think the honorable senator is using a sledgehammer to drive a tack.

Senator Wright:

– I am accepting that position completely.

Senator HENTY:

– I believe the honorable senator has made his point by raising this matter.

The CHAIRMAN:

– Order! The Clerk has drawn my attention to the fact that no provision exists in the Standing Orders for the motion which the honorable senator seeks to move. The honorable senator should move that progress be reported.

Senator WRIGHT:
Tasmania

.- I am obliged to you, Mr. Chairman. In conformity with your ruling I would like to move that the committee report progress. While I am on my feet I would like to make it plain to the Minister that I did not wish to raise the other issue. I wished only to mention this matter and point out that I do not rely on it. I use it for the purpose of offering in some degree a mild apology for any inconvenience that will follow from the inclusion in this non amendable Bill of an item which I seek to have excised. To achieve that objective I must move that progress be reported. I want to make it quite clear that I do not wish to disturb those waters at this stage. I hope the Minister will understand.

Senator Henty:

– I am sorry, I am not clear on it. Perhaps the honorable senator will explain to me what is his purpose.

The CHAIRMAN:

– Order! I ask the honorable senator to state his motion.

Senator WRIGHT:

– The motion is, “ That the committee report progress “. Mr.

Chairman, I always believe that the main purpose of parliamentary deliberations is achieved if we can adequately reveal our understanding. I want to say to the Minister that I adverted to the fact that this is a Bill for Ordinary annual services, which precludes me from moving an amendment in respect of any particular item unless I engage in a great constitutional contest on which the Chair would have to invite the ruling of the Senate. I did not want to encounter that at the moment. I drew attention to the fact only to explain why I did not move a straight out amendment to an item and put the Minister to some inconvenience by moving that progress be reported. The motion, if carried, would involve the deferment of the whole Bill.

I want to delay the other question and not re-agitate feelings now, because I wish to express a considerable degree of satisfaction at the general method of presentation of these Bills on this occasion.

In the interests of the people I represent in Tasmania, I am objecting to expenditure on such an inappropriate and useless purpose by a person in whom I have no confidence to produce anything that is worth the expenditure of £15,000 in three years, or £5,000 in one year or £500. I adopt the only course that can register a parliamentary decision as to whether this chamber passes or defers that item. It is in that spirit that I adopt the form of motion that you, Mr. Chairman, have been good enough to proffer to me to achieve my purpose. I move -

That the Chairman report progress and ask leave to sit again.

Senator Henty:

Mr. Chairman-

The CHAIRMAN:

– Order! Further debate is not permissible at this stage. The question is -

That the Committee report progress and ask leave to sit again.

Question put -

The Committee divided. (The Chairman- Senator T. C. Drake-Brockman.)

AYES: 18

NOES: 24

Majority . . . . 6

AYES

NOES

Question so resolved in the negative.

Senator BRANSON:
Western Australia

– I refer to Division No. 787 - Acquisition of Sites and Buildings. I shall confine myself to the subject of the tracking station at Muchea in Western Australia which is to be disposed of because tracking facilities in Western Australia are now at the new site at Carnarvon. Recently I interviewed the Minister for Supply (Mr. Fairhall) and outlined a proposition, to which he listened with interest, for the future use for the Muchea Station. I met the Minister on 6th May and asked him to give favorable consideration to the suggestion that I shall outline.

While I was at Carnarvon recently inspecting the new tracking station there I was reminded of the day I attended the opening of the tracking station at Muchea. I reminded the Minister that it was at Muchea that for the first time in history an Australian spoke to a man in outer space. A small plaque has been erected there to note this fact. The proposal I put to the Minister was that instead of disposing of all the buildings and obsolete and surplus equipment at Muchea, the station be preserved for posterity as a national space museum. Because of rapid development in the space age there is bound to be further obsolete equipment over the years which also could well be placed in the proposed museum. Apart from its educational value as a museum, it would be a monument to those brave men who were the first to venture into outer space as well as those dedicated men who manned this station at Muchea.

I venture to say that it would not cost the taxpayers any great amount of money, because a small charge could be made for admission to cover maintenance and the salary of a caretaker. 1 know it would prove a tourist attraction because the museum that was established at Mundarring Weir to honour a great man, Mr. C. Y. O’Connor, attracts many tourists. A small charge covers the cost of a guide and a caretaker. 1 went to some lengths to explain to the Minister that action would have to be taken now, because if it were delayed it would be very expensive to restore the site and perhaps to get back some of the equipment that had been sold. This proposal might not appear to be very important or of very great interest, but for a long time the Muchea tracking station was of great value to those astronauts who were circling the globe. I venture to say that generations to come would find this equipment most interesting. I find I am in good company, because Senator Cormack has directed my attention to an article which was published in the Melbourne “ Age “ yesterday about Cape Kennedy, the former Cape Canaveral. The article stated -

This is the frightening and fascinating thing about the Cape - the speed with which science has moved since January 31, 1958 when the first U.S. satellite was launched.

That is only seven years ago. The article continues -

The Titan, Thor and Atlas missiles lying about in the dust - the best that science could provide three or four years ago - are now antiques, relics of a primitive period.

Even more so the Army Redstone Rocket, which stands nearby on a pad in its improvised gantry (a converted oil derrick), from which astronauts Alan Shepard and Virgil Grissom were launched on their separate sub-orbital flights in 1961. This is now vintage material - the T-model Ford of the Space Age, so to speak.

Unless we do something to preserve the site, building and basic equipment at Muchea which apparently is not of much use to anybody it will be disposed of, and to restore the station would be expensive. Eventually the American National Aeronautical and Space Administration plans to make at Cape Kennedy a museum of the items there that

I have just mentioned and other exhibits it is collecting. In this connection, the article I have quoted from states - “We envisage it as perhaps a national shrine,” our guide explained. “ We plan to preserve it for posterity . . .

When I put this proposal to the Minister for Supply he showed definite interest in it and he has asked officers of the Department of Supply to go into the matter. I ask the Minister representing the Minister for Supply to inform the Minister for Supply that I have raised the matter in this chamber and I hope that if no honorable senator speaks against it this will be taken as tacit support for the proposal.

Senator KENNELLY:
Victoria

.- I refer to Division No. 318 - Electoral Branch. I thank Senator Wright for bringing before the notice of the Committee the research by Mr. George Howatt into ways and means of overcoming deadlocks between the Senate and the House of Representatives. The Government gave Mr. Howatt a limited grant to enable him to conduct research and prepare his paper entitled “ Resolving Senate-House Deadlocks in Australia “. Now we have a new item under Division No. 318 - “University of Tasmania - Grant for Research into Senate Electoral Arrangements, £5,000 “. I do not know whether the Government has any right on its side in spending this money after there has been a deliberate vote in this House against any inquiry at all.

After listening to Senator Wright and the Minister for Civil Aviation (Senator Henty), I understand that Mr. Howatt will delve into the method of voting for the Senate to see whether it is possible to devise ways and means under which we can at least minimise to a large extent the informal votes in Senate elections. I take it that would be his main purpose. It amazes me to think that behind the back of the Parliament the Government is doing exactly what it refused to allow honorable senators to do on 9th August 1962. On that date I moved the adjournment of the Senate for the purpose of appointing a Select Committee -

To inquire into and report upon the method at present in use of electing Senators and as to whether any and, if so, what changes in the method are desirable.

I should like to have from the Minister some information on the capabilities of our friend in Tasmania in regard to investigating Senate voting that none of us here has. If the resolution which I asked the Senate to adopt in 1962 had been accepted, the usual practices of a select committee would have been followed. That committee would have had the right to send for persons and papers, &c, that it considered necessary to clear its mind on certain matters and to enable it to produce a report that would do justice to its work and so help the Senate in its deliberations on this matter. I would like the Minister for Civil Aviation (Senator Henty), who is in charge of this Bill, to explain to me why the resolution I moved in 1962 was rejected on the advice of the then Leader of the Government, Senator Sir William Spooner. Can the Minister tell me why Mr. Howatt can submit a better and more comprehensive report on this matter than a select committee could submit? What has Mr. Howatt got that we who live by electoral votes and who should know something about Senate electoral procedures have not got? lt is amazing to me that an instance like this could occur. It seems to me that th: Government is flouting the will of this chamber and is saying to the Senate: “ Well, what doc: it matter what you carry? “. If the Government is prepared to provide £5,000 a year for a period of three years for this work, then it must be sure that it will obtain a more comprehensive report from him than it would obtain from a select committee of the Senate. I do not think that the Government can put up a case that would justify its action. I have never known such a thing to happen in the years that I have been here or in other places. After the Senate, dealing with a matter which was in its own interests, decided that there would not bc any inquiry into this matter, the Government without even bringing the matter back before the Senate has decided that there will be an inquiry.

I never noticed any statement or report to the effect that this person had been asked to carry out the inquiry. I do not know the gentleman in question. I have no reason for saying that I would be any more competent than this gentleman or have a greater knowledge of Senate voting procedures than he has. but I think, from a practical point of view, there would be senators who would ku w exactly what they wanted to find out and what they believed was in the best interests of the Senate. It is up to the Minister to give this chamber an explanation as to the qualifications of the gentleman concerned. We should be told the capabilities of this person and the reason why he has been asked to do this work seeing that, as I have stated, the Government has already rejected the appointment of a select committee of the Senate to inquire into this matter. Furthermore, we would like to know what help, apart from the monetary help that the Minister has stated here, the Government is giving to this gentleman. Has he the right to send for persons and papers to assist him in his inquiry? Because he has been given this job, will he have the right to interview all electoral officers?

This is one of the most remarkable things I have ever known. If the Senate had not rejected my proposal, I would have said: “ Let us hope that this gentleman has a lot of practical knowledge in this field. Let us hope that as a result of his report an alteration will be made in our electoral methods “. As far back as 1962, I said in this place that our electoral methods were such that approximately 10 per cent, of electors were voting informally. I do not believe that it is in the best interests of the Senate or of our system of government that the Government can more or less go behind the back of the Senate, after the Senate has rejected a resolution that had as its purpose exactly the same intent as is behind the inquiry which the Government is now asking this gentleman in Tasmania to carry out. This is the first time that anything like this has ever come to my notice. I sincerely hope that it will be the last time. The Government is quite entitled to ask any person to do a job if it thinks that person is capable of doing that job. I admit that there has been a change of Ministers for the Interior in the meantime, but, in this instance, the Senate rejected the original proposition. So. I think that the Minister for the Interior (Mr. Anthony) owes it, out of courtesy to all honorable senators, to inform the Senate through his ministerial representative here what he proposes to do so that the Senate will have the opportunity of voicing its opinion.

Senator McKENNA:
Leader of the Opposition · Tasmania

– Before the Minister replies. I would like to say a few words about the provision of £5,000 for the current year for the purpose of an inquiry into Senate electoral arrangements conducted at the University of Tasmania by a scholar nominated by the Government through the Minister for the Interior. Firstly, I think the item falls into the category of funds that might well be in another bill. It may be that it is a matter running over several years. It might come back to this type of bill after the first time. It might fall into the category of ordinary annual services. I do not want to pursue that line of thought any further, but that is an interesting point which has been raised in relation to this matter.

It is, of course, quite competent for Senator Wright to move a request in this matter. I regret that strictures have been passed upon the scholar, Mr. George Howatt. I would think that the University of Tasmania and the gentleman in question would be completely competent to undertake a study of the nature that has been entrusted to them. I fail to understand why they require three years. I say with complete sincerity that the work could be done in far less than that time if it was handled by a Senate select committee with all the powers that such a committee has, including the power to send for witnesses of every type. The University, or necessity, will have to seek the various witnesses out and travel to them. They would be readily available to a Senate select committee. I ‘think that the performance of Senate select committees in recent years has indicated that they function with great speed and very great competence. I am perfectly certain that the whole field could be traversed by a Senate select committee during the life of the current Parliament and that it would be able to bring back a report that would cover every aspect of the matter.

I come back to the strictures that have been passed on Mr. George Howatt and I say that I do not concur in them. I know the young man. He is very industrious, very intelligent and, I think, of great merit. He has done very good work. I do not think it is proper to embark upon a discussion of the merits of his work and thesis on the subject of deadlocks in the Senate and avoidance of double dissolutions. It is many months since I read his thesis, but I say quite frankly to the Senate that from time to time I encouraged him to address himself to that project. I thought it was a provocative, stimulating and quite novel approach in an attempt to solve what is a serious problem in this Parliament. I refer to the relations between the two Houses. Whether one agrees with his conclusion or not, one must acknowledge the brilliance of the conception, the novelty of it, and the assiduity with which he addressed himself to it. Since he is not able to speak in this place I feel I should at least say those few words for him. I would not be worried about Mr. Howatt’s competence to undertake the study. I do not think the University of Tasmania is nearly as well equipped as would be a Senate select committee to deal with this matter. We of the Opposition are resentful of the fact that only three years ago we moved for the appointment of a select committee and begged honorable senators opposite to join us. We were then rebuffed and we now find that the Senate is being bypassed in favour of a branch of a university.

Without speaking in derogation of any university or any section of a university, I am sure that a Senate select committee composed of specialists in the very field that the body in Tasmania is asked to consider, and with practical knowledge that would not have to be bought but which would already have been acquired, would address itself to this problem very much better. So we of the Opposition find, after our proposal for the appointment of a Senate select committee has been rejected, that the task has been entrusted to a body without the facilities and without anything like the background knowledge that a Senate select committee would have. From our point of view that is adding insult to injury. I regret that the Government did not avail itself of the talent that is readily available to it in this chamber and allow our senators to address themselves as specialists to this problem.

Nobody questions the need to investigate the matter. The large number of informal votes, the factors that conduce to it, the complexity of the Senate ballot paper and the need to set it up fairly so that no one candidate is favoured over another, all are great problems that go to the very roots of true voting and so to the roots of democracy. This is an important issue. We on this side do not mind it being investigated, but we resent the fact that the Senate has been deliberately bypassed by the Government although the Senate was fitted and ready, at least so far as the Opposition is concerned, to function in the matter.

Senator O’BYRNE:
Tasmania

.- I wish to come to the defence of Mr. George Howatt, a very able American scholar who has been in Tasmania for a number of years on a Fulbright scholarship and who has made some valuable contributions in the field of political and parliamentary research. He has applied himself to a problem in Tasmania relative to the Hare-Clark system of voting at elections and evidently has evolved a formula whereby the uncertainty that prevailed in the past in regard to equal voting has been for the time being eliminated. I give him all credit for the work that he has done.

With regard to Mr. Howatt’s report on the avoidance of deadlocks in the Senate I do not take the matter as seriously as Senator Wright has taken it. I believe that Mr. Howatt did a lot of good work in connection with it. For the first time we saw an exposition of the actual relationships between the Senate and the House of Representatives and of the problem of deadlocks. Mr. Howatt did a lot of spade work that had not previously been done. It is my view in these matters that even though a scientist achieves world fame for bringing to finality a line of research, behind the breakthrough there is a tremendous amount of work that is never recognised. The research often runs up the wrong channels, but on the way new material may be found and may contribute to the reservoir of knowledge which eventually leads to the result that it is sought to achieve.

I look on George Howatt as one of the few men in this country with a natural gift for probing problems such as that which we are discussing. To me, it is worthwhile to get him to apply his undoubted talents and competence to the solution of these problems. I do not agree at all with his final conclusions on the solution of double dissolutions. I agree in part with Senator Wright’s suggestion regarding the bringing in of an extraneous vote that upsets the traditional balance. On the other hand, there is a tremendous amount of material in Mr. Howatt’s report that will be of great value to people interested in this line of research in the future.

I join those honorable senators who feel aggrieved that, at the ministerial and executive level, the Senate should have been deprived of the opportunity to have a committee of its own to investigate this matter. Such a committee would have access to the work being done at the various universities, and the legal people throughout Australia who have given some thought to this matter in their spare time would be able to contribute their views. The collation of the knowledge gained from that wider field perhaps could put George Howatt on the right track and enable him to refine, as it were, the Senate select committee’s report. That may or may not be so. In any event, I want to come to the defence of George Howatt because he is a dedicated man who has contributed in his own way to the fund of knowledge concerning a problem that has perplexed all of us.

As I mentioned earlier, the whole process of building up the democratic parliamentary system has been a matter of trial and error. Standing Orders were devised for the Senate, but over the years they have been subjected to amendment. If one looks at the basic document that is in the possession of the Clerk, one will find numerous additions here and there which indicate that the original idea has been found to be wanting in some particular. Perhaps the alterations that have been made have been valuable in providing for the better government of this Commonwealth.

I believe that Senator Wright was quite entitled to raise, and indeed has done a service in raising, this matter and in suggesting that the Senate has more or less been bypassed by the Minister. But I think that George Howatt should be encouraged to continue his research. Whether the money comes from the Fulbright Foundation, from the Churchill memorial fund, from the taxpayers of Australia, or as a bequest, whoever keeps this man busy on this research is not wasting the money. The procedure that has been adopted by the Minister has been criticised, and I think it is due for criticism. On the other hand, the man who is involved has my support, not because, as I said earlier, I agree with his conclusions in regard to resolving deadlocks in the Senate. He has my support because of the amount of effort he has put into his work and his integrity and purpose. Even though he does not always hit the jackpot, he is contributing his time and intellectual capacity in a way in which not a great number of other people in this country are, and he is accumulating a storehouse of knowledge about this rather nebulous thing that we describe as democratic parliamentary procedure. For that reason, we are doing well to provide funds to keep him occupied in this work. I believe that the money is not being wasted but that the method of its allocation is being justifiably challenged.

Senator HENTY:
Minister for Civil Aviation · Tasmania · LP

– The grant in question, which is to be made to the University of Tasmania, is for research by that University into Senate electoral matters. The man who is undertaking this work is a Fulbright scholar. He is Mr. George Howatt, M.A. This man has interested himself over a number of years in all kinds of political research. I am sorry that Senator McKenna should have thought that the Senate was being bypassed in relation to this item of expenditure. Sometimes it is not a bad idea to have an independent man to conduct such research. Sometimes those who are close to the position are not the best to undertake the research desired. It may be well that this research is being undertaken by a scholar such as Mr. Howatt. Having spent three years on research into elections back to the early days of Federation, he will be able to make his information available.

It may well be that a Senate select committee could then be set up to investigate the whole matter against this background of research. A Senate select committee would not be able to undertake such work in the limited time that normally would be available to it. Honorable senators should not feel that they have been bypassed. If, after this man had completed his researches a select committee were appointed, that committee would have a better basis upon which to work than would otherwise be the case. This item should be agreed to; the expenditure will be well worth while.

Senator BENN:
Queensland

.- I do not think it is necessary for honorable senators to question or to comment upon the capabilities of the person who is engaged upon the research work in question. The purpose of this Bill is to appropriate an additional sum out of the Consolidated Revenue Fund for expenditure in respect of the current financial year, not for next year. The Estimates were passed in August or September last, but it has since been found that a further sum of money is required to carry out the services outlined in the document up to 30th June next. Let us be clear on that point.

The item in question appears in Division 318 - Electoral Branch and is described in these terms: “01. University of Tasmania - Grant for research into Senate electoral arrangements.” That does not imply that the officer who does the research has to be a highly qualified research officer. A clerk who is engaged on ordinary duties could be given the research work to do. It is not for us to question that. Unquestionably this item has been included with some particular object in mind. 1 do not think we need even to survey the field of work undertaken by the officer. Any analysis of electoral systems is of some value, but 1 doubt whether any honorable senator is qualified to say whether the analysis in question will be of value.

I listened with interest to Senator Wright. He referred to the Constitution and based the main part of his argument upon it. That is why I was most willing to help him. If the Constitution provides for a certain number of senators to represent Tasmania, nothing can be done to change that provision unless it is done by way of a referendum. Reference was made to the ordinary services of the Government and the question was raised as to whether this item should have been included in the Schedule to the Bill. Of course it is an ordinary service, because the Electoral Branch is carrying out research work all the time. Returning officers in divisions throughout the Commonwealth are engaged continually in some class of research work. They cannot spend all their time simply taking names off and putting names on the roll. The additional work they do becon.es ordinary work. I do not agree that is wrong to include provision for this item. Secretly, of course, I supported what Senator Wright had to say. It was not made clear to us that this research work is being done objectively or what the goal was before the person involved was put to work and asked to submit a report. We would have to object to a highly qualified person coming here from the United States of America and the Commonwealth Government just providing him with research work to keep him occupied. If 1 knew that that was being done, I would certainly condemn it and I feel sure that 90 per cent, of senators would also condemn it.

Senator Wright:

– That is exactly the position. He has run out of a job in Tasmania and this is a continuation.

Senator BENN:

– I would have to have concrete evidence of that. If there were no evidence before us, I would not be inclined to do anything about it. It stands as an item in the Bill and we can allow it to go through. The Minister would not have the final say about the insertion of that item in the Bill. It would have to be discussed with the Secretary of his Department, the Chief Electoral Officer and the Secretary of the Department of the Treasury. When the question had been distilled by having it passed from one officer to another and having conferences about it, the item would be inserted. Such items can usually be passed by the Senate without fear. I have no doubt that the officer employed to do the research would furnish a report with some authority. Whether the result of his work would be of any value to the Senate or anybody else is not for us to question at the moment, because we have no evidence about it.

Senator Sir WILLIAM SPOONER (New South Wales) [9.23].- I should like to put a point of view very briefly on the facts as I have heard them during the debate. There is no ground for complaint and no substance for the statement that this action on the part of the Minister is in derogation or against the dignity of the Senate. On the facts as I have picked them up from the debate, the Senate, after debating a motion by Senator Kennelly in 1962, refused to agree to the appointment of a select committee to look into this matter. The Minister has a responsibility to administer his Department. Coming to the year 1965, he feels that he wants some advice or assistance and he decides to commence upon a research programme, against the background that the Senate itself has refused to appoint a select committee. What possible ground for complaint can there be against the Minister’s acting in that fashion? He has a department to conduct. He has his responsibilities to discharge. He comes to a matter which requires consideration in relation to which the Senate has said: “ We will not appoint a select committee “. The Senate having said that he then takes some other course of action. In those circumstances, I find no substance in the argument that something is being done to the Senate which should not be done.

I should like to take my ‘ argument a step further. I would find no cause for objection to the Minister’s authorising a programme such as this even if the Senate had appointed a select committee, because the Minister has to accept the responsibility of making recommendations to the Government upon all matters that come under his control, even on reports that are made by a select committee of the Senate. If the Minister feels that he wants further advice and further work done on the subject, I do not see any reason to object.

It is not to be thought that the report of any committee of the Parliament will automatically be adopted by the Government. I would have no objection to a Minister acting in this way but it would make no difference whether or not T had objections. No Minister will deal with a report of any kind without getting the best advice that he thinks is available and is required. Consider the report of the Senate Select Committee on the Encouragement of Australian Productions for Television. Does anyone suggest that the Postmaster-General (Mr. Hulme) is not getting further advice on the recommendations of that Committee? I refuse to be influenced by the argument that this is not a perfectly normal and proper thing for the Minister to do. Here we have a complicated set of voting arrangements. Surely it is natural for the Minister to say: “ I wonder whether I can get some advice or assistance from the academic world. Someone concentrating on the matter may come up with a set of suggestions which have not been made before.” I cannot enter into the argument which has been raised on personal grounds, that is, that the person selected is not competent. I do not know. Prima facie I do not accept that a Minister deliberately would select a wrong person to carry out a research programme.

Senator MATTNER:
South Australia

– Perhaps we might be clearer in our minds if the Minister gave us some idea of the terms of reference in this matter. It is a very personal and domestic matter so far as the Senate is concerned. We do not know what terms of reference this man has had given to him. A question of privilege conies into it.

Senator Henty:

– It is the university, not the man.

Senator MATTNER:

– Well , the university. A great deal of privilege comes into it. There is a question as to the files and papers to which he has access. The Senate should be really informed. One cannot go to an electoral office and have a look at voting papers. Could any senator get access to those papers?

Senator O’Byrne:

– He would get returns, but not the papers.

Senator MATTNER:

– Yes. That is what we want to know. That is where the question of privilege comes in, to my mind. Perhaps the Minister on some other occasion will give us the terms of reference. I should like to be perfectly clear also as to whether this man will be given access to the voting papers in order to scrutinise and collate them.

Senator BISHOP:
South Australia

– I support the representations which have been made by the Leader of the Opposition (Senator McKenna) and the Deputy Leader (Senator Kennelly). I think that with Senator Wright they have made out a clear case on what seems to be a very simple and easily recognised proposition. I cannot follow the approach that Senator Sir William Spooner has made. I see the proposition simply in this light: In 1962 the Senate tested a proposition introduced by Senator Kennelly, in relation to an inquiry into these matters. The matters having been debated, Government supporters decided to reject the request for an inquiry. The need for an inquiry having been disclaimed by the Government, the Minister for the Interior (Mr. Anthony), who is an instrument of the Government, decided to carry on some sort of inquiry himself or at least to authorise some person to conduct research. It seems to me that the question of who will perform the task is only incidental. The important thing is that having had the proposal tested in, and rejected by, the Senate and by the Government, a Minister, responsible to Cabinet and the Parliament, then decided to institute an inquiry into a proposition in relation to which the Senate, in particular, would not be able to investigate, persuade, direct or analyse. In this respect I also support Senator Mattner.

Having done this, and having decided there were good reasons to reject the Opposition’s 1962 proposal the Government decided there was some merit in allowing a specially trained person to conduct certain inquiries and afford advice to it. Obviously the Government should have advised the Senate and the Parliament of its decision because the decision of the Minister was in direct conflict with a decision of the Senate. There should have been some reconciliation between the two performances of the Government.

To my mind this is a very simply stated proposition. It is obviously improper for a sum of money to be voted by the Parliament having in mind that we had rejected in principle basically the kind of inquiries which it is proposed shall now be undertaken. It could be argued that the present research will be on other than the general nature of the inquiry we proposed, but I suggest that Senator Kennelly’s proposition was in fact that there should be such an inquiry. The proposition was put to the Senate and it was rejected. In that circumstance nothing should be done about the particular excursion now under review until the Senate has had a chance to debate it.

Senator HENTY:
Minister for Civil Aviation · Tasmania · LP

– I should like to give the Senate a little more information which has just come to hand. It probably will resolve some of the doubts in the minds of honorable senators. It is to the effect that the Government has decided to make a grant of £5,000 a year for three years to the University of Tasmania to allow detailed studies to be made into Commonwealth electoral methods. The University, which has charge of the project, has arranged for Mr. Howatt to do the research. The University will receive the grant funds from the Commonwealth and will decide how the money is to be disbursed.

The Minister for the Interior (Mr. Anthony) has asked the University to arrange research initially into the following projects -

Ways and means of reducing informal voting at Senate elections;

Preferential voting - extent to which preferences should be marked;

Methods of eliminating or improving “ random selection “ in Senate elections.

As work on these projects proceeds, the Minister expects to propose research into a number of other subjects such as “ donkey” voting, the filling of casual Senate vacancies, and other matters.

Mr. Howatt has been engaged almost exclusively for 12 years in research into aspects of the Australian electoral system. The University of Tasmania has become widely known for the electoral research undertaken under its direction by Mr. Howatt, who has completed studies for the Commonwealth and Tasmanian Governments and for New South Wales authorities. He has paid particular attention to the proportional representation system.

Mr. Howatt has studied electoral systems used in other countries, and is the author of a large number of published discussions on electoral systems in magazines and newspapers in the United States and Australia. He graduated with honours when he gained his B.A. degree at Muhlenberg College, Allentown, Pennsylvania, and with the highest grade awarded when he gained his M.A. degree at Lehigh University, Bethlehem, Pennsylvania. Before coming to Australia Mr. Howatt was lecturer in government from 1947 to 1952 at Lehigh University.

Because of Mr. Howatt’s wide knowledge of Australian electoral methods and the large volume of background information he had gathered in his studies it was felt he was specially suited to undertake the research required and that it was not necessary to look further for a suitable person to do the work. I point out that electoral research is a function of the electoral branch of the Department of the Interior.

I remind honorable senators that it is the University which is receiving the grant; that it is the University which will be in charge of the project and that it is the University which will decide how the money is to be disbursed.

Senator WRIGHT:
Tasmania

.- Do I understand, Mr. Chairman, that no request has been made in relation to this item?

The CHAIRMAN:

– That is right.

Senator WRIGHT:

– Then, I move-

That the House of Representatives be requested to omit the following item under Division No. 318 - Electoral Branch, sub-division 4 - Other services, item 01 - “ University of Tasmania - Grant for Research into Senate Electoral Arrangements £5,000 “.

I rose to put the matter in order and to notice the argument advanced by Senator Wood and Senator Sir William Spooner. This argument aggravates my opposition to this item because in 1962, following Senator Sir William Spooner’s leadership in rejecting the proposition that there should be an inquiry into this matter, we voted against it with a feeling of confidence. Now, 18 months or 2 years later, he asserts the propriety of his colleague pursuing such an inquiry by a method which has been subjected to severe criticism. But the main point is that this Senate, under his leadership, voted against the inquiry and that he now asserts the propriety of his colleague persevering with the same inquiry.

Senator McClelland:

– A case of the Executive placing itself above the Parliament.

Senator WRIGHT:

– Exactly, showing contempt for this chamber in a matter which is of peculiar interest to this chamber. It is infinitely worse when we realise that in the ordinary course of business we should be able to expect that once we vote that such an inquiry should not be undertaken, a colleague of the Minister who previously led that opposition should not himself institute the same inquiry without reference to us and by a means which would not be acceptable to any responsible House of Parliament.

I feel some measure of sadness when I hear degrees from colleges in Pennsylvania paraded in the way they have been and coupled with 12 years experience in research into Tasmanian electoral systems, including perhaps some excursion into New South Wales on a subject about which I do not know anything. How evident it is that if a Senate select committee had been set up it would have received the earnest attention of scholars in political science in every university of Australia, on not only the constitutional side but also the electoral and political side, just as the Senate select committee which was set up when the proposal to resolve deadlocks was the subject of inquiry received submissions from scholars versed in every element of that subject. If a select committee had been set up we would have received a report from our own colleagues together with the evidence of a multitude of scholars. We would not have been confined to the inquiries of one particular scholar with quite limited advantages and as to the moulding of whose judgment other scholars in Australia would have not the slightest interest. Just imagine one scholar charged with this research expecting others developing this field to turn aside and submit their thoughts to him for his interpretation to this Parliament.

Then there is the point Senator Mattner raised which, I must confess, had entirely escaped me. But it is a point for consideration. Unless this scholar is to be expected to make a report on such material as would be available to any other scholar it is, I think, pertinent to say that he might intrude into matters which would constitute a breach of privilege.

Senator PROWSE (Western Australia) [9.42.1. - I rise to oppose the point of view that has been expressed by Senator Wright and to support the point of view advanced by Senator Sir William Spooner. In 1962 the Senate rejected the submission that a select committee should be appointed to inquire into Senate voting, and not that an inquiry should be held into Senate voting. The Senate did not reject the proposition of an inquiry. I cannot see how the rejection by the Senate of the Opposition’s motion at that time has any bearing on what seems to me to be purely an administrative act. The Minister for the Interior (Mr. Anthony) is in charge of the Department concerned. If he desires to inform the Government on a change that has taken place over the last three years in respect of Senate voting and examine new factors which must be taken into consideration he may quite validly depute some officers of his Department to undertake that task, he may employ new staff or he may take the course he has followed, of making a grant to somebody outside his Department to supply the advice he seeks. I can see no implication that the Minister has done anything other than a purely administrative act for which he has full authority.

Senator BRANSON:
Western Australia

– I do not wish to question the entitlement of the Minister to follow the course he has taken but I still do not believe that the Senate should not have something to say as to whether the money should be spent. I would like Senator Henty, who represents the Minister for the Interior (Mr. Anthony), to inform the Senate what opportunity we have, if this item is passed now, to criticise the way in which the money is expended or to disallow the grant?

Senator HENTY:
Minister for Civil Aviation · Tasmania · LP

– In answer to Senator Branson’s question, the Senate is asked to approve for this year expenditure of £5,000 lor the purpose stated in the item. The Minister has acted entirely correctly in seeking approval for that expenditure by his Department. The Department of the Interior is responsible for the electoral system and the Minister is responsible for his Department. He wishes to obtain advice from an outside source. The Senate may disagree with the advice obtained or with the source which supplies it, but the Minister is seeking guidance and assistance in a number of matters from the University of Tasmania after it conducts research. I have not before heard the Senate speak against university research into projects. The item seeks expenditure for a project to advise the Minister and the amount required for this year is £5,000. As I see it, next year it will be £5,000. So far as I am aware, and I hope I am right, if the item goes through in this form on this occasion next year it will be included in a non-amendable bill.

Senator KENNELLY:
Victoria

.- We have heard a remarkable speech by Senator Sir William Spooner. It is true, as Senator Wright said, that Senator Sir William Spooner led the Government in the Senate in 1962 and he made the decision - possibly after a party meeting - that the proposition that a select committee should be appointed into the question of Senate voting should be rejected. I shall quote from the “ Hansard “ report the words that Senator Spooner used. He said -

The Government considers–

Not he- that a select committee of the Senate would not be likely to produce material which is not already available to the Government. Therefore, the Government does not feel the need for the aid of a select committee’s consideration on the matter.

Senator Sir William Spooner:

– Did I lead for the Government in that debate?

Senator KENNELLY:

– Yes. As a rule the honorable senator did not let others lead very much when he felt that he could knock a proposition. I ha%’e quoted the words reported in “ Hansard “. It seems to me to be a remarkable thing that in 1962 the honorable senator had all the answers and did not see the need to seek any other information. He did not want a select committee to examine the question. Now, in the financial year 1 964-65, an amount of £5,000 is sought to be granted to the University of Tasmania for this purpose. If honorable senators read a little further on in the Bill they will see that a certain party has been asked to undertake the task. We should not fool ourselves. I have nothing to say about the individual concerned. I have never met him and therefore I would not think of condemning him or of saying anything derogatory about him. However, it seems to me that if the Government was quite satisfied with the position in 1962 - and it is the same Government now - it is very surprising that suddenly the Government wishes to employ an individual to give advice on the matter.

Senator Prowse has said that an inquiry was not rejected. What was the select committee to do? I proposed the appointment of a select committee -

To enquire into and report upon the method at present in use of electing senators. . .

Honorable senators opposite voted against the proposal and the natural corollary of their action was that they defeated the idea. I admit that a Minister running a department is entitled to administer it in his own way. But a Minister of the same administration has submitted this item of expenditure.

Senator Prowse:

– But not the same Minister.

Senator KENNELLY:

– I have already said that. I have a high personal respect for the Leader of the Country Party in another place, the honorable member for Murray (Mr. McEwen). We know from the Bills that are still to be presented why he took hold of this proposal. But the Government or whoever represents the Minister for the Interior (Mr. Anthony) in this chamber should have informed the Senate of the proposal we are discussing. What we are asked to approve should not have been done the way it was done. May I even hope that out of this report we will obtain something of value to the people?

Senator Branson:

– It will want to be good for £15,000.

Senator KENNELLY:

– I am not going into that, because I think a man is worthy of his hire; but in this case I want first to see the job he produces before I comment on it. A terrific number of reports have been submitted. This Government has been able to do all sorts of things with those reports because it has had the numbers. We remember the report of the Senate Select Committee on the Encouragement of Australian Productions for Television. Once the Government had the report it forgot about it. The Government satisfied a few senators in the Libaral Party who wanted to have a look at the Australian content in television programmes. But having got the report the Government forgot all about it. I regret that the position we are discussing has arisen. The Government is flouting the will of the Senate, and that is wrong. There was no need to flout this chamber. All the Government had to do was to have one of its Ministers say in the Senate that the present Minister for the Interior wanted an investigation into Senate electoral arrangements.

Senator HENTY:
TASMANIA · LP

– The Minister made a public statement on the subject.

Senator KENNELLY:

– The point is that the announcement should have been made in the Senate. Then honorable senators at least would have had an opportunity to express their opinions. The Minister’s statement might have been reported in some States and not in others. Possibly because it affected the University of Tasmania it was news in Hobart. I did not notice any report in the Victorian newspapers and I generally glance through them. On the other hand, I will not say that it was not published in Victoria. The fact is that a decision on this proposed grant was made by the Government and I remind supporters of the Government that it was they who voted against my proposal in 1962. Now that the Government has taken this step, I can only come to this conclusion: Whatever the decision of the Senate is on any question, the Government is prepared to throw out a proposal and then renew it after a space of time if it thinks fit. No matter what the Government thinks of the Australian Labour Party - andI am not casting aspersions one way or the other - I think this is wrong. The Government is not doing the right thing by honorable senators.

Motion (by Senator Henty) put -

Thatt he question be now put.

The Committee divided. (The Chairman - Senator T. C. DrakeBrockman.)

AYES: 24

NOES: 20

Majority . . . . 4

AYES

NOES

Question so resolved in the affirmative.

Question put -

That the request (Senator Wright’s) be agreed to.

The Committee divided. (The Chairman - Senator T. C. DrakeBrockman.)

AYES: 20

NOES: 24

Majority . . 4

AYES

NOES

Question so ‘resolved in the negative.

Bill agreed to.

Bill reported without requests; report adopted.

Third Reading

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

page 1013

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

Second Reading

Consideration resumed (vide page 910), on motion by Senator Henty -

That the Bill be now read a second time.

Question resolved in the affirmative.

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

page 1014

SUPPLY BILL (No. 1) 1965-66

First Reading

Debate resumed (vide page 910). on motion by Senator Henty -

That the Bill be now read a first time.

Senator WEDGWOOD:
Victoria

– Having regard to the discursiveness of the debate on the Bill with which the Senate has just dealt I hesitate to enter this debate on the Supply Bill (No. 1), but I do so to remind honorable senators of some of the circumstances that were generated by the debate in this chamber about 12 months ago on the presentation of the Appropriation and Supply Bills. Honorable senators will recall that on 5th May 1964 the then Leader of the Government in the Senate, Senator Sir William Spooner, announced that the Government had decided that from 1964-65 the contents of the Appropriation Bill and the Appropriation (Works and Services) Bill would be amalgamated, subject to the separation out and inclusion in separate measures of any particular items which, as a matter of interpretation, did not fall within the description of appropriations for the “ ordinary annual services of the Government “. Senators Cormack, Mattner, McKellar, Scott and Wright from the Government side of the chamber, and Senator Murphy from the Opposition’ side, expressed very strong views as to the probable effect of the decision on powers reserved to and exercised by the Senate since federation. These views were strengthened and fears were aroused still further when on 14th May 1964 Senator Paltridge, the present Leader of the Government in the Senate, presented Supply Bills requiring the appropriation of £427 million for the ordinary annual services of the Government, in relation to which the Senate had power to make a request but had no power to amend, together with a bill requiring the appropriation of between £1 million and £2 million in respect of which the Senate had power to amend. The pattern was repeated when the Appropriation Bills were introduced during the Budget session. On that occasion honorable senators again discovered that practically the entire range of items previously found in the separate amendable bill had been removed from it and placed in the non-amendable Bill.

I do not propose, particularly at this hour, to repeat any of the arguments that were used 12 months ago. They can be found in “ Hansard “. Honorable senators who are interested may read them and refresh their memories, but I would like to refer to a reference that was made on a number of occasions to the 1961 inquiry by the Joint Committee of Public Accounts, and to its subsequent report to the Parliament. I repeat what 1 said 12 months ago, that the Committee undertook a review of the form and content of the financial documents presented to the Parliament in an endeavour to eliminate procedures which had been found to be costly, cumbersome and wasteful.

In its report the Committee stated its awareness of the administrative and accounting advantages that could flow from an alteration in the form and content of the papers, but the Committee deliberately refrained from making any recommendation in relation to the practices of the Parliament. It is very evident that during the last few months the Government has given much consideration to the matters raised last May and during the Budget session, particularly as they applied to subjects concerned with constitutional interpretation and parliamentary practice. As a result, the Treasurer (Mr. Harold Holt) and the Minister for Civil Aviation (Senator Henty) who represents him in this chamber, have informed both Houses of the Parliament that after further discussion on the classification of appropriations the Government has now decided that henceforth there will be a separate bill, on this occasion entitled the Supply Bill (No. 2), which will be subject to amendment by the Senate, and that this separate Bill will contain appropriations for expenditure on (a) the construction of public works and buildings; (b) the acquisition of sites and buildings; (c) items of plant and equipment which are clearly definable as capital expenditure; (d) grants to the States under section 96 of the Constitution; and (e) new policies not authorised by special legislation. Subsequent appropriations for such items will be included in the Appropriation Bill not subject to amendment by the Senate.

In the debate on the Appropriation Bill (No. 3) 1964-65 Senator Branson inquired whether an item which was in dispute at the present time was likely to be the subject of amendment during the Budget session and the Minister, if I understood him correctly, said he would think that that item would appear in the non-amendable bill during the Budget session. I should think that that would be so since it could not be claimed that it was an item of new policy as it has appeared in the Appropriation Bill referred to above. In the Treasurer’s statement and also in the statement made by the Minister for Civil Aviation in this Chamber, we were given to understand that subsequent appropriations for such items will be included in the Appropriation Bill not subject to amendment by the Senate.

In essence, the Senate understands that it is dealing with a bill appropriating £398,654,000 to carry on the ordinary annual services of the Government during the first five months of 1965-66, in relation to which the Senate may make a request but which is not subject to amendment by the Senate, lt is also dealing with a Bill requiring an appropriation of £95,026,000 for what the Senate understands is expenditure not being expenditure for the ordinary annual services of the Government and which is subject to amendment by the Senate. Honorable senators may have noticed that I have twice said that the Senate understands that that is the position. My reason for saying that the Senate understands that the appropriations in the Supply Bills are for expenditure for the ordinary annual services of the Government and for expenditure not being for the ordinary annual services is that I notice that in the long title of Supply Bill (No. 1) the draftsman has used the following words: “To make interim provision for the appropriation of moneys out of the Consolidated Revenue Fund for the service of the year ending on the thirtieth day of June one thousand nine hundred and sixty six “. In the Supply Bill 1964-65 the words “ for the ordinary annual services of the Government “ appeared, but in this Bill the words “ for the service” have been inserted. The long title of the Supply Bill (No. 2) 1 965-66 is as follows-

To make interim provision for the appropriation of moneys out of the Consolidated Revenue Fund for certain expenditure in respect of the year ending on the thirtieth day of June, One thousand nine hundred and sixty six.

In that Bill the word “ certain “ is used instead of the words “ not being expenditure for the ordinary annual services of the Government” which were used hitherto.

I make these points not in any critical sense but because I am certain that all honorable senators will be satisfied with the outcome of what appeared last year to be a very difficult situation. The Government and officers of the Treasury are to be congratulated upon their work to find a solution that would be acceptable to both Houses of the Parliament. They appear to have found a solution. I believe that they have set out in a more, if not a completely, definitive way the classification of items that the Senate may expect to be included in the future in a separate amendable Bill. In other words, this Bill establishes a criteria hitherto absent. What is most important to honorable senators, it retains for the Senate the power to amend which is reserved to it in sections 53 and 54 of the Commonwealth Constitution.

Nevertheless, in my opinion it would be unwise to regard this whole matter as being resolved completely or for all time. The Bills under discussion tonight cover only a proportion of the total expenditure for 1965-66. Therefore, I shall watch with particular interest the form that such Bills take when the total expenditure for the year is under consideration by the Senate in the Budget session. I shall be interested to know also whether the words in the present long titles are intended to cover an interim period or are to find permanent expression in all Appropriation Bills. This is a question which I do not expect the Minister to answer either today or tomorrow, but I leave it as a challenging thought for the future consideration of honorable senators should the necessity to re-examine it arise. I therefore have much pleasure in supporting this Bill.

Question resolved in the affirmative.

Bill read a first time.

Second Reading

Senator HENTY:
Minister for Civil Aviation · Tasmania · LP

– I move -

That the Bill be now rend a second time.

When the Appropriation (Special Expenditure) Bill 1964-65 was presented last

October it was explained that that Bill contained those appropriations for which, in the opinion of the Government and its legal advisers, a good case could not be made out for the view that they were for the ordinary annual services of the Government. At the same time it was indicated that discussions on the classifications of appropriations were continuing.

Since then there have been further discussions as a result of which the Government has now decided that henceforth there will be a separate Bill, on this occasion entitled the Supply Bill (No. 2), subject to amendment by the Senate, containing appropriations for expenditure on - (a.) The construction of public works and buildings;

  1. The acquisition of sites and buildings;
  2. Items of plant and equipment which are clearly definable as capital expenditure;
  3. Grants to the States under section 96 of the Constitution; and
  4. New policies not authorised by special legislation. Subsequent appropriations for such items will be included in the Appropriation Bill not subject to amendment by the Senate.

The purpose of this Bill then is to seek an appropriation totalling £398,654,000 for purposes other than those to which I have referred to carry on the normal services of Government during the first five months of 1965-66. The total amount sought comprises -

In general, these amounts represent approximately five-twelths of the 1964-65 appropriations and make no provision for new services. However, the amount of £161,676,000 for defence Services makes provision for implementation of the expanded defence programme announced by the Government last year, and also for large contractual payments due in the first five months of the financial year.

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 expenditure on services of the Government, particulars of which will afterwards be submitted to Parliament. 1 comment the Bill to honorable senators.

Senator MURPHY:
New South Wales

– Throughout the history of Australia some persons have made a significant contribution to the maintenance and strengthening of our parliamentary democracy. Some honorable senators who are at present serving in this chamber have striven to uphold the Constitution, with considerable success. The Australian Labour Party takes the view that the present form of the Appropriation Bills accords with what is required by the Constitution - that is, that there should be a Bill which provides for the ordinary annual services of the Government and another Bill or Bills which provide for other appropriations.

There has been considerable disputation about the content of these Bills. Some honorable senators who prefer to remain nameless have worked with much assiduity, with great success and with credit to the Senate, towards the realisation of the practical working of the bicameral system and the achievement of democracy in Australia. I should like to congratulate those honorable senators upon their achievements in relation to measures of the kind we are discussing tonight. I am not satisfied that a completely satisfactory result has been achieved. 1 believe that the provision for the Parliament ought to be put on a different basis fromwhat it is now and that certain other matters ought to be provided for in a different manner so that the independence of the Parliament may be maintained. But what has been achieved is a most significant advance. I trust that those who have succeeded thus far will persist with their efforts.

Question resolved in the affirmative.

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

page 1017

SUPPLY BILL (No. 2) 1965-66

Second Reading

Consideration resumed from J 9th May (vide page 910), on motion by Senator Henty -

That the Bill be now read a second time.

Question resolved in the affirmative.

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

page 1017

INTERNATIONAL MONETARY AGREEMENTS BILL 1965

Second Reading

Debate resumed from 19th May (vide page 950), on motion by Senator Henty -

That the Bill be now read a second time.

Senator BISHOP:
South Australia

– The Opposition does not oppose this Bill. Australia accepted membership of the International Monetary Fund in 1947 when the world was just emerging from the war years. The then Prime Minister of Australia, the late Mr. Chifley, reported to the Parliament on reasons why the then Government had decided to persuade international bodies to embark upon the establishment of some organisation by means of which planning towards international monetary controls might be undertaken. At that time the Government, and to some extent the Opposition, saw the new organisation as a means towards economic progress, the facilitation of international trade and the general stabilisation of monetary policies.

Debate interrupted.

page 1017

ADJOURNMENT

The PRESIDENT (Senator the Honorable 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 negative.

page 1017

INTERNATIONAL MONETARY AGREEMENTS BILL 1965

Debate resumed.

Senator BISHOP:

– When the Minister for Civil Aviation (Senator Henty) introduced the Bill, he indicated that at the annual meeting of the Board of Governors of the Fund in Tokyo last year, which the Treasurer (Mr. Harold Holt) attended, it had been decided that Australia should accept an increase of 25 per cent, in its quota and that there would be special increases in the quotas of 16 member countries to bring their quotas into line with those of comparable countries. The Minister also mentioned that Australia, had on three occasions made drawings from the Fund and that the situation externally was serious enough for the need to support the Fund to be recognised; that the United Kingdom very recently had made drawings from the Fund totalling 2,400 million dollars, and this was an additional reason why there should be the greatest support for the Fund; and that Australia would have drawing rights totalling £A290 million. The Minister very properly indicated that the Fund was a necessary adjunct to trading and stability and that it was an insurance against balance of payments difficulties of a temporary nature. We agree with this general approach to the question. When the Chifley Government introduced the legislation it sought to persuade the United Nations to encompass the objective of full employment and economic stability. A device was established to enable member nations to draw funds to offset emergency problems or balance of payment problems of a temporary nature.

While the Opposition does not oppose the Bill, it seems to me that while the Fund is serving a useful purpose it is limited, and self-satisfaction as to our ability to draw upon the Fund should not be of great comfort to us, because we must have regard to still wider problems that face this country and, for that matter, the United Kingdom and the United States of America. On this occasion some mention should be made of the wider problems that face Australia. In view of the late hour, I do not intend to occupy very much time on the question, because the various matters involved have been placed on record in another place. While the Government has suggested that our international reserves are very satisfactory, it is obvious that our position is not very sound. Our balance of payments position is relatively good only because we are dependent on the inflow of capital. This is illustrated by a statement in the “ Treasury Information Bulletin” of January 1965, which reads -

Australia’s holdings of gold and foreign exchange at the end of December 1964 amounted to £825 million, a decline of £13 million in the December quarter and of £30 million in the first half of 1964-65. Exports in the recent December quarter were £19 million lower in value than in the December quarter of 1963, while imports were £79 million greater. Whereas exports exceeded imports in the December quarter of 1963 by £96 million, in the recent December quarter imports exceeded imports by £2 million. On current account as a whole there was a deficit of £70 million in the recent December quarter compared wilh a surplus of £38 million a year earlier.

In many debates we have made it a point that there ought to be some reassessment by the Government of this dependency on capital from overseas. There has been some slight recognition of the situation. In a letter dated 12th March 1965 to the President of the United States of America, the Prime Minister (Sir Robert Menzies) stated -

Ordinarily Australia has a large current account deficit with the United States. In 1962-63 Australia’s exports to the United States totalled 297 million dollars while her imports from the United States amounted to 478 million dollars. Her net invisible payments to the United States in that year were 181.2 million dollars giving a deficit on current account of 362.2 million dollars.

This current account deficit with the United Slates has been offset in part by capital inflow from the United States, most of it on private account. In 1962-63, the annual inflow from the United States and Canada (by far the greater part being from the United States) of private oversea investment (including undistributed income) in companies in Australia was 201.6 million dollars, and this increased to 220.2 million dollars in 1963- 64. In the latter year, the inflow from the United States and Canada was not far short of half of the total of 481.6 million dollars of private oversea investment in companies in Australia.

In this connection, we feel constrained to point to the contrast between the rapid expansion of the United States exports to Australia - Australia now being the fastest growing of the United States major commercial markets - and the manner in which United States policies impede Australian efforts to expand exports to the United States of some major Australian export commodities.

The position is not very satisfactory. Australia must reassess its position in relation to its dependence on overseas investment. We do not resist the importation of capital when it will produce wealth for Australia but we object to the continuing dependence on funds which create a liability for the future.

In his speech when presenting the Budget for 1964-05, the Treasurer reported -

Externally, the results of the year were quite spectacular. Exports reached £1,374 million which was £309 million above the high total of the previous year. Even though imports rose strongly in the latter part of the year, our receipts from abroad greatly exceeded outgoings and our overseas reserves increased by £228 million to a total of £854 million. By a considerable margin, that is the largest amount of overseas reserves we have ever held at the end of a financial year.

I want to refer to a document which has been prepared by the Bureau of Census and Statistics titled “Appendix II - Balance of Payments - Summary “. The document provides figures for the years 1949 to 1964 but I shall refer only to those for 1964. In our current account the value of our exports amounted to £1,372 million and our imports to £1,117 million. When we take account of the invisible credits and invisible debits which have been estimated by the Bureau we have a balance on current account of minus £13 million. This position is restored by the inflow of investment from overseas which totalled £215 million. There was a net identified capital inflow of £199 million. We believe that this state of affairs should concern us deeply. It has been illustrated elsewhere. We have such strong international reserves only because we are dependent on continuing capital inflow.

The Opposition has asked the Government on many occasions to reassess its position. Wc do not complain about continued support for the International Monetary Fund. We think that basically it was formed on good premises. The schedule to the Act sets out its objectives as the organising of co-operative action between member countries and the provision of a fund upon which member countries suffering from termporary balance of payments problems can draw. We believe that it is necessary for the Government to consider the wider field. In this wider field we are interlocked with the United Kingdom and the United States of America in matters which have been the subject of representations. The factors I am mentioning have been recognised by the Treasurer. In the statement which he circulated to members of Parliament following his visit to Washington he made certain comments which support the approach that we make to the inflow of foreign capital. On page 24 of the statement he said -

Local borrowings by overseas controlled organisations are, on the other hand, different in certain respects from share issues by such bodies since they carry a commitment to pay interest, normally at fixed rates, instead of dividends and the Australian lenders have no standing in the management of the enterprise.

We would not, for example, wish to see money borrowed in Australia by overseas interests for the purpose of facilitating the remittance of funds abroad. That would amount to an export of capita] and, in the main, we are not in a position to become exporters of capital except perhaps for limited and specific purposes which are of clear advantage to Australia.

The Opposition puts to the Government that we should have regard to this situation. We should make a firm analysis of our position in relation to overseas borrowings, not wishing to retard borrowings which will help to produce wealth in Australia but rejecting by every means investment in Australia which will be a liability on future generations. 1 know that this aspect has been mentioned by the Deputy Prime Minister (Mr. McEwen) and by some Government members, but there has been no positive Government action. We have given expression to it. The Opposition has also suggested an inquiry into franchises which operate in Australia which prevent Australian companies, subsidiaries of overseas organisations, exporting to near markets.

These are the general broad submissions that the Opposition makes. We do not intend to hinder the passage of the Bill. Rather are we trying to relate the main purposes of the Fund to the wider purposes of planning, having regard to our dependence on overseas borrowings which are not, to the extent that they should be, creating wealth in Australia. Otherwise we raise no objection to the Bill.

Senator CORMACK:
Victoria

.- I want to take up a phrase which was used by Senator Bishop a few minutes ago. He said that the Labour Opposition in this chamber and in another place tended to take the wider view. He directed his remarks on the Bills before the Senate to what he conceived to be the wider view, that is to say, the narrow Australian problem relating to the balance of payments. There is a wider view on this which I will make clear in a moment. The point that must be repeated, as I stated earlier and as the Leader of the Government (Senator Paltridge) mentioned earlier and from time to time in answer to questions, is that the balance of payments problem is a worldwide problem. This problem has been coming over the horizon for some time, and in my speech to the Senate on the ministerial statement on our balance of payments position I attempted to illustrate that the rate of capital inflow is not the cause of our balance of payments problem. Rather, the balance of payments problem is a worldwide phenomenon. At its Tokyo conference in February 1965, the International Monetary Fund recommended increased contributions by member nations.

It should be recognised by every honorable senator that there are two causes for our balance of payments problem. One is the inability of the United States of America, which holds the reserve currency of dollars, to sustain the rate of conversion which has been forced on it by Western European countries, particularly France and Germany, which have been seeking to exchange dollars for gold. It seems that the impetus substantially comes from General de Gaulle who appears to resent the fact that dollars and sterling are a reserve currency. That, in part, has caused the immediate hiatus, as I and others have explained before, in the balance of payments problem.

The basic problem in relation to balance of payments is a lack of money suitable to underwrite the increased growth in world trade. That is the reason why the International Monetary Fund has recommended to its subscribing members the increases which appear in the annex to the report presented to the Senate. In addition there has been laid on each senator’s desk and introduced into the Senate by the Minister for Civil Aviation (Senator Henty), who is in charge of this Bill, the terms of Australia’s acceptance of a reservation to the protocol for amending the General Agreement on Tariffs and Trade.

The object of the exercise is to try to free some of the choked channels so that in physical terms trade can move freely. It is complementary to the attempt by the International Monetary Fund to increase its reserves of currencies, both in gold and dollars, which depositors will make in order to assist the free movement of international trade. The annex to the report illustrates the wider problem that has not been acknowledged, it seems to me, by any member of the Opposition either here or in another place. The annex to the report and the papers presented to the Senate relating to the amendment to G.A.T.T. show that the concessions on tariff matters which we have made parallel almost exactly the unfortunate countries that are involved with the problems of trying to develop their own economies so that the attack on the economic development of the under developed countries of the world shall be twofold. First, we must try to free the channels of trade so that they can earn currencies in order to carry out their own development. Secondly, the more developed countries must provide assistance wherever possible, to the under developed countries. The annex to the report shows the contributions that are to be made in United States dollars. Africa is a rather text book case in the wider problem not acknowledged by the Australian Labour Party. I shall cite the Central African nations. Burundi is to contribute 15 million dollars; the Cameroons. 19 million dollars; Chad, 10 million dollars: Congo, 10 million dollars; Ghana, 69 million dollars; Ivory Coast, 19 million dollars.

Senator Wright:

– What amount is Australia to contribute?

Senator CORMACK:

– Five hundred million United States dollars. France, another illustration of a developed country, is asked to subscribe 985 million dollars. The United States of America, to underwrite the International Monetary Fund, is required to subscribe 5,160 million dollars. The United Kingdom is asked to make the substantial contribution of 2.440 million dollars. New Zealand, which is a small European-derived nation as it were, has to subscribe 157 million dollars. The population of New Zealand is about 2i million. The Democratic Republic of Congo, with a population of perhaps 20 million, is asked to contribute 57 million dollars. That illustrates the disparity existing in relation to development and under development in the world today as assessed by the International

Monetary Fund. It also illustrates the problems facing the world. Money must be obtained for development and I suggest that it is useless for the Opposition, either here or in another place, to decry Australia’s attempt to import capital for the further development of this country. Surely the measure of the correctness of the importation of capital into Australia is the International Monetary Fund’s assessment of Australia’s capacity to subscribe to that Fund.

My only other comment in relation to that matter is one I shall harness to the subject matter of the debate. It is well known that the Prime Minister (Sir Robert Menzies) is to attend the Commonwealth Prime Ministers’ Conference in London soon. It is obvious to anyone who has been fortunate enough to attend a conference ort behalf of the Australian Parliament - as I was 18 months ago at Kuala Lumpur - that the pressure is coming on the developed countries of the Western world, but in particular it will come on the Prime Ministers’ Conference in London to try and set up parallel monetary systems, managed and directed by a secretariat. The belief was expressed quite frankly in Kuala Lumpur by. many representatives of African countries that when such monetary systems are established, they will be able to make a levy on the developed Commonwealth countries for the capital they believe is necessary for their own development. I do not know that we can sustain our own capital development and that of Papua and New Guinea, our defence requirements and at the same time find additional capital to sustain the developmental needs of the African countries. I believe that if this demand is made at the Commonwealth Prime Ministers’ Conference in London, we should not be committed too deeply to find additional capital for the development of those areas. In my view we have enough on our plate at present. I shall not detain the Senate any longer. I commend the Bill.

Question resolved in the affirmative.

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

page 1021

STATES GRANTS (PETROLEUM PRODUCTS) BILL 1965

Second Reading

Debate resumed (vide page 962).

Senator KENNELLY:
Victoria

– To be fair to myself and to the Senate, I must say that it is a shame that bills of this nature have to be introduced at this stage of the sessional period, lt is true that the Prime Minister (Sir Robert Menzies) gave notice of this Bill in his policy speech last year, but 1 do not think we can be fair to the Bill by attempting to grapple with its terms in the short time available. We are making the passing of legislation a bit of a farce.

The purpose of the Bill is to provide that nowhere in Australia shall petrol and certain petroleum products cost more than 4d. a gallon over the price charged in the capital cities. I have read that the measure will not operate completely in Western Australia because of the resellers’ margins. The Bill provides arrangements for petrol companies to receive reimbursements through the respective State Governments. The Commonwealth Government will pay to the States the amounts they need and it is estimated that in the first year the cost to the Commonwealth Government will be £6 million. I understand that this arrangement to pay the money to the States has been made necessary by section 96 of the Constitution. The States are to pass appropriate legislation so that they can reimburse the oil companies.

The preparation of this scheme has taken some 15 or 17 months and one would have expected that the Commonwealth would have asked the States that have price control legislation to apply such control to this subsidy. Broadly, the Commonwealth Government will be giving £6 million a year to the oil companies for the benefit of consumers of petroleum products. This could mean an increase in the consumption of petrol and the other oil products concerned. There should at least be an obligation on the States with appropriate powers to ensure that petrol prices will not rise. If they do rise, the Commonwealth Government will have to pay more than the estimated £6 million.

As the estimate of £6 million is based on a provision that the normal price of petroleum products will nowhere in Australia be more than 4d. a gallon above the level of capital city prices, an increase in prices of Id. a gallon would make a difference of about £1 .5 million. I am not saying that the petrol companies will increase prices and I think they would be foolish to do so; but we have to protect the finances of the nation. If the Commonwealth is going to disburse money under the provisions of this Bill through the State instrumentalities, because that is what the Constitution requires, at least appropriate action on prices should be taken by the States that have power to do so through State legislation.

As a subsidy is being granted under this Bill I should have felt more satisfied if such a provision had been made at least for the period that this measure will operate. I understand that the Commonwealth Government will have another look at the scheme in three years, not necessarily with any idea of amending it but to ascertain whether it is working as well as the Government expects. It is true that the Government hopes no extra costs will be involved in rail fares and road transport as that would mean that its contribution would have to be increased. I think the Government has a duty to safeguard the people’s interests, and I am concerned that the Government appears to be taking rather less care than it should, in my opinion.

This legislation covers motor spirit, power kerosene, automotive distillate, aviation gasoline and aviation turbine fuel. I have had only limited opportunity to study the scheme but I was amazed to discover how much the companies using aviation gasoline, whether it be 80 or 100 octane, will receive compared with the subsidy they will get on ordinary petrol and power kerosene. I suppose aviation gasoline is carried in much smaller quantities and therefore transport costs are higher.

This brings me back to one of my favourite themes. Indications are that an airline company which uses its fleet in intrastate flights in all States will be in a much happier position than a company which is not allowed to fly intrastate services in more than two States. I wonder also whether the assistance the airline companies receive will help them to give something back to the people by way of reduced air fares or lower air freight charges, lt seems to me that if the airline companies do not give something back they will be getting a much bigger rake-off than they would otherwise get. On the other hand, the Government might estimate that the granting of the subsidy will increase taxation revenue from those who benefit from the scheme, because they will make larger profits whether they be farmers or manufacturers in country centres. However, this scheme should help to keep people in the country and may encourage the decentralisation that we would all like to see. Whether it will or not remains to be seen. lt is true, as the Minister for Customs and Excise (Senator Anderson) said in his second reading speech, that a bill of this kind raises very difficult administrative problems. The intention is, first, to ensure that the money provided by the Government is passed on to the consumer. It is hoped that costs associated with the delivery of petrol to country areas will not be increased and so require bigger payments by the Commonwealth. It can hardly be said that each of these conditions is met in a very satisfactory manner.

With regard to the first of them - that is, that the consumer receives the full benefit of the subsidy - I think it is true to say that the subsidy is paid to the oil company. The oil company concerned has to be strong enough to see that whoever distributes its product keeps within the bounds of this Bill. No doubt, the people consider that they will derive a great benefit in this provision. 1 do not think that the administration of this provision will be as difficult as some people believe, from the point of view of whether or not the consumers receive the benefit of this subsidy. The scheme could hardly be described as a watertight one. The Minister, in his second reading speech, admitted that the distributor of the petrol cannot be completely supervised to see that he carries out the requirements of the legislation. But. as I said, I suppose that supervision will largely be the job of the wholesaler or the petrol company concerned and, no doubt, a certain amount of the work involved will have to be done by the person who purchases the petrol.

Secondly, there is a provision in the Bill to ensure that the subsidy is nol offset by other cost increases. This provision will come up for consideration at some future time. The Government will be able to inform itself about the position only after the scheme has run for some time. The Minister said that the Government hopes that increases in rail freights, road taxes and other distribution costs of petroleum products will be avoided as far as possible. This is in the lap of the gods.

Senator Morris:

– And in the laps of the State Railways Departments in some cases.

Senator KENNELLY:

– Yes, that is true. State Railways Departments have to look after their own financial positions. I do not suppose they will be very concerned if they have to increase freight charges, for instance. The Railway Department in my own State has me wondering whether it will ever get tired of putting up fares.

Senator Morris:

– If the honorable senator lived in Queensland, he would not have that problem.

Senator KENNELLY:

– I do not think Senator Morris would want me to live there because there might be a battle between the honorable senator and myself for the right to sit here.

Senator Morris:

– If that is the case, I would welcome the honorable senator.

Senator KENNELLY:

– You would?

Senator Morris:

– Yes, with confidence.

Senator KENNELLY:

– That is very nice, but the honorable senator knows that that will not happen.

As the Minister has said more than once, this is not an easy Bill to analyse. The Government has stated that it will refund the administrative costs and other costs paid by each State in connection with this scheme. This is fair. I do not desire to keep the Senate at any length, but there is one clause of the Bill on which I would like an explanation from the Minister when we are in Committee. This is clause 5 (5.), which provides -

The scheme -

may provide for the payment by the State to registered distributors of eligible petroleum products -

in respect of expenses incurred by them in connection with the scheme.

After reading the Minister’s speech, 1 do not know just what expenses that provision refers 10. lt is the duty of the State to register the distributors. I do not know what other duties there are. The States will have to submit accounts to the Government for payment, but one wonders what other expenses will be incurred. I ask the Minister to give us some information about this provision in Committee.

This Bill should be a great boon to country people. I am hoping that the Government will see that the Bill will reduce the price of petrol, and that this legislation will be a means of helping industry in the country. I refer not only to secondary industries but also rural industries. I hope also that the Government will get something in return by way of petrol tax. This tax. as has been said here on many occasions in connection with other Bills we have discussed, plays an important part in our economy. Speaking purely from memory - and I do not want to be held to this figure - I think about 27 per cent, of our costs are represented by transport costs. I remember reading that the figure was 19 per cent, in the United States of America and 18 per cent, in Great Britain. I hope that this Bill will do all that the Government wants it to do.

Senator SCOTT (Western Australia) [1 1.18). - 1 support this measure. I am very pleased to see that the Deputy Leader of the Opposition (Senator Kennelly), on behalf of the Opposition, has stated that his parly does not oppose this measure. In fact he has given it the blessing of the Opposition. This measure is one of the items that was promised to the people of Australia in the policy speech of the Prime Minister (Sir Robert Menzies) in the election campaign of 1963. lt is interesting to note that, of the 14 specific promises that were made in that policy speech only two remain to be fulfilled, and this is one of them. The other promise to be fulfilled is in relation to the Trade Practices Bill 1965 which was introduced in another place last night. I assume that that Bill will not be opposed bv the Opposition so that when this Bill is passed together with the other measure I have mentioned, all the promises made in the policy speech of our Leader, the Prime Minister, in the 1963 election campaign will be fulfilled

This measure is designed to help people in outback areas of Australia by reducing the costs of transport. If we look at the schedule we find that places such as Halls Creek in Western Australia are referred to. After this Bill becomes law the people at Halls Creek will be able to purchase motor spirit at a price not more than 4d. above metropolitan prices, which means that a subsidy of 22d. a gallon will be payable in that instance. That is not the highest amount of subsidy. Higher rates of subsidy will be payable in other parts of Australia, including the Northern Territory.

Senator O’Byrne:

– How many people live at Halls Creek?

Senator SCOTT:
WESTERN AUSTRALIA

– I do not think that is important. The important thing is that the people who are there, whether there are 50, 60 or 100 of them, will have their petrol subsidised to the extend of 22d. a gallon.

Senator O’Byrne:

– Has not the honorable senator been to Halls Creek?

Senator SCOTT:

– Yes I have, and I was welcomed.

Senator O’Byrne:

– But you do not know how many people live there.

Senator SCOTT:

– The township is growing so quickly under the administration of this Government that it is difficult to keep pace with the population increase. The honorable senator should not try ro decry this measure. I assure him that it will mean a lot to people throughout Australia, and I remind him that in the first year of operation of the Bill the total amount of subsidy will be almost £6 million.

I wish to stress the sympathetic treatment that the Minister for National Development (Mr. Fairbairn) has given to outback stations. There are stations in Western Australia of one million acres in area. Some of the station owners bring their petrol from Derby and Broome which means that distances of 200, 300 or 400 miles must be covered. Freight has to be paid at the rate of £20 a ton. Under this legislation the station owners will receive by way of subsidy an amount of approximately £20 a ton provided that they register with an oil company and are approved by the State Government. In fact, all the people living in the outback areas will benefit from this subsidy. The differential for motor spirit sold in Darwin has been set at Hd. a gallon which means that the cost of motor spirit in Darwin is lid. a gallon above that charged to the same class of consumer in Sydney. If subsidy payable in the Northern Territory were to be tied to differentials based on Darwin and did not follow the present practice of the differentials being based on Sydney, the wholesale prices in the Territory would need to be more than 4d. above the Darwin price, or 5id. above the Sydney price, before subsidy would be payable. The effect of this would be that the wholesale price in the remoter parts of the Territory would be lid. dearer than in the remote parts of, say, New South Wales. To avoid this situation the Government proposes that the rates of subsidy for the Northern Territory shall be based on Sydney wholesale prices. The effect will be that at the Territory locations set out in the schedule the wholesale price will be 4d. above the Sydney wholesale price.

Senator Kennelly said that he hoped this scheme would work because he thought it was a step in the right direction. He mentioned that the hour was getting late. I agree with him and I conclude by saying that I have great pleasure in supporting this Bill which I think is a most important one.

Senator DRAKE-BROCKMAN:
Western Australia

– By means of this Bill the Government seeks to establish, in cooperation with the State Governments and the oil companies, a petrol policy whereby it will be possible for people in each State to purchase motor spirit, power kerosene, automotive distillate, aviation gasoline and aviation fuel at a price not greater than 4d. a gallon above the ruling city price. I have much pleasure in supporting the measure. There is no doubt that it deals with an extremely intricate and complex matter. When we look at the schedule we appreciate the great amount of work in which the oil companies and the Department of National Development have been involved in compiling the list of prices and in determining the amounts of subsidy. This is perhaps a long way off implementing a promise that the Prime Minister (Sir Robert Menzies) made in his policy speech on behalf of the Government parties, but it is a method that has had to be employed because the Commonwealth cannot exercise price control. It has no power to do so.

I think that the Minister for National Development (Mr. Fairbairn) and the officers of his Department have done a fine job. The scheme they have evolved is a thoroughly practical one. I believe it will yield far-reaching benefits to people throughout the Commonwealth. I agree that anomalies probably will occur when the scheme is put into operation, but it is natural to expect anomalies having regard to the complexity of the legislation. However, I believe that when anomalies arise and are brought to the notice of the relevant authorities every endeavour will be made to overcome them.

I am particularly pleased with this legislation because for as long as 1 can remember my party has been worried about the cost of fuel. I remember that in the early 1950’s Mr. Cornell, who is the Country Party member for Mount Marshall in the Western Australian Parliament, was chairman of a committee which investigated the possibility of introducing a uniform price for petrol in Western Australia. For a long time the primary producers in the State had been agitating for such a move. However, it was shown in evidence tendered to the committee that if the committee were to bring about the result that it had set out to achieve, and that if a standard price for petrol meant increasing the price of petrol in city areas and reducing it in country areas, many problems would be encountered. In that instance the oil companies were against the proposal. They thought that if the price of petrol were increased in Perth there would be resistance by users of petrol. Other companies were afraid that the oil companies which had established a large number of petrol stations in Perth would reap the benefit of the scheme, to the detriment of companies which had established depots in the country. The matter was dropped.

Throughout the years, when the costs of primary producers have begun to increase and the prices for our goods sold on overseas markets have begun to fall, the primary producers have agitated for a standard price for petrol throughout Australia. Time and time again from many political platforms in this country my own leader has suggested that the Government should introduce a standard price for petrol. So I am very pleased indeed to see this legislation.

It does not merely mean the giving of something to the primary producers. As a result of the tremendous rate of development that has taken place in Australia in recent years and the rising standard of living, increased costs have been imposed on all sections of the community. Some sections have been able to pass on their costs. But the primary producer is at the end of the road and has nobody to whom he can pass on his costs. He is obliged to sell on the overseas market in competition with the producers of other countries.

Senator Cormack:

– The dairy farmers receive a guaranteed price for their product.

Senator DRAKE-BROCKMAN:

– Not in relation to butter. Farmers have an average cost for wheat.

Senator Cormack:

– It is built into their cost of production in assessing the price.

Senator DRAKE-BROCKMAN:

– The honorable senator may argue that at another time. In agitating for relief of the kind that is now to be granted, our party believed that the primary producer alone should not be asked to bear the burden of developing this country. We believe that every section of the community should be called upon to share the cost. That is why we have been so much in favour of this legislation.

The introduction of this petrol price equalisation scheme will lead to a decrease in transport costs. The very minute in which this legislation comes into operation some of the burden of transport costs will be lifted. Not. very many years ago the Western Australian Government decided, because of the losses that were being incurred by the railway system, to close down some of the spur lines and some of the main lines. This meant that primary producers then had to rely on road transport, and the cost of petrol became a vital factor in their cost of production.

Senator Scott has referred to the long distances that are travelled and the benefit that this legislation will bring to people in the north. 1 do not look upon this Bill only as being a means of helping the primary producer. 1 believe that, in passing this legislation, the Parliament will be assisting to achieve decentralisation. It is the responsibility of governments to introduce legislation that will prevent the concentration of industry and population in city areas and the thinning out of population in country areas. People choose to live where a job and a home can be had, where education, medical services and amenities are adequate, and where living costs are not excessive. If living costs are excessive and if people cannot find a home or adequate amenities in country areas, they will flock to the cities. It is to prevent that happening that governments should introduce legislation of this kind. It is not sufficient to give primary producers taxation concessions or money for extension services. We must look after their social welfare. The Government is now doing this.

Just recently we had placed before us legislation which provided for Commonwealth finance to be given to Western Australia to enable that State to extend its water supplies in the south-west. The extension of water supplies will lead to the provision of amenities for the people who are living in the area concerned. Those people will be enabled to grass their ovals and to maintain gardens, bowling greens and so forth. With the completion of Phase 4 of the Government’s television programme, television coverage will have been provided for 90 per cent, of the people of Australia. Now in introducing this legislation the Government is lightening the burden of transport costs.

But 1 look beyond those benefits. I look upon this legislation as being a social measure. Not a great deal of entertainment is available in country areas and people sometimes have to travel long distances to go to football matches, picture shows or dances. This Bill will mean much to young folk in country areas. Two or three young people often dub in to buy petrol to go to dances in a nearby country town. Availability of petrol at Id. or 2d. a gallon less must surely help in keeping young people in the country areas. It will be seen that this legislation will be of very great benefit to people who live outside the city areas of Western Australia. For that reason, I have very much pleasure in supporting it.

Senator MORRIS:
Queensland

– I apologise to honorable senators for taking time to speak on the Bill at this hour. In my maiden speech here I made a very strong plea for assistance to be given to people who were suffering because they were living in what I described as areas of maximum hardship. 1 believe that this legislation will do a great deal to assist those people. Their costs are very high. Speaking from memory, Senator Kennelly said that transport costs represented approximately 27 per cent, of the total cost of production. I think he was fairly close to the mark. The transport costs of people who live in extremity areas would be infinitely higher, as a percentage of the total cost of production, than those of people who live in areas close to the ports. For producers who live in a lot of the areas with which I am very intimately associated this Bill will mean a saving of up to 2s. a gallon in the price of petrol. It will mean a saving of almost the same amount in the price of dieselene which many of them use in vehicles. Therefore, this legislation will be a very positive and a major contribution to the easing of their burden.

I should like to make many more comments, but it is too late now to do so. I shall content myself with two. First, we talk a lot about northern development and we all mean what we say. I forecast that this legislation will do a lot towards developing the north. Freight costs have done much to keep people out of the northern areas, especially those that I know in Queensland. Secondly, I congratulate the Minister quite seriously upon the introduction of a very difficult piece of legislation. That has been acknowledged by all who have spoken on the subject, either in this chamber or in the other place. Having said that, and having said that I should like to say a lot more about it, and probably will on some future occasion. I most strongly support the Bill.

Senator WEBSTER:
Victoria

– The Bill before the Senate is to grant financial assistance to the States in connection with the price of certain petroleum products. It seeks to bring about a more equitable cost structure for petroleum fuels throughout Australia. The intention is that the price per gallon should be no more than 4d. above the main city prices and that the whole of the benefit should go to the eventual purchaser of the fuel. This policy was stated by the Prime Minister (Sir Robert Menzies) in his policy speech in 1963. I certainly fully endorse the Bill. I compliment, as did former speakers, the Minister for National Development (Mr. Fairbairn) who, 1 understand, played a leading part in the preparation of the Bill, and the Minister for Customs and Excise (Senator Anderson), whose Department will have to implement the measure. The Bill will provide financial assistance to the States so that they may be able to make payment to distributors of eligible petroleum products. Payments to the States will be made under section 96 of the Constitution.

The Bill has some interesting features. First, the Minister is to be given power to formulate a scheme and he is to be given power to amend this scheme. I compliment the Minister upon the very comprehensive document that we have been given in explanation of this proposal. Under the scheme, distributors are to be registered. To become registered distributors, they must enter into an agreement with the Commonwealth. They must give an assurance that the purchaser will be given the benefit of the subsidy and that they will not claim unless they have given the purchaser the benefit of the subsidy. There are provisions in the Bill which give reason to believe that good safeguards will exist. The States will make payments to distributors of amounts ascertained in accordance with the scheme. Clause 5 (5.) (a) states that the scheme shall provide for payment by the State to registered distributors, in respect of the sale by them at places to which the scheme applies of any eligible petroleum products, of amounts ascertained in accordance with the Scheme, but the following paragraph states that the scheme may provide for payment by the State to registered distributors in respect of their own use of eligible petroleum products and expenses incurred by them in connection with this scheme. In one instance it is stated that the scheme shall provide; in the other it is stated that the scheme may provide. Perhaps that position could be made a little clearer.

The Bill prescribes how amendments may be made to the scheme. If the Minister is satisfied that an eligible petroleum product was on 30th June 1964 sold at a place specified in the schedule and by reason of curcumstances existing on 31st December 1964 it is desirable to vary the rate of payment, the schedule may be amended. He may amend the schedule by omitting the name of a place, if a new site is selected for distribution. I take it from another provision that if a distributor moves under the wing of another State, an amendment of the schedule may be made. The Minister may amend the schedule to substitute for the rates of payment in the schedule rates in the currency provided for by the Currency Act. 1963. I take it that that relates to decimal currency. We have the benefit of knowing that the schedule will be published in the Gazette.

Information will be furnished by the States. One safeguard is that application has to be made to the Commonwealth by the Stales on a form approved by the Treasurer. We shall have the protection afforded by the certificate of the Auditor-General of the Stale that payments have been made in accordance with the scheme. Only on provision of that certificate will payments be made. An indemnity will be paid by the Commonwealth to the State if any legal action arises, as a result of which compensation must be paid. 1 welcome the Bill. We in the Country Party have for many years worried about high costs in the outback. Here in one stroke the Government is removing a crushing burden of transport costs in the country. We who are closely connected with all country matters realise that there has been something of a cost and price squeeze going on in country areas for many years. The national policy of growth and continued expansion, population growth, full employment in country areas, and manufacturing development, have inevitably put pressures on costs. It is the farmer who feels this type of squeeze particularly. We all know that the farmer has lifted his efficiency greatly in past years and has boosted his output dramatically with a lower work force. What is not generally known is that despite this performance, in the years since 1952-53 in real terms, net farm income has fallen by nearly 2 per cent. On the other hand the average incomes of male wage and salary earners have risen by some 30 per cent. In some measure this shows how the farmer’s relative income position has deteriorated.

There is need for the Commonwealth to adopt compensatory policies. Unlike other units in the economy, the farmer, exposed to export in the cold world, cannot pass on increasing costs. Not only has he to battle against upward cost pressures at home but also his problems are aggravated by unremunerative prices in overseas markets, shrinking access to markets, and even competition from heavily subsidised farm products from moderately wealthy industrialised nations. So, rightly, at a time such as this he turns to the Government for some assistance. Some adjustment must be made to ensure an equitable position for the primary producer in the economy. National policies must include compensating measures to sustain the strength of agriculture on an expanding basis. But equity is not the only ground. The balance of the economy in the Commonwealth is involved. The stability of the economy depends on the export earnings of primary industry to pay for the things that represent ambitions of growth.

This is the broad thinking of the Government which underlies the Bill. This is a continuation of the policy that has yielded the superphosphate bounty, beef road schemes in Queensland, research and extension services, tax concessions, irrigation, rail standardisation, and protection of the overseas operations of primary producers. The proposition in relation to the price of petrol is another example of the application of policies designed to assist not only the farming community but also industrial communities which aire removed from city areas. They are designed also to bring some amenity to rural dwellers.

There is a great personal factor in this Bill. We want a strong, prosperous and happy country community. We want to make life in rural areas attractive. This raises all kinds of personal considerations which, as I have mentioned, the Government has endeavoured to meet in a host of practical ways. The Government is always endeavouring to bring amenities to country areas. Senator Drake-Brockman mentioned that nearly 90 per cent, of the Australian community now has television available to it. Let us consider the activities of the Post Office. The number of rural automatic exchanges has increased from 169 to 1,784. In 1949 only one in ten country subscribers were provided with automatic exchanges. Now one in two have them.

A good deal of the funds allocated to the States finds its way into avenues of development in country areas, such as in the construction of schools, the carrying out of shire and municipal works and the provision of various amenities. Perhaps even “more importantly, we are striving to reduce the added costs of family life in the country. In country areas good roads are essential not only for increased production but also for good living conditions and for the provision of reasonable amenities for families. The Government makes it mandatory for at least 40 per cent, of its allocation to the States for roads to be spent on rural roads. We now have twice as many miles of sealed roads as we had in 1949. The Bill now before us will reduce the price of petrol in rural areas - a practical and constructive contribution towards reducing the personal cost of transport and towards reducing the added cost of life in the country where nearly every family owns a car and using a car is part of family life.

We have here a concrete measure designed to reduce the added cost of production in the country. Senator Kennelly suggested that the Bill was designed with the objective of gaining increased taxation because the farming community would receive an increased income. The honorable senator may have that thought in mind. I believe that there are other vitally important things about this Bill. It will provide assistance not only to primary industries but, as I have said, to rural manufacturing industries as well. We must keep in mind that our great exporting industries need assistance.

The Bill could be of considerable value in the field of tourism. The reduction in the price of petrol will reduce the cost of travel and will induce people to travel further to see some of the extreme areas of our great Commonwealth. One of the important features of the Bill is the subsidy on aviation fuel. I think this shows great vision because there is an ever increasing use of light aircraft in country areas. The Government’s action will tend to reduce costs in the light aircraft industry and for the people who own and use light aircraft.

In some respects the schedule is rather difficult to follow and I should like to direct the Minister’s attention to it. The distribution points in Tasmania are listed on only one sheet, those in Western Australia on 17 sheets, in South Australia on 7 sheets, in Queensland on 21 sheets and in Victoria on 15 sheets. I mention those States because we have said that the centres listed are those which we will declare to be approved for receipt of the subsidy. For some reason which the Minister may explain the list for New South Wales and the Australian Capital Territory covers 89 pages.

Senator Anderson:

– They are the existing points of distribution.

Senator WEBSTER:

– This is rather difficult to follow. For instance, every place which is a distribution point for petrol is also apparently a distribution point for aviation gasoline. That is difficult to imagine, because I should think that aviation gasoline would be distributed from the airport. I cannot think that aviation gasoline is taken in 44 gallon drums to all of the places in New South Wales and the Australian Capital Territory listed in the 89 pages.

Senator O’Byrne:

– Nearly every station property has its own airstrip.

Senator WEBSTER:

– If there are so many such places in New South Wales and the Australian Capital Territory that they fill 89 pages, I congratulate those two areas. I point out also that although high subsidies are paid in certain areas for motor spirit, power kerosene and auto distillate, there are instances in which no subsidy is paid for aviation gasoline. In that circumstance I take it that the aviation gasoline is obtained at what I might call the home base and is sufficient for the forward and return journey.

I see the reverse position which is hard to imagine. A place like Weipa mission will gain a reduction of 28£d. on aviation fuel and gasoline but the suggestion is that there are no motor vehicles there. That must be so because no subsidy is mentioned for motor spirit.

This is an excellent measure. It will be of great value to the Commonwealth. To me, the most important feature in this Bill is the encouragement and stimulus which the States, with the assistance of the Commonwealth, will be able to give to the cause of greater, balanced development. I commend the Bill heartily to honorable senators.

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

– in reply - I am grateful to the Opposition and to honorable senators on the Government side for their support for, and general approval of, the Bill. As has been said, a tremendous amount of work has gone into the preparation of this Bill for presentation to the Parliament. Both the Commonwealth and the States are concerned in this legislation because, of necessity, it has regard to the provisions of section 96 of the Constitution. The States and the oil companies have had to be brought together so that a scheme acceptable to all parties could be evolved. This has not been easy to do, and the reference to the volume of work done by the Minister for National Development (Mr. Fairbairn) in another place is well merited. It was necessary to evolve a scheme which would not only protect the Commonwealth, in the sense that it will be providing £6 million for the implementation of the scheme, but would also give effect to the promise contained in the Prime Ministerls policy speech. The officers of my Department have also played a not inconsiderable part in preparing this legislation.It was a tremendous job because as the Bill and the second reading speech indicate, the Department of Customs and Excise will be called upon to administer the Act.

Senator Kennelly suggested that any increase in the price of petrol would corrode the scheme. 1 point out to him that the scheme is based on the differential factor. An increase in the capital city price does not affect the scheme, which is based on the differential. The differential was pegged at 31st December 1964. It is necessary to bear in mind, too, that the only factor which could affect the situation would be a variation in differentials by the oil company. In that respect honorable senators should remember that in three States price control operates. In any event, the cost to the Commonwealth will remain static because it is based on the differential as at 31st December 1964. It is based on a price of 4d. a gallon over and above city prices. To that extent it remains constant. lt is interesting to take random examples from the Schedule to see the benefits to be gained by people in the country. For example, in New South Wales, Cobar is to receive an advantage of 6d. as compared to the present price. Walgett will benefit by 5d. In Victoria, Mildura will receive an advantage of 2id. The advantages to be gained in Victoria are not so marked because it is a small State and the distances to the distribution points are not so great.

This is reflected in the retail prices. In South Australia, Maree will benefit by 61/2d. Halls Creek in Western Australia will benefit by ls. 10d., which should considerably assist the residents there. The price at Broome will be reduced by 7d. and at Birdsville, in Queensland, by 2s. 41/2d. If Senator Maher were present, he would be delighted to learn that the price at Cooktown will be reduced by 8d. a gallon. Victoria River Downs, in the Northern Territory, is a recognised distribution centre and is therefore incorporated in the Schedule. The price there will be reduced by ls.51/2d. Alice Springs will benefit by 91/2d.

It is true that administrative problems will arise in a scheme of this nature which involves the States, the Commonwealth, and the oil companies. I am sure that they will be solved to the advantage of the country community which will find that as a result of this legislation the prices paid for petrol will not be more than 4d. a gallon over and above the capital city price.

Senator Webster found some difficulty in understanding the Schedule. There are 5,000 recognised distribution points at present which are listed in the Schedule. As to aviation fuel, it will be seen that a dash is shown against most places listed for New South Wales. In some cases the Schedule is based on the assumption that subsidy rates are fixed on the industry’s list prices. The oil companies are prepared to sell aviation fuel, if required to do so, at the points indicated in the Schedule.

I thank honorable senators for their cooperation in assisting to facilitate the progress of this legislation.

Question resolved in the affirmative.

Bill read a second time.

Friday, 21 May 1965

In Committee.

The Bill.

Senator WRIGHT:
Tasmania

. -I wish to say that it is a positive disgrace that the Government should programme its work to include a major Bill of this description for the consideration of the Senate at this time. It was introduced in the chamber not much more than 12 hours ago. Honorable Senators who give attention to the business of the chamber and devote a genuine interest to the job are precluded from a proper scrutiny of the legislation. Only a subservient House would accept such posi- tively insulting and disgraceful treatment from a Government. I regard it as an affront that the Committee has to deal with a measure of such major national importance, as the short but pregnant speech of Senator Webster pointed out, among other things. 1 wish to refer to several matters at this stage because I desire to have elucidation. Much as 1 regret the necessity to take time at this hour, the responsibility to the Senate is not mine. I shall not insult members of the Committee by imputing to them a lack of interest, even at this hour. The responsibility is the Government’s for offering us this insult. 1 ask the Minister: What security do wc have to see that the differential, to which the honorable gentleman referred in his speech in reply, is based upon a price that cannot be so varied by oil companies as to deny the transporter and the consumer of oil in the outback the advantage included for them in this Bill? I would like the Minister to explain to me what is the basic factor that governs the determination by oil companies of prices in the cities, and what assurance this Parliament can have that the prices will not be so varied by an oil company as to take away some of the benefit that is intended in the legislation for the outback consumer and use it to the oil company’s own advantage? 1 shall explain my difficulty a little more by saying that 1 understand there are eight oil companies. It seems to me that the Schedule is constructed on the basis that there is complete uniformity of price. Am I to infer that by some mystery that does not enter into the category of a trade arrangement, each of the eight oil companies is able to sell petrol in Perth at the same price? And then, insofar as there is any competition in Kalgoorlie, it is sold there at the same price? And then in Cobar, or at any point listed in the Schedule, there may not be competition. How do we get the same price there? It seems to me to be a matter as to which one must necessarily inquire whether the disunity to which Senator Drake-Brockman referred as confronting this proposal some years ago from the oil companies has now been developed into unity by some degree of amenability on the part of the oil companies, motivated by the advent of the restrictive trade practices legislation. But if there is an expectation by the oil companies to escape that legislation and maintain their unity, how do we obtain a guarantee that they will not vary the basic price upon which the differential is calculated so as to deny to the ultimate recipient the advantage intended by the subsidy? I would like to have that basic information.

Senator MCKENNA:
Leader of the Opposition · Tasmania

– May I address a few questions to the Minister for Customs and Excise (Senator Anderson)? Senator Kennelly directed attention to the fact that the Bill provides that the administrative expenses incurred by the distributors are to be reimbursed to them through the States. My first question is this: Do these expenses include the costs incurred by the oil companies in negotiating for the establishment of this scheme or do they commence only when the scheme itself is in operation? If the answer to the first question is in the affirmative, can the Minister give us any idea what amount is likely to be involved?

My next question is: What is the nature of the administrative expenses? Would they be confined merely to the provision perhaps of additional office accommodation and of additional staff? Can the Minister give us any idea of the nature of the expenses that would be incurred in implementing the scheme? I imagine that the main work thrown upon the oil companies once the scheme is in operation will be to keep very strict accounting of their sales and to prepare accounts for submission to the States claiming the subsidy due to them. On the surface, it does not appear to be an item that should concern the oil companies very greatly if that is the only expenditure they may claim under the provisions of the Bill.

In the matter of checking, what will the oil companies do? Will they be obliged to state the full wholesale rate on their invoices and then to show separately the deduction by way of subsidy to the people to whom they distribute? lt seems to me that this would make the checking of their accounts decidedly easy.

There was no reference in the Minister’s second reading speech to the provisions of clause 5 (5.) (b) under which payments are to be made by the States to registered distributors of eligible petroleum products. When I refer to page 17 of the manuscript giving details of the scheme at paragraph E5, I note a distinction between the terms of the Bill and the terms set out in the details of the scheme in relation to expenses incurred by the oil companies. In paragraph E5 it states-

A registered oil company shall … be entitled to be paid by the State amounts calculated to compensate the oil company for administrative expenses reasonably incurred in connexion wilh the scheme.

Will the Minister indicate whether there is any difference between the terms used in the two documents or whether the two terms arc used to express one idea? The details of the scheme as presented to us in the associated document show that the amount to be paid to an oil company for administrative expenses shall be a percentage of an amount that the oil company is entitled to be paid by way of subsidy. The wording of the clause proceeds in those terms and the following clause sets out what the percentage shall be. However, the percentage is left blank in two places. Although a percentage is mentioned and is intended to be specified, we can gather no impression from the clause what the percentage will be. 1 should like the Minister to give us some practical idea of the basis upon which a percentage of subsidy is to produce an amount that will be a fair reimbursement of expenses incurred by the distributors in operating the scheme. 1 regret that I have had to ask so many questions at once. If they are not clear, I can take them up with the Minister later.

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

– In reply to Senator Wright, I come back to the point I made in the first place that the differential is fixed as at 31st December 1964 and that is constant. The recipients are to receive a fixed amount so that they will pay no more than 4cl. over and above the capital city prices in the relevant States. That figure is known. If there is to be any alteration in the differential, there would not be so much an erosion of the amount the Commonwealth would pay but there would be a situation where it would not necessarily be an amount in excess of 4d. over the wholesale price. In other words, the Commonwealth’s contribution would remain at £6 million. The people would get the advantage but it would not necessarily be the sum total of the amount over and above 4d. a gallon.

Senator Wright expressed some concern about the way the petrol industry operated and how it happened that wholesale prices of petrol were the same in the various States. Prices are fixed first for the city and the country in the three States which have price fixing legislation. Those States which do not have the power to fix prices follow the same general pattern. Differentials are fixed by an all-industry committee and again, in the case of the three States I mentioned first, these are approved by the prices commissioners in the States concerned.

The Leader of the Opposition (Senator McKenna) asked some questions about costs. In broad terms, the final cost that will be allowed to the oil companies has not yet been resolved but it will be shown on a percentage basis.

Senator Wright:

– The Minister is speaking of the final expenses to be allowed?

Senator ANDERSON:

– That has not been resolved finally but will be a matter for negotiation. Of course, the Department of Customs and Excise has some very specialised knowledge of these costs because the Department is involved with the industry in another field. Therefore this is not a situation where we are not particularly well informed on what might be considered reasonable costs of administration in this field. The Leader of the Opposition also referred to percentages. The actual percentage basis has not been resolved.

Senator McKenna:

– Can the Minister say what the nature of the work will be?

Senator ANDERSON:

– The oil companies will have to carry out a considerable amount of clerical work in collating the sales in each of the subsidised areas. Besides this clerical work, the oil companies will have to make claims. These claims will have to be made on prescribed forms. Officers of the Department of Customs and Excise will become officers of the States for the purpose of supervision. Whilst claims will be cleared initially for the purpose of payment, in the Bill, there is provision, as honorable senators know, for advance payments. Provision is also made for officers of the Commonwealth to make subsequent inspections and investigations of claims and, if any error in the claims is detected, power is given to make an adjustment. All of these things will require work by the oil companies. The point at issue is the degree to which the oil companies consider that they will be disadvantaged. As I said in my second reading speech, apart from the fact that this scheme may stimulate the sale of petroleum products - I think Senator Kennelly or Senator Webster made this point - there is in fact nothing in the scheme for the oil companies. They will not get any monetary consideration out of the scheme.

Senator Wright:

– It depends upon what percentage the Minister fixes.

Senator ANDERSON:

– I know. My second reading speech is quite clear on this point. The oil companies receive no advantage beyond the fact that, perhaps, this scheme will stimulate the sale of their products.

Senator Kennelly:

– Will not the oil companies have other advantages,

Senator ANDERSON:

– No. The Government will pay the oil companies for the expenses in which they may be involved. Honorable senators should get back to the basic scheme. The distribution centres are established and they will be constant. We know that wherever the price is 4d. above the price in the capital city of the State concerned, the consumer is to get the advantage of the supplement, which the companies will pay to them. The oil companies arc obliged under their charter and registration to pass on the subsidy. The oil companies will make their claims on the State Governments concerned. In turn, the Commonwealth Government will pay the State Governments for the claims made upon them. There is no profit in the scheme for the oil companies beyond the point made in the second reading debate that, naturally, the sale of their products will be stimulated. I think honorable senators have to get the basic scheme well and truly established in their minds. The petrol companies have to seek registration. They are obliged to conform to certain requirements. Officers of the Department of Customs and Excise will check their claims. There will be subsequent checks on claims. There is the provision in the Bill for reference of matters to the auditor.

This is not a simple Bill. We cannot read through this legislation in chapter and verse style as is possible with some measures. As I said at the outset, we have an agree ment here which is made between the Commonwealth, the States and the oil companies. In those circumstances the Bill does not lend itself at this stage to a complete spelling out of all normal requirements. But I want to say to all honorable senators - and this adverts to the point made by the Leader of the Opposition as to the actual amounts the oil companies are to receive for the expenses that they will outlay - that if we held the scheme back while this particular point was finally resolved, the effect would be to deny to thousands of Australian people in country areas the advantage which it is the decision and policy of the Government to give to them. While this matter remains unresolved, our whole purpose is to get this Bill enacted and placed on the statute book. We want it implemented for the purpose of enabling this advantage to be passed on to people in country areas by October of this year.

Senator WRIGHT:
Tasmania

– May I correct any misunderstanding that may exist? New South Wales is one of the States where price control does not exist?

Senator Anderson:

– That is right.

Senator WRIGHT:

– I wish to discuss an actual instance in order to get an understanding of this matter.

Senator Anderson:

– I am sorry. I misquoted the position. The States in which prices control exists are Queensland, South Australia and New South Wales.

Senator WRIGHT:

– Then I take an instance in Victoria where there is no price control. I direct the attention of the Minister to the supplement to his speech that relates to the schedule of subsidies in Victoria. There is a 6d. subsidy, I take it, on motor spirit in the town of Glen Valley. Am 1 correct?

Senator Anderson:

– Yes.

Senator WRIGHT:

– Let us assume that the price of petrol in Melbourne was 4s. a gallon in December 1964.

Senator Anderson:

– In Melbourne the wholesale price of petrol was 2s. 9$d.

Senator WRIGHT:

– Let us take 3s. a gallon as a round figure. Is there anything in this scheme or otherwise to prevent an oil company raising that price of 3s. a gallon in December 1964 to 3s. 4d. a gallon in December 1965? That is what 1 want to know.

Senator Anderson:

– There is not any reason but we are to pay on the differential as it was pegged in 1964.

Senator WRIGHT:

– That is the point. I want to get an understanding of this matter. The Minister says the price is pegged. I say: “ No “. 1 suggest that what the Minister means is that there is an agreement between the Government and the oil companies as to what the price then was. They were able to satisfy each other as to what price was then being charged. To take the instance of a non-price fixing State, Victoria, I think it is quite clear that there is nothing to prevent an oil company, say, the Shell Co., although 1 have no brief for or against any oil company, from varying its price according to its commercial judgment and reason. We will take the actual figure mentioned by the Minister, which was 2s. 9Jd. There is nothing to prevent that price being raised to 3s. a gallon in the following December. We know the degree to which trade depends upon the retail price, or the retail price upon the capacity of the traffic to bear an increased price. There is an inevitable attraction and tendency in every avenue of commerce, once an advantage is given into the periphery of the industry, to increase a price. The farmer and the transporter in the country will be getting a benefit out of this scheme to the extent of, say, £90 and £900 respectively. A petrol company could say: “ There is not so much buyer resistance to the product. The buyer is able to bear a higher price”. So, the charge of 2s. 9Jd. a gallon goes up to 2s. lid. a gallon. That in itself erodes the advantage. It seems to me that one of the weaknesses in this scheme is that there is no law which prevents an oil company from raising its price while the scheme is in operation and no adequate safeguard in the legislation or the scheme to prevent the basic price from being increased. A company which increased its price would say that there were commercial considerations which warranted an increase. But there is an inevitable tendency once the benefit reaches the periphery of the industry - and this subsidy will go to the ultimate purchaser - for there to be less buyer resistance. There will be an inevitable tendency also for the oil companies to take some benefit from that situation. What safeguard is the Parliament providing in that respect?

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

– It is true that in some States, such as Victoria, there is no price control of petroleum products. It is equally true that price control operates in three States. We live in a free economy. This Government does not believe in price control. If an oil company for good and sufficient reasons, as Senator Wright suggested, decided to increase the price of petrol it could do so. All that it would have to contend with would be the weight of public opinion. The company would have to answer to public opinion for its action. I concede that that is so. But let us come back to this scheme. Regardless of what the oil companies do with their prices, the point is that the price of petrol as at 3 1st December 1964 is known and is established. It is not something which can be altered subsequently.

Under this scheme we propose to provide that that price will be the basis, and we intend to pay a differential amount so that the price of petrol in country areas will be not more than 4d. above the price in the capital cities as at that date. Therefore, I do not think that a variation in price would have the weight that Senator Wright attributed to it, but I am bound to acknowledge that in the States where there is no price fixing if a company for good and sufficient reason, or for other reasons, wished to increase the price there would be nothing that could be done about it. But as I have already stated, within the oil industry there is a degree of uniformity in regard to prices. In any case, as normal traders, the oil companies have to face up to the responsibility for an increase of price and the effect that it will have on the industry.

Senator Webster:

– Could the Minister state the proportion of the £6 million subsidy that will be applied to aviation fuel?

Senator WRIGHT:
Tasmania

– I should like to know the proportion that sales of petrol outside city areas bears to total sales. That figure will indicate to us something of the magnitude of the bounty that is to be paid from the Treasury.

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

– I inform Senator Webster that the subsidy in respect of aviation fuel will amount to approximately £400,000 of the total amount of £6 million. Senator Wright has asked me to state the percentage of total sales that will be applicable in country areas. That is a very complex question. As the honorable senator will be aware, there are many country areas, such as in Victoria, which will not attract the subsidy at all. It would be necessary for my Department to undertake some research in order to answer the question, but the information could be made available to the honorable senator if he wished to have it.

Senator Sir WALTER COOPER (Queensland) [12.36 a.m.]. - I point out to the Minister that there is a depot at Winton, in Queensland. The town of Middleton is 135 miles from Winton, and between the two towns there is a town called Woodstock, which is 75 miles from Winton. Would people at Woodstock be allowed the benefit of the 75 miles they would have to travel if they went to Middleton to purchase petrol?

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

– Winton is a recognised distribution centre. A person living in that area would purchase his petrol at the distribution centre where he would get the most advantage. Petrol sold at Winton would attract a subsidy of 6id. The subsidy at the nearest place where there was a recognised distribution centre might be 7d. or 5d. a gallon. The subsidy at Middleton will be Hid. a gallon. Obviously, there must be a limit to the number of distribution centres.

Senator Sir Walter Cooper:

– Could a person who lived at Woodstock go to Middleton and purchase his fuel there?

Senator ANDERSON:

– Yes, if that was the nearest distribution centre.

Senator Sir Walter Cooper:

– It is farther out.

Senator ANDERSON:

– It is still necessary to work on the base figure.

Senator Sir Walter Cooper:

– He could go to the Middleton depot and purchase his fuel there?

Senator ANDERSON:

– Yes, if that was the nearest distribution point.

Senator WRIGHT:
Tasmania

– This legislation is based on section 96 of the Constitution which empowers the Commonwealth Parliament to grant financial assistance to the States: I should like to know under which provision of the Bill such assistance is extended to the Territories of the Commonwealth.

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

– That is not provided for in the Bill at all. In relation to the Northern Territory, it will be done by means of an ordinance. The price in the A.C.T. will be based on the wholesale price out of Sydney.

Senator WRIGHT:
Tasmania

– I am obliged to the Minister for that infomation. Having before me the information that the Australian Capital Territory is to be regarded as an outlying province for this purpose, I protest.

Senator Anderson:

– Tt is to the advantage of the residents.

Senator WRIGHT:

– What?

Senator Anderson:

– We must bear in mind that if they got a differential in Queanbeyan and it was not applied here in the Territory-

Senator WRIGHT:

– They must take the Constitution as they find it. Here they are to be fatted to the extent of £25 million a year, in spite of the fact that this scheme is designed to benefit the outback. Canberra cannot have it both ways. I shall be looking out for the ordinance when it is available. I wish to register an emphatic protest against a differential for the Australian Capital Territory which is based upon the idea that Sydney is the relevant capital. Canberra is the relevant capital in this instance. If my patience persists, I shall be waiting for the ordinance.

While I am on my feet there is one other matter in which I am interested. I refer to clause 12. I want to know what damages or costs it is envisaged that the Commonwealth will be obliged to pay to the States in connection with any action or proceeding arising out of an act or thing done or omitted to be done by the State in pursuance of the scheme in relation to the State for the purposes of the Act. Will this be something of a constitutional nature or in the nature of a collision, or will it be a question of commercial difficulty?

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

– My officers are preparing an answer to that question. Adverting to the position in the Australian Capital Territory, the thing to be remembered is that the claim will be made by the oil companies and Sydney will be regarded as being the capital city for the purposes of the operation of the scheme. I repeat that the claim will be made by an oil company in Sydney, not as though it were for oil supplied in the area.

Senator Wright:

– Can the Minister give me the wholesale prices in Sydney and Canberra as at December 1964?

Senator ANDERSON:

– The wholesale price in Sydney was 2s. 9$d. a gallon. The wholesale price in Canberra was 3s. 3Jd., or 6d. more than the Sydney price. In regard to the other matter mentioned by the honorable senator, a guarantee was given to the States. Senator Wright will appreciate that the customs officers will be made officers of the States for the purposes of administration. The States said very properly: “That is very good, but there is some need to indemnify a State in relation to any officer of the Commonwealth who will be acting as a State officer for the purpose of administering the Act “.

Senator Wright:

– Will the Minister be good enough to give me the Hobart price as at the same time?

Senator ANDERSON:

– The wholesale price in Hobart for standard grade petrol was 2s. 10id., and for premium grade 3s. lid.

Senator McKENNA:
Leader of the Opposition · Tasmania

– May I remind the Minister that there were two questions which he did not answer? I do not blame him, because I asked quite a lot of questions. 1 now ask whether any obligation is cast upon the oil distributor to invoice at the full wholesale price and then show the subsidy as a deduction.

Senator Anderson:

– The invoice will not show the amount of subsidy. It will show the point of sale. That will be sufficient to indicate the amount of subsidy.

Senator McKENNA:

– Am I to understand that the figure that will be shown on the invoice will be the full wholesale price less the subsidy, or will it show the net figure?

Senator Anderson:

– That is right.

Senator McKENNA:

– I merely invite the Minister to consider whether it would not be very much easier if it were done the other way. Would it not be then clear to everybody what was happening?

Senator Wright:

– And it would be an additional check.

Senator McKENNA:

– It would seem to me to be an additional check. I do not press the matter, but merely raise it with the Minister.

Senator Anderson:

– The honorable senator will agree that it is purely an administrative matter.

Senator McKENNA:

– It is.

Senator Anderson:

– Of course, my officers are expert in this field. That is the way it was put in the first place. I cannot do more than give the honorable senator the facts.

Senator McKENNA:

– It would seem to me to be so much clearer if the oil distributor were to show his wholesale price, then the deduction, and then the net amount. 1 understand that what he will do will be to show the net amount and we will have to go behind what appears on the invoice to get at the real facts.

Senator Anderson:

– It will show the point of sale, which is the fundamental thing.

Senator McKENNA:

– That is all very well for knowledgeable officers who know all the ropes in relation to these hundreds of places. But there are many people who will be entitled to various wholesale rates - the primary producer as opposed to the industrialist and so on. However, I am merely asking for information at the moment. The other question I ask is this: Will the reimbursement to the oil companies, after taking into account expenses incurred in administering the scheme, include the cost of their trips, conferences and everything . else prior to the actual launching of the scheme?

Senator Anderson:

– I am happy to be able to say that the answer is “ No “.

Senator McKENNA:

– I am happy to hear that. My final comment is this: Senator Wright pressed the Minister in relation to the possibility of variation in the city prices of petrol and that variation extending evenly into country areas. The Minister mentioned that three States - South Australia, Queensland and New South Wales - are concerned to fi prices. In view of another remark that the Minister made about price fixing, is it not to be anticipated that price fixing will cease to operate in New South Wales in the near future and that the only States to which we will be able to look for a norm in price fixation will be Queensland and South Australia? Would not that weaken any persuasive effect on the other States? It seems to me that what the Minister has told us here today is that, regardless of what increases occur in the basic price, the Government will not lose anything because the differential will remain constant.

Senator Anderson:

– Yes.

Senator McKENNA:

– I appreciate that, but I am certain that what Senator Wright was concerned about - I am concerned about it too - was this: Supposing the price went up by 4d. a gallon immediately, as it could in four States, the Government would be no worse off but undoubtedly the consumers would be. They would be in the same old position that they were in prior to the operation of the subsidy.

Senator Sir William Spooner:

– That presupposes that the metropolitan price would not go up.

Senator McKENNA:

– I made that position clear. I said that. You begin at the base in the capital city, and the effect spreads.

Senator Sir William Spooner:

– I said that it presupposes that the metropolitan price would not go up.

Senator McKENNA:

– I put the other proposition. I am assuming that the price did go up and that it went up evenly throughout the country. The Government would lose nothing, because the differential is constant as between all those points and the capital city. The poor old consumer would be paying just as much as he was before the subsidy was granted.

Senator Wright:

– Unless the subsidy is shown on the invoice, he has no method of checking it.

Senator McKENNA:

– There are these difficulties. There is always a grave danger in subsidising an uncontrollable price or charge. I would have been happy to have time to pursue the matter very much further and to have reassurance on the point of protection for the consumer.

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

– What the Government of New South Wales would do on this matter is a hypothetical question. Therefore, I think it is not proper for me to comment on the suggestion. This is an attempt by the Government to produce a scheme which will give an advantage to country people. We have to take things as they are. We must have a scheme which is acceptable to the State Governments and to the oil companies. If some of the contingencies conjured up by honorable senators arose, any government would have to look at the situation. The scheme has been based on petrol prices which are static, which are the subject of price control in three States, in an industry in which prices are fixed on internal trade arrangements. If some other circumstances arise, the situation will not be novel. As circumstances change, schemes and Acts of Parliament have to be re-examined.

As this scheme has been mutually agreed upon by the Commonwealth, the oil companies and the State Governments at the conference table, there is every reason to hope that it will succeed. It was evolved in good faith. All the normal safeguards that can be thought of at this point of time have been written into the scheme. I am satisfied that with the co-operation of all the parties, which obviously we shall have, this will be of great advantage to country people.

Bill agreed to.

Bill reported without amendment; report adopted.

Third Reading

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

page 1037

CUSTOMS TARIFF BILL 1965

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

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

– I move -

That the Bill be now read a second time.

Mr. President, the bill I have just introduced represents a major change in the nomenclature of Australia’s customs tariff but not in the levels of import duties chargeable under our fiscal policy. The Bill puts into effect a Government decision to recast the Tariff into the internationally recognised language of the Brussels Nomenclature. The new tariff, however, does not make any significant change in the level of duties. Historically, there have been three major nomenclature changes in Australia’s customs tariffs since Federation. They are represented on the statute book by the Customs Tariff 1902, the Customs Tariff 1908 and the Customs Tariff 1921. Not included is the Customs Tariff 1933, from which the present Customs Tariff 1933-1965 is derived, since the 1933 tariff, although it resulted in major changes in the levels of duties, largely replaced the Customs Tariff 1921 as amended, without changing the nomenclature of the earlier Tariff Act.

Honorable senators may be interested if 1 recall some of the facts about these three earlier tariffs. The 1902 Tariff was introduced by the Rt. Hon. C. C. Kingston, P.C., K.C., Minister for Trade and Customs, on 8th October 1901, as a budget measure, it comprised some 136 items and was a single column tariff and took effect from 4 p.m. Victorian time on the 8th October 1901. The next tariff with a major nomenclature change was introduced by the Hon. Sir William John Lyne, K.C.M.G., the Treasurer of the day, as a tariff proposal, on 8th August 1908, again as a budget measure. This tariff of about 30 pages comprised 444 main items. It was a two column tariff, giving, firstly, a general rate and secondly, a preferential rate, in some cases, to goods the produce or manufacture of the United Kingdom.

The next major nomenclature change was introduced on 24th March 1920, by the Hon. Walter Massy Greene, the Minister for Trade and Customs. This tariff was a three column tariff providing for British and Dominion preferential rates, an intermediate tariff rate - what we today speak of as the most-favoured-nation tariff - and a general tariff rate. Its wording and numbering in a great many items was identical with today’s tariff. Indeed, it is remarkable that much of the wording used in the 1902 and 1908 tariffs has been carried forward to the present day and is still retained in sub-items and paragraphs in many items in the new Tariff Bill before the Senate.

So much for past tariffs. As I stated earlier, the Tariff Bill I have just introduced differs from previous tariffs in that it is, for all practical purposes, a change in working without a change in rate. In other words, it was drawn up, so far as it was practicable, so that the rates of duty applying under the present legal tariff will continue to apply after this bill is enacted. There will be some marginal differences between the existing and proposed rates and in some areas of low trade significance a rationalisation of residual rates has been made, but basically, the levels of tariff protection and the areas of non-protection are the same.

A handbook, entitled “ Introduction to the New Australian Tariff”, which was prepared in my Department and released as a training document early this year, is being circulated for the information of honorable senators. This handbook gives a concise explanation of the new tariff nomenclature, its origin, and how it works. Also available for perusal is a concordance showing each item, sub-item, paragraph and sub-paragraph in the bill, and the principal tariff items and operative rates of duty in the Customs Tariff 1933-1965 that are the source of each reference in the bill. Honorable senators may select any item in the Bill, note the rates proposed and, by turning to that item number in the concordance, compare the new rates with existing rates.

In addition, in order that persons could see whether the tariff rates or the protection under which they now operate would be changed in the new Act, my Department released, at the end of January, a draft Tariff for general information. Honorable senators will recall that I notified them at that time of the release of the draft Tariff and that copies of the draft were placed in the Libraries in the Commonwealth Offices in the capital cities. Members of the public were invited to report discrepancies they believed they had detected to the Comptroller-General of Customs on a special form released for that purpose. In most cases it has been possible to make adjustments to the Schedule to maintain the status quo, in other cases it was found that the goods were currently being wrongly entered and in a small number of cases it was concluded that there should be no amendment to the published draft. I am glad to be able to assure honorable senators that should any further major discrepancies be detected they will be adjusted at the first convenient time. lt may be of assistance to honorable senators if I outline the principal provisions of the Bill. It is in 4 parts of 29 clauses and 4 schedules. Part I, comprising clauses 1 to 12, is typical preliminary material giving definitions of words and the meaning of terms used in the Bill. Clause 6 relates percentage rates shown in the First and Second Schedules to the value of the goods, clause 7 defines f.o.b. price, that is to say. free on board price, a term used in some items in the First Schedule, while clause 8 defines rates of duties.

To explain clause 9, I should perhaps firstly explain the present method whereby preferential rates are accorded to certain countries. The Customs Tariff 1933-1965 makes provision for goods the produce or manufacture of the United Kingdom to be admitted at rates set out in the column in the Schedule that is headed “ British Preferential Tariff “. Canada and New Zealand obtain preference, generally at British preferential tariff rates, through separate preferential tariffs, which direct the British preferential tariff rate in the Customs Tariff to apply to Canadian or New Zealand goods, or, in special cases, make other duty provisions. Honorable senators will recall that in past tariff debates, there have often been, consequential to the main Tariff Bill, preference bills which were passed after the main Bill, usually without debate. These bills formally altered preferences to line up with the main Tariff Act.

In the new Tariff, all preference provisions have been included in the one Tariff. Furthermore, as it had been decided to restrict the new Tariff to a two-column Tariff, in particular items, preferential rates, different from British preferential rates, have been identified and are spelt out in the preference column in the new Tariff Bill, by specifying the name of the country, identified by code prefix, and the rate of duty applying under the particular item. Clause 10 sets out what countries are or may be deemed to be preference countries and how they can be identified by appropriate abbreviations in column four in the First Schedule.

An important change in the new Tariff is the method of numbering. In the new Tariff a wholly numerical sub-division of items - instead of the present pattern of number, letter, number, letter - has been adopted. Clause 11 tells how the commencement of an item is to be recognised, how the commencement of a sub-item is to be recognised and so on. Since the new nomenclature is based on precise classification, it provides a rigid set of rules to enable goods to be classified. Clause 12 formally recognises these interpretative rules and their basic use. The rules themselves are set out as Part I of the First Schedule. Part II of the bill deals with the imposition of the duties and covers clauses 13 to 23. Clauses 13 to 16 stipulate when customs duties are imposed, to what countries the rates in columns 3 and 4 of the First Schedule apply and what is to be done if two rates are shown as applying to goods depending on whether the choice lies between the higher or lower of the rates quoted. Clauses 17 and 18 deal with deferred duties and temporary duties in the same language as in the present customs tariff and thus introduce no changes to the present procedures.

Clause 19 takes the place of the third column in the old Tariff and this clause can be used if it is desired to surcharge goods from countries other than goods from countries entitled to most favoured nation treatment. Let me elaborate here on clause 19. Clause 19 gives power to surcharge named goods from a named country by 20 per centum, but it should be noted that in clause 19 (5) the 20 per centum surcharge is applicable only to column 3 of the First Schedule. The surcharge is not applicable to the preferential rates in column 4.

In the existing Customs Tariff 1933-1965 the third column specifies duties which are applied to countries not accorded most favoured nation treatment. On a number of items these duties are higher than most favoured nation rates and the surcharge varies from 21/2 per cent, to as high as 45 per cent. Present legislation places no limitations on the surcharge that may be imposed on non-most favoured nation countries by amendments to the Tariff.

The new Tariff will not carry forward the present surcharges and countries formerly affected will receive the benefits of most favoured nation tariff treatment from 1st July, 1965. The purpose of clause 19 is to give a limited reserve power which could be invoked if difficult problems arose in the field of international trade. Other countries have similar provisions. Let me assure the House this power will not be used to accord Tariff protection. Tariff protection will continue to be accorded only after the matter has been considered and reported on by the Tariff Board and the Board’s report accepted by the Government. I would also draw the attention of honorable Senators to the fact that any order I might make - this would only be as a result of a positive decision of the Government - has to be published in the “ Gazette “ and in accordance with clause 28 has to be laid on the table of both Houses and is subject to disallowance in the same manner as regulations. Opportunity to debate any such order is therefore available to honorable senators.

Clause 20 extends concessional duties to certain classes of importers or to certain broad classes of goods. These provisions could not be included in the First Schedule because the Brussels nomenclature does not lend itself to such strictly national provisions. Such concessions were accordingly included in a Second Schedule to this Bill. All the provisions in the Second Schedule appear in the Customs Tariff 1933-1965 in practically identical words and at the same rates of duty. The Second Schedule thus enables all the existing concessions to be continued.

Clause 21 deals with substitutes and imitations. At present, substitutes are dealt with by section 139 of the Customs Act 1901- 1963 and imitations by Prefatory Note No. 1 to the old customs tariff. With two exceptions, all the present substitute notices have been written into the First Schedule of the Tariff and clause 21 remains as a reserve power. Clause 22 (1) provides power for the Minister to strike a proportion of a specific rate where a part for an article which is subject to a fixed rate of duty is imported. For example, if household clothes washing machines are subject to duty at a rate of £6 each, it would seem inequitable to charge £6 on a part of the machine such as the revolving tumbler. Clause 22 (2) makes provision for the Minister to direct that the duty on parts for goods shall not be higher than the duty on the whole goods into which the parts are to be incorporated. Both these powers are presently usable by the Minister under existing legislation.

Clause 23 deals with the question of duty on sets and on machinery incorporating electric motors and other driving units. Subclause (1) allows the Minister to direct that the duty shall be payable either on the basis of the duty payable on the one article in the set which gives the set its essential character, or, alternatively, on the basis of the duty payable on each article in the set as if each were imported separately. The need for alternative approaches stems from the recognition that sets may be of two principal types - firstly, the set comprising a principal article with several makeweight articles and secondly, the set with more or less equal articles such as occurs in a canteen of cutlery. In the first case the duty can be collected on the basis of the main article, in the second case on each article. The powers to be accorded the Minister under clause 23 are presently operated by powers conferred by Prefatory Notes Nos. 11 and 1 2 to the customs tariff.

Part III of the Bill covering clauses 24 to 27 deals with the imposition of primage duties. As honorable senators know, primage duty ispresently imposed by the Customs Tariff (Primage Duties) 1934-1958. This Act is proposed to be repealed and primage duties, not at higher level than are presently being imposed, will now be imposed by the Third Schedule to this Bill. Honorable senators will note that clause 24 of the Act imposes primage on goods from countries other than certain countries specified in that clause and if goods are not included by Tariff Item number in one of the four Parts, they are exempt from primage duty.

In addition, a Ministerial Order will be published in the Gazette on 1st July 1965 exempting from primage duty all the existing primage exemptions which are expressed in general terms, such as machinery for use in the mining industry and so on. This provision is given by clause 27 and is subject to disallowance by either House.

Part IV comprising clauses 28 and 29, deals with miscellaneous matters. Clause 28. provides that Orders made under clauses 9, 19 and 27, are subject to Parliamentary disallowance, while clause 29 provides for the repeal of the Customs Tariff 1933 as amended to date, the preference tariffs and the primage tariffs. The details of the Acts to be repealed are set out in the Fourth Schedule to the Bill.

Turning then to the schedules, the First Schedule is the principal schedule and is that based on the Brussels nomenclature so far as the first four numbers of the items are concerned. The fifth, sixth and seventh numbers where they occur are divisions of the four figure items which are introduced for national purposes so as to retain the existing rates of duty and to differentiate between areas of protection and nonprotection and international preferences. The commodities in the First Schedule and the rates applying thereto are basically those subject to the Customs Tariff 1933- 1965 and now to be repealed. This is the main tariff schedule setting out the substantive duties applying on all imported goods. The Second Schedule makes provision for concessional entry for goods for the Commonwealth, for foreign governments as approved, for diplomatic personnel, for principal by-law purposes, for re-imported poods and many other concessional provisions in the Customs Tariff 1933-1965. The Third Schedule is the Schedule which takes the place of the Customs Tariff (Primage Duties) 1934-1958. It is divided into four Parts. Goods classifiable in the First Schedule under the items in the First Column of the four Parts of the Third Schedule, except to the extent of any goods listed in the second column are liable to primage duty. The Fourth and last Schedule sets out the titles of Acts, to be repealed.

In conclusion, may I remind honorable senators that the main schedule to the Bill has been translated from the existing Tariff Act in accordance with the Government’s direction that any changes in the levels of duty should be minimal, but that rationalisation should be made to produce a workable document. The translated document will thus maintain existing levels of protection and is not expected to cause us any difficulties insofar as our international commitments are concerned. The timing of the Bill is 1st July 1965, and this requires the Bill to be enacted before this session of Parliament ends. The timing for a major change of this nature can only be 1st July in any year without destroying the value of two years trade statistics. The Commonwealth Statistician is geared for the change over from 1st July this year. From the point of view of overseas trade talks, the transition to a similar tariff to that adopted by the European Community and many African and Asian States has much to commend it.

Honorable senators may also be interested in comments on the new Tariff published by the Melbourne Chamber of Commerce in the February issue of Commerce News. 1 have copies of the Press release for perusal by any interested senator and I shall merely quote from a circular letter sent by the Customs Agent Section of that Chamber when forwarding the Press article to their clients, as follows -

This Section agrees with the statement by the Minister for Customs and Excise, Senator Anderson, that an Australian tariff with a common Nomenclature to that used by many other countries and one which presents a more logical and systematic approach to tariff classification, should be a benefit to all concerned with imports.

Earlier I said that members of the public had been invited to report discrepancies they had detected in the translation as disclosed by the draft Tariff released at the end of January. Those advices received before this Bill went to print were of course incorporated in the Bill. However, in the past two to three weeks additional reportings have been received which require modifications to the schedule. Any attempt to add these to the schedule at this stage would introduce a major printing problem and I intend therefore to make the changes by “ Gazette “ notice to operate from 1st July 1965. These changes would then be introduced into the Parliament by Tariff Proposals in August and be debated by both Houses in duc course. Other changes requiring to be introduced by “ Gazette “ notices are the changes introduced by Tariff Proposals of 18th and 23rd March 1965, 8th April 1965 and 6th and 11th May 1965 and which, because they have not been debated, have not been included in this Bill. They will also be re-introduced by Tariff Proposals in August and debated at a convenient date. 1 commend the bill to honorable senators.

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

page 1041

CUSTOMS BILL 1965

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

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

– I move -

That tile Bill be now read a second time.

Mr. President, with one exception ; the repeal of Section 144, relating to the valuation of proprietary medicines - this Bill to amend the Customs Act contains only amendments consequential to the principal change as contained in the Bill for the new Customs Tariff. Clauses 1 to 4 of the Bill are procedural changes While clauses 5 and 6 repeal sections 131, 138, 139 and 140 of the Principal Act. The sections so repealed related to matters to which I shall refer.

Section 131 .exempted goods the property of the Commonwealth from liability to Customs duty. This provision is duplicated in the existing Customs Tariff 1933-1965 and will now be found as item 1 in the Second Schedule to the Customs Tariff Bill. Thus, section 131 can be repealed.

Section 138 directed that the higher rate of duty is to be charged whenever goods are classifiable under two tariff items. More elaborate rules for the classification of goods will be found in Part I of the First Schedule to the .Customs Tariff Bill and this enables Section 13.8 to be repealed.

Section 139 provided that substitutes may by Ministerial Notice be chargeable with duty at the rate applicable to the goods for which they are substitutes. This power is transferred to Clause 21 of the Customs Tariff Bill and Section 139 of the Customs Act becomes redundant.

Section 140 made provision for the Minister to vary the duties on parts in approved circumstances and this principle is carried forward in clause 22 of the Customs Tariff Bill.

Leaving aside clause 7 for the moment, clauses 8 and 9 make certain procedural alterations to sections 151, 151 A, 151B and 153 A by bringing together various provisions in the Customs Act and preferential tariffs relating to goods the produce or manufac?ture of overseas countries and by clarifying the meaning of value in relation to goods. Similar amendments are made to sections 154 and 160 by clauses 10 and 12 of the bill. There are no changes of substance involved.

Clause 1 1 which inserts a new section 155 sets out how inland freight charges on goods sent from Canada to Australia are to be calculated. This provision exists at present in the Canadian Preference Tariff which is to be repealed by the earlier bill.

The amendments proposed by clauses 13 to 15 pf the Bill to sections 271, 272 and 273 recognise the alteration of the titling Of Customs by-laws from departmental bylaws to by-laws. Section 273e, which is repealed by clause 16 of the Bill, provided rules for deciding when by-law items should take precedence over non by-law items. This directive is transferred to the interpretative rules in Part I of the First Schedule to the Customs Tariff Bill. This completes the .changes directly .concerned with the changes involved in recasting Australia’s Tariff and I return to clause 7 of this Bill, which repeals section 144 of the Principal Act in accordance with a decision of the Government.

Section 144 of the Customs Act provided that the valuation of incomplete medicinal and toilet preparations imported for completion and preparation for retail sale should be calculated on the value of the completed goods less .certain costs incurred in Australia. Bearing in mind that bulk materials were imported, this meant that duties applied by section 144 valuations were out of proportion to the value of the goods imported. The result of this type of valuation was to discourage manufacturing in Australia in that the same type of duty would be payable on the fully imported product without the cost of setting up a manufacturing factory in Australia,

As Australia’s tariff is geared to encourage investment ‘and the production of goods in Australia the need for section 144, which was part of the original 1901 Act and served as a revenue raising device, has passed. Technically, objections to section 144 can be raised on several grounds. First, the section is contrary to the accepted principle that a duty should be ascertainable at the time of clearance of the goods; next, the basis of valuation provided under the section is not wholly related to the materials imported; thirdly, the section is discriminatory in that it isolates two particular kinds of commodities for special treatment as to valuation for duty; fourthly, the provisions of the section may be easily circumvented by using a different trade name, or by shipping from a country where the product is not sold domestically or by putting up the goods in expensive packs in Australia; and lastly, the administration of the section is so complex that the bulk of any duties collected are absorbed in the administrative costs. In all the circumstances the Government is of opinion there will be less restriction on trade if section 144 is repealed as is now proposed. I commend the Bill to honorable senators.

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

page 1042

CUSTOMS TARIFF VALIDATION BILL 196S

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

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

– I move -

That the Bill be now read a second time.

The Bill now before the Senate provides for the validation until 30th June 1965, of the collection of customs duties introduced by Customs Tariff Proposals on 18th and 23rd March 1965, 8th April 1965 and 6th and 11th May 1965. These were the Customs Tariff Proposals Nos. 31 to 38 and Customs Tariff (Canada Preference) Proposals No. 4. Honorable senators will appreciate that these proposals, which, as introduced, conformed to the legal tariff at that date, are required to continue to operate on and after 1st July 1965.

The language used in the proposals, but not the rates, needs to be changed to conform to the new tariff for imports after 30th June 1965. As the Act to which these proposals relate is to be repealed after 30th June 1965 these proposals would lapse at that date, but in addition, the duties collected would not have been legally imposed without the enactment of this Customs Tariff Validation Bill. The tariff changes, contained in the proposals covered by this Bill will be reintroduced by notice in the Commonwealth “ Gazette “ to operate on and from 1st July 1965 and will be included in a tariff bill to be introduced in the next sitting. The proposals will then be debated at an appropriate time. I commend the Bill to honorable senators.

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

page 1042

SALES TAX (EXEMPTION’S AND CLASSIFICATIONS) BILL 1965

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

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

– I move -

That the Bill be now read a second time.

The purpose of this Bill is to preserve certain existing sales tax exemptions that would otherwise become inoperative after the commencement of the proposed new Customs Tariff which I have just explained to honorable senators. These sales tax exemptions, which apply to imported goods, are complementary to provisions in the customs tariff. The sales tax exemption items generally refer to the relevant item number in the Customs Tariff. The proposals in this Bill will maintain the link with the Customs Tariff and provide for the continuance of the relevant sales tax exemptions after the proposed new tariff comes into force. I commend the Bill to honorable senators.

Debate (on motion by Senator McKenna) adjourned.

page 1043

STATES GRANTS (SCIENCE LABORATORIES) BILL 1965

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator GORTON:
Minister for Works and Minister in Charge of Commonwealth Activities in Education and Research · Victoria · LP

– I move -

That the Bill be now read a second time.

This Bill seeks authority for the Government to continue, during each of the next three financial years, grants to secondary schools for the construction and equipment of science laboratories. Such grants were first made in the present financial year by authority of the States Grants (Science Laboratories and Technical Training) Act, 1964. Operations in this year have demonstrated the value of this form of aid and have resulted in assistance in varying amounts being given to an impressive number of secondary schools.

State Governments have been paid £3,618,900 for provision of laboratories in State schools and this grant, since it was made on condition that State Governments did not reduce their own contributions, has resulted in the States being able to undertake programmes to provide science laboratories and equipment in 293 more secondary schools than would otherwise have been possible. New South Wales intends to provide facilities in 80 schools, Victoria in 167, Queensland in 11, South Australia in 18, Western Australia in 7 and Tasmania in 10. The States have not, for their own internal reasons, been able to spend in this year, all the money made available to them. However, they have committed it and the assurance of a three year programme which the Bill will give, will enable them to plan for accelerated spending in the knowledge that they are assured of the necessary finance.

In the case of independent schools, £1,334,000 was provided this year for independent schools in the States and £47,000 for independent schools in the

Australian Capital Territory and the Northern Territory. Of this total sum £1,200,000 has already been paid to independent schools and by the end of June virtually all the funds provided will be in the bands of the schools and be represented by laboratories which have been finished, laboratories which are under construction, or by modern equipment. In all, 189 independent schools will have been assisted, 120 by way of grants for laboratories and equipment and the remainder by grants for equipment only. At present 708 independent schools are registered with the Department as being interested in receiving assistance. Here again the provision of a three year programme will enable independent schools to plan their building programmes ahead in the knowledge of the amount of assistance they will receive and the year in which they will receive it.

The scheme has been greatly assisted by the co-operation of State Governments most of whichhave, amongst other helpful actions, agreed to provide equipment to independent schools through the same channels as those through which they provide equipment to Government schools, thus ensuring equipment being purchased at the lowest possible cost.

The Government has been greatly helped too by the advisory committees in the States which have recommended priorities among the many independent schools which have sought assistance under the scheme. The Advisory Committee on Standards has made a most significant contribution to the success of the programme in independent schools. This Committee has developed a series of laboratory plans and its members, who all have much experience in science teaching, visit applicant schools and give advice on the most suitable laboratories to meet their individual needs. Broad proposals for the next three years have been submitted to the Commonwealth but have not yet been agreed to in detail. The programme will provide £5 million for science laboratories and equipment over each of the next three financial years. With the permission of the Senate I incorporate in “ Hansard “ a table showing the distribution of the proposed grants among government and independent schools for each of the next three financial years.

I commendthe Bill to the Senate.

Debate (on motion by Senator McKenna) adjourned.

page 1044

UNIVERSITIES (FINANCIAL ASSISTANCE) BILL 1965

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator GORTON:
Minister for Works and Minister in Charge of Commonwealth Activities in Education and Research · Victoria · LP

. -I move -

That the Bill be now read a second time.

In October 1963, the Parliament passed an act to provide finance for universities in the various States during the calendar years 1964, 1965 and 1966. In November, 1964, the Parliament amended that act to make some additional provision for higher academic salaries in State universities during 1964. The present Bill is for the purpose of amending the previous legislation in order to make more Commonwealth funds available in respect of the three years 1964, 1965 and 1966. More finance is necessary to increase the capital grants to universities following the Government’s acceptance of the recommendations in the Tertiary Education Committee report, and to provide for increases in recurrent costs resulting from acceptance of the increases in academic salaries which were recommended last year in the Eggleston report.

Funds are also required to give effect to the Government’s decision to support an increase in fees paid to part time academic staff, and to provide further amounts for research in State universities.

As recommended by the Tertiary Education Committee, the Commonwealth will meet half the cost of certain additional capital works to be undertaken during the next 18 months at the following universities - Macquarie, La Trobe, Bedford Park, Newcastle, Townsville University College - and for a start on a second university institution in the Brisbane area. The total value of these works is £2,450,000 of which the Commonwealth will pay £.1,225,000. The Bill makes provision for the Commonwealth contribution. Honorable senators will recall that in November 1964, following consideration by the Parliament of the Eggleston report, an amendment was made to the Universities (Financial Assistance) Act of 1963 to permit payment of the estimated cost of increased academic salaries during 1964. We have since obtained from the Australian Universities Commission, precise figures for each State university for each of the years 1964, 1965 and 1966, and the present Bill revises the interim grants for 1964 and increases the grants for 1965 and 1966.

The Government has now decided to support higher fees for part-time academic staff commencing from 1st July 1965. The Commonwealth is prepared to join with any State in providing funds to support a maximum fee of £6 per hour for part-time lecturers, together with appropriate rates for otherpart-time academic staff. Where a State decides on a lower fee, that will be the limit to our support. This decision is in accord with the advice of the Universities Commission and the revised First Schedule to the Act incorporates the higher rates for both full-time and part-time academic staff. In October 1963, the Parliament also provided £500,000 as the Commonwealth’s half share of funds to be specially set aside for research in State universities. This money was used during 1964 for postgraduate research activities, which are closely bound up with post-graduate training. The Government is now proposing that a like amount be provided for the same purposes during each of the years 1965 and 1966. The total cost to the Commonwealth over the three years will be £1.5 million, and the distribution among the State universities will be as the Universities Commission has recommended.

The final provision in this Bill to which I wish to refer is the recognition of the University of Newcastle in its own right. It will be remembered that in response to a request from the Government of New South Wales, the Commonwealth Government has agreed to recognise the independence of Newcastle from 1st January 1965. The Bill does this by making provision in the schedules for the University of Newcastle to the extent contemplated when that institution was part of the University of New South Wales, and the sums set aside for the University of New South Wales have been adjusted accordingly. The amendments now before the Senate require Commonwealth grants for State universities of £6,947,000 above those originally made for the years 1964, 1965 and 1966. The total Commonwealth contribution to State universities over those three years will now be about £64 million.

In conclusion I point out to the Senate that we are not proposing any funds in this Bill in support of teaching costs in medical hospitals. A report from the Universities Commission was presented to the Government a few days ago, but there has been no opportunity to take decisions and carry them forward into this Bill. Nevertheless, I assure the Senate that the Government will deal with this matter promptly, and I know that the Senate will agree that when we are ready to announce our decisions we should do so for the benefit of all concerned, without waiting for resumption of the Parliament. I commend the Bill to the Senate.

Debate (on motion by Senator McKenna) adjourned.

page 1045

STATES GRANTS (TECHNICAL TRAINING) BILL 1965

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator GORTON:
Minister for Works and Minister in Charge of Commonwealth Activities in Education and. Research · Victoria · LP

– I move -

That the Bill be now read a second time.

This Bill extends for the next three financial years the grants for State technical colleges and schools first given by authority of the States Grants (Science Laboratories and Technical Training) Act 1964. As with the science grants £5 million will be provided each year and the distribution between States remains unchanged. These grants are given in an area where independent schools do not operate, and the grants are therefore confined to State institutions. They are intended to facilitate the training of young men and women in trades schools and technical colleges. Trades schools include schools of automotive engineering, printing schools and schools teaching carpentry and joinery and many other skills.

Experience of the first year of this programme has indicated that it fills a most important place in the Australian educational scene. For every scientist or technologist, many highly skilled technicians and tradesmen have to be trained. The equipment to train these people must be adequate in quantity and up to date. It has become clear in the course of the first year’s administration of the scheme that equipment has neither been adequate nor up to date. The size of the Commonwealth grant in relation to past State allocations for technical training has been so generous that the States have found considerable difficulty in stepping up their construction and equipment programmes within the first year of the programme. But with the assurance of three more years of finance at this level, they will be able within that time to make a substantial impression on the needs for well equipped training facilities.

Some examples of the States’ proposals for the new triennium will illustrate the nature of the programme which this Bill will facilitate. In New South Wales work will be undertaken at colleges in Cooma, Wauchope, Wollongong, Gunnedah, Newcastle, Cowra, Leeton and Blacktown, as well as in the metropolitan area, and much equipment will be installed. In Victoria, the State has made proposals for the grants to be spent in a number of technical schools and colleges on building and equipment to teach science, applied science, metallurgy, the engineering and motor trades, woodwork and plumbing. In Queensland, the proposals cover the Central Technical College and technical colleges at Bundaberg, Cairns, the Coorparoo School of Food, Eagle Farm, Ithaca, Kangaroo Point, Rockhampton, Yeronga, and the Queensland Agricultural College. Projects range from chemistry and electrical engineering to plumbing, sheetmetal and bricklaying, with animal science and dairy technology buildings at Gatton.

In South Australia grants have already been made in 1964-65 for Education Department establishments and at the South Australian Institute of Technology and Roseworthy Agricultural College, and the proposals for the triennium include substantial expenditure on an automotive trade school and further expenditure on engineering, food technology and at Roseworthy. In Western Australia, building has already taken place at five schools and the proposals for the triennium include a substantial equipment programme and a very large expenditure for the Fremantle Technical School. In Tasmania, the whole of the expenditure in the first two years of the triennium, amounting to over £334,000 will be spent on the new general block at the Hobart Technical College.

I commend the Bill, which will have such an important effect on the training of skilled personnel in our country, to the Senate.

Debate (on motion by Senator McKenna) adjourned.

page 1046

DEFENCE (RE-ESTABLISHMENT) BILL 1965

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator GORTON:
Minister for Works and Minister in Charge of Commonwealth Activities in Education and Research · Victoria · LP

– I move -

That the Bill be now read a second time.

The intention of the Government to bring down legislation to provide a reestablishment charter for national servicemen was publicly announced some weeks ago. It is now my pleasure to introduce the Bill to give effect to this charter. Our reestablishment proposals are directed to three ends. They are, first, the protection of the interests of national servicemen in relation to their reinstatement in civil employment; secondly, the protection of national servicemen in relation to obligations entered into before they become liable for national service; and thirdly, the facilitation of the reestablishment of national servicemen in civil life on completion of their period of continuous national service.

I must, at the outset, point out that not every aspect of the charter, of the entitlements, to be enjoyed by national servicemen is covered by the present Bill. National servicemen who serve in special areas will qualify, under the same conditions as those applying to regular soldiers, for repatriation and war service homes entitlement. They will, of course, receive the same rates of pay as regular soldiers. Provisions covering these matters are to be found in the repatriation, war service homes and defence legislation. In addition, a series of benefits will be provided administratively. First, in addition to any other Army leave due to them on discharge from their period of continuous service, national servicemen will be granted seven days termination leave or, at the discretion of the Army, pay in lieu. Secondly, national servicemen will be paid a gratuity of £40 on completing their two years service, with a minimum payment of £20 for those discharged, for example, for medical reasons, before two years. Thirdly, the Department of Labour and National Service will of course assist national servicemen with any problems arising in regard to their reinstatement rights and, in the case of those without jobs to which they can return, will assist them in securing suitable employment. We are also taking up with the relevant authorities, Commonwealth and State, and with the national employer organisations the importance of giving favorable consideration to the adjustment of age limits for appointment or advancement to positions where age limits exist. This will also assist the re-establishment of national servicemen.

Let me now come to the Bill before the Senate and to the principles that have guided us in considering the form and content of this legislation. We want to avoid, as far as practicable, and certainly to minimise, the possibility that those called upon to serve their country under the national service scheme may be disadvantaged by comparison with those not called up. The character of this current national service scheme is different from that of its predecessor. A major difference is the length of the period a national serviceman will be away from his civilian employment. This cannot but present for some young men problems of re-establishment. On the other hand the length and character of the service may open up new prospects and opportunities on return to civil life. Many will obviously benefit from this. It seems prudent to draw heavily on the arrangements for protection of rights and reestablishment benefits that were so carefully worked out in respect of men called up during the last war. At the same time it is necessary to remember and take account of the distinctions between that situation and the situation that we confront under this national service scheme.

A further point of some importance is that some decided changes have come over the habits, and particularly the purchasing habits, of the community in the last 20 years. This has been strikingly evident in the case of young men of national service age. 1 have in mind here the vast growth in hire purchase transactions and the greatly expanded range of items to be so purchased. These changes in habits have had to be taken into account in framing the legislation. The matters with which this Bill deals are protection in relation to civil employment, moratorium vocational training, rehabilitation of disabled men, and reestablishment loans, It is convenient to deal with each in turn. The Bill deals with them in the order I have just mentioned.

I start with Part II of the Bill dealing with protection in relation to civil employment. The provisions under this heading are, apart from what might well be described as technical changes, basically the same as those that have been contained in Part XII of the Defence Act which are to be repealed under the Defence Bill which was recently before the Senate. Part XII covered members of the Reserve Forces and the Citizen Forces. It was an adaptation of the provisions contained in the original National Service Act. The provisions in the current Bill have, therefore, had detailed consideration by the Senate on other occasions. So they require little exposition.

I point out that these provisions apply to national servicemen, members of the Reserve Forces and members of the Citizen Forces. They apply to men called up for continuous Full-time service and going into annual camps. Men of these classes employed with an employer for 30 days or more before call-up for continuous service, or going into short term camps, will be entitled to reinstatement if they apply to be reinstated as soon as is reasonably practicable. To meet the case of the longer periods of continuous service, application for reinstatement must be made within 30 days or such longer period as the Minister allows.

The Bill provides that reinstatement must be in the pre-service occupation under conditions no less favorable than would have applied if the man had not been absent on service, including any increase in pay he would have received if he had not been absent. On reinstatement, continuity of employment will be deemed not to have been broken by the period of defence service. If the man stays in his reinstated employment for as long as he was away on service, the period of his absence will count for long service leave, superannuation and pension purposes as though he had not been absent. The short term periods of defence service will count for purposes of determining annual and sick leave also. It is not necessary to provide that long term service shall be counted for these purposes because the Army will be looking after annual and sick leave during service.

In the carefully defined circumstances described in clause 12 which are of long standing in legislation of this sort, employers will be excused from reinstating. It will not be a sufficient excuse that someone else has been employed to replace the person on defence service.

The provisions respecting moratorium for national servicemen - which, like the remaining provisions of the Bill, relate only to national servicemen - are to be found in Part III of the Bill. These follow very closely the provisions in the Reestablishment and Employment Act of 1945 as amended. Only in several respects are there any departures from the earlier provisions that are worthy of note, and I will refer to these as I go along.

I should explain here that the whole idea behind providing for a moratorium in relation to transactions to which national servicemen are parties is to ensure that their interests will not be prejudiced because of changes in their financial circumstances on commencing national service. Many men will be better off financially while on national service. Some men will be in business on their own account and will have entered into business transactions of various types. Others, in the custom of today, may have involved themselves, quite legitimately, in commitments which they may find hard to keep up while on service. What we have set out to do is to strike a balance and to protect both parties to transactions affecting men who become national servicemen.

Put briefly, what the Bill does is to give protection to a national serviceman, that is to say, a national serviceman who has commenced actual service, and a female dependant as defined in the Bill, in respect of mortgages, agreements, debts, contracts, hire purchase agreements, and so on, subject to two conditions. They are, first, that the transactions must have been entered into before, what the Bill describes in clause 17 as “ the moratorium date “, and secondly, that the liability of the national serviceman under the transaction must continue to exist at the time of his commencing service. The moratorium date is normally the date upon which an age group is required to register under the National Service Act. If, however. a registrant is, pursuant to the National Service Act, deferred from call-up the moratorium date is the date upon which he receives his call-up notice. This will be roughly a month before he commences service.

This is one of the departures from the wartime moratorium legislation. It takes account of the differences between the circumstances of that time and now. Then, the moratorium applied to all transactions that had been entered into before a man was called into the Services. The reason for this was that call-up could take place at any time and with little notice. This will not be the case with the great run of national servicemen. When men are called on to register they will know that they are liable to be called up. Only a short time will elapse before a man knows whether he is deferred indefinitely or for a limited period or whether he will be called up without delay. So, with the exception of some men granted limited deferment - for example, as students or on grounds of exceptional hardship - those who register will know where they stand about entering into new commitments. For some of those deferred, there will be an element of uncertainty as to time. Deferments granted may or may not be renewed. Hence the different provisions regarding the moratorium date. Commitments entered into before the relevant moratorium date will be protected. Those entered into after will not be protected. While the relevant date is different in this Bill, the principle is the same as applied to the wartime legislation. If a man enters into obligations after he has become aware that he is to be called up, he will do so knowing what his financial position will be whilst he is on service.

Putting it broadly, the protection the Bill gives will continue for twelve months after completion of national service or, if the service is less than that, the period thereafter which is equal to that service. Moratorium provisions are necessarily complicated, and these provisions are no exception. Honorable senators will notice that Division 2 of Part 111 deals specifically with mortgages and agreements for the purchase of land. Then Division 3, dealing with the prohibition or suspension of proceedings, has provisions which deal not only with mortgages and agreements for the purchase of land but also all other transactions including hire purchase agreements.

Let me take the mortgages and sales of land first. The protection given to the national serviceman - to avoid repetition I do not repeat that female dependants as defined in the Bill are included - is that, subject to a number of qualifications, payment of principal and instalments is postponed until after the completion of ‘the national service or the shorter period, mentioned already, where that service terminates in under twelve months. These postponement provisions are not of an absolute character. They are subject to a number of qualifications. Interest has, of course, to be paid meantime on the payments postponed. These provisions for the postponement of payment of principal and instalments will not apply if the appropriate court considers that the postponement is unnecessary having regard to the interests of the national serviceman, if the national serviceman has abandoned his land, or if the court considers that the postponement would cause hardship or loss to the mortgagee or vendor. Nor will the postponement apply where a mortgagee has entered into possession before the national serviceman commenced his national service, or where a mortgagee or a vendor has been authorised by a court to exercise his remedies before then.

L now turn to the general provisions in Division 3. These, as I have already remarked, extend also to hire purchase agreements. These clauses, in short, provide that the leave of the appropriate court must be obtained before a judgment against a national serviceman can be enforced or before any legal remedy in consequence of any default in payment of a debt or performance of an obligation by a national serviceman can be exercised. Again I emphasise that these provisions apply only in relation to transactions entered into before the moratorium date. The protection given by Division 3 extends for the period I have already mentioned in relation to Division 2.

The protection given under Division 3 is, as was the case with the wartime legislation, subject to qualifications. The appropriate court is required to take into account the interests of both parties on any application that is made to it. It will not be necessary to seek the court’s leave in the following types of cases: First, where default is made in paying interest; secondly, where a mortgagee in possession of property other than land is exercising a power of sale which arose before the date on which the national serviceman commenced service; and thirdly, where the national serviceman has purported to sell or otherwise dispose of the goods covered by a contract or has parted with their possession. In addition - here is a second departure from the wartime moratorium legislation - the provisions requiring leave of a court do not apply in relation to a hire-purchase agreement where the liability under it is less than the amounts mentioned in clause 29 of the Bill unless the appropriate court on the application of a national serviceman, in the circumstances described in the clause, is satisfied that he should have the protection given by the Act.

As was the case with the wartime legislation, goods that are used by, or belong to, a national serviceman, except goods acquired under a hire-purchase agreement made after the moratorium date, cannot be seized or taken possession of without the leave of the appropriate court. The same applies to writs of execution against land on which is erected a dwelling house owned by a national serviceman. Leave cannot be granted in this latter case if the national serviceman or his female dependant is occupying the dwelling house or is taking steps to obtain possession to occupy it. The appropriate courts, which are defined in detail in the Bill, are given extensive powers to deal equitably with applications made to them. They are required to have regard to the circumstances of each individual case, and naturally the particular circumstances of both parties.

I turn now to Part IV dealing with vocational training. We all know how successful the Commonwealth Reconstruction Training Scheme was. The scale of the scheme for which this Bill provides will necessarily be much smaller. But we do need a vocational training scheme of this sort if men are not to be at a disadvantage in their employment upon return to civil life. This is not the place to give an exhaustive list of the types of situations to be faced. There will be some who acquire skills whilst in the Army and we want to make provision which will enable them to be supplemented in appropriate cases by post-discharge training. There will be some who may need some form of refresher training to bring them up to date with developments that have occurred in their particular vocation. There will be those who, for various reasons, may not have reinstatement posts to go to. They will clearly be aided in their resettlement by an appropriate form of training. The vocational training arrangements will make all the difference to the effectiveness of the re-establishment of the national servicemen and indeed to their usefulness in the community.

Part IV is in very wide terms, and desirably so; inescapably so. It enables the Minister to make arrangements for the postdischarge vocational training of national servicemen where it is considered necessary or desirable for their effective resettlement. Training may be full time, part time or by correspondence. Arrangements may be made with the States for the use of their services and facilities for vocational training. The Minister is authorised to pay to trainees allowances, expenses, tuition and like fees, and to provide text books, equipment tools of trade, and so on. The development of the vocational training scheme which the Bill authorises will, of course, require the working out of many details and these are currently receiving active attention.

Related to the training that I have been discussing are the provisions contained in Part V dealing with the rehabilitation of disabled national servicemen. We would all hope that there will be little need to resort to these provisions. But if there are men with disabilities hindering their effective resettlement which could be overcome by treatment and training, they will be provided for under Part V - provided of course that they are not eligible for similar benefits under the Repatriation Act.

Part VI deals with re-establishment loans. Under these provisions a national serviceman will be eligible for such a loan where this would be necessary to enable him to re-establish himself in a business, profession or occupation, including farming, in which he was engaged prior to call-up or was prevented from entering because of call-up. These provisions are also based on the Reestablishment and Employment Act. I am sure that they will be found most valuable for some at least of those who render national service.

Mr. President, I have run through the provisions of this most important reestablishment charter for national servicemen. I have explained the principal features of the various Parts of the Bill. I remind honorable senators of my opening remarks that other benefits will be available to national servicemen by virtue of other legislation or administratively. The whole of these arrangements considered together do, we believe, provide a comprehensive set of measures calculated to take care of the problems that will face national servicemen. There is nothing niggardly about this programme, and rightly so.

It is entirely right and proper that arrangements of the kind contained in this Bill should be legislated for. This Parliament and the people it represents, would be failing in their duty if this ‘legislation were not enacted. I commend the Bill to the Senate.

Debate (on motion by Senator McKenna) adjourned.

Senate adjourned at 2 a.m. (Friday).

Cite as: Australia, Senate, Debates, 20 May 1965, viewed 22 October 2017, <http://historichansard.net/senate/1965/19650520_senate_25_s28/>.