17 August 1965

25th Parliament · 1st Session

The Senate met at 3 p.m.

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His Excellency, Colonel Sir Henry Abel

Smith, Administrator of the Government of the Commonwealth of Australia, entered the chamber, and, taking his seat on the dais, said -

Honorable Senators:

I am present this afternoon to administer to senators elected to serve in the Senate from 1st July 1965, the oath or affirmation of allegiance as required by section 42 of the Constitution.

The Acting Clerk produced and laid on the table the certificates of election for the following members elected, on 5th December, 1964, to serve in the Senate for their respective States, from 1st July, 1965:-

New South Wales -

Alister Maxwell McMullin.

James Patrick Ormonde

Kenneth McColl Anderson.

James Anthony Mulvihill

Thomas Louis Bull

Queensland -

Felix Cyril Sigismund Dittmer

Ian Alexander Christie Wood

Alexander Greig Ellis Lawrie

James Bernard Keeffe

Vincent Clair Gair

South Australia -

James Philip Toohey

Keith Alexander Laught

Clement Frank Ridley

Gordon Sinclair Davidson

Arnold Joseph Drury

Tasmania -

Donald Michael Devitt

Alexander Elliot Davidson Lillico

Justin O’Byrne.

John Edward Marriott

Robert Herbert Lacey

Victoria -

John Grey Gorton

Patrick John Kennelly

Ivy Evelyn Wedgwood

Albion Hendrickson

Francis Patrick McManus.

Western Australia -

Malcolm Fox Scott

Hartley Gordon James Cant

George Howard Branson

John Murray Wheeldon

Thomas Charles Drake-Brockman

The abovenamed senators made and sub scribed the oath of allegiance.

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The Acting Clerk. -I inform the Senate that Senator Sir William Spooner resigned his office as Senator for the State of New South Wales from 14th July 1965. In accordance with section 21 of the Constitution the Governor of New South Wales was informed’ that a vacancy had happened in the representation of that State in the Senate. A certificate has now been received of the appointment of Robert Carrington Cotton to fill the vacancy in the representation of New South Wales in the Senate.

The Acting Clerk then laid on the table the certificate of election of Robert Carrington Cotton.

Senator Robert Carrington Cotton made and subscribed the oath of allegiance. (His Excellency the Administrator having retired)-

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Minister for Defence · Western Australia · LP

Mr. Acting Clerk of the Senate (Mr. Odgers), I remind the Senate that the time has come when it is necessary for the Senate to choose one of its members to be President.I move -

That Senator Sir Alister Maxwell McMullin do take the chair of this Senate as President.

Senator McKellar:

– I second the motion.

Senator McKENNA:
Leader of the Opposition · Tasmania

Mr. Acting Clerk, I propose to the Senate for its President, Senator J. P. Toohey, and Imove -

That Senator James Philip Toohey do take the chair of this Senate as President.

Senator Kennelly:

– I second the motion.

The Acting Clerk. - I invite the two candidates to address the Senate.

Senator Sir Alister McMullin:

-I submit myself to the will of the Senate.

Senator Toohey:

– I submit myself to the will of the Senate.

The Acting Clerk. - There being two nominations, in accordance with the Standing Orders a ballot will be taken. Before proceeding to ballot, the bells will be rung for two minutes. (The bells having been rung) -

The Acting Clerk. - The Senate will now proceed to ballot. Ballot papers will be distributed to honorable senators, each of whom is requested to write upon the paper handed to him the name of the candidate for whom he desires to vote. The Clerks Assistant will now distribute ballot papers to all honorable senators. (A ballot having been taken) -

The Acting Clerk. - I have to announce the result of the ballot as fallows: - Senator Sir Alister McMullin, 33 votes, and Senator Toohey, 27 votes. Senator Sir Alister McMullin is therefore elected President of the Senate in accordance with the Standing Orders. (Senator Sir Alister McMullin having been conducted to the dais) -


– Honorable senators, I would be less than human if I were not aware of the responsibility that you have placed on my shoulders in electing me to be your President for the next three years. I appreciate the honour that you have conferred upon me. I am aware of the great responsibility of ensuring that the dignity of the Parliament is upheld and that the Parliament as an institution does not suffer because of our association with it. This is of very great importance today, because Parliaments in various countries are changing. It is from a country such as Australia and from a House such as this Senate that much inspiration may be derived by other countries in ensuring good government and good behaviour in the legislative sphere. With your co-operation, understanding, and a continuance of the goodwill that I have experienced during past years, I am quite sure that the ensuing years will be quite successful from the legislative point of view. I again thank you very much.

Senator PALTRIDGE (Western Australia - Minister for Defence). - Mr. President, on behalf of all Government senators - and I think on this occasion I can speak for all honorable senators present - I congratulate you on your re-election to the high office of President of the Senate. We all know the distinction which you have brought to the office, both inside and outside Parliament, and over the yearshave respected the impartial manner in which you have at all times exercised your authority. It will be of interest to honorable senators, particularly to new senators, to know that you, Sir, have served continuously as President of the Senate for a longer period than any previous

President and that within the next 12 months you should, in fact, pass the record aggregate for a President, a record at present held by the late Mr. President Givens. These facts speak for themselves and reflect the obvious high regard which has prompted the Senate to re-appoint you from time to time. I congratulate you, Sir, and I assure you that you will continue to have the support of the Senate in the exercise of your high office.

Senator McKENNA (Tasmania - Leader of the Opposition). - Mr. President, on behalf of members of the Opposition I congratulate you on your re-election. Your length of tenure, referred to by the Leader of the Government in the Senate (Senator Paltridge), is, perhaps, the best testimonial to your fitness to hold your important office. That office demands high and varied qualities of its occupant. You have demonstrated that you possess those qualities which, in turn, are strengthened by the rich experience you have had. Apart from matters on which the Opposition must disagree with you, Sir, we have enjoyed serving under your presidency. Reserving only those matters of obvious disagreement, we shall be well satisfied if you continue to function in the period ahead as you have done in the past. We wish you well in your new term.

Senator PALTRIDGE (Western Australia - Minister for Defence). - I wish to inform honorable senators that His Excellency the Administrator will be pleased to receive Mr. President and such honorable senators as desire to accompany him, in the Senate Opposition party room forthwith.

Sitting suspended from 3.38 to 4.25 p.m.

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– I have to report that, accompanied by honorable senators, I have, this day, presented myself to His Excellency the Administrator as the choice of the Senate, and His Excellency was pleased to congratulate me upon my election.

The President read prayers.

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Minister for Defence · Western Australia · LP

– I inform the Senate that Her Majesty the Queen has been graciously pleased to approve the appointment of Lord Casey as GovernorGeneral of Australia. I hope soon to be able to announce the date on which Lord Casey will be sworn in.

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Motion (by Senator Paltridge) agreed to -

That the Senate do now proceed to elect a Chairman of Committees.

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

– I move -

That Senator Thomas Charles Drake-Brockman be appointed Chairman of Committees.

Senator Paltridge:

– I second the motion.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I propose Senator Tangney to the Senate, for its Chairman of Committees, and move -

That Senator Dorothy Margaret Tangney do take the Chair of the Senate as Chairman of Committees.

Senator Kennelly:

-I second the motion.

THE PRESIDENT. - There being two nominations, a ballot will be taken. (A ballot having been taken) -


– The result of the ballot is: Senator Drake-Brockman, 33 votes; Senator Tangney, 27 votes. I declare Senator Drake-Brockman elected.

Western Australia

Mr. President, I wish to express my appreciation to honorable senators for re-electing me Chairman of Committees. I hope that during this term of office, my association with honorable senators will be as pleasant as it has been inthe past. As I said when I was appointed Chairman of Committees in the last sessional period, it will be my aim at all times to ensure that the dignity of the Senate is upheld. Honorable senators will receive from me at all times just and fair consideration on whichever side of the chamber they sit. I am conscious of the responsibilities of the office to which I have been elected and will devote to it all the ability I possess.

Minister for Defence · Western Australia · LP

– I take this opportunity of extending the congratulations of honorable senators on the Government side - and, I believe, of all honorable senators - to Senator Drake-Brockman on his reelection to the very responsible position of Chairman of Committees in the Senate. Senator Drake-Brockman does not bring to his office the length or diversity of experience that you do to yours, Mr. President, but during his occupancy of the position in the last sessional period, he impressed us all with his ability and his fairness. I congratulate him and express the firmly founded thought that the service he gave to the Senate during his first term of office as Chairman of Committees will be repeated and enhanced during his next term of office.

Senator McKENNA (Tasmania - Leader of the Opposition). - Mr. President, on behalf of all Opposition senators and, in particular, Senator Tangney - Senator DrakeBrockman’s opponent in the recent ballot - I extend hearty congratulations to Senator Drake-Brockman on his re-election to the office of Chairman of Committees. From our experience of his brief occupancy of the chair prior to the recess, we have every confidence that he will comport himself inthat office to the satisfaction of all parties and all members of this Senate. I can assure him that he will have the Opposition’s complete co-operation in his effort to achieve the very high aims that he has already set for himself as holder of the office of Chairman of Committees. We wish him well.

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– I have received from His Excellency the Administrator a commission to administer to honorable senators the oath or affirmation of allegiance.

Commission laid on the table and read by the Acting Clerk.

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Assent to the following Bills reported -

Appropriation Bill (No. 3) 1964-65.

Appropriation (Special Expenditure) Bill (No. 2) 1964-65.

Supply Bill (No. 1) 1965-66.

Supply Bill (No. 2) 1965-66.

Poultry Industry Levy Bill 1965.

Poultry Industry Levy Collection Bill 1965.

Poultry Industry Assistance Bill 1965.

Conciliation and Arbitration Bill 1965.

Western Australia (South-west Region Water Supplies) Agreement Bill 1965.

International Monetary Agreements Bill 1965.

Defence Forces Retirement Benefits Bill 1965.

Cellulose Acetate Flake Bounty Bill 1965.

States Grants (Petroleum Products) Bill 1965.

Customs Tariff Bill 1965.

Customs Bill 1965.

Sales Tax (Exemptions and Classifications) Bill 1965.

Customs Tariff Validation Bill 1965.

Estate Duty Assessment Bill 1965.

Income Tax and Social Services Contribution

Assessment Bill 1965.

Gold-Mining Industry Assistance Bill 1965.

Parliamentary Retiring Allowances Bill 1965.

Sulphuric Acid Bounty Bill 1965.

Pyrites Bounty Bill 1965.

Broadcasting and Television Bill 1965.

States Grants (Science Laboratories) Bill 1965.

Universities (Financial Assistance) Bill 1965.

States Grants (Technical Training) Bill 1965.

Butter Fat Levy Bill 1965.

Dairy Produce Export Control Bill 1965.

Dairy Produce Research and Sales Promotion Bill 1965.

Dairy Produce Export Charge Repeal Bill 1965.

Dairy Produce Levy Repeal Bill 1965.

Processed Milk Products Bounty Bill 1965.

Commonwealth Electoral Bill 1965.

Referendum (Constitution Alteration) Bill 1965.

Air Force Bill 1965.

Defence Bill 1965.

National Service Bill 1965.

Naval Defence Bill 1965.

Defence (Re-establishment) Bill 1965.

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Minister for Defence · Western Australia · LP

– by leave - Mr. President, I inform the Senate that the Hon. C. E. Barnes, Minister for Territories, has been appointed a member of the Cabinet. Mr. Barnes takes the post left vacant in the Cabinet following the appointment of the Hon. H. S. Roberton, formerly Minister for Social Services, as Australian Ambassador to Ireland.

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Ministerial Statement

Senator HENTY:
Minister for Civil Aviation · Tasmania · LP

– by leave - Mr. President, the agreement reached on the formation of a free trade area between Australia and New Zealand, following the negotiations between Mr. Marshall, the New Zealand Minister of Overseas Trade, and Mr. McEwen, Minister for Trade and Industry, has now been confirmed by our respective Governments.

A free trade area has a technical connotation. It is an arrangement between two or more countries which provides for the goods included in it to be traded free of duty between them, but allowing each country to maintain separate tariffs on imports from countries outside the arrangement. It is different from a customs union which requires the members to introduce a common external tariff against imports from other countries. Under the present arrangement Australia and New Zealand will each maintain separate tariffs against imports from third countries.

The General Agreement on Tariffs and Trade requires that, when two countries enter into a free trade agreement, substantially all the trade between the two countries should be subject to the free trade provisions. This indicates that some areas of trade can be excepted. There are no precise rules to indicate the dimensions of the trade which must be included, and there is no strict rule governing the period over which “ substantially all of the trade “ must be brought into the free trade arrangement.

The arrangement reached between our two Governments has token these considerations into account. Our agreement includes items covering some 60 per cent, of the total trade between our two countries -not 60 per cent, of the trade of each country, but approximately 60 per cent, of total trade between the two countries. The bulk of the items to be included initially in this 60 per cent, of the trade between the two countries are those already traded on a duty free basis. The balance of the items are at present dutiable. It has been agreed that, where duties are very low, they will be removed immediately. In other cases they will be reduced to free over eight years. In certain cases it may be agreed to extend the period beyond eight years.

It has been recognised by both Governments that there are some items which may not be included in the duty free list. Where serious harm, or serious unemployment would result from competition by the other country the items concerned will never be traded duty free. The items of trade which have not been included at the outset will come under periodic examination by both countries for decision as to whether, or when, they should be moved into the duty free section, under the agreement known as

Schedule A. Where items of trade included in Schedule A are not being produced by one of the countries, that country may, at a later date when production commences, temporarily withdraw an item from the schedule and introduce protective duties. Where the establishment of an industry is essential for economic development an item may be withdrawn permanently from Schedule A.

The greatest single generic item of trade between the two countries - forest products, ranging from timber and paper pulp to paper - will now be predominantly duty free. Only a limited range of paper products will remain dutiable.

New Zealand is the biggest customer for our manufacturing industries. The agreement will sustain and over the years develop that position, while not depriving New Zealand of the right or opportunity to establish further manufacturing industries. New Zealand is, of course, predominantly an exporter of primary products. Australia will accept certain of her primary products duty free. In some cases a limit has been set on the quantity to be imported duty free from New Zealand, but in no case at a level which would result in measurable harm to the Australian industry concerned. Provision has been made for the phasing out of duties over as long a period as eight years so that no sharp consequences may result.

Before the list of products to be included was finalised the circumstances of the industries concerned were investigated and confidential discussions were held with people who could advise the Government on the competitive position of the industries in Australia and New Zealand. Items in Schedule A of importance to New Zealand export industries include, frozen peas and beans, dried vegetables, cheese, lamb, pigmeats and timber and paper products. The present duties on these items will be phased out over a period of up to eight years - nine years in the case of frozen peas and beans - after the agreement enters into force. In regard to cheese and certain pigmeats there is also provision limiting the quantities to be subject to the duty free arrangement. Duty free imports in the first year will be 3,000 tons of pork and 400 tons of cheddar cheese. The ceiling reached on cheese after 5 years will be 1,000 tons. Special arrangements have been made in respect of the items mentioned above to ensure that New Zealand’s quantitative import restrictions will not prevent Australian producers from having an equivalent opportunity to compete in the New Zealand market within their range of production.

I will now describe in more precise terms the provisions in the agreement which will govern the whole character of the new trading relationship between our two countries. The existing trade agreement between Australia and New Zealand, which has been in operation since 1933, will form part of the free trade agreement except as superseded or modified by it. This means that the contractual rights we both enjoy under that agreement have been maintained. As already indicated, provision is made for the regular review of trade in goods not listed in Schedule A with a view to the inclusion of additional items. The objective of these reviews would be the progressive addition of goods to the schedule except where their inclusion would be seriously detrimental to an industry in either country or contrary to the national interest. The first of these reviews will take place within two years of the entry into force of the agreement.

There are a number of provisions designed to ensure that there will be fair and equitable trading conditions between the two countries in the commodities included. Particular situations in which action might have to be taken by one of the parties to prevent unfair trading have been identified and provisions drafted to deal with them. Where goods are being dumped or are in receipt of a subsidy from the exporting country, provisions allow the importing country to take necessary action to safeguard any affected domestic industry.

There is an article dealing with deflection of trade which might arise if producers of one country had access to raw materials or machinery at significantly lower prices than producers in the other country. This article will permit the second country, following consultations, to take corrective action to protect affected producers. Either country, following a consultative procedure may suspend temporarily its obligations in respect of products which are being imported in such increased quantities and under such conditions as to cause or threaten serious injury to its producers.

Rules of origin which determine whether goods included in Schedule A will qualify for reduced duties in terms of die agreement are the same initially as those provided under the existing trade agreement, lt is proposed, however, that the rules should be reviewed within two years.

The agreement provides that one country shall not maintain quantitative import restrictions on imports from the other unless it is at Ohe same time applying such restrictions to imports of a third country. Australia undertook not to impose quantitative import restrictions, introduced for balance of payments reasons, on imports from New Zealand. Because of its continuing and serious balance of payments position, New Zealand was not able to give a similar undertaking, but has indicated that it will provide for special arrangements in respect of some imports from Australia. Quantitative import restrictions will be removed on certain products from Australia including timber plywood and veneers from the date of entry into force of the agreement.

The care taken in the selection of items, the quantity limitations prescribed in certain cases and the arrangements to phase out existing duties over a number of years, together with the safeguard provisions to prevent any serious dislocation of trade should ensure there will be an avoidance of serious injury to existing industry in the two countries.

In selecting commodities which at the outset would be included in the arrangement particular attention was also given to the interests of third countries. There should be no disruption to the trade of our other trading partners. The General Agreement on Tariffs and Trade provides for free trade arrangements between members and that organisation will be advised of the details of the agreement as soon as practicable.

It has also been agreed to set up a consultative committee on forestry products comprising representatives of the two countries. This committee would meet, as necessary, and would advise the two Governments on the steps necessary to develop and coordinate all phases of the industry in the two countries to achieve the best use of their forest resources.

New Zealand has undertaken, where import duties levied on goods from Australia are higher than the lowest rate applicable to goods imported under the same tariff item from any third country, to eliminate the difference in the rates at the earliest practicable date. Australia has already eliminated any similar differences which had existed in the Australian tariff.

Special reference should be made to the understanding reached in regard to raw sugar. Raw sugar is not listed in Schedule A but is nevertheless included in the scope of the agreement on the basis that the existing import duties shall be phased out in accordance with the provisions of the agreement but that the non-tariff measures at present in force shall continue. The agreement will continue for ten years. After that it will remain in force but be subject to termination with 180 days notice.

Time has not yet permitted the agreement reached between the two Governments to be translated into a formal document. It is still necessary to finalise the legal drafting of the articles of the agreement and to ensure that the commodities in Schedule A are defined accurately in terms of the tariff classifications of both countries. The agreement will then be printed. When this is done, it will be signed. These processes will be completed with a minimum of delay and it is expected that the agreement will be printed and ready for signature within a few weeks. At the earliest opportunity after signature, arrangements will be made for the relevant documents to be tabled in the Senate.

The conclusion of this free trade arrangement represents the culmination of intensive activity by both Governments extending over two years. It constitutes an historic landmark in the development of trade relations between Australia and New Zealand. Although its immediate results in new trade will not be spectacular, the free trade arrangement is expected to have farreachinglongterm effects on the welfare, development and growth of our two countries.

I present the following paper -

New Zealand - Australia Free Trade Agreement -Ministerial Statement, 17th August 1965 - and move -

That the Senate take note of the paper.

Debate (on motion by Senator McKenna) adjourned.

Sitting suspended from 4.56 to 8 p.m.

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BUDGET 1965-66

Senator HENTY:
Minister for Civil Aviation · Tasmania · LP

– I present the following papers -

Civil Works Programme 1965-66;

Commonwealth Payments to or for the States 1965-66;

Estimates of Receipts and Summary of Estimated Expenditure, for year 1965-66;

Expenditure -

Particulars of Proposed Expenditure for the Ordinary Annual Services of the Government, for year 1965-66;

Particulars of Proposed Expenditure other than for the Ordinary Annual Services of the Government, for year 1965-66;

Government Securities on Issue as at 30th June, 1965;

Income Tax Statistics for income year 1962-63;

National Income and Expenditure 1964-65 - and move -

That the Senate take note of the papers.

On the occasion of presenting the Supply Bills 1965-66,I explained the changes being made in the form of the annual appropriation measures. I indicated that henceforth there will be a separate measure containing appropriations for expenditure on -

  1. the construction of public works and buildings;
  2. the acquisition of sites and buildings;
  3. items of plant and equipment which are clearly definable as capital expenditure;
  4. grants to the States under Section 96 of the Constitution; and
  5. new policies not authorised by special legislation. Subsequent appropriations for such items will however be included in the Appropriation Bill not subject to amendment by the Senate.

The document entitled “Particulars of Proposed Provision for Certain Expenditure in respect of the Year Ending 30th June 1966” contains details of the proposed appropriations for these purposes. I advise honorable senators that a full set of these documents will be available when the Treasurer (Mr. Harold Holt) has finished delivering in another place his Budget Speech for 1965-66. It is my privilege to outline to the Senate the Budget proposals of the Government.

The Budget for 1965-66 makes provision for a greatly enlarged expenditure on defence, a substantial increase in payments to

State Governments, further growth in social welfare payments, increased international aid and increases in many other items encompassed in the Budget as a whole. Together, these proposals comprehend an estimated increase in Commonwealth expenditure this year of £275,000,000. This is the largest expenditure increase for which a Commonwealth Budget has ever had to provide. Our steadily expanding economy will give us a large increase in revenue but one falling substantially short of the proposed increase in expenditure. To help meet this additional expenditure and to offset to some degree the additional call Government expenditures of this magnitude will make on resources, the Government proposes certain increases in taxation. I shall mention these in detail later.

Basically, of course, the annual Budget comprises a set of proposals submitted to Parliament for raising revenues and other receipts and for expenditures to carry on various activities and to meet various commitments. But it has long since become accepted in all advanced countries that, since the Budget has important social and economic effects, the policy of the Budget must be shaped, both in the large and in detail, with these effects in view.

Budgetary policy must necessarily form part of overall economic policy, be consistent with it and serve identical aims. We have often stated the broad aims of our economic policy - the steady growth of Australian population and output, a high standard of living, full employment, stability of prices and a strong external balance of payments. To these must be added the increased emphasis now given to national security by a much enlarged defence programme. These objectives guide us from year to year in drawing up our Budget proposals. It is no longer a matter of merely considering how to balance the public accounts. Some years it appears right that, to stimulate expansion generally or in some sectors, expenditure ought to be allowed to rise ahead of receipts; in other years, it appears that there ought to be some check on the rate of increase in demand.

This year the predominant fact is that the Australian economy is already running at full pitch. It is a year in which, for example, we shall see an enlarged demand for (re sources on the part of several great mineral projects now gathering momentum and when some diversion of resources must be made to meet a total defence expenditure of £385,921,000, Last financial year it was £304,491,000. While further resources for production will become available during the year, they are likely to be more limited in extent. Demand has risen strongly and seems likely to continue to rise.

Our additional expenditure will add considerably to the general demand for goods and services. But the taxation measures we are taking to meet and offset its effects are in no sense designed to slow down expansion in real terms nor, we believe, will they do so. Our aim is to ensure that growth goes on under the conditions of a steady balance between demand for goods and the supply of goods and of resources for producing them.

Last financial year, 1964-65, saw a further big rise in national output - despite labour shortages, industrial disputes, sharp falls in some export prices and drought over wide areas of the country. By any reckoning, it was a good performance. But while output thus increased substantially, expenditure increased still more. In the national accounts for the year, gross national product at current prices snowed an increase of 9 per cent. Gross national expenditure, on the other hand, increased by 13 per cent.

There were two main results of this. The labour situation became still more difficult, with shortages of skilled people - and indeed of many other types of labour - worse than ever, labour turnover high and a vast amount of overtime working. The other result was a large rise in imports - some £250,000,000 or 22 per cent., above the previous year. Concurrently, there was some weakening of our external position. Exports fell some way below the total of 1963-64 and doubts arose as to whether capital inflow would continue on the scale of recent years. Our overseas reserves fell by £158,000.000.

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The main elements in our proposed expenditure for this year and the reasons for the increases which have come about are as follows.


Defence is not the largest item in the Budget but it does this year show the largest increase. We are providing for total expenditure of £335,921,000 which would be £81,430,000 or about 27 per cent, greater than actual expenditure last year. Of this increase, about £58,000,000 will be spent within Australia and £23,000,000 overseas.

These are large sums but they simply express the fact that we are now engaged in a big and widespread defence effort, both at home and abroad. Apart from the pay and maintenance of increased forces, we are acquiring a great deal of costly new equipment such as submarines, guided missile destroyers, patrol craft, anti-submarine frigates. Mirage fighters, Hercules transports, control and reporting units and a wide range of arms and materiel for the Army. There is also a large amount of construction involved. Expenditure on airfields, barracks and similar works is estimated to be £30,000,000 this year. Last year it was less than £15,000,000.

Payments to or for the States.

Payments to or for the States make up the largest item in the Budget. It is estimated that this year they will reach £549,640,000- and this does not include anything for the support we may have to provide for Loan Council borrowing programmes. It amounts to an increase of £61,402,000 or 12.6 per cent, over the payments made last year.

Within this increase of £61,402,000, about £37,000,000 is due to the rise in financial assistance grants this year under the new arrangements agreed with the States last June to cover the period 1965-1970.

Following recommendations of the Commonwealth Grants Commission, there will also be an increase of £5,025,000 this year in the special grants payable to Western Australia and Tasmania.

Grants to States for assistance for universities will be £22,714,000, an increase of more than £2,000,000, and we will be providing £9,953,000 for science laboratories and technical training, £750,000 for research grants and £1,000.000 for interim capital grants for Colleges of Advanced

Education. The two latter items, amounting to £1,750,000, appear in the Budget for the first time this year.

Grants and advances to the States for developmental projects this year total £11,567.000, which is £2,496,000 above the total for 1964-65. Besides this, £14,238,000 is being provided for rail standardization works in South Australia and Western Australia, an increase of £6,860,000 over last year.

Social Services

Expenditure from the National Welfare Fund is the second largest item in the Budget. We estimate that, on the present scales of benefits, it would amount to £465,652,000, an increase of £20,469,000 over expenditure in 1964-65. This year, we have it in view to improve certain benefits and to widen eligibility for others.

We propose that supplementary assistance, which is now payable to single pensioners who are deemed to be dependent solely on their pension and who pay rent, will be increased from 10s. to £1 a week. This will be associated with a means test under which some supplementary assistance will be payable until, a pensioner’s meansasassessed reach the equivalent of £1 10s. a week. Eligibility for supplementary assistance on the new basis will be extended to a married couple where the husband is a pensioner and his wife receives a wife’s allowance. The husband’s pension in these cases will also be increased to the standard rate of £6 a week. These measures will increase the income of eligible married couples by up to £1 10s. a week.

The wife’s allowance of £3 a week presently payable to the wife of an invalid pensioner or age pensioner who is permanently incapacitated for work will in future be paid to the wife of any age pensioner where she has the care of a child. In addition, payments for dependent children will be extended to all age pensioners.

At present, payments to pensioners for children undergoing full-time education cease at the end of the year in which these children reach 18 years of age. We propose to continue the payment of these benefits until the student child reaches the age of 21 years. Widows with student children will remain eligible for the Class A widow’s pension until the youngest child, if a student, reaches 21 years.

Action is proposed to assist a pensioner who is responsible for the funeral costs of a spouse, a child or another pensioner. In these circumstances, a funeral benefit of £20 will be payable. The present funeral benefit of £10 will be maintained where the funeral costs of an age or invalid pensioner are met by a person who is not a pensioner.

We also intend to introduce a new benefit, to be known as a guardian’s allowance, of £2 a week for widowers and other unmarried persons receiving an age or invalid pension who have the care of one or more children. Where, for example, an eligible age pensioner has, say, one dependent child, his weekly income will be increased by £2 15s., comprising £2 for the new guardian’s allowance and 15s. for the child. Such a pensioner will thus receive each week benefits totalling £8 15s., excluding any supplementary assistance to which he may be entitled.

These proposals will require amending legislation. The additional and new pension benefits will be payable on the first pension pay day after the legislation comes into operation.

Soon after assuming office, this Government introduced the Pensioner Medical Service under which free general practitioner medical services, pharmaceutical benefits and public ward hospital treatment are currently made available for certain age, invalid, widow or service pensioners, and for persons in receipt of the tuberculosis allowance. These benefits are also available to dependants of such pensioners and recipients of tuberculosis allowances. We now propose to extend the scope of the Pensioner Medical Service in two important respects.

First, we propose to remove the existing means test governing eligibility for enrolment in the Pensioner Medical Service. This will mean that all persons who are receiving age, invalid, widow or service pensions or tuberculosis allowances will become eligible. Secondly, the definition of dependant will be extended to include student children. We will approach the States to seek the inclusion of this enlarged group of eligible persons within the present arrangements for free public ward hospital treatment.

Some 120,000 pensioners and their dependants should benefit from these extensions of the Pensioner Medical Service which will commence on 1st January 1966. The estimated cost of all these decisions is £7,720,000 in a full year and £5,180,000 in 1965-66. The total expenditure from the National Welfare Fund in 1965-66 will be £470,832,000.

Repatriation Benefits

In the field: of repatriation benefits we are putting forward a new intermediate rate of war pension which will fall between the special totally and permanently incapacitated rate and the general 100 per cent. rate. Its purpose will be to provide for the needs of seriously disabled exservicemen whose war-caused incapacities render them incapable of working other than part-time or intermittently.

At present, a sustenance allowance is paid where the nature of the treatment given for a war-caused disablement temporarily prevents an ex-serviceman from working. In the case of such an ex-serviceman receiving out-patient treatment, the sustenance allowance provided is at a rate of up to the 100 per cent, general rate of £6 per week. In future, where out-patient treatment extends over a period of four weeks ot more, sustenance allowance may be paid at up to the special totally and permanently incapacitated rate of £14 5s. per week.

These payments will be payable on the first pension pay-day after the necessary legislation has been passed. The estimated cost of these benefits, together with adjustments to service pension benefits consequential upon the decisions announced in the social services field, is £1,150,000 in a full year and £860,000 in 1965-66.

Superannuation and Defence Forces Retirement Benefits

Many requests have been made for further adjustments in existing pensions to ex-Commonwealth employees and members of the Forces under the Superannuation and Defence Forces Retirement Benefits Acts but the Government concluded that, in the context of this year’s Budget, it was not possible to provide a further general increase. However, the rates of children’s pensions under both Acts will be increased from £1 per week to £2 per week if the mother is alive, and from £3 per week to £5 per week if both parents are dead. The age limit for children’s pensions will also be increased, for children undergoing fulltime education, from 16 years to 21 years.


Total Commonwealth expenditure on the Territories will amount to £86,588,000, an increase of £9,977,000 on 1964-65. The growth in the grant to the Papua-New Guinea Administration strikingly reveals the major contribution Australia is making to the development of that Territory and the well-being of its people. This year it will be £31,000,000; last year it was £28,000,000, and four years ago it was £17,300,000. Moreover, these particular figures do not take account of quite substantial expenditure in Papua-New Guinea by various Commonwealth departments. These other expenditures are now running at a rate of over £5,000,000 a year.

International Aid

From an important standpoint, we may properly regard our expenditure on PapuaNew Guinea as belonging to the category of international aid since its purpose is to assist the Territory and its people towards the achievement of economic viability and political independence.

Hence, taking our provision for the Territory this year along with estimated expenditure on various other forms of international economic aid, we may say that the total amount we are providing for such aid this year will be of the order of £50,860,000. The comparable figure last year was £47,904,000 and that included a special gift of wheat to India at a cost of £3,801,000.

Nowadays we are involved in many forms of international economic aid and our contributions to some of them are growing fast; for example, our subscription to the International Development Association will this year rise by £2,067,000 and our subscription to the Indus Waters Scheme by £546,000. We will also increase Colombo Plan Aid by over £783,000 this year, it being our policy to do all we can to promote development in the Colombo Plan area.

When account is taken of both the quantity and quality of Australian aid, our record compares favourably with that of any other country. We are, for example, virtually the only country in the world which provides aid wholly in the form of grants. Consequently, when Papua-New Guinea reaches independence, none of the assistance which we have provided to date will be treated as a debt requiring servicing or repayment. Even if we enter into no new aid commitments, our aid expenditures will continue to grow rapidly in future years. Nevertheless, although it will be impossible to meet all the requests t,v new aid which are now being made to us., we must stand ready to continue to play our part in assisting less developed countries, especially those in our own immediate area.

Defence Aid

Along with aid for economic development, the need to provide defence aid to the Malaysian area and Vietnam is also giving rise to increasing expenditures associated with the deployment of our own forces overseas and with the provision of defence aid of a material kind.

Following a request by the Malaysian Government for additional aid to help build up its own defence forces, the Government has decided to extend the £3,000,000 programme of equipment and training assistance which was commenced last year. The new programme will involve aid of about £9,500,000 over the next two years and, added to the balance of the initial programme, will require expenditure of £5,871,000 in 1965-66. The Government believes, that, together with the aid being provided by the United Kingdom, Canada and New Zealand, this new programme will be of considerable assistance to Malaysia in the strengthening of her defence capability. The separation of Singapore from Malaysia may require some adjustments in the implementation of the programme.

Capital Works and Services

Expenditure by the Commonwealth on its own capital works and services in this year is estimated to reach £218,297,000, an increase of £14,976,000 on last year.

For capita] works of the Post Office we are providing a total of £90,000,000 of which £82,400,000 is for technical equipment and £7,600,000 for buildings and other construction. This represents a large increase of £10,318,000 over expenditure last year, but a prospering economy places high store on Post Office services and this creates an ever-enlarging demand for the necessary resources.

The amount to be provided for civil aviation facilities is £11,839,000, of which £2,600,000 is for technical equipment and £9,050,000 for construction. The total amount is £3,047,000 greater than expenditure in 1964-65. Development of the airports at Sydney and Tullamarine accounts for the greater part of the increase.


Mention has been made of the grants and advances, totalling £11,567,000, we are proposing to make to the States this year by way of Commonwealth contribution to a wide range of special developmental projects and also the amount of £14,238,000 which has been included for expenditure on rail standardisation works in South Australia and Western Australia.

We have had under consideration a number of further proposals from State Governments for Commonwealth assistance on developmental undertakings. Inevitably, we have had to consider them in the light of our general budgetary position, the state of the economy and the prospective heavy demand on resources. The Commonwealth still has commitments totalling more than £90,000,000 on projects of this character it has previously undertaken to assist.

Nevertheless, we have decided to offer the Queensland Government a loan of up to £1,635,000 to finance harbour and township works at Weipa. When details of the arrangement have been agreed with the Queensland Government, legislation will be brought down. Meanwhile an amount of £750,000 has been included for the purpose in the estimates. This will increase expend.ture on special developmental and railway projects in the States in the current year to £25,805,000.

Beef Roads

This special developmental expenditure includes provision for payments of £2,750,000 to Queensland and Western Australia under the present arrangements for financing beef roads in those two States. This amount includes £750,000 for Western Australia, which will be the last payment under the existing Agreement with that State. For Queensland, estimated payments of £2,000,000 in 1965-66 will leave approximately £300,000 available to the State of the total of £8,300,000 covered by the existing Agreement.

However, we do not mean this to end the Commonwealth Government’s participation in this important field of activity. In fact, the Government has under examination a report on the future of the beef roads programme recently prepared by the Northern Division of the Department of National Development. In due course, we will expect to hold discussions with the States about various aspects of the future programme.

A sum of £1,150,000 is also being provided this year for the continuation of the Northern Territory beef roads scheme. This scheme now includes the provision of a sealed road from Katherine to Top Springs, the first stage of which, Katherine to Willeroo, was commenced last year. This year, the final stage of this important link, Willeroo to Top Springs, will be commenced. The whole road is expected to cost about £1,600,000.

Oil Search

The approved programme of new commitments to be entered into for payment of subsidy under the Petroleum Search Subsidy Act was £5,500,000 for 1964-65. This programme, together with commitments brought forward from previous years, resulted in a cash expenditure in 1964-65 of £4,419,000. Expenditure by petroleum exploration companies continues to rise strongly and a continuation of subsidy payments on the existing basis involves a substantial increase in the Commonwealth’s liabilities. Nevertheless, it has been decided to maintain the present unit rates and standards of eligibility of subsidy payments and, in addition, to remove the limit of £100,000 on subsidy payments for any one drilling operation. As a consequence, the subsidy programme in 1965-66 will be raised to £7,000,000 and it is estimated that cash expenditure this year will be £5,700,000.

Petroleum Products Prices

The date of bringing into effect the Petroleum Products Prices Subsidization Scheme is dependent on the passage of State legislation, but for the purposes of the Budget we have estimated that it will come into operation by 1st October next. An amount of £4,270,000 has been included in the Budget to cover expenditure under the Scheme this year.

Royal Flying Doctor Service

For many years now the Commonwealth Government has been giving financial support to the Royal Flying Doctor Service. In recent years, this has amounted to a subsidy of £95,000 a year. The Government had decided to increase the subsidy to £140,000 a year for the three years commencing 1st July last. Of this subsidy, £65,000 a year will be payable on a £ for £ basis as a capital grant and the balance of £75,000 a year will be a contribution towards operational expenditure.

Industrial Design Council of Australia

We propose to increase the financial assistance the Commonwealth has been giving to the work of the Industrial Design Council of Australia. For 1965-66 there will be a base grant to the Council of £20,000 and a further £15,000 will be available for matching on a £ for £ basis donations from sources other than the Commonwealth. We will also make a special grant of £10,000 to help meet the cost of establishing a design centre in Sydney which the Council plans to open during 1965-66.

State Works and Housing Programmes

At the meeting of the Loan Council in June, the Commonwealth undertook subject to certain conditions, to support borrowing programmes for State works and housing this year amounting to £295,000,000. This means that, in the event of loan raisings for the year falling short of that amount, which seems likely, the Commonwealth will be prepared to consider making up the difference from its own resources.

Total Expenditures

Added together, these various commitments, on our own account and on behalf of the States total £2,667,030,000. That figure does not include prospective debt redemptions which I shall refer to presently.

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Last year we had almost everything in our favour in point of revenues. Through 1964-65, employment and earnings rose strongly and that made for high pay as you earn collections and pay-roll tax receipts. The big increase in imports swelled the yield of customs duties. Excise and sales tax revenues rose with increasing sales of goods subject to those taxes. Besides this, income tax assessments based on 1963-64 incomes drew upon the relatively high incomes derived in that year by primary producers, companies and business in general. Then, of course, there were in the Budget certain increases in taxes and charges, estimated to have brought us an additional £80,000,000 or thereabouts of revenue. In all, Commonwealth receipts for the year were £317,311,000 greater than those of 1963-64.

We could hardly expect to do as well again this year from existing revenue sources. Employment is not likely to rise as much as it did last year because there simply will not be as much additional labour to employ. Average earnings are already high. They will rise to some extent though not, it is thought, as much as in 1964-65. Farm incomes fell quite heavily last year, and that will affect revenues this year from tax assessed on those incomes. Almost certainly, company incomes rose less in 1964- 65 than in 1963-64. Again, in our reckoning there will be a much smaller increase in imports and sales of goods subject to excise and sales tax may not show as big an increase.

Nevertheless, we can count on obtaining fairly substantial additional revenues from taxation, business undertakings and various other sources. We estimate that, on current rates and charges, there should be an increase of about £183,990,000 in taxation revenue and an increase of about £41,045,000 in other receipts. Thus, total receipts would be approximately £225,035,000 above those of 1964-65.

Taking overall expenditure commitments, other than for debt redemptions, at £2,667,030,000 and total receipts at £2,538,975,000, the excess of such expenditures over receipts other than loan raisings would be £128,055,000. That amount would have to be recovered by borrowings in one form or another.

Loan Raisings and Redemptions 1965-66

The possibilities of raising loan money, either at home or abroad, have deteriorated very considerably since the performance of 1963-64 when our total loan proceeds were £317,387,000. Last year, they were £255,602,000, which was a fall of £61,785,000 on the year before, and we also had very heavy redemptions of debt to meet.

This year, with diminished liquidity, it seems probable that the amount of local loan raisings will be smaller again, while the chances of borrowing any substantial amount abroad are not to be rated highly. So many factors can influence the result that estimates in this field can never be very secure. However, subject to this, we have decided to use for budgetary purposes a figure of £210,000,000 for loan raisings in 1965-66. Redemptions, on the other hand, could be rather less than last year when they totalled £158,350,000; we are putting the amount at £135,000,000. Net loan raisings on this basis would be about £75,000,000, compared with £97,252,000 in 1964-65.

On our figuring to this stage, therefore, the total of revenue and net loan raisings from the public would fall £53,055,000 short of meeting estimated cash outlays. Unless otherwise removed, this deficiency would have to be financed by temporary borrowings - largely if not wholly from the Reserve Bank.

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Necessarily, we must consider the budgetary situation and the question of what should be done about it in relation to the broad trend of our economy over the coming year. There are certain features of the situation abroad which could conceivably have an adverse effect on our fortunes. Of direct and immediate concern to us is the political and military situation to the north now centred on the conflict in South Vietnam. On the economic side, there appears to be some tendency for growth to slow down in a number of the major industrial countries and that could mean a slowing down in the growth of world trade. Once again the terms of trade have turned heavily against the primary producing countries. Through measures taken by the United States and United Kingdom Governments to strengthen their currencies, there has been a sharp check to the international flow of capital for investment in many parts of the world. Furthermore, we are not as yet within sight of any solution to the great problem of international liquidity.

Our home economy has been and still is running at full pitch, with little if any current labour resources to spare. But this does not preclude a further growth of output. It seems most unlikely that employment could rise by as much as it did last year or the year before that, because unemployment is now very low indeed and a considerable part of the so-called fringe labour has already taken up work. The increase in employment could be of the order of 3.5 per cent, as against 4 per cent, last year.

For this reason, if for no other, it is to be expected that the overall rise in national output will be rather smaller this year. Certain other factors are working in the same direction. For example, drought in New South Wales and southern Queensland is bound to cut back rural output quite significantly.

With increasing employment and incomes, we can be sure that consumer spending will continue to increase and that, of course, is by far the largest element in total spending.

In the area of private capital expenditure, dwelling construction and purchases of motor vehicles have levelled off though, of course, at a very high level. Farm investment has undoubtedly fallen to some extent. The indications are, however, that expenditure on industrial and commercial building and construction and on factory plant and equipment will continue to rise.

Public authority expenditure, on both current and capital accounts, will certainly rise a good deal - mainly in the Commonwealth area but to a significant extent also in the field of State Governments. ‘Not all of ‘this additional expenditure will constitute demand for goods and services within Australia - some part of it will be spent overseas. But the direct local effect will be very sizable and, of course, such additional spending adds to incomes and leads to further spending. On the other hand, taxation even on existing scales will take part of the increase in incomes which occurs through the year and this will tend to reduce the expansive effect of higher governmental spending. Since, however, it would take only part of the increase in incomes, it would be only a partial offset. The effect the Commonwealth Budget would have from this standpoint may be seen more clearly when it is analysed on a national accounting basis as has been done in Statement No. 6 attached to the Treasurer’s Speech.

There can be no certain or precise forecasts on a situation like this and yet, on an overall view of the prospect, it seems probable that there will be a fairly strong lift in expenditure. Proportionately, governmental expendiure will contribute more to this increase than any other class of spending.

The implications this has for economic policy are plain enough. All through last year the strong tendency was for demand for >goods and services to out-run supplies to be had in Australia. The results were that total productive resources came under heavy pressure and there was a big additional call on imported supplies.

That is not a situation we would want to go on for too long. Internally, there has been a fairly strong and continuous rise in costs and, although this has not shown up in the final prices of goods as much as might have been expected, the rise in these prices has been greater than we would normally wish to see.

Nor would we wish to see a further large rise in imports, the level of which is already very high. Indeed, some fallingback in the rate of importing would be welcome. Fortunately, we still have strong overseas reserves but the disturbed state of the international economy must raise doubts as to export possibilities. On present indications, our exports this year will be less than last year - by how much it is not possible to say. What amount of private capital we will receive from abroad is, again, problematical. On the prospect as a whole, however, it seems fairly certain that there will be a further reduction of our overseas reserves, possibly a substantial reduction.

For these several reasons, then, it seems desirable that there should be some moderation of the rate of increase in overall demand and certainly an avoidance of anything which would make for a stronger increase in demand - as the Commonwealth

Budget with its exceptionally large addition to expenditures could very well do. We are, of course, not unaware of factors, such as reduced monetary liquidity and the fall in farm incomes, which are likely to have a steadying effect on demand; and we are concerned, as we always are, to ensure that there will be sufficient strength of demand to keep industry running at full capacity and to absorb whatever additional labour comes forward. But we judge that there is sufficient impetus in the economy to provide for this without any strong stimulus from the Budget.

Accordingly, on both financial and economic grounds, we feel that some further increase in taxation is necessary.

Income Tax

First as to income taxation: Because of the change-over to decimal currency next year it will be necessary to adjust the existing rates of income tax so that they will be readily convertible from their present form to dollars and cents. This adjustment will be made so that the tax payable under the adjusted scale of rates will not, in any case, differ significantly from that which would be payable under the existing rates.

We have, however, also decided that income tax payable by individuals should be increased by 2t per cent. The increase, which will apply to income of the current year 1965-66, will be in the form of an addition of 6d. in the £1 of the tax calculated at the scale rates.

It is proposed also to revise the tax instalment schedules so that they too will be exactly convertible to dollars and cents when the change-over to decimal currency comes into force. At the same time, the additional levy of 2i per cent, will be included in the amounts of instalments. The new rates of instalment deductions will come into operation on the first pay day on or after 1st October next. The provisional tax for 1965-66 will also be adjusted appropriately.

It is estimated that the increase in income tax will result in additional revenue of £18,900,000 in a full year and £17,800,000 in 1965-66. f.8225/65.- -s-[2

The service pay and allowances of members of the. Defence Forces serving in Vietnam and Borneo are to be exempted from income tax. Generally, the period of exemption will commence when the member leaves Australia for service in an operational area and terminate when he returns to Australia. This exemption will first apply as from 1st July 1965.

In 1964-65, the remuneration for parttime duty of members of the Citzen Forces was exempted from income tax. We now propose to extend a corresponding exemption to the pay and allowances, including bounty and call-up gratuity, of members of the Defence Forces Emergency Reserve.

The cost of these concessions isestimated to be £230,000 in a full year and £80,000 in 1965-66.

Customs and Excise

page 18


The rates of customs and excise duties on petrol, automotive distillate, aviation gasolene and aviation turbine fuel will all be increased by approximately 3d. per gallon. Even after the proposed increase in duty to 14.76d. per gallon, petrol will be taxed lightly in Australia compared with other countries. For instance, in the United Kingdom, the tax on petrol is 48.75d. per gallon.

The proposed increases have been varied slightly from 3d. in the case of petrol (3.01 d.), aviation gasolene (2.984d.) and aviation turbine fuel (2.98d.) to ensure that the new rates on conversion to dollars and cents will not produce more than two places of decimals of cents. The increases, which will come into effect immediately, are expected to yield an additional £25,060,000 in a full year and £21,890,000 in 1965-66.

page 18


The rates of excise and custom’s duty on beer will be increased by1s. 61/2d. per gallon, which is broadly equivalent to an increase in duty of something over1d. for a 10-oz. glass. This increase, the first since 1956, will take effect immediately and will produce an overall rate of excise duty which, on conversion to decimal currency, will give a convenient rate in dollars and cents. The increase is expected to produce an estimated £20,900,000 in a full year and £16,560,000 in 1965-66.

page 18


The rates of customs and excise duties on spirits were last increased in 1956. We now propose they be increased by £111s. a proof gallon. This is equivalent to an increase in duty of slightly more than lid. a “ nip “. The increase will apply uniformly to all spirits so that the existing special margin of about £1 10s. per proof gallon in favour of brandy will be undisturbed. The additional revenue from these proposals, which will take effect immediately, is estimated to be £6,420,000 in a full year and £5,390,000 in 1965-66.

page 18


Rates of customs and excise duties on cigarettes will be increased by 4s.11d. a pound, on cigars by 4s. l0d. a pound and on manufactured tobacco by1s. 11. 8d. a pound. The increases, which will have immediate effect, are approximately equivalent to an additional 3d. duty on a packet of 20 larger cigarettes or on a 2-oz. packet of tobacco. The increase in duty is, of course, less than 3d. on a packet of 20 smaller cigarettes. The resultant rates of duty will convert conveniently to dollars and cents. The additional revenue from these proposals is estimated to amount to £13,300,000 in a full year and £10,700,000 in 1965-66.

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Altogether, additional revenue from the proposed increases in customs and excise duties is estimated to amount to £65,680,000 in a full year and £54,540,000 in 1965-66.

Lighthouse Dues

It has been decided to increase the rate of lighthouse dues payable by ship owners from1s. 3d. to1s. 6d. per net registered ton as a means of obtaining a greater contribution by ship-owners towards the cost of providing and maintaining coastal lights and other aids to navigation. It is estimated that this increase will result in additional revenue of £200,000 in a full year and £150,000 in 1965-66.

Air Navigation Charges

The Government has considered again the situation arising from the increasing annual cost of providing, maintaining and operating airport and airways facilities. The assessed cost was £19,600,000 in 1964-65 and could reach £21,000,000 in 1965-66. Recoveries from the users of these facilities by air navigation charges amounted to £2,300,000 in 1964-65 and, at the same rates of charge, would be a little over £2,600,000 in 1965-66. It thus becomes all too evident that the gap between costs and recoveries is increasing year by year. The Government has affirmed as a general line of policy that it will seek to eliminate the gap and as a further step in this direction it has decided to increase by 10 per cent, the rates of air navigation charges payable by all users. These increases, which will take effect from 1st January 1966, are estimated to bring in £60,000 in 1965-66 - because of their application for only six months and an unavoidable lag in accounting - and £240,000 in a full year over and above increased revenue because of greater flying activity. It is proposed to explore the possibility of taking further action towards closing the wide gap between costs and revenues during the course of the year.

Australian Capital Territory

With the growth of Canberra as a city and as a business centre, we think it would be no more than fair and proper that residents of Canberra should bear certain taxes of a nature comparable with those levied on residents of the States. Accordingly, the Government has decided to introduce stamp duty upon a range of instruments and transactions completed or made in the Australian Capital Territory. The new duties, which will apply inter alia to cheques, promissory notes, conveyances, hire purchase transactions and so on, will be introduced next year, thus allowing time for drafting of the necessary legislation and establishment of the administrative machinery that will be necessary.

Following its review of the general level of charges in Canberra for the equivalent of municipal and other services, the Government has come to the conclusion that some increases, including increased hospital charges, will be necessary. These will be the subject of further examination.

Total Taxation

In total, the variations in taxation and other charges mentioned are estimated to bring in an additional net amount of £72,470,000 in 1965-66 and £84,790,000 in a full year. Total receipts from revenues and other sources will therefore become £2,611,445,000.

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If, as estimated, receipts other than loan raisings reach a total of £2,611,445,000 and expenditures total £2,667,030,000, the amount to be met from borrowings will be £55,585,000. This would be £22,795,000 less than the sum that had to be borrowed in 1964-65. However, net loanraisings are tentatively estimated at £75,000,000. That is to say, they would exceed by £19,415,000 the £55,585,000 by which receipts other than borrowings are expected to fall short of expenditures. This £19,415,000 would represent a cash surplus for the year. The comparable amount in 1964-65 was £18,872,000.

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Current times present an exceptionally strong challenge to economic and financial management. It is difficult enough under ordinary conditions to preserve a balanced situation. But present conditions are far from ordinary. It happened that our economy had reached virtually full employment when the need arose to step up defence preparations, and the expenditures that go with them, very substantially indeed. It has happened also that various large industrial and mining enterprises are in the full tide of expansion. These further demands have been superimposed on a resources situation already strained. Clearly there are dangers in all this - serious dangers of disruption and instability. But we do not see these as unavoidable dangers. We believe that, with moderate though firm restraint, the economy can be brought through without needless loss of impetus to expansion.

Debate (on motion by Senator Kennelly) adjourned.

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(Question No. 501.)

Senator PROWSE:

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

How many houses have been built on farms with the assistance of funds provided from the Commonwealth and State Housing Agreement during the five years ended 30th June 1964?


– The Minister for Housing has provided the following answer to the honorable senator’s question -

As all the housesbuilt by State housing authorities from money advanced by the Commonwealth under the agreements may only be erected on land owned by them, these authorities do not build any dwellings on privately owned farms. The State Housing Commissions or Trusts do, however, build for sale or lease a large number of homes in country towns to house farmers and rural workers.

Farmers are eligible to receive advances from moneys provided through the Home Builders’ Account in each State for the erection of houses on their properties. The individual advances are made through building societies and banks. Statistics of the number of loans made from Home Builders Account moneys to assist the construction of farm houses are unavailable.

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(Question No. 502.)

Senator PROWSE:

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

How many houses have been built on farms from funds provided under the War Service Homes Act during the five years ended 30th June 1964?


– The Minister for Housing has supplied the following answer to the honorable senator’s question -

No statistical details have been maintained to enable this information to be furnished.

page 20


Motion (by Senator Paltridge) agreed to-

That the Senate, at its rising, adjourn until Tuesday, 24th August, at 3 p.m.

page 20



Minister for Defence · Western Australia · LP

– I move -

That the Senate do now adjourn.

Mr. President, earlier today we witnessed in this chamber the swearing in of a new senator from New South Wales, Senator Cotton, who replaces Sir William Spooner, a former colleague and Leader of the Government in the Senate. I should like to refer very briefly to Sir William Spooner’s resignation from the Senate, which occurred last month. I do this, firstly, because his resignation occurred after we last met here and after we said farewell to other honorable senators who we knew would not be with us at this time and, secondly because with his depature the Senate has lost one of its most staunch and formidable supporters.

Senators who were in attendance here almost twelve months ago to the day will remember that, in referring to Sir William’s retirement from the Ministry and as Leader of the Government in the Senate, I set out in some detail his parliamentary career and, with others, referred also to many of his personal qualities. I do not wish at this stage to repeat what I said then, but I believe that I should not let the resignation of our friend and colleague pass without taking advantage of this first opportunity to include in the parliamentary record a further short reference and tribute to his career here and to express the wish that he will enjoy for many years to come the well earned retirement which he has now chosen for himself. The Senate, and particularly the Government parties, have lost a leading figure. I trust that the example of his parliamentary life will be followed vigorously by those of us who are still here.

Senator McKENNA:
Leader of the Opposition · Tasmania

Mr. President, I am pleased that Senator Paltridge has referred to the retirement of Sir William Spooner. Before I knew of the intention of the Leader of the Government in the Senate to do this I had telephoned Sir William to tell him, before I re-entered the fray in this place for a new period, that I would miss him and to wish him well. I had that opportunity to speak to him at 2.30 p.m. today. 1 and my colleagues will certainly miss him, but I think the Government will miss him more. Even after his retirement from the Cabinet, he brought to debates in this place a solidity and a power that was quite his own. I believe that the Government will very much miss his debating strength in coming months and perhaps in coming years.

Like Senator Paltridge, on 11th August last upon the retirement of Sir William Spooner from the Cabinet, I made quite a lengthy reference to the fact and paid a full tribute to his quality and worth. I do not wish to. repeat what I then said, but having re-read my remarks today, I confirm every word that I then uttered. I join with Senator Paltridge in again expressing my pleasure at paying a further broad tribute to him. Now that Sir William Spooner is out of politics I can say without qualification oi any kind whatsoever that I wish him well in all respects, even politically.

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

– On behalf of the Australian Country Party I would like to pay a tribute to Sir William Spooner. From 1959, when I entered this chamber, at a time when Sir William Spooner was Leader of the Government in the Senate, he has given the Country Party at all times a very fair deal. It was not very long after my arrival that I experienced a feeling of strong friendship towards Sir William. That feeling has existed ever since. There have been occasions when I have differed from him very strongly, both in the Senate and in the party room, but those differences have not affected our friendship. I agree that his retirement will be a loss to the Government and to the politics of Australia. He was a very hard working Minister. I always had the impression that he did not spare himself in any way when any work connected with his office was to be done. He drove himself very hard indeed and I am glad, for his sake, that now he has seen fit to take a respite from the arduous work that he performed in his ministerial capacity over the years. I join with previous speakers in wishing him a very happy retirement.


– I wish to refer very briefly to the death during the parliamentary recess of the honorable Alexander John Fraser, M.C., a former member of the Senate. Mr. Fraser was a member of the Senate in 1946. He represented the Victorian electorates of Grant from 1950 to 1952, Caulfield East from 1955 to 1958, and Caulfield from 1958 to the time of his death. He held the portfolios in the Victorian Government of Minister for Forests and Minister for State Development.

Those who knew the late Mr. Fraser will agree that he was a man of most generous instincts. I would like to speak of him as a man, because the Premier of Victoria, the Honorable H. E. Bolte, has paid a public tribute to him as a Minister, as a parliamentarian and as an administrator. Those of us who knew him when he was Senator Fraser and also were privileged to know him in the intervening years, are conscious of the fact that no one ever went to him for help without receiving it. He won the Military Cross as a very young man during the First World War and to the time of his death he was one of our finest Victorians. I hope that all members of the Senate will join with me in expressing to his widow and to his family our sincere sympathy. Mr. Fraser was a fine Australian gentleman of whom it may well be written in the record: He fought the good fight. He kept the faith.

Question resolved in the affirmative.

Senate adjourned at 9.4 p.m. till Tuesday, 24th August, at 3 p.m.

Cite as: Australia, Senate, Debates, 17 August 1965, viewed 22 October 2017, <>.