Senate
2 September 1965

25^th Parliament · 1^st Session

QUESTION
- CENSORSHIP
QUESTION
- SINGAPORE
QUESTION
- SHIPPING
QUESTION
- EMPLOYMENT OF WOMEN
QUESTION
- LAW REFORM
QUESTION
- TELEVISION
QUESTION
- ABORIGINES
QUESTION
- INTERNATIONAL SEED TESTING ASSOCIATION
QUESTION
- SOUTH VIETNAM
QUESTION
- TELEVISION
QUESTION
- PEAS
QUESTION
- CIVIL AVIATION
QUESTION
- TREASURY BOOKLET
QUESTION
- OVERSEAS INVESTMENT IN AUSTRALIA
QUESTION
- MR. CHEN
QUESTION
- INFORMATION BOOKLET
QUESTION
- CIVIL AVIATION
QUESTION
- RADIO EQUIPMENT FOR INDONESIAN ARMY
QUESTION
- EDUCATIONAL TELEVISION
GOVERNMENT BUSINESS
- Precedence
SPECIAL ADJOURNMENT
MINISTERIAL ARRANGEMENTS
BUDGET 1965-66
- Civil Works Programme 1965-66;
- Expenditure -
- National Income and Expenditure 1964-65
PRINTING COMMITTEE
ADJOURNMENT
- Kashmir Dispute

Senator GORTON:
Minister for Works · VICTORIA · LP

– 1 have noted the statement that was made by the Minister for Labour and National Service. Indeed, I think a question about the subject was asked in this place on Tuesday last. There is no doubt that many married women, especially those whose children have grown up or who are childless, prefer to have some useful employment, and they should bc given the opportunity to engage in such employment. I have noted also that the Minister for Labour and National Service claimed in another place yesterday that, as a result of the Government’s initiative, approximately 60,000 more women joined the work force last year. With regard to the last part of the question, I can only ask the Minister for Labour and National Service, who is responsible for this aspect of administration, what answer he would give to the honorable senator.

page 288

QUESTION

LAW REFORM

Senator FITZGERALD:
NEW SOUTH WALES

– I address the following question to the Minister representing the Attorney-General: In view of the satisfaction that has been given by the uniform marriage and divorce laws of the Commonwealth, will the Minister discuss with the Attorney-General the possibility of instituting a uniform policy to bring the cost of justice within the range of every citizen by introducing uniform laws and cutting through many forms of red tape which create excessive costs? I raise this matter because of the prominence that has been given to the high cost of justice in Australia. This matter has been highlighted by the recent law conference that was opened by the Prime Minister in Sydney last week.

Senator GORTON:
LP

– I am not quite sure what the honorable senator is asking. He covers a rather broad spectrum when he asks whether I will discuss with the Attorney’ Genera] the introduction of uniform laws in order to cut through red tape. I think the honorable senator is concerned mainly about whether I will discuss with the Attorney-General some method of reducing the cost of legal actions.

Senator Fitzgerald:

– By the introduction of uniform laws, yes.

Senator GORTON:

– I shall bring the honorable senator’s question to the notice of the Attorney-General. I have read the same Press reports as the honorable senator in relation to this matter. 1 should imagine that, as the Attorney-General was present at this conference, he would have some knowledge of the discussion. However, I shall bring the question to my colleague’s notice in case he does not know of that discussion.

page 288

QUESTION

TELEVISION

Senator LAUGHT:
SOUTH AUSTRALIA

– I address a question to the Minister representing the Postmaster-General. In doing so, I refer to a question I addressed to him on 24th August last in which I inquired whether he would arrange for the PostmasterGeneral to discuss with the Australian Broadcasting Commission the question of reallocating the hour of 7 p.m. for the news service on television Channel 1 in South Australia. I now ask whether the Minister has anything to report on that matter.

Senator ANDERSON:
LP

– The PostmasterGeneral has advised me that the Chairman of the Australian Broadcasting Commission has informed him that the new time for this programme was introduced for a trial period. The results are under close examination and will be analysed fully in the near future.

page 288

QUESTION

ABORIGINES

Senator CAVANAGH:
SOUTH AUSTRALIA

– My question, which is addressed to the Minister representing the Minister for Territories, arises from a report in today’s Press. I ask: Were two appointments made by the Commonwealth to a committee to protect sacred Aboriginal objects and sites? Is it correct that the appointees have not been informed of their appointment or told of the nature of their duties and powers? Were the appointments made more than 12 months ago? Will the Minister make a statement on this apparent neglect, which is referred to in the report of a select committee of the Legislative Council for the Northern Territory?

Senator GORTON:
LP

– I know nothing personally of this matter. I am not aware whether the assertions made by the honorable senator in the form of a question are in fact true, but I shall bring those assertions to the attention of the responsible Minister.

page 289

QUESTION

INTERNATIONAL SEED TESTING ASSOCIATION

Senator BREEN:
VICTORIA

– My question is directed to the Minister representing the Minister for Primary Industry. Some time ago the Minister stated that Miss G. Easton, Senior Seed Analyst of the Victorian Department of Agriculture, would be the chief Australian delegate to the 14th conference of the International Seed Testing Association to be held in May of this year at Munich. Can the Minister say whether the conference was held and whether the proposed discussion of developments in seed testing techniques and relevant matters produced information of benefit to Australian farmers?

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

– The honorable senator was kind enough to inform me that she intended to ask this question and the Minister for Primary Industry has provided the following answer -

Yes, the International Seed Testing Association held its 14th conference in Munich in May last. Australia was represented by Miss G. Easton, Senior Seed Analyst, Victorian Department of Agriculture, Dr. L. A. T. Ballard, Division of Plant Industry, Commonwealth Scientific and Industrial Research Organisation, and Mr. W. Hartley, Chief Scientific Liaison Officer, C.S.I.R.O., London. The conferences are held every three years and it is customary for Australia to be represented generally by a senior seed testing officer of a State Department of Agriculture. The conferences are concerned with international standards and techniques in relation to seeds and seed testing and, as good seed is the basis of good crops, the work of the International Seed Testing Association is undoubtedly of benefit to Australain farmers.

page 289

QUESTION

SOUTH VIETNAM

Senator ORMONDE:
NEW SOUTH WALES

– I ask the Leader of the Government in the Senate whether he has read a report that the most recent

Premier of South Vietnam has claimed that South Vietnam is not yet ready for peace. Can the Minister inform me whether there is any official basis for this report?

Senator PALTRIDGE:
LP

– I confess that I have not seen the report referred to. I can only assume that the statement attributed to the Prime Minister of South Vietnam was made in the general context of statements which have been made by the present and preceding Governments of South Vietnam for many months past, to the effect that they are not ready to negotiate on North Vietnamese unconditional terms. That is the only interpretation I can place on this reported statement.

page 289

QUESTION

TELEVISION

Senator O’BYRNE:
TASMANIA

– I preface my question to the Minister representing the PostmasterGeneral by advising him that a television antenna has been erected in Wivenhoe, a suburb of Burnie, Tasmania, to serve a group of people who are clients of a television merchant. The antenna interferes with and distorts the reception of other television sets in the area that are not serviced by the communal antenna. In view of the fact that representations made to the Australian Broadcasting Control Board have shown that power to act on this nuisance does not rest with the Board - although it does in the case of radio - will the Minister ask the Postmaster-General to take measures to amend the Broadcasting and Television Act to provide similar powers relating to television interference as at present apply to radio interference? The Minister assured me on a previous occasion that he would obtain whatever information he could from the Postmaster-General.

Senator ANDERSON:
LP

– Yes, I did. The Postmaster-General has informed me that the installation to which the honorable senator refers is a community television aerial system which operates at Wivenhoe under authority of the Postmaster-General on the recommendation of the Australian Broadcasting Control Board pursuant to the Broadcasting and Television Act. I am aware that in recent times this system has been the cause of interference to a number of viewers who are not connected to it. This trouble has been the subject of very particular attention by both the Board and the Department. Several visits have been made to the area by officers. As a result of this action, the operator of the system was advised of the steps which it would be necessary for him to take to eliminate the trouble to viewers’ reception. The latest official information is that he has taken the necessary steps and that the interference has ceased. However, there has been some further complaint about television reception in the Wivenhoe area and this is at present under investigation. An amendment to the Act is not necessary to deal with this particular matter.

page 290

QUESTION

PEAS

Senator WRIGHT:
TASMANIA

– My question to the Minister representing the Minister for Trade and Industry relates to the Tasmanian canned pea industry and the -impact made on it by the recent New Zealand-Australia Free Trade Agreement. I observe that in 1964-65 imports of peas from New Zealand totalled 2 million lb. and imports from other sources totalled 3 million lb. The imports from New Zealand attracted a total duty of £13,000 whereas those from other countries attracted a duty of only £4,000. In other words, the duty on the New Zealand product was three ‘ times higher than that on the foreign product although the quantity from New Zealand. was about one third lower than that of the foreign product. Will the Minister inform me what procedures are necessary to obtain a revision of the tariff operating on foreign peas? I feel that this might be the means of adjusting any adverse impact made by the recent trade agreement upon the Tasmanian pea industry.

Senator HENTY:
LP

– I understand that the duty applied to imports of peas is on a sliding scale and is on the basis of ls. 10id. per lb. Imports which cost less than ls. 10id. per lb. attract a higher duty than those which cost more. It is obvious from the figures that Senator Wright has cited that the peas imported from New Zealand cost less than those imported from other sources and, therefore, they attracted a higher, duty.

The honorable senator asked what steps can be taken to have these duties revised. The industry can make an application along those lines to the Department of Trade and Industry. If the industry feels that it is being seriously damaged by imports, it can seek an immediate hearing before the Special Advisory Authority. If it does not feel that it is being immediately damaged, it can apply to the Tariff Board for a hearing with a view to the duty being increased.

page 290

QUESTION

CIVIL AVIATION

Senator MCCLELLAND:
NEW SOUTH WALES

– Has the

Minister for Civil Aviation recently returned from Kuala Lumpur where he represented Australia at the opening of the new international airport for that city? Was the Minister impressed with the fact that the new runway at this airport is 11,400 feet long and 150 feet wide? Has the Minister also seen a report that a New South Wales Government party committee has made the recommendation that the runway at Mascot should be extended from 8,500 feet to 10,000 feet? Bearing in mind what the Minister has seen in Kuala Lumpur, and in order to ensure that Mascot is retainedas Australia’s international airport, will the Minister favourably consider the recommendation of the New South Wales Government party committee that the runway at Mascot be extended to 10,000 feet?

Senator HENTY:
LP

Senator HENTY:
LP

– I think the work on the extension of the runways is going according to the timetable. I have not been informed otherwise. I believe that much of the rest of the work is being considered by the Public Works Committee which reported on some recently. With regard to the alleviation of the immediate problems which exist at the International Terminal, I think plans and specifications are now before the Public Works Committee for an extension costing in the vicinity of £150,000 to relieve immediately the problems existing while the new airport is being built.

page 292

QUESTION

RADIO EQUIPMENT FOR INDONESIAN ARMY

(Question No. 522.)

Senator CAVANAGH:

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

Have arrangements been made for an American commercial radio company to equip the Indonesian Army with modern radio equipment?
Is it essential for such a company to obtain an export licence from the American Government?
Has such a licence been issued and has the Australian Government made any representations tothe American Government on this matter?

Senator GORTON:
LP

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

An American company has been discussing the sale of radio equipment with the Indonesian Army but no salehas yet been arranged
Yes.
No licence has been issued. There has been no occasion for the Australian Government to make representations to the United States Government.

page 292

QUESTION

EDUCATIONAL TELEVISION

(Question No. 527.)

Senator WRIGHT:

asked the Minister representing the Postmaster-General, upon notice -

When was the Committee appointed to advise the Australian Broadcasting Control Board on the future of Educational Television constituted?
What were the Committee’s terms of reference?

Senator ANDERSON:
LP

– The PostmasterGeneral has supplied the followings answers to the honorable senator’s questions -

January 1964.
The Committee operated within the following terms of reference -
1. To satisfy itself whether there is, or is likely to be, need for a greater number and range of educational programmes than is now being televised; and if so
2. To recommend the levels - that is, primary, secondary, tertiary and adult - at which this need exists;
3. To examine and report on the extent to whichprogrammes may be appropriate for televising in States other than the State of origin;
4. To consider whether such programmes could be transmitted by existing stations, and the means by which this could be done; and if this is not practicable
1. To recommend what additional services and facilities should be provided, and by what stages they should be provided -
2. In each capital city;
3. In provincial and country districts where national or commercial television services are operating or for which such services are planned;
4. In any other areas;
5. To advise on the authority or authorities which should be responsible for the operation of educational television services;
6. To advise on possible means of financing the recommended services;
7. To report on any other relevant matters which are likely to be of assistance to the Board in making a recommendation to the Minister.

page 293

GOVERNMENT BUSINESS

Precedence

Motion (by Senator Paltridge) agreed to -

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

page 293

SPECIAL ADJOURNMENT

Motion (by Senator Paltridge) agreed to -

That the Senate, at its rising, adjourn till Tuesday, 14th September, at 3 p.m.

page 293

MINISTERIAL ARRANGEMENTS

Senator PALTRIDGE:
Minister for Defence · Western Australia · LP

– The Minister for Supply (Mr. Fairhall) left Canberra this morning on the first stage of a visit to Britain, the United States of America and Europe on government business. He will be absent for about five weeks. During his absence the Minister for Air (Mr. Howson) will act as Minister for Supply. Mr. Fairhall usually represents me as Minister for Defence in the other chamber. While he is away the Minister for External Affairs (Mr. Hasluck) will do this.

page 293

BUDGET 1965-66

Debate resumed from 31st August (vide page 229), on motion by Senator Henty -

That the Senate take note of 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 the year ending 30th June 1966;

Expenditure -

Particulars of Proposed Expenditure for the service of the year ending 30th June 1966;

Particulars of Proposed Provision for Certain Expenditure in respect of the year ending 30th June 1966;

Government Securities on Issue as at 30th June 1965;

Income Tax Statistics for income year 1962-63;

National Income and Expenditure 1964-65

Upon which Senator Kennelly had moved by way of amendment -

At the end of motion add the following words: - “but the Senate condemns the Budget because -

such taxation increases as it contains add further burdens to wage and salary earners whose living standards have already been eroded by price rises and the Government’s active intervention against wage increases;

such meagre social services benefits as it proposes are inadequate, belated and partial in their application; and

the Budget fails entirely to deal with such problems as increases in imports and Australia’s dependence on foreign capital.

The Senate further declares that only by proper economic planning, can Australia rapidly expand the resources required to meet its urgent needs in the fields of defence, development, education and social welfare.”.

Upon which amendment Senator Gair had moved as a further amendment - “At end of Senator Kennelly’s amendment add the following words -

The Senate further declares that provision for defence in the Budget is still inadequate to meet the needs of Australia’s security, and the essential and justifiable commitments, which we have undertaken in South Vietnam, Malaysia, Thailand and South East Asia generally.

The Senate declares that effective defence requires much increased specific and separate budgetary provision.’.”.

Senator BISHOP:
South Australia

– Prior to the adjournment last night I had referred to partial improvements to social services announced in the Budget. I mentioned very briefly the need for an alteration of the means test particularly in relation to subscribers to superannuation schemes in government services which had arranged to pay what was in fact a Christmas bonus. Some of these bonuses were as small as a few shillings and others amounted to £4 or £5. I made representations to the Minister for Social Services (Mr. Sinclair) about this. In cases where the bonus was less than1s. a week - for instance if a man received a bonus which actually amounted to 6d. a week over the year - the Department of Social Services extracted1s. from his pension. I found that there was no intention on the part of the Government to investigate the complaint, or to take the matter further and say there was a very special case for some consideration in relation to the means test. A great injustice is inflicted on people who make provision for their old age and who, when they reach the age at which they would normally qualify for a Commonwealth pension, are denied this payment because they had been thrifty.

The Treasurer (Mr. Harold Holt) reported that the economy was going at full pitch, but he put the other side of the picture, when he said that, on the other hand, the Government faced a number of difficulties. He referred to what he called the difficult labour situation resulting from a shortage of skilled men, and a rise of 22 per cent, in imports. So one Minister argues that the position is not good and for that reason the Budget has to be restricted; another Minister argues that we ought to be satisfied with the state of the economy because the rate of growth over the years, and particularly last year, has been been satisfactory. In this respect I want to refer to a matter to which attention has already been directed. In considering the rate of growth, we must have regard to increased price levels throughout the year and the number of additional workers, mainly recruited from overseas. A. brochure entitled “ The Australian Economy 1965 “ canvasses many of these matters and it is well worth reading. While it properly equates all of these issues, including that of overseas investment, it seems to me that the statements made support the point of view of the Opposition. Let me refer first to the rate of growth. The authors of this document - I assume that it has been prepared by experts in the various departments - state at page 8 -

What has actually been happening to growth through 1964-65 cannot yet be expressed, even in a preliminary way, as a rate of increase in national production at constant prices. The most that can be done at this stage is to consider the indicators of physical output and activity in the first three quarters of the year. Such as these are, they give a strong impression that the output performance for the year has been better than thought likely when the year began.

It seems to me that the first point that -we must realise is that this rate of growth, which is often stressed by Government supporters, must be evaluated correctly in the light of price levels and also increased production resulting from more labour. The other side of the picture is that in these debates and in answers to questions concerning overseas shipping it is said that statistics are not available to enable an assessment of the position. I believe that the Government should consider examining the types of figures which are necessary. I shall refer later to an answer given by the Minister to a question by Senator Cohen on shipping charges. The Government should advise the Commonwealth Statistician of the type of information it requires. It seems that the Commonwealth Statistician will as far as possible supply the type of information needed by Governments, authorities or public groups of sufficient importance to have figures set out for their consideration.

In many respects often we must guess at the true position of the economy. One of the worst features of the overall state of the economy, in a wider sense, is what has been referred to by a Minister in another place as the Government’s very poor relations with the trade union movement. As I said last night, the Opposition takes the view that when examining the economy it is not enough to study dead figures -on rates of growth, increased production, additional work force, attempts to recruit more married women into the work force and so on. It is necessary to look at the way the economy . will benefit through the trade union movement working with the Government - not for the Government - in economic matters. A Minister’s statement in another place that the Government has developed very bad relations with the trade union movement does not come as news to the Opposition. We have seen this situation developing over the years. We have seen representations made by the Australian Council of Trade Unions to the Government in relation to general economic matters, pension rates and equal pay being put aside. As I said briefly last night, we have seen the Commonwealth Government intervening in basic wage hearings arguing against wage increases on economic grounds and not paying proper regard to the necessity to maintain the standards of the work force.

It is no accident that relations between the Government and the labour movement have worsened. This would be a bad thing in an ordinary situation of national expansion where no external dangers existed, but it is much worse in a situation where the Government requires the inflow of all types of personnel into the work force to manufacture important equipment and to support a training scheme to increase the flow of labour. Of course, the ideal result will never be achieved while the trade union movement is offside. The Opposition believes that the situation has been badly handled by the Government, particularly in recent years. Today it is not possible to conduct negotiations at round table discussions which should take place, when opinion in the trade union movement hardens and the Government initiates the application of penal powers against the unions.

Senator Wright:

– Did not the trade unions deliberately withdraw from the council constituted by the Minister for Labour and National Service for that very purpose?

Senator BISHOP:

– The honorable senator is referring to an old body - a labour advisory body - which existed seven or eight, or perhaps 10 years ago. The trade union movement withdrew from it because it considered that its representations were not carrying the same weight as they would if they were made directly to the Government. I have tried to make the point that we have established a liaison with the Government while sustaining what has been recognised as an independence and national trade union movement, which is always necessary in any democratic community. The A.C.T.U. was able to go to the Minister and put forward its ideas, not only about wage policies, but also about general economic trends. As somebody said yesterday, I was a member of the executive of the A.C.T.U. for some time. I knew of these discussions. I believe that overall they were of benefit to the trade union movement, and no doubt the Government thought that they were of benefit to it. I suggest that that relationship was destroyed by the intrusion of the Government in basic wage cases. As I pointed out last night, at the 1965 hearing the Government at first assumed a position of neutrality. Then, after the hearing had proceeded for some time, the Government advanced a number of strong points in opposition to the union’s claims. We believe .that the judges took great note of those submissions.

Senator Wright:

– The trade unions would have had a full opportunity to contest those “claims.

Senator BISHOP:

– That is true. But we believe that the Government’s submissions were reflected in the Commission’s judgment. Mr. Hawke, the advocate for the Australian trade union movement, is a very competent man. He was able to point out the duplicity that was displayed by the Government. As I pointed out last night, the Government adopted a quite dishonest attitude. It ought to have maintained its earlier attitude or to have given very stong reasons for changing it.

Doubtless honorable senators recall that for a considerable time the quarterly cost of living adjustments were based on the C series index. Those figures were followed for some time; but it became difficult statistically to maintain the index and eventually, after considering the views of all parties concerned, the Commonwealth Statistician devised the consumer price index, which was adopted in 1960 and with which the Commission said it was quite satisfied. In the 1961 case the Commission said -

We will each year make the assumption that the effect of movements in the Consumer Price Index should be reflected in the basic wage unless we are persuaded to the contrary by those seeking to oppose the change. As the basis of our decision is the desirability of maintaining the value of the real wage based on the concept of national capacity, the appropriate matter for consideration would appear to be what should be the effect on the six capital cities basic wage of movements in the six capital cities index.

The Commission said also that it believed that the old C series index was suspect.

Senator Wright:

– Has the honorable senator at hand the names of those who constituted the Commission when that statement was made?

Senator BISHOP:

– There were four members, including Mr. Justice Kirby, Mr. Justice Moore and Mr. Justice Gallagher. I have forgotten the name of the other one. It seemed to the trade union movement that the adoption of the consumer price index heralded the arrival of the time when the real purpose of the Conciliation and Arbitration Act could be maintained and a real wage established. To anybody who knew anything about it, the old index seemed to be inadequate. It did not take account of modern standards of consumption, items such as the cost of housing were not properly expressed, and there existed in the regimen commodities that were off the market. Although there may be some need to examine the new consumer price index, it did seem to be adequate at the time it was adopted. The Commission said also - the C Series Index was over a period becoming suspect and the Court and the Commission could not have relied on it to achieve a proper result. . ‘ . . We add that amongst other things the emergence of the Consumer Price

Index has also enabled us to fix at this time a standard which, in our view, is more likely to be properly maintainable than recent past standards.

The point I am making is that the Commission had available to it all the indicators on which it relied, lt knew of the position in relation to productivity and it had before it the consumer price index, which is fixed and reliable. In those circumstances we expected that the Commission would have responded to the application by the unions.

As Senator Wright has said - and I know it to be true - the advocate for the trade union movement was, in fact, able to destroy the case presented by the employers on this and on other occasions; but that does not get away from the fact that the Commonwealth Government’ has an obligation to consult with the trade union movement in respect of its overall economic and defence policies and also concerning proposals for the training of workers and the reception into industry of new groups of workers, such as women and physically handicapped people, and to do everything possible to maintain wage standards. In such cases, I think that the Commonwealth Government has an obligation to do no more than take up a neutral position and let the employers and the workers argue the case.

We can, perhaps, take some satisfaction from the fact that the minority report of the Commission contained a very sound statement, as I see it, regarding prices. I have already referred to prices in my speech. As a result of this decision of the Commission, the Australian Council of Trade Unions became very critical, but as always, it took a moderate stand in relation to stoppages. In such circumstances, a bad situation can arise because a responsible body is losing a certain amount of control and prestige. The A.C.T.U. made a further attempt to go before the Commission for the purpose of having the Commission’s mistake rectified, and in doing so it criticised very strongly the policy of the Government.

Senator Kennelly has already referred to what Mr. Kerr said in relation to the Commonwealth Government’s attitude. That attitude can be expressed very simply by saying that essentially for the reasons put forward for intervening as it does in the national interest, the Commonwealth believes that it cannot do otherwise than say to the Commission that an increase in the basic wage at this juncture would be fraught with great danger to the economy. Many of us in the trade union movement thought that the fairly moderate reaction of the Minister for Labour and National Service (Mr. McMahon) to the decision of the Commission meant that the Commonwealth might npt intervene should a further application be made to the Commission, and would see to it that the path was made easy for an application to rectify what was in fact an injustice. We should not have an economic situation which is brought about by Government policy and which results in the standards of the workers being reduced unnecessarily. The standards of the workforce must be maintained, as I have argued, not only to meet the needs of production and growth but also to meet our defence needs. lt always seems illogical to us that the Government should take the position it docs in regard to prices. It says it is concerned about price rises, but of course the action of the Government in increasing taxation on such things as petrol, beer and tobacco, particularly on petrol, means escalation of prices. There is no attempt to allow the ordinary processes, such as proceedings before the Arbitration Commission, to go their way with a view to effecting proper standards. In regard to the increased excise on petrol, we know that already the major airlines have said that there will be an increase of fares. We know too, that many public transport authorities in all Stales have since adjusted fares and will further adjust them when the accumulated effect of the increases has been felt. The cost of capital equipment has risen. Public transport, of course, is not always available close to industrial units. The increased excise on petrol amounts to a restriction of the effectiveness of the workforce because it will affect workers who use motor cars to travel to their places of work. The worker is already carrying greatly increased insurance and registration charges, and now the fuel for the vehicle that he uses to get to his place of work has also increased. If he decides to use public transport he will find that the cost of this has increased too. The Government’s representative had this to say to the Commission -

There is not in sight any trend or development which might ease the pressures on the economy, whereas a wage increase would certainly add to them . . . The Commonwealth is conscious that the unions feel they are thoroughly justified in making the present claim. But it has to ask whether the granting of the claim would necessarily bc in the interests of wage earners, and, even more, of other groups in the community. Prices have been rising for a year or more and the movement has gathered pace. The most important thing is to do nothing which could lend strength to this price movement.

I think that I have illustrated the point of view that we take. We think it is wrong to voice support for price stability but do nothing to achieve it or take the opposite line of action and apply additional charges on the community.

The minority judgment expresses very clearly, in my view, the position that we of the Opposition take up, and certainly the position that the A.C.T.U. takes up. It is in these terms - lt seems … to be putting the cart before the horse to suggest that we should treat our function as if it were a purely economic one, and us if lbc delicate questions which arise in attempting to promote goodwill in industry and to prevent and settle industrial disputes can be subordinated to purely economic considerations.

It went on -

The Commonwealth and public bodies such as the Reserve Bank . . . can and should give to price stability the dominance in their respective planning they think proper . . . The Commission . . . must give priority to its task of fixing just and reasonable wages. And, of course, in this view “just and reasonable” wages meant wages which have their purchasing power preserved.

The President said -

The loss within one year of 12s. purchasing power per week is not a technical matter for those employees (in receipt of the basic wage plus a small or moderate margin) and their families. It is a matter of hardship.

As a result of this decision, the trade union movement hardened its attitude towards the Government. There is no doubt that any future discussions with the Government and any future consultations designed to increase productivity and the number of people in the work force will be more difficult. It will be more difficult to achieve or even to canvass those objectives. As the A.C.T.U. advocate argued - we suggest rightly - in situations in which labour does not consider it has had a fair go, it must have recourse, not only to ordinary measures of negotiation, but also, in many cases, to industrial pressure. This is a result of the issues not being given proper consideration.

This is a very unsatisfactory state of affairs and I am sure all of us are saddened that it should have arisen.

I also want to mention what seems to me to be a most unsatisfactory attitude by the Minister for Labour and National Service. Recently he made a public statement about the need to recruit women into industry. Perhaps the worsening relationships to which I have referred are the reason why he did not put this on the plate before the trade union movement and the employers in a tripartite discussion or why he did not consider the submissions which the unions had made to him on the question of equal pay for work of equal value. He was reported in the Press as saying -

With so many huge developmental tasks ahead of us in Australia, we’ simply cannot afford to deprive ourselves of talents just because they happen to belong to females.

The newspaper report continues -

Mr. McMahon said that in the past employment in many industries called for physical effort beyond the capacity of females and for a basic education in technical subjects conventionally unavailable to girls.

The report states earlier - “The garment industry as a whole is one of the most important employers of female labour in Australia.”

Mr. McMahon said that he wished that other industries would grow out of their Victorian attitude to the employment of women. The report continues - “ The time is coming when it will seem the most natural thing in the world for girls to take up apprenticeships in fields such as the skilled metal and electrical trades “, he said.

Mr. McMahon said the proportion of women who were employed in managerial and executive positions remained very small. “ I do not believe that executive and organisational ability is confined to one sex “, he said.

We agree with those remarks. This was a public statement by the Minister on the matter. There had been no preliminary discussions with the trade union movement about it. The Government was rejecting what had been said by senators on this side of the chamber. In fact, we have moved resolutions here calling for introduction of equal pay for the sexes within the Commonwealth’s own organisations. We have had support for those moves. A question was asked this morning by a senator on the Government side about this matter. However, when our resolutions were put before the Senate in the past Government senators, unfortunately, voted against our suggestion that they should reconsider their position.

This statement by the Minister for Labour and National Service evoked some public replies by the leaders of employers. Mr. F. R. Curtis, who is the president of the Metal Industries Association of South Australia and deputy president of the South Australian Chamber of Manufactures is reported as having said -

While women could do most industrial jobs as well as men - they have for example proved themselves as technicians and welders - they were prohibited by awards from lifting weights of more than 35 lb.

This could mean complications in production processes, loss of time, the need to provide male staff for lifting and carrying and corresponding increases.

The Secretary of the Employers’ Federation of South Australia, Mr. G. E. Prike, made the point that -

Apart from the economic hazard to employers there was opposition from trade unions which were traditionally opposed to women doing jobs which in the past had been done exclusively by men.

Senator Wright:

– Is it the honorable senator’s complaint that the Minister made that statement without consulting the trade union movement?

Senator BISHOP:

– No. I have two complaints. My first complaint is that the Minister made this statement. It seems to me that it might have been influenced by what has been reported in the Press - and the Press seems to have an inside running regarding these matters - as to what will be contained in the Vernon Committee’s report on our economy. That report is supposed to recommend the recruitment of more married women into industry. Secondly, a Treasury information bulletin which refers to this matter has been issued. What I am saying is this: Coupled with the stand which the Government has taken and which I say is wrong because of its bad relations with labour, there is a breakdown of conciliation which provides the worker with the means to obtain his proper share of the increase in productivity. The Minister makes a statement off the cuff in a way which would not produce any satisfactory result.

Worse than this, as the Minister knows, is the position that he has taken in the past With regard to equal pay for equal work.

Last year, the Minister attended the International Labour Organisation Conference at Geneva. He had attended similar conferences before. I attended one with him. Over the years that this Conference has met, the Australian Government has supported its conventions and recommendations in relation to these matters. Every time the subject of equal pay is brought up in the Parliament, every time a deputation from a women’s organisation or the trade union movement has gone to see the Government, the Government has said: “The obligations under the International Labour Organisation Charter are different in respect to Australia because we are a Commonwealth with sovereign States.” The Government leaves it to the States to make the Crown decisions on the matter. We have always charged that the responsibility is with the Government. The Government is represented at meetings of such organisations as the I.L.O. and votes on these matters.

For instance, a resolution concerning women workers in a changing world was adopted on 8thJuly 1964 by 265 votes to 23 votes. The Australian Government’s representative voted in favour of the adoption of this resolution. One of the sections of the resolution reads -

Urgently appeals to member States to take all positive steps–
1. To ratify and implement fully the Equal Remuneration Convention 1951, and Discrimination (Employment) and Occupation Convention 1958; and
2. To implement in respect of girls and women the provisions of the Vocational Training Recommendation 1962.

– I have just criticised the honorable senator’s Government because it has introduced a Budget which has put burdens on the community and increased prices. I say to the honorable senator that his Government does not help to raise our standards, yet it wants married women with families to enter industry, without proper safeguards and certainly without the basic acknowledgment of their standard by giving those women equal pay when they do work equal to that performed by men. A Government senator, in a question asked this- morning, supported what

I am saying. The honorable senator said that this ought to be done. If the Government wishes the employers to recruit the women, management will have to change its working rosters. It will mean not only the imposition of problems on management, whether they be difficulties in relation to supervision or catering, but also the necessity to consult the trade union movement in respect of what -wages should be paid. If the Government wants women to offer themselves for the jobs, it must oiler them the best standards it can. It is possible - I accept this as a matter of fact - that in the future Australia might have to follow this course. I am confident that when we have to do so, it will bc done in a first class manner and that when we recruit labour not only from the sources from which we are trying to get it now but also from other sections of the population which may be able to assist, we will have to accept the principle of equal pay.

Yesterday, the “Australian”, after referring in a general way to what the Minister for Labour and National Service had said, and without criticising it unduly, made the same point as I have already made when it said -

In addition to rectifying this matter, the Government could do much more to speed up the inevitable progress towards realisation of the principle of equal pay for equal work.

Not only would this have the effect of encouraging more women to join the workforce; but it would also provide employers with an added incentive to make more efficient use of the female workforce which already exists.

As we see it, that position is unsatisfactory. I understand that yesterday the Minister for Trade and Industry (Mr. McEwen) in reply to a question in another place, more or less reiterated the position that he and other Ministers had taken up - that they might do something about this matter if it did not involve a charge on the economy. As I have already said, in an emergency any government has to make special provisions, but this Government has evaded its obligations to the International Labour Organisation in respect of this matter over the years. It should already have begun to give its own employees equal pay for work of equal value.

I mentioned earlier the need for complete statistics relating to many important matters.

I want to refer to a question which Senator Cohen asked of the Government in 1962. It was as follows -

What is the total annual cost of shipping freights paid by Australian primary producers and traders to overseas shipping lines on both exports and imports?
ls it a fact that Australia suffers grave trading disadvantages because of the enormous sums of money paid to overseas shipping lines for freights?
ls Australia the only major trading nation In the world which has no ships trading overseas?
In view of the growing body of public opinion in favour of the establishment of a Commonwealth overseas shipping line which would build, man and run Australian ships, and in view of the challenge to Australia’s trading position raised by the European Common’ Market problem, will the Minister give urgent consideration to this proposal?

Senator Spooner replied ;

The Commonwealth Statistician advises that statistics arc not available to show the amount paid overseas for freight on Australian exports. In Australia, as in most countries, figures for exports are expressed on a f.o.b. basis. Conventional balance of payments procedure is to treat the cost of transferring goods beyond the exporting country as a transaction between the foreign importer and the carrier. Accordingly, no estimate is prepared for this item. Freight paid overseas on Australian imports is estimated at about ?125 million for the year 1961-62. The figures include, however, freights paid to Australian shipowners. These are mainly for imports from Australian territories and nearby Pacific islands and the amounts concerned arc not large. Some payments to overseas shipowners for carriage of inter-state cargo (e.g. petroleum products) are also included.

This raises the question of the need to have readily available statistics which will supply the Government with the information that it should have if it is to cope with such problems as overseas investment in Australia and the desirability of having a Commonwealth shipping line. The Government still takes the same view about the need for a Commonwealth shipping line. It says that Australian costs and wage rates are such as to price us out of the shipping world. It pays no regard to the fact that, even if it had to subsidise a Commonwealth shipping line, the use of Australian ships would avoid the payment to overseas companies of large sums to meet freight charges and invisible items. The Government makes a negative approach. A great deal of attention has been paid to this question, not only in the Parliament but also outside, where the wool growers and other sections of the community a<~e complaining about increases in shipping freights. The Australian Dried

Fruits Control Board in its report for the year 1964-65, said -

It is a matter of considerable concern to the Board, and no doubt other Marketing Authorities and- Exporting Interests in Australia, that rates of freight to markets other than the United Kingdom and Continent have been very considerably increased over the recent years without even the courtesy by the Shipowners to permit the Marketing Industries concerned to submit any form of representation or reply before the effective date of the increases.

In view of the importance to Australia of satisfactory shipping services being maintained to all our export markets at fair and reasonable charges, in the opinion of the Board the Australian Government should immedately introduce the necessary legislation permitting it to take a more active role in the negotiations at present being conducted from time to time between Australian Exporters and Overseas Shipowners. It is considered that effective and immediate measures should be taken to stabilise all rates of freight to markets overseas for a period of at least three years with provision for triennial reviews thereafter.

It seems to us that there is not enough push by the Government - that there is no real desire to examine this question in a serious way. But this must be done. Yesterday the Minister for Trade and Industry referred to increasing freight charges and explained what the Government had tried to do about them. We know that there has been an overall increase in shipping freight charges. From July of this year there has been a 10 per cent, increase on cargoes from the east and west coasts of North America to Australia; a 71 per cent, increase on cargoes from Australia to East and South Africa; a 7i per cent, increase on cargoes from Australia to Ceylon; a 10 per cent, increase on cargoes from Australia to the Far East; and a 5 per cent, increase on cargoes from Hong Kong and Japan to Australia.

Senator Wright:

– Are these cargoes carried by Conference line ships?

Senator BISHOP:

– Most of them are. I asked the Minister a question about this this morning in view of a report that legislation regarding Conference line ships operating to and from Australian ports is pending. It would be a start, at least, if the Government introduced such legislation and also took powers under the restrictive trade practices legislation to cope with the situation that now obtains. I believe that in the long run the Government will have to consider doing what the United States Government does - that is, use its own ships and apply surcharges to those of other countries. Australian costs and- wages might bc high but against that factor we should weigh the present cost to the community of using overseas ships. Therefore, the establishment of a Commonwealth shipping line is worthy of extensive considerations.

This brings me to another question we have often raised - the growth of overseas investment in Australia. I recognise, as I think most honorable senators recognise, that there is a continuing interest in overseas investment on the part of the Government, but it has never taken a positive stand such as that taken in the policy which the Australian Labour Party has announced in this respect. We have taken a pretty strong stand against the inflow of capital which does not add to the wealth of the community and places on future generations an obligation to pay considerable charges. We have referred in other debates to some very strong statements made on this matter by the Minister for Trade and Industry in another place. A Commonwealth publication entitled “The Australian Economy 1965” canvasses various aspects of this matter but eventually comes out, I think, in support of what we have said in the past. At page 39, under the heading “ Overseas Control “ this publication says -

To pass judgment on the performance of overseas investors in Australia through the years would be to generalize about a very wide, varied and changeful area of experience. It would, of course, bc possible to list various things done by foreign investors in Australia which have not been to our liking; yet it would be just as easy to name a good many foreign enterprises which have done much to advance our country and have gone far towards identifying themselves with it.

We would agree that many of the people and much of the capital -brought into Australia have added something to our country. The publication continues -

For some, however, a conclusion of that sort scarcely ends the matter. They are looking to the future and they are concerned at the growing extent of foreign ownership and control of Australian industry. There may be emotional elements in their attitude which can, indeed, be as much political as economic. They can, nevertheless, point to some weighty facts. On the figures quoted in the recent Treasury Information Bulletin Supplement, probably one quarter of the investment in Australian companies over recent years has been foreign-owned and reasons are suggested there for thinking that the extent of overseas control over our industries may be of much the same order as foreign ownership. Further, the signs arc that these proportions have tended to grow somewhat.

Continuing, the ; publication refers to the Australian community’s apprehension about the situation.

Senator Wright:

– From what document is the honorable senator quoting?

Senator BISHOP:

– From “The Australian Economy 1965 “.

Senator Paltridge:

– Did I misunderstand? Did the honorable senator say that that document concluded that there should be some restriction on overseas capital entering Australia?

Senator BISHOP:

– No. 1 did not say that. I made it very clear when I first referred to the document that it was a Government publication and that I thought that the contributions were worthwhile. It canvassed all sides of the problem. I suggested that the weight of the statements I have just read supports the proposition that I am putting forward. Page 42 of the document deals with what is called “ A way between “ and refers to equity participation by Australians in this matter. I suggest that if one studies the document one can see that it canvasses all the arguments in relation to this matter. It comes down with a sort of general support for the propositions which we say the Government has to do something about. As the Government is facing an increase of 22 per cent, in imports and a fall in our overseas reserves, it ought to be able to say: “This is where we stop in this matter. We are going to ensure that the capital coming into the country is used to add to the wealth of the country and not take over the service organisations.” I refer to organisations such as the retail organisations and also the soap manufacturers because the Australians in those industries are adequately efficient in their work. The Labour Party believes that this is an urgent problem which should be tackled by the Government.

As my time is running out, 1 want to deal with a purely local matter concerning South Australia. I refer to beef roads. In the Budget provision is made for Western Australia, the Northern Territory and

Queensland to receive continued grants, which have been made towards the construction of beef roads. But the petitions from the South Australian Government and the requests from South Australian senators have always been put aside. Honorable senators on both sides of this Chamber have supported the motion that some assistance should be provided to the State Government of South Australia to enable it to maintain, construct and resurvey roads in the northern part of South Australia which are essential to the beef industry. Questions have been asked of, I think, the Leader of the Government in the Senate (Senator Paltridge) and, through him of the Minister for National Development (Mr. Fairbairn). We have been told that this matter has been under review.

During the debate in this Chamber on beef roads, honorable senators from both sides of the Chamber argued that consideration should be given to the beef roads position in South Australia. We referred to a report on the economics of transport costs in South Australia. We referred also to the effects which bad weather has on the roads. The heavy trucks cut up the roads. We supported the applications which were made by the then Premier of South Australia, Sir Thomas Playford, for assistance by the Commonwealth Government. I understand that the present Government of South Australia has since made similar requests. I can see no reason why the Commonwealth Government cannot consider the applications from the South Australian Government, in the same way as it has considered applications in relation to Queensland, the Northern Territory and Western Australia for assistance in a matter which concerns northern development. We have been told that a section of the Department of National Development was carrying out a new investigation into this matter and that it was aware of the economic survey which had been made by a group of business people and members of the South Australian Pastoral Board. It was said that this could be considered but nothing has been done. I trust that the Government in the near future will do something about this matter.

Senator PALTRIDGE (Western Aus am familiar with the document from which Senator Bishop, who has just concluded his speech, quoted in respect of overseas investment. If time permits before I sit down, I hope to say some rather general things about overseas investment. But I am prompted to say to him immediately that he would fall into grievous error if he concluded that the document from which he quoted came down with any conclusions that there should be restrictions placed upon overseas investment. Indeed, the Paper does no more than to canvass the vital issues on this subject and to lay them bare. For this purpose I think the Paper is one which should commend itself to all honorable senators, and to those members of the general public who are interested in this subject. But I repeat that the honorable senator is in error if he concludes that the Paper comes down with any recommendations or suggestions one way or the other.

I want at once to congratulate the newly elected senators who have delivered their maiden speeches. Senator Davidson, Senator Cotton. Senator Lawrie, Senator Gair, Senator Keeffe and Senator Mulvihill all gave speeches which were interesting and informative, and I think gave genuine promise that their services to this Senate will be valuable according to their own lights and political beliefs. In addressing myself to the general subject of the Budget, I observe firstly that its public acceptance has been the quietest that I can remember during my term of service in this Parliament. Despite this fact, the Opposition has moved certain amendments. In the course of my speech I will be addressing myself with particularity, to. some of the matters which the Opposition raised.

It is said that the Budget should be condemned because the taxation increases impose further burdens on the wage and salary earners of the country, that the social service benefits that are provided by the Government are meagre, and that it fails entirely to deal with the problems of increases in imports and of the dependence on foreign capital. I notice that to the proposed amendment a further proposition, emanating from Senator Gair, has been added in relation to defence expenditure.

Senator Gair referred to our overseas operations as - the essential and justifiable commitments, which we have undertaken in South Vietnam, Malaysia, Thailand and South East Asia generally. lt would appear from that amendment that the Government and the Leader of the Australian Democratic Labour Party (Senator Gair) find themselves in agreement as to the justification for the action taken in South East Asia, even if there is some disagreement as to the extent of the assistance given.

Approaching this subject in a general way, I ask myself, as Senator Cavanagh asked himself: What is the purpose of any Budget? 1 agree with Senator Cavanagh’s statement in general terms that, first, the purpose of a budget is to put before the Parliament an account of the Government’s proposed expenditure and its expected revenues over the next twelve months, revealing to the Parliament the variations in those proposed expenditures and revenues, as compared with the previous year, and thus manifesting any changes in policy or any changes in the emphasis of policy. But. in addition to that, it is important always to remember that budgetary policy must accord with and be part of the general economic policy of the Government, lt has to serve that policy. Indeed, in addition to serving it, it has to exercise an influence on that, policy, where an influence is needed to obtain certain required economic results. It has, in short, to serve the economic aims of the Government.

What are the economic aims, the national aims of the Government of this country? They are: First, of course, to defend our country and our territories and the peoples who inhabit them; to provide for the steady, uninterrupted growth of the Australian population; to provide the conditions in which there can be constantly increasing production in all forms; to provide for full employment and a living standard as high as can be sustained by the economy at any time; to ensure that there is a stability of cost and of prices and that our external financial position remains strong. These, I believe - speaking to a Budget introduced by this Government - are the tests which should be applied as to its effectiveness or otherwise. If these tests are applied to this Budget and to the economic policy of the

Government generally over a long period, anyone making an objective examination will agree that those aims have been maintained over the period for which this Government has been in office.

I have said, Sir, that the Budget had a good public reception. I think that that is right, but there is another test which should also be applied to the general economic policy of any country. That is the way in which the policy is assessed in other parts of the world. One of the fundamental tests of overseas opinion is not in terms of economics but in terms of people. When the history of Australia is written, it will be shown that over the 16 years of the Menzies Government conditions have prevailed and continued to prevail in this country which have been a constant source of attraction to people from many other lands seeking to establish a new home in the new country of their choice. If we look for a fundamental test as to how our policy has been received internationally, the continuing success of the migration policy provides, I believe, an affirmative answer.

Now I come to the criticisms which have been made of the Budget. It has been said that it is not in fact a defence Budget, Senator Gair has said in his amendment that not sufficient financial provision has been made to meet our justifiable commitments in South East Asia and elsewhere, I have been closely associated with the defence policy of the Government over the last 15 months and I hope that I am not misunderstood when I say, with modesty, that there has been continuing, stepped up activity in all the Services and in all defence undertakings over the last two and a half years. Some of our policies introduced into this Parliament have been policies which in the past have attracted the most torrid and hostile opposition from elements within the community, including the Australian Labour Party. I put it, in respect of national service training, that this was the very earnest of a Government which was determined that it should fulfil all of its defence commitments adequately - indeed more than adequately.

But we have not concentrated merely on building up manpower. In today’s world, manpower- important as it- is - is only one factor of defence, and it has been necessary for us to take action in respect of the acquisition of equipment. 1 cite some figures of recent years to indicate in a general way the growth that has occurred. The cost of equipment purchased or acquired under the heading “ buildings, works and acquisitions” in 1965 ran to £119.5 million. In 1965-66 that figure will increase to £167,790,000. In each of the two succeeding years, 1966-67 and 1967-68, the figure will be £200 million. This represents acquisitions of equipment, plant and works. Defence, unlike many other Government votes, should not be accepted as the law of the Medes and the Persians - unalterable. Defence is under continuing review in the very real sense.

As an indication of how expenditure can vary, let me point out to the Senate that within the last few weeks we have made an announcement concerning an increase in the force which is to serve in South Vietnam. That will not be achieved, and no one would expect it to be achieved, on a basis that was planned before the addition. I cite this merely as an example of what can happen - indeed, what has happened, even since the preparation of these figures was completed. Should it be necessary in the light of developments to make further adjustments in the defence vote, I can assure the Senate that those adjustments will be made. We have said as a Government, and said many times, that we will accept our defence obligations in every sense of the word. It would not be, I think, of much use at this stage to indicate again what sorts of equipment are to be acquired under the new programme. In November last the Parliament debated that matter at some length. It will be recalled that as a result of our acquisition programmes all Services are to have greatly increased supplies of new, modern arms. Much of what was announced in November in respect of additional modem arms is now in progress and it is to be hoped that quite soon we will be able to see the results of some of the decisions which we then announced. I merely refer to the progress recently made in the acquisition by the Air Force of jet trainers, plans for which we announced only a few days ago.

Senator Wright:

– What is the cost of them?

Senator PALTRIDGE:
LP

– I am sorry, I do not have the detailed figure with me.

Senator Laught:

– The cost of the jet trainers is included in the Budget figures, is it not?

Senator PALTRIDGE:

– For 75 of them, within the three-year programme. 1 am not suggesting to the honorable member that this last decision represented an addition to this programme. I am suggesting that the decision manifests the speed with which we are carrying into effect the policy which was announced only a few months before. In answer to the suggestion that we are not spending sufficient money on defence, all that I can say at this moment is that a defence effort, if it is to be sound and well based in this grey aTea which is neither peace in the accepted sense nor war in the conventional sense, necessitates our continuing to make adjustments to our defence spending as adjustments are required to be made.

– Prior to the suspension for lunch I was addressing myself to the incidence of increased taxation and I showed that for a man who has a wife and two children and who is receiving £2,000 a year, or approximately £40 a week, the increase in the impost would be less than 2s. 6d. a week. I suggested that this was a minimal amount and that the criticism which had attached to it was quite unjustified in the present circumstances.

I pass from that matter to refer briefly to one item of indirect taxation. I eschew any reference to the increased duty on spirits, beer and cigarettes. I do so for the simple reason that I believe that in the circumstances in which we are living today the vast majority of the Australian people accept the proposition that non-essentials of this kind should be taxed. I suggest that that has been the public reaction to the Government’s proposals in relation to beer, spirits and cigarettes. But the tax on petrol is another matter. It has excited my curiosity to the extent that I made some inquiries about the growth in the consumption of petrol in Australia and the expansion of the number of motor vehicles. I suggest that the figures I shall quote are very pertinent to both the tax on petrol and the point I was making earlier about the general level of prosperity and progress in this country.

I established that in 1948-49 there were in Australia 1,104,000 vehicles, of which approximately 650,000 were motor cars and station wagons and approximately 455,000 were commercial vehicles. The total increased by 1960-61 to no fewer than 2,870,000 vehicles and by 1963-64, there was, as compared with a total of 2,120,000 10 years earlier, a total vehicle population of 3,450,584. Of that number 2,598,000 were either motor cars or station wagons and 852,000 were commercial vehicles. I point out that the motor vehicle population for every 1,000 members of the population of Australia rose from 139.7 in 1948-49 to 230.5 in 1955-56, to 275.1 in 1960-61 and bv the end of 1963-64 to 309.9. I suggest that this is a remarkable manifestation of the progress that has been made and the general rise in standards that has occurred. The vehicle population of 309.9 for every 1,000 members of the population is exceeded only in the United States of America and, quite marginally, in New Zealand. As a matter of further interest, as the Treasurer (Mr. Harold Holt) stated, petrol consumption has risen over the last 10 years from 93 gallons per head of population to 148 gallons.

Senator Wright:

– Are these figures available in tabular form?

Senator PALTRIDGE:

– Yes. With the concurrence of honorable senators 1 incorporate this table in “ Hansard “.

Senator Tangney:

– Does the amount of £42 6s.1d. cover social service payments as we know them, or does it also include expenditure on education?

Senator PALTRIDGE:

– No. The table deals with expenditure from the National Welfare Fund. It relates to items which are covered by the Fund, plus the service pension.

The next point of criticism made by the Opposition was the alleged failure of the Government to do something about northern development. I will be the first to acknowledge that one of the problems of government today is to allot priorities between competitive claims for development, not only in the north, but throughout the Commonwealth. The suggestion that this Government has failed to do anything for develop ment, particularly northern development, is belied by the facts. In order to remind the Senate of the true position I want to do no more than refer in very general terms to some of the works which have been undertaken as a result of the support and assistance given by this Federal Government to State Governments. In Queensland the projects include beef cattle roads, brigalow land development, Weipa development, coal loading works at ports and, of course, the Mount Isa railway. In Western Australia they include northern development involving expenditure of £8,500,000, beef cattle roads, water supply and the rail standardisation work which is a special project in the southern part of the State. Incidentally, the total expenditure on rail standardisation in Western Australia is £48,900,000. In addition, there is the construction work on the Derby jetty. There are also other works which are not included in the table I have before me.

The point 1 am making is that expenditure on approved special projects currently being undertaken in the north of the country, as well as others which are not in northern Australia, amounts to the astronomical total of £163,536,000. That sum has been provided by a Government which, the Opposition alleges, has no sympathy for undertakings of that kind. With the concurrence of honorable senators, I shall incorporate in “ Hansard “ a table which includes the works I have mentioned.

Senator Cant:

– What proportion of the sum the Minister has mentioned is repayable at interest?

Senator PALTRIDGE:

– I cannot say, but some of it is. As the honorable senator well knows, the point is that the fact that the money is repayable does not reduce the problem of the Government that has the task of actually finding it initially. The big strain is to find the cash. Some of it may have to be repaid over a period, usually of 52 years, but that does not lessen the load of the Government which actually has to put up the cash.

Senator Cant:

– Can the Minister say what the matching grants by the States would amount to?

Senator PALTRIDGE:

– No. But the figures could be obtained quite easily. I am sorry that I am rubbing honorable senators opposite a little. There is reference in the amendment moved by the Opposition to the question of imports and our dependence on overseas capital. In this respect I wish to say, first, that I believe we would fall very much into error if we tried to regard imports in isolation. It is a fact that all these economic factors are inter-related and interlocked. One cannot consider the size or the extent of imports without considering the effect of imports on other sectors of the economy because it is true to say - it is an established fact - that well over 70 per cent, of imports goes to the manufacturing industries of this country.

The problem of imports, therefore, becomes not one of restriction but one of achieving the means to pay for imports so that you can go on servicing with raw materials and other materials the secondary industries in an expanding economy. This, in turn, raises the further problem of how you are to maintain that economic progress, once you have it started, when you require for its maintenance the investment of large sums of money. At this point in development we run into the problem, as have other countries during their developmental periods, of how to finance progress.

One of the interesting things about development in any country is that there is a time in the early history of that country when it is unable, by means of its own savings, to finance its own development. This is completely true of Australia. This is completely true of the great United States of America. T mention the United States because I think frequently of how closely our own economic progress can be related to the economic progress of the United States of 100 years ago.

Senator Kennelly:

– Was there anyone in the United States at that time who believed as the Deputy Prime Minister, Mr. McEwen, believes now? I am asking a simple question.

Senator PALTRIDGE:

– This is not question time. Will the honorable senator place his question on the notice paper? Between 1 850 and the end of the century the population of the United States increased from 23 million to 100 million. During that time, and until the first years of the First World War, the United States, this now powerful economic unit, was a capital importing country, just as Australia is today. We have had the same experience. In my own State of Western Australia, where I think we live closer to our own history than do the people in other States, we see this very plainly because in our State we did not get any real stimulus to develop until the discovery of the mining fields and the investment of overseas capital in those mining fields. lt is interesting to see that some of the capital which was invested here at the turn of the century by British investors has become, and has been for some time, virtually indigenous Australian capital, being reinvested in this, that and other projects, making progress and providing employment as time goes along. One of the problems that will confront any government of any political colour which seeks to impose restrictions on the import of overseas capital will be the problem of determining which capital is to be restricted. Will it be British capital or United States capital? If it is to be British capital, how far back will you go before you regard it as Australian capital?

I have said that no country has been able to finance its own early development. This applies to our own country. As we progress and gain economic strength we are certainly achieving an ability to provide for more of our own development. In fact, Australia has one of the highest average rates of savings of any country in the world. The fact that the output of all produced articles and services over the last 15 years has increased by 50 per cent, indicates what the activity in this country has been. In point of development, £16,000 million has been invested in Australia in the last 15 years. Of that total, £2,200 million came from overseas, a proportion of something like 1 to 8. But what I have said about our capital and its availability for investment leaves unsolved a problem which faces the commercial and financial sectors in this community and which they are beginning to accept, namely, the development of the type of organisation which mobilises investment capital and channels it into the kind of industrial activity which has attracted so much attention in recent days.

– No, I am not. I am merely referring to the report of the Canadian Royal Commission on Banking and Finance.

Senator Toohey:

– There is nothing inane about a royal commission.

The ACTING DEPUTY PRESIDENT (Senator Wood). - Order!

Senator PALTRIDGE:

– I am suggesting this is a practice which is suitable for Australia to follow rather than the hide-bound policies which I gather would be put into effect if we had a Labour government in office. The effect of Labour policy would be. inevitably, to frighten away all forms of foreign investment. It would reduce our ability to maintain the immigration programme; it would reduce our ability to expand our industrial capacity; and it would have the effect of bringing the economy to a halt.

I have attempted to deal with the four points that have been raised by the Opposition in its proposed amendment. I merely say in conclusion that this is the sixteenth consecutive Budget introduced by the Menzies Government. Over all those years, this country has gone forward, because the Government created in Australia the type of atmosphere in which personal resource and private enterprise could take this country forward 10 ever increasing standards and with ever broadening horizons.

Senator McKENNA:
Leader of the Opposition · Tasmania

– Whilst bowing to a majority decision of this Senate regarding the holding of a debate on the Budget in the innocuous terms which are before us, I begin by expressing my distaste for a motion which enables this place to debate the Budget at the same time as the Appropriation Bills are under consideration in another place. I have voiced that protest for many years, and I have indicated in various ways my dislike of the practice.

Like the Leader of the Government in the Senate (Senator Paltridge) I take the opportunity to congratulate those honorable senators who made their maiden speeches yesterday. I refer on my side to Senators Mulvihill and Keeffe and, on the Government side, to Senators Cotton and Lawrie. I do not think I can describe Senator Davidson’s speech as his maiden speech because he has been a member of the Senate before. I think in his case I might describe his speech as his. inaugural address. I congratulate him upon that, too. I thought, that all those who spoke came through their ordeals splendidly. Their speeches augur well for thir future contributions to debates in the Senate.

I support the amendment moved on behalf of the Opposition by Senator Kennelly. The arguments in support of the amendment have been presented quite adequately by speakers on this side of the House and will be amplified by other speakers when I conclude my remarks. So I do not intend to traverse those arguments at any length. My main reason for entering the debate was that I felt it my duty to record the attitude of the Opposition to the amendment moved by Senator Gair, on behalf of his Party, to the Labour Party’s amendment. Before I do that I wish to say a word or two about the remarks made by the Minister for Defence (Senator Paltridge) during his contribution to the debate. He held up as the superlative test of the budgetary performance of this Government in the past 16 years, and of its management and control of the nation’s affairs, the number of people who have come to Australia from abroad during that period. I do not think he was serious in putting that argument forward and pretending that it is the Government’s budgetary performance and management of the economy which induces migrants to come here from all over the world. If he cast his mind back to the raging inflation that followed the advent of this Government to office - the inflation that raged from 1949 to 1956 - if he had regard to the dreadful horror Budget of 1951-52 and all the unemployment it precipitated as well as the harm it did to the country’s economy, if he thought of what is termed the little Budget of 1955-56 and of the mass employment that the Government’s budgetary and financial policies precipitated in 1961-62, he would immediately see the falsity of the argument that he put to the Senate. Those things were disasters for Australia.

I do not pretend to see into the mass mind of the migrants who come here, but I would suggest tentatively that what attracts -them beyond all else is the opportunity which exists in this young and developing country for high endeavour and effort. I think that, more than anything else, is what attracts migrants. Again, I think the element of personal freedom which permeates life in this country, and which is outstanding against the type of atmosphere encountered in so many countries abroad, is another of the main factors which induce people to come here. I reject the test that the Minister sought to apply. I do not think we can regard the level of migration as a test of the excellence of the budgetary and economic policies of his Government.

The Minister referred to social services and to the vast increase in expenditure in this field that has taken place during the past sixteen years. I concede the great expansion of that expenditure, but I say that figures based merely upon current money values from time to time, and not based upon one common level of money values, present an entirely false picture. Anybody who presents the type of argument that the Minister presented without acknowledging that many of the benefits now being enjoyed were in their infancy in 1949 presents a false picture. In that year, the pharmaceutical benefits, scheme had only just got under way; the scheme to eradicate tuberculosis had just begun, although it was completely formulated and covered by legislation; and the health services and medical benefits pursuant to the power obtained in 1946 were in their infancy. All these things had to develop. I point to the enormous growth in the cost of pharmaceutical benefits in the interim. Anyone who does not take account of that element in pointing to benefits of this type is doing a complete disservice to objective thought in the Senate:

I acknowledge that new benefits have been introduced and that they do play a part, but simply to take the 1949 figures, to ignore inflation and the depreciation of money values, and to make no reference to the fact that many benefits were only in their infancy when this Government took office, is not to present a true picture or a very sound argument. As I have said, I do not deny that new benefits have been introduced, but that does not affect the legitimacy of our protests against what is done for social services in this Budget. Owing to the natural expansion of the social services field alone, some £20 million extra expenditure would have been incurred this year in any event. The new benefits will cost £5 million for this year. There are important alleviations of anomalies and matters that are the subject of complaint, but in a Budget of something approaching £3,000 million - we are on the way towards that figure now - the provision . of an extra £5 million in this financial year for new benefits or for the amelioration of existing ones is, in the view of the Opposition, a paltry contribution, especially at a time when the position of beneficiaries in the social services field is worsened by rising costs. Accordingly, the Opposition’s objection, voiced in the amendment moved by Senator Kennelly, is completely well based.

– The trouble is that that is all that happens to them. I am just giving to the honorable senator an indication that I am not talking at large or without a basis of experience of the Government’s actions in relation to reports. I hope that this will be taken from me as a very strong plea from the Opposition for the release of the Vernon report at the earliest possible moment. There are many elements in the community, quite apart from the political parties in the Parliament, who need to have the opportunity of perusing it. 1 hope that we shall have the report before us, preferably with the Government’s full consideration, but if hot, then without it. I think that the report should bc made public and made available at the earliest possible opportunity.

I pass now to the amendment, which Senator Gair moved to the amendment proposed by Senator Kennelly. Senator Gair suggested that at the end of Senator Kennelly’s amendment the following words should be added -

The Senate further declares that provision for defence in the Budget is still inadequate to meet the needs of Australia’s security, and the essential and justifiable commitments, which we have undertaken in South Vietnam, Malaysia, Thailand and South East Asia generally.

The Senate declares that effective - defence requires much increased specific and separate budgetary provision.

Had the amendment stopped at the word “ security “ and read -

The Senate further declares that provision for defence in the Budget is still inadequate to meet the needs of Australia’s security,- the Opposition would have had no objection. But it proceeds to open up the whole field of foreign affairs by referring to the essential and justifiable commitments abroad in South Vietnam, Malaysia, Thailand and South East Asia generally. I do not for a moment deny that there is the closest relationship between defence and foreign affairs. They are inextricably linked. My strong feeling is, however, that it would be better to debate the issues of foreign affairs on the paper that is already before the Senate. I hope that we shall have the opportunity to debate it in the not very distant future. Because the viewpoint that we hold on the question of activity in South Vietnam differs entirely from the viewpoint taken by Senator Gair’s party and the viewpoint of - the Government, I propose to say something on that matter.

But let me first, on the broad aspects of the adequacy of defence, point to the latest announcement that the Australian Labour Party put before the people of Australia: I refer to the Senate election campaign of November last when we stated our stand on defence in these terms - ‘

The attitude of the Labour Party on defence can be stated quite clearly:

We insist . on this nation having adequate defences.

Our present “defences are not adequate; and for this state of affairs the- Menzies Government alone is to blame.

We insist that . Australia should bc able to fulfil its role, in partnership with its allies, the United States and Great Britain, in its OWn defence and

In the common defence against aggressors. Communist or otherwise, in accordance with its. treaty obligations.

We are not in a position now to do either of these things.

That is as true today as it was last November. It continued -

If it is found necessary to call upon the people of Australia for additional sacrifices, for the defence of Australia and to fulfil our part against Communism and aggression, we will not hesitate lo ask for those sacrifices. We of the Labour Party will ever strive for peace through the United Nations, but we stand with the free world against Communism. But wc believe the people should be taken into the confidence of the Government as to the extent and nature of our commitments.

We reject the proposition that the action of Australia in Vietnam is justifiable. I do not want to go into this matter at tremendous length because I think it would be more proper in another debate altogether. But I indicate to the Senate that we have consistently taken the attitude that, whilst America is to be supported and not let down as one of our major allies in this particular field, our own interests and the interests of the United States of America would have been better served if we had refrained from active participation in hostilities in South Vietnam. We see the role of Australia, not just for a year or two years ahead, and not in the circumstances of the existing moment. We are looking to Australia’s position in Asia, not merely 10 or 50 years ahead, but 100 years ahead.

We, in the action that we are taking now, can be influencing the way in which we will be regarded by Asia down the vista of many years ahead. It is that long view that gravely concerns Australia. The decision readily to agree to move into active hostilities in South Vietnam with the small force which is all that we can contribute, no matter how powerfuL effective and efficient it is - and I willacknowledge that it is powerful, effective and efficient - has provided relatively insignificant active assistance when compared with the forces that are required to be effective in the area. It is not so much a matter of relieving America of an undue strain or a heavy financial commitment as a matter of moral support, apparently, that has taken Australians in there - I repeat - to their own detriment, to the detriment of this country and to the disadvantage of our ally.

If we, a power in Asia, with no history of colonialism and no colonial aspirations, and seen in those two capacities by Asia, had refrained from hostilities in that area, and had moved in as an intervener, seeking to restore peace to that tortured area, to save the destruction of life and property; if we had confined ourselves to a mission of mercy in the area - and there is a good deal of need for that - we would have preserved the respect of Asians and of many nations in the world. We would have been in the position to do, perhaps, what nobody else has yet done, that is, really to intervene on a fair basis and on a clean basis with the North Vietnamese to see whether we could get them to the conference table. The certainty is that no matter how long this trouble lasts it will end, and it will end in some kind of negotiated settlement. Whilst damaged property can be restored down the years, there is no restoration for the death of human beings; that is final when it is achieved. There is no question that many of the South Vietnamese people, on two sides in this conflict, are dying, are suffering and have so suffered, in proceedings that literally have been going on in their country for the past 20 years.

I should like to point to the communique from the Commonwealth Prime Ministers’ Conference, which ended only on 25th June last, as the right outlook in relation to South Vietnam. This is a communique that was subscribed to by our own Prime Minister, and, one assumes, by the Government of this country. It will be recalled that there was appointed a mission headed by Britain to intervene, to talk to the parties interested in and engaged in the conflict in Vietnam, and to endeavour to procure a cessation of hostilities with a view to a conference and a negotiated settlement of the trouble. At page 10 of the document issued by the British Information Service is set out a statement issued to the mission by the Prime Ministers’ Conference itself. It is called a statement of guidance. I take time to read some extracts -

There is already general agreement on certain basic considerations: (a) There is an inherent risk of the conflict in Vietnam escalating into a wider war. (b) For this reason, there are grave doubts as to an early or final solution by military means. (c) A comprehensive ceasefire and a conference of all the parties directly involved in the situation seem to provide the essential precondition to the solution of the problem.

Then the ultimate objectives for the mission were set out -

A suspension of all United Stales air attacks on Vietnam.
A North Vietnamese undertaking to prevent the movement of any military forces or assistance or material to South Vietnam.
A total ceasefire on all sides to enable a conference to be convened to seek a peaceful solution.
The objectives of such a conference might be to:
1. End the war in Vietnam.
2. To secure the withdrawal of all foreign military presence from Vietnam and the neutralisation of the area.
3. Establish for a period an international peace force under the auspices of the Geneva Agreement, to safeguard peace in Vietnam.
4. Establish principles for the eventual unification of the country through free and internationally supervised elections.

– It is. That is why I will now take a little time to put the nine propositions of the Prime Minister of the United Kingdom. He said -

To sum up the Vietnam situation I invite the agreement of the House to these propositions. First, this is a war . . . which as long as it continues will bring death, destruction, tragedy and mutilation to thousands upon thousands of people whose only desire is to live in peace with their own people and who in all conscience have seen enough fighting, fighting on their own homeland, fighting without respite for almost a quarter of a century

Secondly, this is a war which carries with it the gravest danger of escalation, of extension to the point where we might within a very short period of time see it extended to become a major land war on the Asian mainland.

Of course, that danger grows every day while the war effort is being mounted. The Prime Minister of the United Kingdom went on with his third proposition -

. this is a war, the very fact of which is poisoning the whole of international relationships, is halting the hopeful progress towards coexistence on which Eastern and Western nations alike have pinned their hopes, and which, if it is allowed to continue, may possibly lead to a reversal of that hopeful trend and a hardening of attitudes which it may take years to break down again. . . .

I suggest that is a very valid point. His fourth point is -

A solution to this problem will not be found by military means alone. A decision to defer any hope of a political solution, to deny the means of a political solution, is a decision that the military measures may be intensified with all that that means…..

Fifthly, to get a political solution means getting men round a table. Every effort to do this -

He recites all the efforts - has so far foundered on the unwillingness of Hanoi and - to the extent to which China accepts responsibility of these matters - of Peking to agree to negotiations. I do not think that there will be any disagreement with that proposition. . . .

Sixthly, all these attempts have established the willingness of the United States, the Government of South Vietnam and of the majority of the Geneva parties to have negotiations. . . .

Seventhly, the key to the situation is Hanoi, as 1 pointed out earlier. This is the view of Her Majesty’s Government, lt is the view of the United States and of the Soviet Union. . . . my eighth proposition, which is that there is no means open to Her Majesty’s Government and to the vast majority, whether of Western powers, Geneva powers, Commonwealth powers or of non-aligned powers, of influencing Hanoi by ordinary diplomatic means, because diplomatic channels do not exist . . .

The last and ninth proposition of the Prime Minister of the United Kingdom is the one to which we subscribe most strongly. It is -

. in these circumstances it was the duty of Her Majesty’s Government, and it remains their duty to seek to get the message through to Hanoi in the hope of getting acceptance first for the Commonwealth peace mission and secondly of getting support for the conference, lt is our duty in these circumstances to do this by any means open to us, orthodox or unorthodox, conventional or unconventional, regardless of whether we may have to suffer disappointments and what right honorable gentlemen opposite like to call rebuffs.

I accept that position and I am urging from my side of politics that no matter what rebuffs there are, we still must try to get a ceasefire and a conference. The Australian Government is simply following the line that the United States of America has taken without taking any independent line of its own. In that process it has rendered itself completely inoperative and futile in the field as an intermediary.

Senator Wright:

– Would the honorable senator rather have it mischievous?

Senator McKENNA:

– I beg your pardon?

Senator Wright:

– Australia’s intervention would produce only mischief in that area.

Senator McKENNA:

– I have not said that. I can understand to an extent Australia’s support of a great ally to whom we are indebted for vast things. I can see the reason why it was done, but I think a proper consideration by the Australian Government of the position in which it was put to Australia in Asia, not merely for now but for the future, would have led to a different presentation of Australia’s viewpoint which, if pressed, would have led to an acceptance by the United. States as a desirable thing for it, as well as for Australia, in the future.

– I should not like to answer for President Sukarno or to say how he would view it. He might well adopt that course, lt is not a matter of what he would think but of what is right. We cannot condition our course of action by what somebody will think of us. We now see the weakness of not having a treaty with Malaysia. Our troops are there pursuant to a treaty that was made originally between Great Britain and Malaya for the establishment of the Far East Strategic Reserve, and which has now spilled over into a treaty as between Great Britain and Malaysia. We have no part in it. Now we find that we are dealing with two bodies - the sovereign State of Singapore and the sovereign Federation of Malaysia, in Malaysia itself there are dissidents in the Borneo territories.

These questions remain to be answered: Why are we in Malaysia? How are our forces to be used? It is right that we should be there, as a Commonwealth country, to help Malaysia to resist aggression no matter where that aggression comes from. But what is to happen if there is disaffection in some of the other territories? Are we to participate in an internal row between the Federation and some of the constituent States?

Can we avoid being involved? It is because of these considerations that the purpose of our troops being abroad should be defined most emphatically and clearly.

All sorts of questions now arise as a result of the departure of Singapore from the Federation of Malaysia. We had an assurance in relation to the continuity of Great Britain’s occupation of Singapore. But recently we have seen reports of statements by Mr. Lee Kuan Yew to the effect that Britain might be emptied out of Singapore at 24 hours’ notice and that Australia and New Zealand may be permitted to take over, but not the United States of merica. Quite frankly, we are faced with the possibility - I do not say the probability - of Britain’s withdrawal gradually from this area.

Senator Wright:

– But in these circumstances are we not in an ever so much better position, with our troops under the control solely of the Australian Government, and not tied to Malaysia by treaty, so that they may be directed as circumstances develop?

Senator McKENNA:

– I would agree with that proposition - to have them directed entirely by the Australian Parliament and the Australian Government. I would very much prefer our having some clear understanding. I remind the honorable senator of the financial involvement, for a start, of our becoming, shall I say, the lessees of Singapore. It would be a very heavy financial commitment. Secondly, there arises the question as to what use we would want to make of the base and how we would be regarded in Asia if we were the direct occupants. I am merely pointing out that there are real difficulties and many factors to be considered. It would be far better if we were to enter directly into an understanding with Singapore in regard tn Australia’s rights and use of the base. I would subscribe entirely to that suggestion.

Senator Gair expressed the view that Australia should begin to develop her own nuclear deterrent, sufficient in strength to inhibit any attacks upon any part of this country. In his tenth point, he advocated support for the United Nations in its work for peace and support for world disarmament, conventional and nuclear. The two things rather seem to me to run counter to each other. Certainly the proposal to establish nuclear power and to develop our own nuclear deterrent is completely opposed to the view that was expressed recently by all the Commonwealth Prime Ministers in London, is clearly opposed to the des’res that have been expressed by U Thant, and is emphatically opposed to the view expressed by the British Government.

The United States wants no proliferation of nuclear power and neither does Great Britain. I think it is safe to say that the Soviet Union also stands firm against a proliferation of nuclear power. What is the inevitable end of our being the first, in this area to arm ourselves with a nuclear deterrent? Our neighbours will not accept the view that it is purely defensive. They will recognise its offensive capabilities as well and will fear them. They will provide against them with a deterrent of a like kind. Then, how much better off would we be?

Senator Gair:

– They have done so already. Red China and Indonesia are equipped with nuclear weapons.

Senator McKENNA:

– Red China has nuclear power, but has it atomic weapons and machinery capable of delivering them? I do not understand that to be the position, nor do I understand the position to be that Indonesia is yet armed with nuclear weapons.

Senator Wright:

– I have read that some authorities say that China will have such capability within five years.

Senator McKENNA:

– Should not that induce this country to press more than ever for China to be brought into the United Nations and to the disarmament conference table, and for a halt to be called to the development of nuclear power before it is too late? It is unquestionable that the more people who get nuclear power the more acute becomes the danger to the world. I certainly do not subscribe to the viewpoint expressed by Senator Gair on behalf of his party that we should begin to develop our own nuclear power.

I have taken much longer than I thought I would take. I thought that I was going to be brief, but Senator Wright egged me along with sundry promptings from time to time.

Senator Wright:

– Thursday afternoon becomes very sleepy unless we egg each other along.

Senator McKENNA:

– I sympathise entirely with the honorable senator. 1 joined with him in the discussion with a good deal of pleasure. He led me at least to develop my theme a little more fully than I would have done otherwise. I felt that I should stand up and personally declare the attitude of our party to the proposal by the Australian Democratic Labour Party and indicate that, for the reasons I have given, along with others, it is not acceptable to the Opposition.

Senator PROWSE (Western Australia) (3.48]. - It has fallen to my lot in the ebb and flow of this Budget debate to follow both the Leader of the Government in the Senate (Senator Paltridge) and the Leader of the Opposition (Senator McKenna). The Senate will pardon me if my effort is somewhat of an anti-climax. I would like first to comment on the fact that we have in this debate heard for the first time a number of new senators making their maiden and not-so-maiden speeches. I read with interest something that Senator Keeffe said regarding the state of nervousness that he had developed. I can assure him that my maiden effort is not so far behind me that I have lost my appreciation of the nervousness that can bedevil a maiden speaker.

I propose to take a clue from Senator Keeffe’s speech. He quoted a statement to the effect that the field of politics is a pandemonium in which lost souls do their best to increase each - other’s torments. He threatened to torment the souls of his political opponents. He went on to say that he would do this while he is in Opposition, and he hoped that in the foreseeable future he would be doing it as a member of a Labour Government. I suggest to him that if tormenting the souls of his political opponents is his aim, he can do so better in opposition than in Government.

Senator Wright:

– There is another place where it is mere expertise to do so.

Senator PROWSE__ Yes. I take the liberty to quote another source which is somewhat different. I intend to quote from the Book of Ecclesiastes. I do not suppose many honorable senators have delved into it, but I recommend it as recreational read ing. It is quite good. I shall take the liberty of slightly misquoting it in the following way - of making many speeches there is no end; and much listening is a weariness of the flesh.

If Senator Keeffe proposes to torment our souls I have no intention whatever of adding to the weariness of the flesh of members of the Opposition or of the Government.

Senator O’Byrne:

– That would be a good note on which to end, then.

Senator PROWSE:

– Yes, it would be excellent. Unfortunately, I was rather provoked by some of the statements that were made by Senator McKenna. He devoted most of his speech to a reply to the amendment moved by Senator Gair. That amendment is in two parts. The first, relating to the need to increase our Budget for defence, apparently had the support of the Leader of the Opposition. In the blank way in which it is set out, it does not have my support. We cannot, of necessity, increase our effective defence solely by budgetary means. We can budget only for something which we can service by human and physical means. We can provide men and materiel only according to our resources of men and materiel. If we increase our Budget by any considerable amount it is an idle investment until we can, by training and by development of our physical resources, fully utilise that capital investment.

The other part of Senator McKenna’s speech was devoted to a denial that the need for defence arises from our commitments in South East Asia. He made a suggestion’ that Australia should act in this dispute merely in the role of a negotiator; that we should go in - he did not say how - and bring the warring sides together. Of course, he ignores the fact that that has been tried. I do not propose to enumerate all the occasions on which it has been tried, but I am interested in the fact that Senator McKenna failed absolutely to suggest means whereby Australia could achieve what so many others have failed to achieve. In trying to justify Labour’s attitude to this dispute - I have a feeling that he was not very happy in this exercise - he brought to his aid quotations from a speech delivered by Mr. Wilson, the Labour Party Prime Minister in Great Britain. He had to delve in that speech to find certain portions that would support his argument.

I think we all should read the whole of the speech made by the Prime Minister of Great Britain in which he supported very strongly the attitude of his Foreign Secretary, Mr. Michael Stewart, Adopting the example set by the Leader of the Opposition in this regard, I propose to read something of what Mr. Michael Stewart said when dealing with the action of North Vietnam against South Vietnam. He stated -

There was no need for this. It was a deliberate decision by the Communist North to make an attack on its neighbour, and it cannot bc said - it cannot be said - that this could be excused by blaming it on a United States presence in the South. When this attack began there were only 700 American troops and civilian advisers in the South. It was not, then, the case that that justification, such as it might have been, could have been pleaded. As the Communist attack increased, naturally the help given by the United States to South Vietnam grew, but we should notice that it was not until 1954- -five years after the attack started - that United States forces struck at the territory of North Vietnam. And even that they did not do until there had been an unprovoked attack on United States warships in international waters, the Gulf of Tonkin. It is as well to remember this sequence of events: five years during which North Vietnam was lending its support to the warfare in the South and before its own territory was struck at. If there are to be any accusations of recklessness, of conduct which might lead to escalation, it is more against the North, against North Vietnam, that that finger must bc pointed.

Following that speech, which was given at a university ‘ teach-in ‘ at Oxford, the British Prime Minister had this to say -

I do not intend to take up the time of the House with a long account of the development and history of the present situation in Vietnam from the 1934 Geneva Agreement onwards. The House will recall that in our last Foreign Affairs debate my right honorable friend, the Foreign Secretary, dealt with the whole 10 or t i years, and in his admirable Oxford speech which has been widely and rightly praised, he dealt with the history of this question with the utmost clarity. He explained, as I tried to do in that same debate last April and many times subsequently, why we have supported the actions of the United States in Vietnam. 1 repeat that this is a statement by the British Labour Prime Minister. He went on -

The American position, which we support, is this - that when conditions have been created in which the people of South Vietnam can determine their own future free from external interference, the United States will be ready and eager to withdraw her forces from South Vietnam. This is what they have said and we support them. This is right, bin it can only be as a result of a conference. We support that too. A unilateral withdrawal of the United States would have incalculable results, first in Vietnam. It would have incalculable results too over a much wider area than Vietnam not least because it might carry with it the danger that friend and potential foe throughout the world would begin to wonder whether the United States might be .induced also to abandon other allies when the going got rough.

We should ponder deep and long on what the British Labour Prime Minister said. If we abandoned our allies in the field could we expect that we would not be abandoned when the going got rough? We have had presented to us the possibility of Australia standing on her own, of Australia defending her shores with all the might of her 11 million people. Against whom? Against what? In its approach to this aspect, the Opposition is completely naive. I had no intention of taking up this line but I was led to do so by the remarks of the Leader nf the Opposition a short while ago.

Senator Cavanagh:

– I suggest the honorable senator gets on to a subject about which he may know something.

Senator PROWSE:

– I do not know many things but I am deeply confident that the leader of the Labour Party in Great Britain is a man who understands the responsibilities of his position in this world. I sincerely hope that if the Labour Party in Australia ever has to accept a similar position of responsibility it will act upon the same lines as those that the British Prime Minister is following today.

I pass now to other aspects of the Budget. I was interested in Senator Kennelly’s speech, but apparently he completely misunderstood certain features of the increased tax burden proposed in the Budget and how it will bear upon the Australian people. I believe that in the main the burden has been apportioned having regard to the ability of the people to bear it. T do not think anyone will deny that there is a necessity in the world today to accept increased burdens. I have some reservations when I say that the Budget spreads the burden equally. 1 have some sympathy with the point of view that certain sections have been asked to bear perhaps more of the burden than they should bc asked to bear, but it would be very difficult indeed to present a perfect Budget for the consideration of the Australian people, having regard to the wide field and the large sums of money covered by the Budget we are now discussing.

Senator Kennelly and others have overdrawn the agony of those who will suffer by reason of the increased tax burden. The honorable senator cited certain figures relating to two people, one paying tax of £400 and the other paying tax of £4,000. I presume he meant a person receiving an income of £400 and a person receiving an income of £4,000. If what he said is what he meant, there is just no sense in it. If a man is paying tax on £400 he will pay 8s. Hd. more under the new scale, not £10 more as the honorable senator claimed. If a man is paying tax on £4,000, he will pay £29 18s. 3d. more under the new scale, not £100 more as the honorable senator claimed. It is apparent that Senator Kennelly does not understand the application of the increase in tax of 21 per cent.

There is another alternative. If we accept that Senator Kennelly referred to a man paying £400 tax and another man paying £4,000 tax, the increased tax would be £10 and £100 respectively but the incomes on which those amounts of tax would be levied would be £2,068 and £8,978 respectively. So he is wrong either way.

I was very interested in Senator Kennelly’s so-called average motorist who travels from 500 to 750 miles per week. It would be more charitable perhaps for me to say that the honorable senator meant per month because, on the basis of 500 or 750 miles per week, the average motorist would travel 26,000 miles or 39,000 miles per year respectively. I do a lot of driving and I cover approximately 20,000 miles per year. To estimate the effect of the imposition of the extra 3d. a gallon on petrol, let us apply it to the person travelling 500 miles a week in a car which averages 26 miles to the gallon. According to my calculations that person would face an extra cost of £12 10s. a year and not £2 10s. as Senator Kennelly said. I suspect that. Senator Kennelly took his figure from another source with some embellishment. - However, having been critical of the submission in regard to the effect of the Budget, I come to the point where I state that I have’ some ‘ reservations about the Budget also. I have reservations in regard to the effect of the fax rate -upon the married man 6iv the basic wage. It is not the increased percentage- that is the worry here. The difficulty seems to arise from the fact that the taxation scales have not been recast since 1954. Because of the escalation of living costs and the increase in the basic wage, the basic wage earner has moved up into a taxation bracket that causes him to pay a much higher percentage of tax in relation to his wage than previously. I did some calculations on this matter. I am not going to guarantee my mathematics but the figures I arrived at show that his tax was near enouth to 4 per cent, of the basic wage in 1954 and is somewhat over 6 per cent, of the basic wage under the present proposal. This is not because of the increased rate but because we have not adjusted our taxation scale between 1954 and the present time. I am prepared to admit that this leads to an unfair taxation levy particularly on the married man on the basic wage. -

Senator Tangney:

– The honorable senator must be right because I arrived, at those figures, too.

Senator Cavanagh:

– The honorable senator is getting better now.

Senator PROWSE:

– Well, we are agreed that that is right.

Senator Toohey:

– The honorable senator does better on his own figures than he does on Senator Kennelly’s figures.

Senator PROWSE:

– I am pleased I am doing all right on one point anyway.

The chart which 1 have shows that under the present taxation proposals, the married man on £16 a week will be paying £1 0s. 3d. of his wage in taxation. I do not think any honorable senator on either side of the chamber will agree that it is reasonable to expect a married man on £16 a week to pay £1 0s. 3d. a week in taxation. I would urge the Government, before the taxation scale for 1966-67 is produced, to revise the incidence of taxation in relation to the basic wage and all that this means. Increases in child endowment would cost very much more than this proposal would. I did some rough figuring and I calculated that the actual cost of wiping out any taxation paid by the basic wage earner with a wife and family - I am not concerned with those without dependants - would not be very much. The incidence of taxation on the basic wage earner with a family is too high and, as I say, it would not cost a great deal to wipe it out altogether. This taxation could be spread over the rest of the taxation range very easily and nobody would notice the difference. I think it could be fairly and evenly spread above the level of the basic wage.

I am concerned, too, regarding some points the Opposition has made relating to arbitration. I am amazed at the insistence of the Labour movement on the preservation of the scale of margins. The result is that in order to help the fellow on the lowest wage, the whole wage structure has to be shifted up to astronomical figures. We need to have a look at our margins position so that we can lift the man on the lower range without pushing up the whole range of wages and so affect the cost structure and take away from the fellow on the bottom the benefit he has received.

Senator Cavanagh:

– Does the basic wage not do that?

Senator PROWSE:

– I think it is the selfishness of those on the higher margins who are not prepared to have their margins shaded in the interests of the people on the basic wage that causes the increased costs that inevitably hit the fellow on the bottom of the wage structure and the family man. I consider that the Labour Party and the trade unions need to have a closer look at their insistence on the preservation of existing margins.

I have further reservations regarding the increased taxation on motor fuels. Two years ago the Government set about to help the economy, particularly exporting industries that were located in the hinterland of this country, by lifting the burden of fuel CoStS from those industries and also by lifting the burden of living costs from the people who live in the outback. This objective has not yet been achieved although the necessary legislation has been passed. It is not yet effective. Before it is effective, the situation has arisen where virtually all of that benefit will be taken away from those people except in the very extreme limits of that concession. It was estimated that this scheme to help the outback would cost - I speak from memory - £4,200,000. The increased cost of the new excise charges on fuels is estimated to be £25 million in the ensuing 12 months. Of course a great deal of this taxation can be borne. Much taxation on motor cars, and fuel- used for pleasure, can be borne. The Minister for Customs and Excise (Senator Anderson), quoted the great increase in the numbers of private motorists. I would have gone along with the idea as far as petrol is concerned, but I have grave doubts about the wisdom of increasing excise tax on diesel fuel because this increase will hit industry, raise costs, and increase the burden on our export industries at a time when the Budget points out that all primary producing countries are facing an increased disadvantage in terms of trade. As T have said, we cannot get a perfect Budget, so my sympathies are with the Treasurer (Mr. Harold Holt) and other members of the Government in their efforts to produce a Budget that meets all objections. I do not think that would ever be possible, but I believe we should all express our opinions on what is being done. I feel that the Government is doing a good job in maintaining the policy it set out to maintain; that is, to produce a state of affairs such that Australia can progress in the face of changing conditions.

I want now to turn to a subject to which the Deputy President referred- drought. He suggested that Country Party Senators should come here with stock whips and lay them about the Government. I do not propose to come here with a stock whip, but I think we should all give serious consideration to the question of drought and what it means to the Australian economy. There is a war for survival in the greater part of the continent. I suppose that, from the beginning of time, Australians have concerned themselves with the war against drought. The Aborigines had to adapt their way of life to the fact that this is a droughty country. They evolved a technique that the kangaroos had evolved, in that they followed the thunder storms and rains. Where there was grass, the kangaroos went; and where they went, the Aborigines went. This may give some clue to the policies we may have to use in adapting our agricultural and, particularly, our pastoral policies to meet conditions of drought in this country. I repeat that this is a war against drought. It may be that we should fight it as a guerrilla war, advancing where we can and making sure that, when we retreat, we can come back again.

One of the problems arising from the stocking of droughty country is that, in endeavouring to maintain stock numbers during a drought, we face a serious danger of erosion and the denudation of grassland. We need to adapt our policy so that we can take stock off country that is subject to drought and bring them back in times when grazing is available there. The Commonwealth’s policy of improving roads in the outback is a material contribution to that end. We must increase our means of communication throughout the drought-liable areas. Of course, this is only one tiny segment of the problem. Drought hits Australia in different forms in different areas. A drought in one area is quite different from a drought in another. I suppose that at no time is the whole of Australia free from drought. Members of the public are made aware of droughts only when they become of great magnitude and affect a whole State or several States. There has been a drought in Central Australia for years. There has been a drought or a semi-drought for years in the east Kimberleys, and one of the problems of the Ord River area is the danger of siltation owing to the grazing of stock in areas affected by drought.

I think the devising of means whereby we can mitigate the effects of drought is Australia’s greatest economic problem today. The short term methods give us all serious concern. They have been dealt with by the Prime Minister (Sir Robert Menzies) and the Treasurer in their statements; but we feel that those statements have not yet been translated into something such that the man faced with his stock dying and with no means of replacing them - the man who is doubtful whether he ran remain on his property - can say: “ Here is something that will give me hope “. We must devote our attention to the task of rehabilitating people and restocking the country when the drought breaks and makes it economically possible to do so. I feel that we will have wasted the lessons of this drought if we do not set in train at the highest possible level some definite organisation to evolve policies which, in future droughts - there will be droughts for as long as we occupy this country - will ensure that economic losses and human suffering are lessened. It is quite within the financial competence of the Commonwealth, through its taxation powers, to do a great deal in this regard.

I will read an extract from a letter from a well known pastoralist in Western Australia, who has spent a life time in the industry. I cannot divulge his name, because I have not his permission to do so, but he said -

For the 43 year period our average rainfall has been 8.42 inches. In 1963 we recorded our record of 1,832 points, and from 5,300 sheep we produced 240 bales of wool, 14.8 lbs. per head at our August shearing.

Then we were fortunate enough to pick good sales and my wife and I were very happy with the year’s operations, for nothing like it had ever been achieved before, and we had visions of putting a little away; for I have now reached my three score and ten, but am still happy to live here and wor)* the property with aid of a young lad.

However, a disappointment came when we received our tax assessment, for between us a total of £9,704 had to be paid to the Treasury. However, finally the provisional was reduced and we paid £7,807; and we shall now just be able to get through the year without having to borrow from our stock firm.

This is a condemnation of our attempt to deal with the problems of taxation in the outback country. Surely, if the Prime Minister says that the Commissioner of Taxation will allow a grazier to buy a reserve of oats to put by and that that expense will be deductible, it would not put the Commissioner of Taxation in any worse position if, instead of buying oats in a period of good income, the grazier put by a similar amount as a financial reserve. It is not always a good thing in a particularly good year to put by a reserve of fodder, be it oats, wheat or hay, because no one knows how long it will be before the reserve will be required. It has to be held and protected, and it inevitably deteriorates over the period. A financial reserve, on the other hand, can be used when and as it is required. But there is no incentive or encouragement for a man to put by a financial reserve of this nature because it first must incur a heavy burden of taxation. Inevitably it comes in a good year and it is taxed at a high rate. I think that we need to look at methods such as I have mentioned to encourage producers to set up a financial reserve that can be used in the future. If the economy is stabilised, if industry is stabiised and if the effects of drought are lessened, inevitably the financial result will benefit the Treasury.

I urge the Government to set up - a matter referred to by the Prime Minister - not only a body comprising members of the

Commonwealth Scientific and Industrial Research Organisation, the Bureau of Meteorology and Bureau of Agricultural. Economics, but also a body of practical men who can co-operate with the scientific and theoretical people and bring to this problem of drought alleviation and mitigation some positive results. We have been in this country long enough to have done more than we have in meeting the challenge of our droughty climate. I started out with the intention of not wearying the flesh. I think at this stage I will take the advice I gave earlier, and, to the great relief of the Opposition, I will conclude on that note.

Senator TOOHEY (South Australia) [4.27J. - I want to subscribe to the amendment which has been moved by Senator Kennelly I also want to add my note of congratulations to the newly elected senators for the excellent calibre of their maiden speeches. I propose to confine my remarks in respect of the Budget to three or four main headings. They are defence, social services, overseas investment and possibly a reference to sales tax. It is not my intention to deal with the complex field of defence as it applies to the position in South East Asia because honorable senators on both sides of the chamber have traversed that field very thoroughly. In addition, we will have an opportunity again, when the foreign affairs statement is debated in the Senate, of centring our thoughts and attention on this very complex problem.

The type of defence to which I want to refer is I consider, just as vital to external defence as it is to defence within this country. I begin by referring to the fact that last week I asked a question of the Leader of the Government in the Senate (Senator Paltridge). It was prompted by my reading an article in the Press. It appeared in several of the capital city newspapers throughout Australia. It carried a headline indicating that there was great alarm at the serious shortage of skilled workers on the Mirage project. The article went on to say that there had- been intensive recruitment, or that attempts had been made to recruit skilled labour from overseas to carry out the current aircraft production work in this country. In reply to the* question I asked the Leader of the Government inthe Senate concerning this matter. I received confirmation that there was a serious short age of skilled tradesmen in the aircraft industry in Australia, that a recruiting mission had been sent to Great Britain, and that it had not been able to secure the number of skilled tradesmen that it had hoped to secure to carry out the very important work of aircraft production in Australia.

That took my mind back to a move which was made by honorable senators on this side oi the chamber as far back as 1956 concerning this question of the provision of skilled aircraft workers in Australia. It is worth remembering that it was the subject of considerable debate in this chamber. It is worth remembering, also, that Senator McManus, on behalf of his party, registered very grave concern at the position that existed at that particular point of time. Had the warnings which Senator McManus and myself and other honorable senators conveyed to the Senate at that time, been heeded, there would have been no need for recruitment to be undertaken overseas and we would not have been in the extremely difficult position in which we find ourselves at the present time. I think that it is valid to make the point here, that a skilled aircraft worker in the field of modern defence is just as important as, if not more important than, a soldier in the front line.

I want to take the Senate’s mind bock to the proceedings which were reported in “Hansard” in 1956. I am going to quote this because I want it to be incorporated in the present report of “ Hansard “ in order that the warnings which we issued some eight or nine years ago and which fell on deaf ears on that occasion might, perhaps, meet a different reception today. In 1956 I said, amongst other things -

What is the position? Since this Government assumed office thousands of people throughout Australia who were employed in this extremely valuable industry have been scattered to the four winds.

I was referring to the aircraft industry in Australia. I continued -

As one who has had some experience in the finer work associated with aircraft production, I know that it takes years to train a man to perform work which requires such extremely fine tolerances. In many instances it is necessary to work by hand so that the parts produced satisfy the required safety specifications, which in the airforce are of a very high order. Within recent years, thousands- and that is noi an exaggeration - of highly skilled technicians who were trained over a period of years have taken up other forms of employment because this Government has ceased to do anything in this field. In the capital cities of Australia today, the only semblance of activity’ in aircraft production is almost confined to maintenance work. All the technicians who have been trained have disappeared.

At this stage an honorable senator interjected and said: “ Shame! *’. I continued -

Of course it is a shame, lt is an indictment of this Government. What will be the position in the future when another government which seeks to follow a wiser course than that which is being followed by the present Government decides that the time has arrived for Australia to’ try to become self-contained in this and similar directions. . .

I went on to stress the importance of this type of work to the defence of Australia. In addition to having the Mirage project, we find that it is proposed . to purchase a new jet trainer from Italy. The decision has been made that these Macchi trainers will be built in Australia. What I want to know, and what members of the Opposition want to know - and I think it is a very pertinent question-r- is: Where are the. skilled workers going to be found to undertake this work? In 1957 there were 1,000 skilled aircraft workers employed by Chrysler Australia Ltd. in South Australia. Twelve months later, because of the policies pursued by this Government, the figure had dropped to 200. Twelve months after that there were no aircraft workers at all in South Australia. This prompted members on this side of the chamber - I was one of them - to seek to wait on the then Minister for Supply as a deputation to ask that the annexe which was used by the Chrysler corporation in Australia in the building of aircraft be carried on.

The Minister informed the deputation that this could not be done because the Government, in accordance with its policy of rationalisation, was going to send all of the aircraft production work to one capital city, namely, Melbourne. I did not at the time accept this talk of rationalisation as sound, and I do not accept it as sound today, because all of those provisions that existed in the various capital cities, and particularly in Salisbury, South Australia, could have been utilised for the type of work “that will be necessary for the Mirage and for the Macchi, if that project comes to- fruition. I think that we should remind the Govern ment of these omissions, i warned it and Senator McManus warned it. lt was warned in another place by members of the Opposition of the inevitable result of this dispersal of skilled aircraft workers.

The difficulties that Chrysler Australia Ltd. had to contend with, even when undertaking aircraft projects for this Government, are worth remembering. I refer to the type of thinking on defence which permitted some officials of the Treasury from time to time to reduce the amount of work that this firm was undertaking, obviously in the belief that it could engage a certain number of men this month, reduce the number by 50 in the following month, and perhaps increase it by 50 a month later. That is the type of thing that was being done in South Australia before the aircraft industry was - I use the term advisedly - virtually sabotaged by this Government. It seemed to me that the Treasury had more say and less experience and knowledge in regard to the aircraft work which was being undertaken by the Government than did the Department of Supply and the company which was contracting to the Government for this work.

I predicted what would happen. I said said that we would find ourselves inevitably in the position of seeking desperately for the men who had been retrenched in 1956 and 1957. These men had been trained over a number of years to exercise skills. Those skills took them years to acquire. I gave the warning at the time, and it was echoed by others, that having received one dose of the treatment that the Government had meted out to workers in the aircraft industry, these men would not be prepared to go back to an industry that offered such uncertainty of employment, after they had undergone all the necessary training to meet the Government’s requirements in this very onerous field. I take no. pleasure in finding that I was right and I am sure that Senator McManus takes no pleasure in finding that he was right. The melancholy fact now emerges that we are short of skilled tradesmen in this country today. As our defence requirements increase and as the field of aircraft production makes more demands, we are exploring the labour markets of Europe to try to make up for the deficiencies of the past. I suggest that we will not get the number of men that we want, and this blot on the Government’s defence record should not be permitted to go unnoticed.

I remember raising this matter at the time. Honorable senators will recall that I was extremely, vocal over a long period about it. The Government seemed to take the view that it was not a very important matter and that it was more important to send whatever small amount of aircraft work was undertaken to one capital city. That is the type of rationalisation which the Government appeared to favour at that point of time and which had the effect of destroying, at least for 10 years and perhaps for longer, what I consider to be an adequate defence measure. Whether or not we will be able to find the number of men we want in the next four or five years remains seriously open to question. I hope that Government supporters who played .their part in sabotaging this industry are properly ashamed of the fact and properly apprehensive about failing to find the men that we want overseas.

Having dealt with that matter, I want to come to the question of overseas investments. I approach this matter, perhaps, from a different angle from that from which it has been dealt with up to date. It may be recalled that when Senator Paltridge was speaking on overseas investments I offered an interjection as to whether he was in favour of a royal commission to determine to what extent, if any, overseas investment was damaging the Australian economy and was placing us in bondage to other countries. He saw fit to suggest that that was an inane interjection, although at that very point he was using, as an argument to support the contention that no danger existed al present in this country, the findings of a royal commission in Canada on the very same matter. Obviously, he thought it was all right for Canada to have a royal commission and it was valid to cite some of the findings of that royal commission, but it was inane to suggest that the same sort of royal commission could be undertaken in Australia to find out whether we had arrived at a point in our economic life at which the future of the country might be threatened *>y the volume of overseas investment.

It is worth remembering that while Senator Paltridge appeared to be quits certain that there were -no problems in relation to this matter his views are not shared by some of . the leading members of his own Government. It is worth remembering also that in the “ Australian “ of Wednesday, 28th July 1965, the Leader of the Australian Country Party, Mr. McEwen, made quite clear that he and his party were concerned at the incidence of overseas investment iri Australia. I am not suggesting that we have reached a stage at which foreign investment is throttling the Australian economy or is offering any great threat to our present position, but I want to be assured that it will not. and there was nothing in the remarks of Senator Paltridge to give me that assurance. Although he was quite confident that there were no problems, his viewpoint is not shared by the Deputy Prime Minister (Mr. McEwen) and it certainly is not shared by the Prime Minister (Sir Robert Menzies). I propose to quote passages from correspondence between the President of the the United States of America and the Prime Minister, dated 12th and 24th March 1965, which indicates some very big doubt in the mind of the Prime Minister as to whether we have reached or could reach a situation in which overseas investment could pose some problems for this country. The Prime Minister wrote -

This is not to say that we would oppose the issue by United States investors of some equity capital in their subsidiaries here to finance new investment in this country. Indeed, it would accord with an attitude wc have frequently expressed. We have made it clear on many occasions In the past that we think it desirable for overseas investors to take in Australian investors as partners in businesses established in Australia. On the other hand, however, . . .

This is the important thing, which indicates the doubt of the Prime Minister - . . we would be troubled and embarrassed if United States investors were to begin repatriating capital, substantially increasing the proportion of profits remitted, or adding largely to their fixed interest borrowings or any other form of capital raising in Australia which gave Australian investors no equity share in the businesses in question. Developments such as these could very well force upon us the need to reconsider the policies we have hitherto followed in these areas. This we should regard as regrettable in the extreme, especially if it resulted in a conflict of policies, with subsequent confusion in, and disruption of, established and greatly valued financial and commercial relationships between our two countries.

Although the Prime Minister’s letter deals with matters other than overseas investment in Australia I submit it is fair to draw the conclusion that on that matter the Prime Minister has reservations. Those reservations are not shared by Senator Paltridge. They are shared, perhaps to a greater degree, by the Deputy Prime Minister and Leader of the Country Party, Mr. McEwen. 1 do not believe that we should argue across the Senate chamber the pros and cons of overseas investment. I think Senator Wright interjected when Senator McKenna was speaking: “Wait for the Vernon report “. This will give us some indication of the position. I share Senator McKenna’s fears that we will wait a long time for that report, but i’n the meantime I make what I think is a fair suggestion; that is, we could remove for all time the vast difference of opinion in respect of overseas investment that has grown in this Parliament if regular reports were given to Parliament by people competent to do so. It is because insufficient details relating to overseas investment are given to the Parliament that we find ourselves so much at odds and so much hostility is generated in respect of this very interesting and vexing quetion. I do not think any honorable senator would cavil at a suggestion that this Parliament, which is the paramount authority in Australia, should be given more information on overseas investment. Perhaps we would secure a greater appreciation of the position. Our fears might be allayed or we might discover that they are well founded.

Senator Wright:

– This is the first time that the Budget papers have included a separate paper on this subject.

Senator TOOHEY:

– That is so, and I think it is a step in the right direction. That is a valid interjection by Senator Wright, but I still feel that the Government has not gone far enough and has not covered the point 1 am making. Perhaps another paper will be presented in 12 months’ time, but in the meantime this disputation on overseas investment will continue. I. make what I believe to be a valid suggestion that every three months a report on overseas investment should be made to the Parliament. Surely there is no need for. us to be placed in the same position as Canada and other countries which did not properly examine the factors associated with overseas capital until it became a real problem and perhaps an economic difficulty. What is wrong with our finding out these things? We would be better engaged in debating- overseas investment on a report made to us every, three months than we are in debating some of the things that come before , us now. It is a matter which has a great bearing on the future of Australia. I hope that honorable senators will recognise that there is some merit in the proposition I have put forward.

Senator Wright:

– What does the honorable senator think would be the effect on inflow of capital to expose it to a threemonthly political running commentary?

Senator TOOHEY:

– What is wrong with that? 1 do not think it would damage the. inflow of capital. Perhaps there is not enough appreciation by honorable senators on both sides of the chamber of the effects of foreign investment in Australia. General Motors-Holden’s Pty. Ltd. has been used as a horrible example of overseas investment 1 do not subscribe to the viewpoint that that company is the classic example of foreign investment which creates problems or acts against the economic interests of the country. In considering General Motors-Holden’s Pty. Ltd. we should remember that that company was started by the Americans as a small company and was developed in Australia. When considering the money it takes out of Australia we should also consider what it leaves in. I disagree with the suggestion of Senator Wright that a threemonthly debate on overseas investment would inhibit the inflow of capital. If we applied our minds to the matter as we ought to apply them, and protected the economic interests of this country, we would find that such discussions would not have any effect on the inflow of capital, provided that we examined the problem in the right way.

I turn now to social services. I commend the Government for removing some of the anomalies that have existed for many years in this most important field. In particular I commend the Government for its decision to bring all pensioners within the ambit of medical entitlements. All honorable senators will remember that in almost every Budget discussion for the last eight or nine years I have spoken on this subject. I am greatly pleased with the action the Government has taken. Although I commend the Government for that action and for other measures included in the Budget 1 think that the removal of some anomalies in the field of social services has served to highlight those that remain.

An anomaly to which I wish to refer particularly relates to the allowance paid to wives of pensioners. In his Budget Speech the Treasurer (Mr. Harold Holt) said -

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.

That is a step in the right direction, but the biggest anomaly in this respect has been left untouched. I refer to the position of the wife of a pensioner who is not incapacitated, who is herself in her fifties and cannot be regarded as employable. I would be interested to know what would be the cost to the Government if wives in that position were granted payment of the wife’s allowance. The step taken by the Government highlights the position of a wife in her fifties whose husband qualifies for the pension, but who does not qualify for the wife’s allowance. I hope that the Government will consider rectifying this very serious anomaly.

I agree that the Government should have given consideration to the position of single pensioners. Their position is not as good as it could be. I think everybody would agree with me. However, there has been some alleviation. I hope that in successive Budgets the upward trend in social services will continue.

Quite a number of honorable senators on both sides of the chamber may share my disappointment that age pensions have not been increased. However much we may be pro-Government or anti-Government, it is idle for us to say that there has not been a sharp increase in the cost of living since the last pension increase was granted. An increase that met only the increased cost of living would have been justified. Let us hope that this anomaly will be rectified before very long.

I could touch upon quite a number of anomalies in the pension field. One that stands out more than any other, particularly in view of the fact that some improvement have been effected in social services, is the permissible income of the pensioner I cannot recall the last time when attention was given to this matter. The permissible income has remained at the same figure for at least 10 years. If I remember correctly, it is £7 for a married pensioner couple and £3 10s. for a single pensioner, subject to a means test. It is almost incredible that some consideration has not been given to removing this anomaly. Particularly does it penalise the superannuated pensioner. Of course, he contributed for his units of superannuation over the years, but the value of money has deteriorated and he receives only the amount for which he qualifies. If it happens to be more than £7 then his pension is affected. I repeat that it is high time that rectification of this very serious anomaly was considered. We know that there are pensioner organisations that do the best they can for the people whom they represent. I have before me a letter than I received from an old man 95 years of age. He said -

I notice that the housewives are appealing- to the Government for the abolition of the means test for all women over 65. May I suggest the same apply to all men 95 and over?

That is not an unfair proposition. When this gentleman wrote to me I said that I would raise if during the Budget debate. At least I have discharged my obligation in that respect. This gentleman writes a very good letter for a. person 95 years of age.

Senator Ormonde:

– That is one vote that you have.

Senator TOOHEY:

– Yes, I should think so.

Senator Scott:

– It is the only one.

Senator TOOHEY:

– I cannot agree with that statement. We of the Labour Party in South Australia can say that we get an extremely good vote. I am sure than even Senator Scott will agree that that is so. The people were good enough to elect three of us’ on the last occasion. Let us hope that they continue to do so. .

Finally, I want to refer to the sales tax. It is a’ matter for regret that consideration has not been given to removing some of the rather laughable anomalies in this field. I have here a letter that I received from the Housewives Association, -Victorian Division. which I am sure the Senate will not mind my reading. It states -

In this jet-propelled year of 1965, it seems obvious that the time has come for our lawmakers to wrench their minds out of the nineteenth century and bring their thinking up to date on one important aspect of taxation policy. We refer to the unrealistic 25 per cent, sales tax on cosmetics and other essential toilet articles, which include babies’ toilet requisites and men’s shaving gear.

Those who make our laws, it seems, consider these items to bc luxuries, and tax them as such. What method did they use in sorting out the toilet necessities from the “ luxuries “ for tax purposes? Wc can almost believe that they shut their eyes and used a pin. How else is it possible to explain a situation in which we can powder our dog with a tax-free canine dusting powder, but when wc powder our babies or our nose, we arc indulging in a 25 per cent, taxable luxury?

In this day and age, to consider cosmetics as luxury items is to shut one’s mind to the society in which we live. Our society puts high premium on ti good appearance. Magazines, newspapers and television ure continually telling us, in their editorial features, how important it is for us to luke advantage of the grooming products available and how we owe it to ourselves and our families (even employers) to be more attractive wives, mothers and workers.

Society demands that women make the best of themselves and so does feminine self-respect, and it lias long been accepted that cosmetics are an indispensable part of their life.

Wc put it to you that a more enlightened attitude by the Government to this matter would meet with the whole hearted approval of all women including the many thousands of women represented by this Organisation. 1 raise this matter because I believe it should be kept alive. There are still very many unnecessary and vexing anomalies in the sales tax provisions. I did not want to let the Budget debate pass without making reference to some of them. The one to which I have referred is one of the most pressing. The logic of the Housewives’ Association cannot be brushed aside.

I should like to have referred to quite a number of other matters. I understand that there are still many honorable senators who want to speak on the Budget. So I shall not deal with all those matters. I hope to have an opportunity during the debate on the Estimates to touch upon some that I have not dealt with this afternoon. Before I conclude, I want to impress upon the Government the need for some immediate steps to be taken to revive the Australian aircraft industry* I strongly suggest that the Government should forget about this nonsense of rationalisation and putting all its eggs in one basket in Victoria. I do not say that out of any sense of hostility towards Victoria. Wherever the Government can find skilled men and machinery in the capital cities it ought to bend its energies towards the expansion of the aircraft industry. I have said before, and I repeat, that the development of the aircraft industry is as important to the defence of this country as the use of front line troops.

Senator SIM:
Western Australia

– Previous speakers on this side of the chamber have referred to the generous approval wilh which the Budget has been received by most sections of the community. Not for many years past has a Budget been received with approval. Usually Budgets are received with rather grave disapproval The available evidence suggests overwhelmingly that the responsible elements in the community - the great majority of the people - support this Budget and that the increases in taxation, to the extent that taxation meas’ures are ever accepted willingly, are being so accepted. Australians realise that we are passing through perilous times and they are prepared, as always, to meet their obligations. This is an Australian characteristic. It is one that we all should understand. I am sure we all do.

I realise that it is the duty of the Opposition to criticise, but I sometimes think that in these matters members of the Opposition are inclined to appeal to baser instincts, if I may use that term. Indeed, the charges that have been made by Mr. Calwell, the Leader of the Opposition in another place, arc so extravagant as to border on irresponsibility. The use of such terms as dishonest, unjust and, to mention a term that was used here or in another place, hypocritical in referring to the Budget is not worthy of comment. The statement that the Budget is the harshest since 1956 is patently absurd. At no stage did Mr. Calwell produce evidence to support that statement.

I suggest that the tax increases are mild. For proof of this I refer to a statement made by Senator Cant with which I think we all agree. He said -

I was rather surprised that this, year’s Budget did not contain very much harder provisions because we are facing very difficult times. I am aware that politics arc played in these matters and that the Treasurer, in bringing down a fairly easy Budget this year, will have to introduce a fairly stiff Budget next year . . .

That is a prediction, of course. It may or may not be borne out. I think it is true to say that Senator Cant does not agree that this is the harshest Budget since 1956. Indeed, with the exception of the 2± per cent, increase in income tax - and Senator Paltridge gave details earlier today of what this increase means - the increases are concerned mainly with non-essential items. I stress the words “ non-essential “. Many of us like cigarettes and liquor, but they are not essential. We should keep the taxation increases in proper perspective. The increased duty on beer amounts to approximately Id. for a 10-oz. glass and on spirits to slightly more than Hd. a nip. I do not think that those increases could be considered harsh. The fact is, I believe, that the increased duty on tobacco is far lower than the increase imposed some months ago by the United Kingdom Government. If we are accused of showing a disregard for the welfare of the workers, then I submit that the United Kingdom Government also can be accused of doing so. But I do not believe that either the Australian Government or the United Kingdom Government can rightly be so accused.

The action of some sections of the liquor trade in increasing prices substantially above the increases imposed in the Budget, particularly while old stocks were being held, should be very roundly and soundly condemned. To add to the increases provided for in the Budget is completely dishonest. I agree with the Opposition that we should al! condemn that action. Of course, increases in fuel prices are always unwelcome. They have the effect of adding to costs The primary industries are always unfairly placed in relation to rises in the cost structure. Legislation to ensure that country residents do not pay more than 4d. a gallon above city prices for petrol will help to overcome this effect. In some States there has been a rise in freight rates which will offset this advantage to a very great extent. I do not criticise the State Governments for doing this, but I think it is regrettable.

Senator Paltridge dealt at some length this afternoon with this matter, and I am reminded that petrol in Australia is among the cheapest in the world. Senator Paltridge gave the equivalent duties on petrol in some other countries I shall refer merely to one such country. In the United Kingdom the duty is 48.75d. per gallon, whereas in Australia it is 14.76d. That is a very big difference. I have referred to the main items which are the subject of tax increases. How those increases could be regarded as harsh or dishonest is completely beyond my comprehension.

I wish to make only one further reference to the amendment moved by the Opposition. It is in reference to overseas investment, a subject with which Senator Toohey dealt at some length, as did Senator Paltridge. I do not support criticism of continued overseas investment in Australia. In my view it is very often, though not always, ill conceived. Without it our development would not have advanced as it has. I do not think there is any dispute on either side of the chamber on that point. I have particularly in mind at the moment investment leading to the development of the great iron ore and mineral deposits in Western Australia. Here we see investment of well over £200 million. Investment finance of this magnitude is simply not available in Australia. Without it, the great deposits would remain untapped, as they did for centuries. This investment has involved, without costing the Australian taxpayer a single penny, the construction of new towns and harbours. I believe that three new ports are to be constructed. In addition, standard gauge railways will be built and industries established. This represents a great example of decentralisation. Eventually, our export income will be increased by a minimum of £70 million a year, while the indirect effects on the Australian economy will be substantial.

I do not deny that there may well be some undesirable features of overseas investment and 1 agree that they should be watched, but the general advantages which our development derives from such investment are so great as to make those undesirable features pale into insignificance. To dwell, as some people do, on a few undesirable features in an endeavour to gain a narrow political advantage is to view the whole question completely out of perspective.

Senator Dittmer:

– The Deputy Prime Minister was a little concerned, was he not?

Senator SIM:

– I am expressing my own views. The Opposition dismisses the defence implications of the Budget by saying that whatever this Budget might be it is not by any stretch of the imagination a defence Budget. I do not recall the Treasurer (Mr. Harold Holt) ever referring to it as a defence Budget. In fact, the Treasurer stated in his Budget speech, in dealing with some of the points that had been considered -

To these must be added the increased emphasis now given to national security by a much enlarged defence programme.

Later he said -

Defence is not the . largest item in the Budget. Payments to or for the States and social service expenditure exceed it considerably and this reflects the increasingly strong call on us for community facilities and services. But defence does this year show the largest increase. 1 suggest that the term “ defence Budget “ has been conjured up by Mr. Calwell to fit in with his own arguments.

The final judgment on the success or otherwise of the Budget must depend on whether it achieves the broad aims of our economic policy. The Treasurer outlined those aims as follows -

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.

That is the broad economic policy of the Government. The plain fact is that despite cries of woe by the Opposition and even predictions of disaster following the introduction of successive Budgets, Australia has continued to go forward with unparalleled development, giving us overfull employment and high standards of living. No one denies that there are problems, some even of a serious nature, but these are inevitable in any economy and more so in an economy such as ours which is so reliant on the political and economic stability of nations overseas.

One fact stands out and provides proof of our development and of our overall strong economic position. It is that, from normal growth, increased receipts this year will amount to £225 million. Although this is somewhat lower than the increase in the year before, when one considers factors such as drought and lower overseas prices, which are outside the control of the Government, as well as the other factors mentioned by the Trea surer, this is a most satisfactory figure. I suggest that this Will again confound that prophet of gloom and predictor of disaster, Mr. Calwell, whose hopes in this respect were never realised. The expressed confidence of the Treasurer and the Government in the future is far more in line with the thinking of the Australian people than is that of the Opposition.

Having made these general observations I turn now to discuss one aspect which, although not mentioned in the Budget speech, has a large bearing on our future growth. I refer to rural finance. This subject has long been a matter of much thought by myself and the Federal Rural Committee of the Liberal Party. Indeed, the minutes of the meetings of the Committee in the early 1950’s reveal that plans were being formulated for a special financial institution to provide both medium and long term finance for rural development.

My friend Senator Cotton was in the forefront of these moves, which eventually led to the establishment of the Commonwealth Development Bank, the appointment of the trading banks as agents of the Development Bank and the establishment of the term lending. fund. The trading banks owe their existence in part or in the main to policies initiated by the rural committees of my Party I do not deny that others may have had similar ideas, and I pay tribute to them, but I merely place on record the part that my own Party has played in these important developments.

The establishment of these institutions showed a recognition for the first time of the fact that modern farm development required a different type of finance from that traditionally provided by the overdraft system of lending which had always been the policy of the trading banks. This, of course, also applied to certain types of development in secondary industry. In a sense, these developments have revolutionised rural development. I cannot forget to mention that scientific research has played a major part in this revolution, and I raise the query whether financial institutions in general have kept their thinking up to date and in line with scientific developments. I may have time to make one or two short comments on this, but I say now that in my experience they have not.

I now turn to examine whether there is in fact an actual - I stress the word “ actual “ - shortage of finance available to the rural sector. We have all read, and many of us, including myself, have supported, resolutions requesting more finance for rural industries. I must admit that few of these resolutions have had even the saving grace of being helpful. They are seldom backed by evidence and, frankly, I fail to see how a government can act on them. So I ask the question: Is there a shortage of finance, in the broad sense, for the rural sector?”

Figures are available to indicate - I stress the word “ indicate “ - that this is not so. I have some official figures which I shall cite relating to overdraft advances by the trading banks. In July 1961 advances to the rural sector totalled £225.3 million but the overdraft limits available were £278.5 million, which meant there was an unutilised borrowing capacity of £43.2 million. In January 1963 advances amounted to £231.6 million, overdraft limits available were £303.8 million and unutilised borrowing capacity was £72.2 million. In January 1965 advances were £229.7 million, overdraft limits available were £319.5 million and unutilised borrowing capacity was £89.8 million. In July 1964 unutilised borrowing capacity was £97.9 million. These figures indicate that a fairly high unutilised borrowing capacity was available to rural industries at those periods. It is not clear, of course, on what terms this money is borrowed. Under Reserve Bank policy the trading banks are expected to lend upon favorable terms. I point out that term lending amounts aTe not included in those figures, which show a relatively high . level of unutilised borrowing capacity.

Further figures are available - again official figures - which tend to suggest that the rural sector either repays its overdrafts or cancels overdraft availability at a reasonably steady rate. I shall mention only, two sets of figures. In July 1962 the previous limit . on overdrafts was £284.7 million. Advances during that period amounted to £47.5 million, so- there was an expected limit of £332.2 million. However, the actual limit was only £299.8 million, which means there was a level of writing off or repayment of £32.4 million. The figures show a fairly steady trend. In January 1965 the previous limit was £313.5 million. Advances during that period amounted to £46.8 million, so there was an expected limit of £360.3 million. However, the actual limit was only £319.5 million, which means there was a level of writing off or repayment of £40.8 million. It is to be noted that these figures do not include advances made by the New South Wales Rural Bank or the Western Australia Rural and Industrial Bank, both of which provide relatively large amounts of rural finance.

These figures suggest that much of the borrowing from this source is required for short term needs only. As well as this source, we have the term lending fund of the trading banks. In announcing the establishment of this fund, Mr. Holt, on 12th April 1962, said -

As to the scope of terra lending, it is envisaged that loans will not be made for consumption expenditure, but for capital expenditure, for production expenditure, broadly defined, in the rural and secondary industries for the financing of exports … As examples of typical purposes of term loans, I may .say that, in rural industry, it is contemplated that loans will be made for the purchase of land, for development, for heavy equipment, for building and fencing, for land clearing, pasture development and herd development … As a general rule loans will be for not less than three years and the range will be from three to eight years or possibly a little longer.

Until January 1965 loans from this fund to the rural sector amounted to £39.6 million and loans outstanding at this date were £26.7 million. An examination of the annual rate and the amounts outstanding leads one to the conclusion that there is a time lag. between arranging credit and actually using the funds. This, I think, is a normal procedure. If a farmer borrows £5,000 he does not take it all in the first year. He takes portions of it as he requires them. Alternatively, loans are being made for periods of less than three years.

The third source of finance is the Commonwealth Development Bank, which provides funds in two ways; first, by making advances for developmental projects, and secondly, by financing the purchase of equipment on hire purchase terms. The charter of the Development Bank is a sound one. It is, of course, subject to different interpretations by different people. I suppose human frailty plays a part in the interpretation one’ places upon it.

Since the inception of the bank in 1960 it has advanced a total of £42.1 million to the rural sector. This includes £6.8 million taken over from what was known as the Mortgage Bank. A study of the advances year by year indicates either a time lag in taking up the loans or quick repayment. An analysis of the loans granted since its inception shows that loans approved in the rural sector average less than £5,500 each. In the hire purchase field £18.3 million was provided in 1963-64, and outstanding balances were £22.9 million. It is stated by the bank that it believes that 77 per cent, of those loans originated outside the metropolitan area.

Still another source of finance are the pastoral companies. As at March 1965, advances totalling £130 million had been made. We now sec that at June 1964, Australian primary producers had outstanding advances of £399 million, excluding those from the Rural Bank of New South Wales and the Rural Industries Bank of Western Australia. In addition, on the face of it, they had further access to £97.9 million of approved overdraft loans. There was also a considerable amount of private mortgage capital and capital from insurance companies in use in the rural sector.

In 1963-64, the realised income of the Australian rural sector was £707 million, and the total borrowings represented over 50 per cent, of earnings. On the other hand, in June 1964, the rural sector had bank deposits with the major trading bank of £407.5. million. These figures would indicate that the overall supply of money to the rural sector is considerable. However it is apparent to many of us in close touch with the farming community that there is strong evidence to suggest that there are insufficient funds available for vital development work. One cannot help but reach the conclusion that to some extent, at least, perhaps even to a major extent, credit resources are being misused. This is a complex problem, admittedly, and one that is easily oversimplified. Finance is required for many reasons, each requiring a different approach.

The Development Bank and the Term Lending Fund represent a new concept. 1 am attempting no more in this speech than to analyse the position, but I wish to make one or two additional points. I have a strong suspicion that development finance is lent on terms assessed as being based on the shortest time a loan can be repaid instead of what period of repayment will enable the best economic use to be made of the loans. 1 believe that a deferment period - that is, a period before commitments have to be met - should be a normal procedure. I recognise and acknowledge that these things have been done. The Development Bank and the Term Lending Fund of the Trading Banks have been providing a deferment period of up to two years and, in some cases, up to five years. I suspect that this is not done as often as it should be done. This deferment period should be based on the principle that it is bad policy to expect repayments before income is being earned from development money expended. I believe this is one of the problems that the rural industry faces. I do not think there is a proper appreciation of the time required before money spent on development starts to earn income.

I also suggest that the financial institutions in their lending policies, should take greater note of development based on the vast amount of scientific knowledge available. Too much money is being advanced for purposes that, are not providing the most efficient returns. I cite as an example, if I may be a little parochial, my own district, or the district of Senator Prowse which is nearby, where it has been proved beyond doubt that, with better utilisation of pastures, the stock-carrying capacity could be doubled or even more than doubled, and the income per acre could be increased enormously. But the financial institutions still are more inclined to lend for land clearing. This is against the advice of many of the agricultural advisers who believe the most efficient use of money is to stock a property in order fully to utilise the pastures available. Although there may have been some change of heart recently, it is only with the greatest difficulty that a person can obtain money from the banks to buy more stock. They are prepared to, lend money to carry out more development. This is the type of uneconomic development to which I have been referring. I think the’ banks have taken a very conservative attitude towards the scientific knowledge available with regard to increased stocking.

So, I make the suggestion that all financial institutions dealing with the rural sector should employ agricultural scientists to keep them up to date with scientific knowledge. There are few financial institutions - the Rural Industries Bank of Western Australia is one of them - which are doing this today. In my experience, there is an appalling ignorance in some financial institutions of up to date information in regard to agricultural research. This is a national problem and must be related to the national needs for increased production at lower costs. In this regard, the primary industries have made a notable contribution. But we must realise that in the years to come an even greater responsibility rests upon the primary industries of Australia. In the last financial year, export income was £1,300 million. It is estimated that, by 1974-75, Australia will require an export income of £2,500 million to balance its payments. One sector that can be expected to contribute greatly to the required income is the pastoral industry if it is allowed to carry out the necessary development.

In this respect, I make a very brief reference to Queensland and the development of the spear grass country which I think you, Mr. Acting Deputy President, will appreciate. I think it was Senator Cotton who, in his maiden speech last night, referred to the outstanding advances being made in this area and the greatly increased cattlecarrying capacity that is possible. Senator Lawrie made a reference to this also. A recent Bureau of Agricultural Economics “Quarterly Review” said that one restriction to development in the spear grass country was “ the limited availability of credit”. So, I believe that this becomes a fairly urgent problem.

I am not criticising the Development Bank or the Term Lending Fund of the Trading Banks in respect of what they have done. On the whole, they have worked reasonably well. Many farmers will testify to the value of the help given to them. But, as I said earlier, they are a new concept with no previous experience to draw upon. The Development Bank has been in operation now for some five years and the Term Lending Fund of the Trading Banks for some three years. I feel that the time may have come for a thorough investigation into the whole problem of rural finance by a competent committee to see what amendments to our present system we require to meet the challenges of the future. It is my belief, and I state it quite clearly, that the future will require a development bank of far greater proportions than the one we have today. This bank may well be divided into departments dealing specifically with different aspects of development. Each aspect would be treated separately and the various aspects could not be considered one against the other. I would envisage, for instance, a Northern Division to cater for northern development. Northern development poses its own problems and they cannot be considered alongside applications for assistance from more settled and favoured areas. However, I will leave that to another time.

The problem of development finance for rural industries requires urgent consideration. In reply to a question, the Treasurer (Mr. Harold Holt) said yesterday that an interdepartmental committee was inquiring into the availability of rural credit. We must go further than that, because rural credit is of no use unless it is available on aceptable terms.

I wish now to mention another matter which has a bearing on the subject 1 have been dealing with. Over the years great progress has been made in increasing our scienitfic knowledge of agriculture. This has been accomplished through the tremendous efforts of our research scientists but, unfortunately, there is still delay in applying this knowledge to farm practice. The delay is caused by a shortage of trained farm management advisers This shortage is all too apparent and far too little is being done about it. One is constantly met with all types of resistance - from some surprising sources - when one attempts to overcome this difficulty. I regret to say - I mentioned this in my maiden speech - that all attempts to get the Government of my own State to assist in the establishment of . postgraduate courses in farm management extension in the University of Western Australia, which is well equipped to handle such sources in the minimum time, have failed although a mere £15,000 is involved. It seems strange that the main opposition to the establishment of these courses comes from within the Department of Agriculture, which I would have thought would welcome such a course, even if only to provide additional training for its own officers.

The advisers of the farm management clubs - in which, 1 am proud to say, Western Australia leads the rest of Australia - are nearly all imported. The clubs are making a notable contribution towards increased production, lower costs and greater farm income. At some other time 1 will tell the Senate about the quite spectacular results of the work of these advisers through the farm management clubs. One factor which limits the forming of many more clubs is the shortage of trained advisers. The overseas source from which these people have been obtained is drying up or has dried up and wc are looking more and more to our own men to fill these positions. I can only appeal to the Commonwealth Government to consider assisting in the establishment of one or two postgraduate courses in this field in Australian universities. In the second volume of its report, the Martin Committee referred to the lack of proper training for farm management extension in Australia and I think it recommended the immediate establishment of two post-graduate courses in Australian universities. If the State Governments - whose reponsibility I believe it is in the first place - fail to accept their responsibility in this matter 1 can only appeal to the Commonwealth Government to assist.

I conclude by referring again to the Budget. I believe it will achieve the broad aims of the Government’s policy and will continue to provide the climate for expansion and increased living standards. I oppose the amendment moved by the Opposition and support the Budget.

Senator FITZGERALD:
New South Wales

– I listened with interest to the address delivered by Senator Sim and admired the calm manner in which he presented his case. He claims that the Budget meets with the approval of the Senate and of the people generally, but in my view there has been some adverse reaction to it by senators on the Government side of the House. I think this has been shown by the debate which has gone on so far. The honorable senator referred to the provision of rural finance and the activities of the Development Bank, and it seemed to me that he was condoning everything that has been done in this field. I began to wonder what members of the Country Party were thinking of his submissions. However, to wards the end of his speech he made some adverse comments about what had been done in the provision of rural finance.

Later on, the honorable senator dealt with overseas investment in Australia. In my view, Senators McKenna and Toohey dealt adequately with that subject. Let me make quite clear where the Labour Party stands on the subject of overseas investment. We have never opposed overseas investment as such, because we recognise that Australia does need capital from overseas. That is conceded, but the question is whether we are becoming too dependent on it and are paying too big a price for it. My colleague, Senator Mulvihill, reminds me that at one time the Government of Mexico was concerned at the position that arose through American capital coming into that country. It was not a matter of resentment of Americans when the Mexican Government stood up against the great Standard Oil Company, but the then President of the United States recognised the position that existed at that time and caved in, as it were. I am quite certain that if, under similar circumstances, this Government were to take a decisive stand on this matter, the Government of the United States would immediately recognise what the position was in this country.

At present, in order to meet current expenditure, we are selling important sectors of our economy. What is happening is like selling part of one’s house to the grocer in order to meet his bill. As the Deputy Prime Minister (Mr. McEwen) put it, we are living by selling part of the farm each year. We say that Australia’s capacity to grow has become much too dependent upon capital inflow. That is the matter which is causing the Australian Labour Party concern. We make our view known throughout Australia at every available opportunity. As I have said, even the Deputy Prime Minister talks of overseas investment as involving us in selling the farm bit by bit.

Senator Sim also referred to defence. The Government’s defence proposals in this Budget have been criticised by many members of this Parliament, including some who support the Government. The criticism has not come only from the Labour Party. Members of the Government parlies, both here and in another place, have condemned the Budget and Ministers in their respective spheres. It seems to me that it is particularly at Budget time that the advantage to the vast majority of Australian’s people of having a Labour Government becomes obvious. That is not a prospect to be scoffed at, because this Government does not have the confidence of the people. A Senate election was held in December last year and in four of the six States the Government was defeated. In two States its candidates had to depend upon a splinter group for assistance. Let me pause here to offer my congratulations to those senators who have just made their maiden speeches. I know how difficult it is to make a maiden speech and 1 think those who did so yesterday must be commended for their efforts.

Sitting suspended from 5.45 to 8 p.m.

Senator FITZGERALD:

– Prior to the suspension of the sitting I had mentioned that it was a great tragedy that the Australian Labour Party was not in control of the Treasury benches. This is exemplified more effectively, I feel, during a Budget debate than during other debates. I have in mind what we could do for the development of Australia, for the social service recipients and the other less fortunate people in our community. We are debating a Budget which provides for a total expenditure of approximately £ 2,667 million. It is the largest Budget that has ever been introduced into the national Parliament. With this expenditure, I realise exactly what could take place under a government more sympathetic to the ordinary people in the community than the one which is in office at the present time.

To put the record straight, it might be as well for me to mention the amendment which was so ably moved by Senator Ken nelly. In doing so, I state quite definitely that I am very happy to support the amendment which he moved. His amendment was to add the following words to the original motion before the Senate - “ but the Senate condemns the Budget because -

such taxation increases as it contains add further burdens to wage and salary earners whose living standards have already been eroded by price rises and the Government’s active intervention against wage increases;
such meagre social services benefits as it proposes are inadequate, belated and partial in their application; and .
the Budget fails entirely to deal with such problems as increases in imports and Australia’s dependence on foreign capital. The Senate further declares that only by proper economic planning, can Australia rapidly expand the resources required to meet its urgent needs in the fields of defence, development, education and social welfare.”

I repeat that I am very happy to support this amendment. Honorable senators opposite last week condemned the Government’s action in relation to Ipec-Air Pty. Ltd., and there is no reason why they should not be courageous enough to support the amendment which has been moved by the Deputy Leader of the Opposition (Senator Kennelly).

Honorable senators opposite spoke at great length about the effectiveness of this Budget. They referred to the fact that the White Paper, “ National Income and Expenditure, 1964-65 “, indicated that there had been a rise of 9 per cent, in the gross national product. But. the White Paper did not mention the 4 per cent, increase in prices that has taken place. Nor did it refer to a statement concerning the work force which has been issued by the Reserve Bank of Australia and which states -

The largest net migrant intake for thirteen years helped offset a reduced number of school leavers and the much smaller scope for reducing unemployment; civilian employment rose by more than 4 per cent.

With the rise of 4 per cent, in prices and the increase of 4 per cent, in the work force, the rise of 9 per cent, in the gross national product docs not reflect a great deal of credit on the Government that speaks about the great effectiveness of its programme.

Turning to the question of defence, Senator Sim, who preceded me in this debate, said that this has not been regarded as a defence Budget. From the way in which Government supporters have been talking about this Budget over a period of time, I thought that defence was the main purpose of the Budget. Again taking the gross national product, I note that defence expenditure in the Budget is 3.5 per cent, of the total gross national product produced by this nation. That is not a great expenditure on defence. The Leader of the Opposition in another place (Mr. Calwell) produced tables which showed that in 1953-54 the outlay on defence was 3.73 per cent, of the gross national product. Today, some twelve years later, it is 3.5 per cent, of the gross national product.

We on this side of the chamber are well aware of the situation and the problems that arise regarding this question of defence. We realise the worries of the Government. We appreciate the fact that if we were the Government of the day we would be faced with problems because of the huge coastline of Australia, the large area of land that makes up the continent and the limited population. In these - circumstances, there is a need and a desire to have firm treaties with our friends near us. These treaties should be regarded as being very essential and very important. I say quite definitely that the policies which the Government has adopted in relation to Malaysia, Singapore, Indonesia and other countries do not reflect great credit on it. I recall trying to ask a question on 24th May of this year of the Minister representing the Minister for External Affairs. I was denied the right to ask the question. The President held his hands up in holy horror when I asked what action the Australian Government was taking to resolve the difficulties that were becoming very apparent and very obvious between Singapore and Malaysia. He felt that it was outside the functions of an ordinary senator to ask such a question. So I placed the question on the notice paper.

I believe that the great role which Australia should be playing today is trying to unite our friends. Singapore and Malaya were great friends of ours. We sent troops to protect that area. But whilst it was apparent to everybody that a crisis was developing in that area, when I tried to raise the matter in this Parliament I was told that it was outside the function of any senator to question what the Government was doing in this regard. We must remember what Labour did in the field of international affairs when it was in office for a period of eight years. We must remember the role that Dr. Evatt played in the United Nations, in Indonesia, and in the dilute iii India. I feel that the present dispute between India and Pakistan is likely to flare up into a violent’ conflict. It is a matter which must concern, not only the members of this Parliament, but every freedom loving person throughout the length and breadth of the world.

We cannot afford to see countries which could and would be our allies in the event of any turmoil or stress arising in the world being placed in an awkward or difficult position. I believe that we ought to act the part of a mediator. I believe that is the main role which we should be adopting at the present time. Unfortunately, we seem to be adopting a policy not of making friends but of creating difficulties. It has often been said here and it is acknowledged by so many people in this Parliament that war is the most frightful thing that can happen to any nation. When conflicts and crises and divisions arise between our allies, Britain and America, in their attitudes to Malaysia, Pakistan and India, and Vietnam, the Australian Government should try to obtain unanimity amongst our friends.

On the matter of defence, this Budget is completely phoney. We contend that other action should be taken in relation to this great problem. I believe that all Australians will accept the need to raise revenue for defence, if they are shown that this is necessary. The Budget just touches the fringe of development, social services, education, housing and health. The amendment moved by Senator Kennelly is, therefore, worthy of the support of the Senate. The Government’s claim to efficiency is so much nonsense. The increase in the gross national product has been brought about by the 4 per cent, increase in the work force and the 4 per cent, increase in the cost of living. We deplore the increased tax on the few luxuries enjoyed by the workers - beer, whisky, tobacco, and the petrol for the motor car they may use from time to time. In a full year these imposts will produce £65.5 million and they will produce £54.5 million in the current year. We on this side of the Chamber suggest that a more careful scrutiny should be made of Government expenditure. We believe that a tax on monopolies which are making outlandish profits and a super tax on excess profits should be considered by the Government, and they would be considered .by us if we were in government.

The Department of External Affairs is one Department which should be looked at closely, particularly in view of the information which has been forthcoming over a period, for instance, in relation to the crisis between Malaysia and Singapore. I believe that had the Australian Government been fully aware of the circumstances and of the difficulties that had arisen it might have been able to intervene in the dispute. A Similar position exists in relation to Pakistan and India. These are matters which the Department of External Affairs should be watching very carefully.

Attention should be paid to some of the things that take place in the precincts of this House. That foolish squash court that has been talked about and given a great deal of Press publicity does not bring very much credit to the Parliament, particularly when it is considering increased taxation which the nation must pay to meet various commitments. 1 direct attention, too, to the proposed provision of £500,000 for elections. The next election will be the tenth since 1949. Whenever the Government, which has had a mandate since 1949, feels that something is going amiss with the economy and brings on an election, the cost is £500,000. The nation has been plunged nine times into elections at the whim, wish or desire of the Prime Minister (Sir Robert Menzies) and his Cabinet when they faced some difficulty. After the elections the Government presents what are termed supplementary budgets, which put on the screws and inflict greater hardship generally on the people. Strong rumour has it that there may be another early election.

When we look at the matter squarely, we see that the Budget does not measure up to the problems facing Australia. Government spokesmen in the Press flew an early kite about the tough Budget that was forthcoming. There was much talk about the drought, the extra £200 million wanted for defence, the adverse trade balance and the payment of dividends on British and American investment in Australia. This was a sane and sensible approach, but I think it cushioned the Australian people to expect something very tough. These problems are still with us. Unfortunately they have not been dealt with. Last year there was a deficit of £147 million in the balance of payments, compared with a favourable balance of £229 million at the end of 1963- 64. In effect, there was a reduction of some £376 million in the balance. Unless something is done about this matter we are in for some very serious difficulties, which the Australian people will have to face. Manufacturers want a brake on the £1,450 million worth, of imports but the Government is doing nothing about this. It is not prepared to face up to the situation. If it had done so in this Budget, in 12 months it would still be in the mire, and in the midst of a Federal election campaign this would create problems for it.

I recall that in 1961 the Australian Industries Development Association claimed that local industries could have manufactured £272 million worth of the goods that had been imported into Australia, and in that way provided employment for the 100,000 workers who were then out of work. It might be argued that those conditions do not apply today. It is perfectly true that there is not a great army of unemployed, but something ought to be done to harness Australian industries to overcome the problems that we face.

As casual vacancies have been filled by honorable senators representing New South Wales, Victoria and Western Australia, an endeavour will be made by the Government to create an issue to divert attention from its record. I believe that within the next six or eight months the Government will* endeavour to create a situation which will allow it to seek a further mandate from the Australian people. If it is successful, the consequence will be the prompt introduction of a supplementary Budget, the idea of the Government being that as it will have an interval of two and a half years before the next Federal elections for both Houses in 1968 there will be plenty of time to overcome the problems it will have created. I hope that the new Governor-General will not accede to the request of the Prime Minister should he produce some flimsy excuse for an election as he has done in the past. The Government may raise industrial issues or the issue of Communism. Irrespective of what diversion is created, the people should be made aware of the dangers that face this nation should another election be sought. A lot has been said on the question of efficiency. The Government could more efficiently control the purse strings by not forcing the people to vote at Federal elections once every eighteen months, because of the way the timing of Senate elections has been changed. We are facing now the tenth Federal election in a period of less than seventeen years since this Government took office.

A great deal has been said about national development. Some honorable senators making their maiden speeches have touched upon that subject very effectively. Dr. Rex Patterson has resigned from his high post as Director of the Northern Division of the Department of National Development as a protest against the Government’s policy in respect of the Ord River scheme, I believe that his words should echo strongly in the minds of the Australian people. Dr. Patterson’s statements have placed the Government in an awkward position. Condemnation by an officer holding such a high position should have an influence at the time of the next Federal election campaign, when Dr. Patterson is to stand as a candidate on behalf of the Australian Labour Party.

I turn now to deal with what are, in the main, the miserable and paltry increases in social service benefits that have been granted to assist people in need. I admit that a few of the increased benefits are’ very important. Some honorable senators on this side of the chamber, including Senator Toohey, have paid tribute to the Government for lifting the means test in respect of medical benefits for pensioners. For many years honorable senators of the Opposition, when speaking in Budget debates and debates on social services, have condemned the Government for denying many pensioners the right to medical benefits which has now been granted to them. A lot of people in our community are in impoverished circumstances. I refer particularly to age and invalid pensioners. I believe that the dependant’s allowance ought to be increased. Deserted wives, who comprise one of the worst affected sections of the community, are in need of greater assistance. The same is true of young married couples with spastic or subnormal children. Provision to grant assistance to Aborigines should have been included in the Budget also. I repeat that the Opposition welcomes the lifting of the means test in respect of medical benefits for pensioners. This is an illustration of the importance of and necessity for agitation by the Opposition in the social services field.

Government supporters have been very much influenced by statements being made in the Press that the average family income is about £42 a week and the average earnings of the Australian worker are about £25 a week. I do not know how these figures are calculated or from what source they are taken, but I know of a great number of people who are in need - people with young families. It is nonsense to talk about average earnings of £25 a week or an average family income of £42 a week. The people consulted to obtain those average figures must have included parliamentarians or people with very high incomes, because they do not reflect the real situation of the ordinary working people. I believe that assistance must be given to the under.pribileged section of the community who have been neglected by the Budget.

When bills are introduced in this sessional period dealing with repatriation and social service benefits, members of the Opposition will voice their protests because of the matters that have been neglected in the Budget. I hope that members of the Government - as they did in voting for the disallowance of a regulation after the debate concerning the application of Ipec- Air Pty. Ltd. - will support the Australian Labour Party and demonstrate to the Government that it has not done the job that it might have done for the majority of the Australian people.

Senator BULL:
New South Wales

– In rising to make my maiden speech in the Senate, Mr. President, I am deeply conscious of my responsibility, lt is, of course, my earnest wish that I shall be able to make a small contribution to the business of the Senate and to the general welfare of our people. While I was elected on the nomination of a political party, I trust that I shall not be so biased as to be unwilling to look at the view point of honorable senators whose views may differ from mine. At all times I shall endeavour to uphold the dignity of the Senate and of the Parliament, something which I am sure is dear to all who believe in our way of government.

I support the motion that the Senate take note of the Budget papers. I believe that a government, when preparing its Budget, must have a definite objective in mind. In my estimation, this Budget fulfils that requirement. I note, first, that it has regard to safeguarding the security of this country. Secondly, every endeavour is being made to ensure that industry is encouraged to expand and that we have balanced development. Thirdly, due regard is had to the welfare of those who perhaps have not had the same opportunities as the’ vast majority in the community. The fourth point I make is that, if an extra burden by way of taxation is to bc imposed, it is right that that burden should be spread equitably over all sections of the community The Budget pays due regard to that principle. Fifthly - this is of tremendous importance - this Budget will inspire the confidence of the vast majority of the people of Australia. This Government has succeeded in achieving that result not only in recent years but over the last 16 years. It is indeed wonderful that the people have had confidence in this Government for so long. I believe that this Budget is objective and that it has been acclaimed by the vast majority of the people of Australia.

I should, like to go back to the points I have made and to deal, first with the subject of security. The decision to increase expenditure on defence is particularly pleasing to me. It will be agreed not only within Australia but also in other countries that we could never be described as being a militaristic people. On the other hand, no other nation has a better record than Australia when it comes to facing up to danger and responsibility when called upon to do so. That was exemplified in two world wars when Australia played a most important part, not only in the defence of this continent, but also in defence of the principles that we hold dear.

There is increasing apprehension about the penetration of militant Communism through South East Asia. Because of the dangers that threaten us as a people, I fully support the action of the Government in going to the assistance of our allies in this area. I believe that failure to assist would have brought scorn from the small nations that are our allies and would have greatly assisted to bring about the collapse of the nations in this area that are still endeavouring to retain their independence. We as a nation must realise that we are destined to take an ever increasing interest in these countries both from the political angle and from the viewpoint of defence and economics. This will be clearly demonstrated to us as each year goes by. As a responsible Government, we owe it to ourpeople to safeguard our security, and we must demonstrate in a practical manner that our allies may look upon us as being a dependable and responsible ally. I, like every other member of the Parliament, hope that the parties to the war in Vietnam can be brought to the conference table, with justice to both sides, and that a reasonable assurance can be given - this is important - that a lasting peace will be brought about.

The second aspect of the Budget that appeals to me is that it gives a quiet but welt founded confidence to Australian industries to grow and expand. Because of falling export prices, because of the drought that has been experienced over a vast area of Australia, and because there has been some recession in world trade, many people feared that this Budget would put a brake on industry. In my opinion, the fact that it does not do so speaks volumes for the overall strength of the economy, for which this Government may take its share of the credit. I invite honorable senators to study some of the comments that have been made by representatives of industry over the last few weeks. I have before me a paragraph from the publication “News and Views of the Australian Motor Industry”, which states -

Very wisely, the Government considered that it was undesirable to take any fiscal action to rock the economic boat, there being no signs of dangerous inflationary tendencies warranting such action.

The Motor Industry, in particular, is at a very critical stage in its development. This is the year of the implementation of programmes to increase still further the local “ content “ of Australian-built vehicles and this has involved significant problems for an industry whose local market is pretty small by world standards.

The action of the Government in leaving vehicle sales tax alone this year, is to be commended.

No other secondary industry reflects more accurately the ups and downs of the economy. That fact has been demonstrated over a great number of years. The need for industry and national development to continue ininhibited by heavy taxes is of vital importance to all- sections of the community. The motor industry is of special significance. because it absorbs a great number of our migrants and is expanding in all directions. It is of great importance to every Australian, be he an employer or a wage earner, that industry be profitable and that as early as possible developmental works be able to show a return on the investment made.

Now I turn to a few other matters of special interest. I refer to the profitability of our export industries. These industries return to Australia a new wealth that is so important for the expansion of industry and development generally. People engaged in primary industry, of course, have been accustomed throughout the years to ups and downs because we sell on a world market and because our income is, to a degree, determined for us, as are our exports, by seasonal conditions. I think we must face up to the fact that we are experiencing at the moment a somewhat downward turn in certain export industries and we can only hope that this will be short lived. In the long term I have the greatest confidence that there will be once more an upward trend, as there has been throughout the years.

Over the last few years particularly, the primary industries have been largely responsible for the additional money that has come into this country and which has been so helpful. At the moment wool prices are somewhat lower than they have been. I think it is true to say that we can expect good prices for our meat and our wheat in this coming year, but again because of the effects of the drought, I fear there may be some reduction in the production of those commodities. As Senator Prowse has mentioned, the increase of petrol tax is a mattei of concern particularly in the drought areas and for people on farms who use fuel oil. However, apart from primary producers who are feeling the effects of the drought, I think that generally primary industry in Australia will be prepared to play its part in meeting the additional finance required under this Budget. I hope that the export of minerals by an industry which is developing very quickly and which has such terrific potential, together with the increase that we hope to see in our secondary industries, will be able to fill a part of the gap left by the fall in the prices of wool and perhaps of some other commodities.

I wish now to deal with the pattern of rising costs. I commend Senator Cotton on his thought-provoking speech on this question last night. He put the position very ably in referring to the effect of costs of production in this country. Let us hope that we may be able in some way to lighten this burden. I was glad to hear Senator Cotton refer to that great Australian the late Sir Ian Clunies-Ross. Without mentioning their names, may I refer to the work of other great scientists who have helped tremendously in lifting production, particularly primary production, in this country? In this connection we think of the great contribution that has been made by the Commonwealth Scientific and Industrial Research Organization. I want to carry this topic a little further because I see in this field great potential for the future development of Australia. I want to refer, as Senator Sim did this afternoon, to the fact that unfortunately we are lagging in extension services to enable scientific knowledge to be applied. I have referred to the cost structure. Those of us who are engaged in export industries realise that our best chance to overcome this great problem, if only . to a degree, probably lies largely within two categories, the first being greater efficiency within industry and the second, greater productivity.

I was told only recently by a prominent officer of the C.S.I.R.O. in the Canberra area that if all the scientific knowledge that we have at the present time were applied, the total sheep population of Australia could be carried in south eastern Australia. We must be tremendously encouraged by the scientific developments that have taken place so recently. There seems to be almost no end to the possibilities in this direction. It was my great privilege only recently to tour the western and northern areas of Australia and to learn at first hand of the potential of those areas, particularly in mineral resources and in the beef cattle industry which, according to most of our experts, has tremendous possibilities. We must ask ourselves: Why are we not applying this knowledge? In the first place, we recognise that we lack sufficient resources. Secondly, we are badly in need of qualified extension officers, if possible with a degree and, more important still, some general training in agricultural economics. Primary industry must be run as a business if we hope to compete and survive in a competitive world, with a rising cost structure.

As other honorable senators have, mentioned in this debate, we have been encouraged lately by the fact that so many farm advisory committees have been formed throughout Australia. This is a development which began mainly in Western Australia, although the first club may not have been formed in that State. The idea is spreading to other States and results are being obtained through having advisers to assist farmers. But there is a serious dearth of qualified men. I know that representations have been made to the Government for aid so that more personnel may be trained in the agricultural and veterinary fields and assisted to acquire a knowledge of agricultural economics. I trust that the Government will act quickly in this connection, in the interests of primary producers generally and so that scientific knowledge may be applied particularly in the more improved areas and in areas of higher rainfall.

Before T conclude, Mr. President, I must say something about the disastrous drought now being experienced in large areas of Queensland and New South Wales. In doing so I wish to divide my remarks into two parts and to refer, first, to the drought as wc see it now, and secondly, to the long term effects. Honorable senators who have some knowledge of New South Wales will be aware that conditions in the northern areas vary from bad to extremely bad.

I noticed in this morning’s newspapers reports on conditions in the northern areas of New South Wales around Inverell and more particularly around Narrabri. These reports told of the extremely difficult conditions which are being experienced. The New South Wales Department of Agriculture has said that in the Inverell area 75 per cent, of the cattle and 60 per cent, of the sheep are either dead or have left the district. The wheat crop is described as ranging from very poor to a complete failure. The Department’s officers have estimated that in the Narrabri district and an adjoining large section of the north west of New South Wales losses have reached £25 million, with no end of the drought yet in sight. As has been said, the extremely bad conditions extend into Queensland. With the warmer weather coming on and with water supplies in these areas at a very low level, the prospects for the future are fairly grim. All this must bring great hardship to individual producers. It wm also have the effect of reducing our export earnings.

I acknowledge and appreciate the statement by the Prime Minister that under the constitutional division of responsibility the provision of assistance to primary producers affected by the drought is essentially a matter for the State Governments concerned. However, I am also pleased that the Commonwealth Government is prepared to play its part in seeing that adequate finance is available for carry-on and rehabilitation purposes, and that the legislation relating to tax concessions is to be amended. This is a matter of urgency and I trust that there will be complete co-operation between the Commonwealth Government and the State Governments concerned. This situation must be watched almost on a week to week basis. I hope that the Government will do everything possible to alleviate the position.

Turning to the other side of the drought problem, let mc refer to the long, range programme. I think this drought has brought home to every one of us, particularly the people concerned, that something must be done on a long range basis to lessen the effects of droughts. The effects of major droughts over the past 60 years present a frightening picture. In what is described as the .1895-1903 drought we lost 54 million or 50 per cent, of the sheep population. It took 32 years to recover to the 1895 figure. In the 1911-16 drought we lost 25 million or 25 per cent, of the sheep population and it took 15 years to recover to the 1911 figure. In the 1919-24 drought we lost 8 million or 9 per cent, of the sheep population and it took six years to recover to the 1919 figure. The last major drought was in 1943-47, when we lost 29 million or 25 per cent, of the sheep population and it took 11 years to recover to the 1943 figure.

From the latest figures available we believe that sheep losses to date have not been terribly great compared with losses in previous droughts, but the next month or two could be absolutely critical. We must see that every effort is made to keep losses to the minimum. In addition, we must implement some long range programme which will correct the position. No doubt if the figures were available we would see a similar picture in relation to the cattle industry. These conditions must have an effect on all primary commodities. We must ask ourselves whether we can afford to allow these losses to continue. We know that efforts have been made in the past to reduce losses. Whenever major droughts have occurred there has been talk of setting up some organisation or of doing something objective so that droughts will not have a similar impact when they occur again, but unfortunately nothing concrete seems to have been done.

We must form an organisation comprising representatives of the Commonwealth Government and of the State Governments, people with scientific knowledge and men from the primary industries who have a practical knowledge of primary production. This organisation would investigate and report on ways and means of minimising the effects of major droughts. It would investigate also the need for incentives in the form of tax rebates on the purchase of fodder and the provision of water. I think it was Senator Prowse who referred to the fluctuating incomes of primary producers. When times are good we must take steps to see that adequate and suitable arrangements are made by way of tax concessions so that a drought, if it should occur in the next year or subsequent years, will not have such a serious impact on primary producers and they will not be required to pay the heavy taxation that they otherwise would have to pay-

In addition, while it must always be the responsibility of each individual producer to make, where possible, adequate provision for additional fodder and water, a national fodder scheme must be instituted so that primary producers in areas where it is not possible to conserve these things will be able to obtain them should an emergency arise. I hope that something will come from the discussions that have been held.

I strongly support the Budget because, as I said earlier, it appears to me to have a definite objective. It is designed to provide for our security and to continue the policies which will develop this country consistent with our resources and manpower. With all this, it shows a sincere and deep appreciation of the needs of all sections of the community. I support the motion that the Senate take note of the Budget Papers and I oppose the amendment.

Senator ORMONDE:
New South Wales

– Mr. Acting Deputy President, whatever might be said about the Budget, it is a monetary document and presents a summary of the economic situation of the country. I think all honorable senators, after listening to the speech just delivered by Senator Bull, must be concerned with the position. I congratulate him on his maiden speech, in which he discussed the state of the nation - the physical nation. The story he told us was a rather frightening one for Australia because it could be that, if the drought is as bad as he says it is, and the loss of primary production will be as high as he says, the next Budget may not be like this Budget If my memory serves me correctly, it takes 12 months for the effects of bankruptcy in country towns to get through into the monetary and government systems.

We had conditions similar to the conditions that Senator Bull speaks of in the rural areas of our country during the depression years. This state of affairs was the basis of the depression which caused such havoc in Australia. The conditions about which Senator Bull spoke relate really to the supply of water. The Government is at a disadvantage at the moment. It has been in office for just over 15 years and has done nothing about Australia’s water problem. The Government cannot blame the Australian Labour Party for this position because Labour has not been in office in the Federal sphere in that time. Other governments have been trying to do something about this matter. I think the Government ought to be concerned about the criticism that is coming from members of the Country Party in the Senate. Country Party senators have expressed fear about the future, as well they may. Although the Minister for Defence (Senator Paltridge) can say that this is a Budget which has the confidence of the people, it does not reflect the state of the nation. That is the serious implication of this Budget.

I wish to congratulate other new senators on their maiden speeches. I think that they will add greatly to the debating strength of the Senate. They will improve both sides of the Senate. I just noticed walking into the Senate one of the faceless men who is now a senator, Senator Mulvihill. I want to congratulate him on his maiden speech. He is one of those faceless men-

Senator O’Byrne:

– And a handsome face it is.

Senator ORMONDE:

– Yes, a handsome faceless man. Also, we have in the Chamber - and I am very honoured to say this - Jim Keeffe, our Federal President-

Senator Mattner:

– The honorable senator had better be careful.

– No, but educate the people and they will be free before that. The white man has finished dominating the black races. That is all over, and most of the wise people in the world believe that. Our silly little war in Vietnam is not going to help, because it is a silly little war.

Senator Wedgwood:

– Keep going and we will win the next election on this. You tell the Australian people this.

Sydney Opera House is in danger of remaining an unfinished symphony. I ask this Government to take a national view of the Opera House in the interests of Australian prestige and to assist the Askin Government to complete it as quickly as possible. It will be a building in which Australians can take great pride in years to come. The idea of an opera house originated in the Australian Labour Party where real culture exists. It was pushed through Labour conferences, branches and unions and accepted. Mr. Joe Cahill, the New South Wales Premier of the day, made one mistake. It was his idea to have an opera house but while it was only a figment of the imagination of the architect - Utzon - and was not even designed on paper, he mentioned a cost of £4 million. He had no real basis for using that figure. It was a rhetorical sort of thing to say, but the newspapers have used it against the Opera House ever since. Anybody who wishes to criticise the Opera House says that its cost has jumped from £4 million to £25 million.

Senator Wright:

– The opera house in Vienna cost £4 million.

Senator ORMONDE:

– And cabbages used to be 3d. each. The great mistake made by the New South Wales Government in relation to the Sydney Opera House was that it did not anticipate that in Australia the type of engineering ingenuity and equipment necessary to erect such a building would not be available.

I ask the Federal Government seriously to consider doing something to help the Askin Government finance the completion of this wonderful edifice on the Sydney Harbour. The ridicule that has been heaped on the building could easily cause people to lose interest in it. That would be very wrong. Although it was the idea of the Labour Party to build an opera house, I think the Federal Government should overlook that and act in the national interest. It would not be the first time that this Government carried on great works commenced by the Labour Party and opposed at the time by the parties that form the present Government. The Australian Labour Party produced the idea of the Snowy Mountains scheme and held a great opening ceremony. The Liberal Party boycotted the ceremony and acted in very nasty fashion at that time. Today the Snowy

Mountains scheme is one of the proudest possessions of this Government. The same thing could happen with the Sydney Opera House. I ask the Government at least to confer with the Askin Government in an endeavour to find a way to speed up completion of the Opera House. It will be a great ornament not only to Sydney and New South Wales but also to Australia.

I believe that the Government is entitled to claim that it has produced a good Budget this year, in the sense that it is balanced. At a time of an inflated economy it is always easy to find money. That is one of the advantages of living in a period of inflation, even if it is only contrived inflation. But there is great dissatisfaction in the community and all sorts of things have happened in this period of what I might call affluence.

The Government ought to examine developments in the wage fixing apparatus. The Government believes in decentralisation and its supporters are always preaching its advantages, but it supports absolute centralisation of the affairs of the trade unions or of the wage fixing system. The Government believes that our wage structure should be settled by four or five judges sitting in the Commonwealth Conciliation the Arbitration Commission. Government supporters generalise and apply blanket thinking to everything. They agree with the proposition that wages ought to be fixed by determining what industry can pay, but assume that all industries have the same capacity.

We do not have real industrial peace. We have a semblance of industrial peace because the strike weapon is so big as to be frightening. I would not mind if a court were established to solve scientifically the problem of wage fixing, but who is to say that what Broken Hill Pty. Co. Ltd. can pay somebody else cannot pay, or vice versa. All industries cannot pay the same wage, but under the present system they are expected to do so. Some industries break away and make over award payments, and other disorganised types of payment. We should be considering some other system, or improvements of the system we have. Even the judges of the Arbitration Commission complain about their ineffectiveness in dealing with problems put up to them. When the recent basic wage judgment was given; great dissatisfaction arose. Even the judges could not agree on whether the’ wage should be split*

Over the years nobody has bothered very much about considering the problem. We have all been doing pretty well. Even the people working for a living have been doing pretty well and have not considered the problems involved in our wage structure. They have been satisfied. They have been working overtime. It has been a two-job economy. The Minister for Labour and National Service (Mr. McMahon) ought to be the last person to talk about women in industry. He wants to have women in industry; he wants shifts to be organised for them. He says that it ought to be possible for the Government to organise a system to enable married women to pack their children off to school by half past nine, to go off to work themselves at ten o’clock, and then go home at four o’clock. That is the sort of idea one would expect from a man who has not yet embarked on matrimony himself. He has had no experience whatever to equip him to deal with this problem. Senator Cavanagh expressed himself very strongly on this matter. Doubtless all honorable senators agree with his statement that the family is the basis of society. For most young people under 25 years of age we certainly have had a two job economy.

All that has been going on, but nobody has been worrying about what is happening to the wage structure and the apparatus that is available to take care of this section of the economy. The judges themselves have expressed the view that they are inadequately equipped to deal with the problem. Nobody in the Senate can tell me whether they have the power to change the system of wage fixation. Has this Government no authority at all? The judges changed the system three months ago. I doubt whether they have any constitutional right to do that. I do not think they have the necessary knowledge to enable them to do it properly. I have heard them complain that they have not the necessary research apparatus behind them. What do they do? They hear cases in other courts and then suddenly they switch over and become economists. I have never heard it argued that judges necessarily are good economists. They hear argument from one side and then from the other, but to my mind that is not the right way in which to r fix a just wage. Probably it was necessary to do that in the. days when a minimum wage had to be fixed for the purpose of giving, everybody minimum security. But that is not the problem today. Today industrial courts are more interested in trying to resolve the problem of not giving too much so as not to interfere with the economy or the ability of industry to pay. Whatever ability the judges may have, I do not think that they are trained to be economists. They are judges. They might give fair decisions according to their lights, but those are not necessarily the wisest decisions.

Before I resume my seat I again congratulate honorable senators who have made their maiden speeches during this debate. I am sure most honorable senators will agree with me that the new senators on both sides of the chamber have made a valuable contribution to the debate. I have a special regard for Senator Lawrie. I saw him play football on one occasion in the second row. He was playing Rugby League. I am pleased to see a Rugby League man in the Senate, because we only ever seem to hear about Australian Rules in this place. As I said, I congratulate the new senators and I hope that sooner than they think those who support the Government will be over on. this side of the chamber.

Senator WEBSTER:
Victoria

.- I rise to add a word or two to the debate on the Budget that is now before us. First, may I, too, congratulate the various- new senators who have spoken within the last few days. It: has been a great thrill to see men of quality coming into the Senate and putting forward their thoughts, even though undoubtedly those thoughts bear the brand of the ideologies and politics that honorable senators have brought to this place. I do not doubt that our new colleagues will assist greatly in the efficient working of the Senate, the work of which in this sessional period should be of great interest.

We are debating the motion that the Senate take note of the Budget papers. Two amendments have been moved. The first was moved by the Opposition, which seeks to amend the motion on three particular grounds, and the second amendment, which was moved by the Democratic Labour -? Party, seeks to add additional words to the first amendment. It is interesting to note at the end of a fortnight of debate - the Treasurer (Mr. Harold Holt) introduced the Budget on 17th August - and after reading the speeches of individual members in another place, after listening to speeches delivered by honorable senators in this chamber, after reading the comments of editors of financial columns in the Press, and after reading the comments of directors of institutions that make the dissection and summarising of government expenditure their special care, that from no quarter has there come any sound criticism of the papers that have been produced by the Treasurer. I think it is fair to say that no newspaper of substance has made a major criticism of the Budget.

The proposals that were brought forward by the Treasurer were somewhat of a surprise to the community generally. As always happens in pre-Budget discussions, there were predictions about increased costs in various sectors of the economy; but I believe that it was a surprise to most of us that the Treasurer was able to present such interesting and fair proposals relating to the income and expenditure of the Commonwealth. The fact that the opposition offered by honorable senators opposite is weak is a matter of great regret. Every Government needs to have a strong Opposition facing it. We have not heard one solid argument raised against the proposals put forward by the Treasurer. He has set a problem for honorable senators who would wish to criticise his Budget papers effectively. Undoubtedly figures can be presented in respect of any undertaking or enterprise to show that a burden is being borne by some particular branch of activity that is producing income for the Commonwealth. It can be suggested that expenditure could be better allocated. Arguments can be advanced in favour of raising income by other methods. But, as was stated by the Treasurer when he introduced the Budget, the basic principle which has to be considered is that there must be an alignment of the aims of the Government and that the Budget must implement the overall economic policy of the Government.

Obviously there will be a divergence of views. On the one hand, the Opposition would support policies that would provide for greater socialisation than we have in Australia at the present time. This Government has adopted a policy of growth. That policy is well supported by both parties in the coalition. We support a policy that is designed to encourage the growth of industry so that an increased population may be serviced adequately, that is designed to encourage the growth of the primary producing industries, and which aims at a high rate of development of the whole of this continent. What an enormous task. It is a task which would test the ability of any leaders. For those within our community who support the policy of development of this country and also support development on a private enterprise basis, there must be some pride in the achievement of enlarging the return to the individual for his labours. We all are very well aware that it is the hope of reward that sweetens labour. That is something which this Government, over its period of sixteen years in office, has sought to do. I believe that it has been successful in producing the economic conditions that we have today. So we see that the Budget and Government policy are closely associated. They are allied and they lay a well prepared field for conscious and sound growth in this coming year. Indeed, the economy of the Commonwealth at this time is due to the preparation of plan and policy, and its administration over many years, by what I believe has been a hard working and devoted Government.

The business community is in good heart. If it were not for drought conditions at this time which wreck this country the primary producers also could claim to be as solid as they have been for many years. May I express the view, Mr. President, which undoubtedly is held by many within this chamber, that Australia’s growth in its foundation years was obligated to the primary industries. I think it can well be said that the future of Australia will be involved with the idea of it being a food producing store for the millions of less fortunate people in the countries which surround us.

Undoubtedly, in a Budget speech there is a great deal that could be discussed. I think that perhaps the lengths to which we can go when we have found no argument against the Budget include arguing against something that has been started in one of the States, as Senator Ormonde did. He discussed a proposition which, I imagine, has been somewhat of a fiasco. I refer to the Sydney Opera House. Those in New South Wales probably will know where to lay the blame for problems such as this, but 1 would have thought that in a Budget debate we could perhaps confine our attention to those things which are of a Federal nature.

I wish to mention briefly four matters.

I think that first we should look to the income which this young country with some

I I million people is able to pay into a common fund and is able to raise by various means and supply for government administration and expansion in the coming 12 months. We have the enormous figure of £2,667,030,000 being produced within this country for the coming 12 months expenditure. Some £55 million of loan funds will be met. It always worries me that loan funds are necessary. Undoubtedly, from an accounting point of view, where there is some inflation within the community it is wise to borrow if you can repay at a later stage at less cost to yourself. That had been the proposition of this Commonwealth over many years and it is interesting to note that there is now encouragement to the community to lend to the Commonwealth in that there is in the special bonds that are put out by the Commonwealth something of a capital gain which can be made by the individual who now invests in them. I think this is wise. I hope that in borrowings by the Federal Government, the Government in which we have some say, this will be continued.

We have, Sir, a total increase in this year’s Budget of some £84 million over last year’s Budget figure. The surprise to most of us is that the Treasurer is able to balance his Budget and meet the enormous cost which is involved in the expenditures set out in the Budget Papers with only £84 million of extra income. The first point that the Treasurer mentioned in regard to new income tax rates was that an increase of 2i per cent, would be applied to personal income tax. Whether by intent or design, members of the Opposition have argued in many of their speeches on an incorrect basis. I do not know whether they have influenced some people to take a hate against this Budget because of the propositions they have put forward, but the gist of many of their speeches was a suggestion that 2i per cent, was being levied on the income of the individual. It has been proved that this is not so. The 2i per cent, applies to all income tax paid by the individual. It is 2i per cent, over the volume of his tax in the previous year.

It is of interest to note that a person on £20 a week will in this financial year pay very close to one guinea more tax than he paid last year. As the scale goes up and the income becomes higher - incidentally, my comment is related to the family man who has a wife and two dependants - we find that where the amount is £40 a week there will be an increase in taxation in the vicinity of 2s. 6d. a week. I doubt whether there is anybody in the community who will take objection to this. The great majority of members of the community feel that the expenditure as set out by the Treasurer is just.

I do not think it has been proved that the aims of the expenditure are incorrect. The money is being put to good use. Indeed, there would be many on this side of the chamber who, I know only too well, would be ready to criticise if this position did not exist. So, we have in the first instance income in the vicinity of £18,900,000 which it is reckoned will be raised from increased personal income tax, but larger customs and excise duties on non-essential consumer products will result in more revenue being produced. The sums which some businesses pay into the Treasury coffers are astronomical. I shall mention one instance, Mr. President. At a recent Public Accounts Committee investigation into excise, the result of which will, I hope, be put before this chamber in the not too distant future, it was stated that a Western Australian brewery was paying, prior to the recent increase in excise, £8i million a year in excise on its beer. That is an enormous figure. If I were a businessman I perhaps would be very worried about the weekly payment that I had to make to the Government on that basis.

I think it is well that the increases should apply to items which are not necessaries in the community. I doubt whether they will have any depressing effect on the consumption of beer and cigarettes. From figures given to the Senate earlier today it is obvious that the amount of excise paid by the consumers of the non-essential commodities’ concerned is not as high in this country as it is in other countries. I think that the cost of the increases is well shared. There is little doubt that the increases have been wisely placed and have been well, received, within the community.

As to the expenditure side, no great argument has been raised that the projects which have been selected for a committal of: funds are incorrect. I think the policy that has been laid down will lead to wonderful development in this country in this very difficult time when we have a war in progress very near to our border - a war in which we must participate for our own survival.

Probably the three major matters which have been discussed during this debate have been, first, our commitment in Vietnam and the consequent necessity for overseas service by our soldiers; secondly, the drought and its effects upon the community; and thirdly, the development of Papua and New Guinea. Our commitment in Vietnam has resulted in an increase in defence expenditure of 27 per cent., bringing it to £385 million. When our next three-year or four-year programme is completed - a programme of expansion along the lines set out by the various Service Ministers - we will have an Australia as well protected as a continent of this size and as undeveloped as this is can expect to be.

One of the most urgent things that we must attend to is the overall development of Australia. The projects in the various States which have been suggested are well warranted, and it must be most difficult to decide the order of priority. When we consider the Mount Isa railway, the Snowy Mountains scheme and the various developments that have taken place and are to take place in the coming year in the north of Australia, we realise that in 1965-66 we will be making a major contribution to the future development of our country.

I align myself with the thought that we should be in Vietnam supporting our wonderful ally, America - the strongest country in the world today. However, I believe that we should stand on our own feet and make our own decisions in many of the matters in which I am a little concerned that decisions may be made for us by America. I. heard on the radio two mornings ago that the American Govern ment proposed to send planes over North Vietnam to drop sweets and. toys to the children there. The comment on the radio was that this was to prove how easily obtainable were, these things in South Vietnam, and how much happier it was to live in South Vietnam. From a quick view of. this suggestion you could imagine nothing more stupid, and I hope our Government never aligns itself with such a proposal.

I should like to mention now the conditions of service of our military personnel who go overseas to fight for Australia. We should look very closely at their rates of pay, their repatriation rights and their return, their protection in the future and, should they be injured or maimed, the protection of their families and dependants. I am not convinced that the community paid sufficient attention to men who served in the last two wars once the wars were over. Only a year or so ago I visited an institution in Victoria and to my great disappointment I saw there a dozen or so servicemen from the First World War, mentally deranged probably as a result of their war service, still walking around behind a wire fence. I believe that Australia should be doing more for these individuals.

We must realise that we have men in action in Vietnam in this year 1965 and we must calculate that at least some of them will return to Australia in a similar condition. This aspect needs close scrutiny. I support the remarks of honorable senators who have suggested that this should be done. No contribution by those who have the privilege of living in this wonderful country is too great to demonstrate, to these servicemen before they go overseas that we are most anxious to see to their welfare when -they return.

The drought has been the subject of a great deal of discussion. Many honorable senators from States other than my own are very well aware of the difficulties and the problems that it has created. I have heard many honorable senators say that something must be done about droughts. I suppose we have been saying this since the 1945-47 drought and we probably said it after previous droughts. This opportunity to direct attention to one or two features of the drought must not be allowed to pass-. I have said that over the past years the primary producing community has shown itself to be by. far the most important sector of our economy. In view of the rising costs of manufacturing and the rising standards of living within our community, I predict that the stability of the Australian economy will continue to rest on the primary producing industries.

However, when we speak about the drought and the great loss that it has caused to this Commonwealth, we must immediately look for some impetus to encourage the individual engaged in the industry to do more, in his own interests, to alleviate the problems of drought. It has been said - I agree with this - that many members of the farming community have carried on uncaring over a period when they could well have made better preparations to meet the problems that confront them today. But this is indicative of all sections of the community. We start an export drive and we are faced with a problem that goes beyond making it profitable for a manufacturer to export. The Government has not only to make the proposition profitable but it must go further as well. There must be double deductions of payroll tax and of expenses incurred in seeking new markets. These incentives are of wonderful assistance in obtaining increased exports. Something along these lines will have to be done for the primary producing community.

I know that primary producers enjoy some advantages because of their calling but I believe that double deductions should be allowed for costs incurred in fodder conservation on properties, for the building of dams and in searching for underground water reserves in future years. It may be of interest to the farming community to know - I did not know this myself until it was mentioned in the Prime Minister’s speech - that as at today a primary producer is allowed to buy in any quantity of fodder that he may wish to buy for future use and this is not taken into account as stock on hand at the end of his financial period, as it would be in a normal business.

Senator Wright:

– Who said that?

Senator WEBSTER:

– The Prime Minister said it, and it came as something of a surprise to me.

Senator Wright:

– I hope the Commissioner of Taxation endorses it.

Senator WEBSTER:

– lt is a pity that I do not have the statement here now so that I could read it to the honorable senator. However, I have checked it because of its importance. If the farming community knew of this, I am sure the farmers would be well stocked with fodder to meet any drought. I would predict that a farmer making some profit in future years will look to constructing sheds on his property in which he could store fodder which he had produced and harvested. The costs of such constructions are allowable as a deduction against his assessable income and the stock need not be taken into account for taxation purposes at 30th June. I put it to the farming community that it should work on this matter immediately. I put it to the Government that a total deduction in that form should be allowed for fodder reserves, the search for water, for the building of dams and wells on properties.

There is one further matter I would like to discuss. This is the development of Papua and New Guinea. Much has been said of this matter in other debates, but I want to speak principally about the development of this Territory. There is no better stimulus to development in Papua and New Guinea than for Australians to show interest there. I commend to the Senate the work which has been done by missionaries, service organisations and service clubs within New Guinea. Australian service clubs have developed service clubs within the Territory. I believe that there is nothing more important than the promotion of youth organisations in Papua and New Guinea at this time. I will give the Senate an example of what I mean.

Some two years ago, the Young Men’s Christian Association of Australia saw the great need to set up a club in the Papua and New Guinea area. The club would look after the indigenous people and bring to them something of the care that is fostered by the Y.M.C.A. in Australia. Honorable senators can imagine the demands placed on an organisation such as this. It would have no funds available in Australia. Honorable senators are probably well aware of the activities of the Y.M.C.A. in Australia also. After research was carried out in the Territory by the Y M.C.A. it was decided that Rabaul and Port Moresby would probably be the two best centres where the work of this organisation could be carried on. Some discussion took place as to whether the efforts should be directed at the young white population. They certainly need some service, as I know from my own visits to New Guinea. But it was decided that the best field for the Y.M.C.A. would be in assisting the young natives who come in from thehills to the bright lights of Port Moresby, and roam the streets with very little to do and very little knowledge of how they should spend their time. Some two years ago the Y.M.C.A. sent a man from Victoria to set up an organisation that would look after these young people. This man had no great knowledge of New Guinea. He has remained there for two years.

I speak of this case because the Government is now playing a great part in the development of Papua and New Guinea. No doubt we would find that the contributions oforganisations such as this are growing just as the organisations themselves are rapidly developing. Up to the present time, the Y.M.C.A. has contributed £3,000 for this work. I think the amount this year will be £3,300. This money is used in maintaining the club and paying the establishment costs of the Association in New Guinea. Today, in Port Moresby itself, 380 Papuans participate in the various activities of the Y.M.C.A. This work is in line with the work of the London Missionary Society whose service club has been set up there. A few members of the white population in New Guinea are assisting in this work. The young men undertake an education programme. When they have finished their day’s work, films are shown to them or speakers address them and introduce some worship into their lives. Physical education is also a part of their training. In the way of general outdoor work, they are building their own institution. This is giving them some goal to work for in the future. It is remarkable that, in two years, this club has attracted 380 young men. Some 17 clubs participate in basketball in New Guinea. What a wonderful thing it is for these young natives to learn this sport.

There is one further matter in relation to which the Y.M.C.A. is looking for greater assistance. A suggestion has been made, and I recommend it to all honorable senators for serious thought. I ask the Government to give immediate consideration to it. The Y.M.C.A. and its establishments throughout Australia have offered to put into hostels in Australia at least half-a-dozen young natives. The Association wishes to bring these young men, who have had some connection with it and who are prominent leaders in New Guinea, to Australia to give them leadership courses in this type of work, and then see them safely back to New Guinea where they will be able to help in the extension of this work amongst other young men in the Territory. I commend this action. I hope that the Government will give consideration to providing assistance for the passage of these young men to Australia.

Finally, I repeat my earlier comments that the Budget that has been presented by the Treasurer has been widely accepted in the community. The conditions within Australia at this time have by no means come about by chance. They have been brought about by good management and good government. Mr. President, I ask for leave to continue my remarks at a later stage.

Leave granted. Debate adjourned.

page 358

PRINTING COMMITTEE

Senator BREEN:
Victoria

– Mr. President, I bring up the eighth report of the Printing Committee. Copies of the report have been distributed to honorable senators.

Report - by leave - adopted.

page 358

ADJOURNMENT

Kashmir Dispute

Motion (by Senator McKellar) proposed -

That the Senate do now adjourn.

Senator CAVANAGH:
South Australia

– Mr. President, I regret the necessity to rise and thereby be the first offender this session to speak on the motion for the adjournment of the Senate, but I will not keep honorable senators very long. A matter which 1 think is of importance has arisen over the Kashmir dispute. According to reports in this evening’s newspapers, India and Pakistan are at war in the area of Kashmir at the present time. My complaint is that we are now breaking up for a recess of a week. Honorable senators know the history of, and will have some information on, the matters relating to this dispute, but the situation could develop to a stage where members of the Federal Parliament will be not better informed on the situation than will be members of the public through Press reports. On Thursday of last week I sought to clarify this matter by directing a question to the Minister representing the Minister for External Affairs. I asked -

Will the Minister make a statement on the Kashmir dispute, which threatens war between India and Pakistan, so that the Senate will be able to discuss the situation in the foreign affairs debate which is listed on the notice paper?

The Minister for Works (Senator Gorton), who represents the Minister lor External Affairs, replied -

I shall inquire of the Minister for External Affairs whether he has any intention of making a statement on the Kashmir dispute.

It is obvious that if the Minister has any such intention, it is not an immediate intention, because a week has passed and we have had no official word of the Government’s attitude to this dispute. We have well staffed embassies in both Pakistan and India, and I am sure that the Department of External Affairs is receiving cables containing information on this question. The duty of our embassies abroad should be not only to advise the Government on affairs in other countries but also to keep the elected representatives of the people in both Houses of the Parliament informed on such matters.

Last year I was a member of a parliamentary delegation that visited both Pakistan and India and discussed political affairs with officials up to and including the President of Pakistan. One of the bones of contention then was Kashmir. On returning to Australia, I wrote a report of my visit. The report was fairly widely circulated and a copy was given to the Minister for the Interior (Mr. Anthony), who was a member of the delegation. It was obvious that he read my report because in the report which he presented to the Parliament reference was made to what I had said, as a statement by a member of the delegation.

In my report I recited the information that we had received about the Kashmir dispute, expressed the opinion that the posi tion there was explosive and said that war would seem to be inevitable unless some action was taken to resolve the dispute. The Pakistani Government was accusing America of arming India for the purpose - as it was claimed - of defending itself against invasion by China although the arms according to the Pakistani accusations, could be used only in a future war against Pakistan. That was given as justification for Pakistan’ increasing its defence vote - something which neither country could afford, as honorable senators would understand if they saw the poverty which exists in this part of the world.

I am seeking information about this dispute so that we may be better informed when we discuss this matter. The position is extremely difficult. Apparently there is a state of war between two Commonwealth countries, and that puts us under some obligation to support both of them. There is also the question of America’s attitude. I will quote from a Press release from the Pakistan High Commissioner’s Office in Canberra on 6th August, giving a report of an address by President Ayub Khan on the occasion of the anniversary of Pakistan’s independence. Among other things, he said -

While we respect our obligations towards our friends, we expect the same from them. Our relations with the United States of America ran into difficulties when, contrary to a clear understanding, arms aid was rushed to India without prior consultation with us. Subsequent to that, the United States entered into a long-term agreement with India under which massive military assistance is being poured into that country. In spite of this, we continued to reason with the United States in the hope that they would appreciate the danger to which we were being exposed through their military assistance to India. That our fears were not unfounded was proved beyond doubt by the massing of the whole of the Indian Army along our borders during the last three months. Unfortunately we failed to convert the United States to our point of view because it was claimed that they must persist in this line of action in the interest of their global policies.

It is against this background that I received a message from the President of the United States of America indicating that the U.S. Government was asking the World Bank for postponement of the Consortium meeting scheduled for 27th of July. The ostensible reason was that certain Congressional difficulties and procedures must be got over before the U.S. could pledge its share of economic assistance toward the financing of our Third Five Year Plan.

Interestingly enough, neither the mood of the Congress nor the procedural difficulties had prevented the United States from pledging assistance to India well in advance of the authorisation by the Congress.

I read that to the Senate for the purpose of showing the kind of propaganda that is being circulated regarding Pakistan’s concern - whether real or imaginary - over the rearmament of India by America. I do not know whether America is supporting India in this dispute and re-arming her with the knowledge that the arms will be used for the purpose to which they are being put today. If that is so, then, in view of this Government’s consistent policy of supporting America, we must be on the side of India. We heard Senator Webster say tonight that we are supporting the strongest power, America. There is also the question of the friendly relationship between Pakistan and mainland China, which again could put us on the side of India. But we have the added difficulty that Pakistan is one of the South East Asia Treaty Organisation powers, which puts an obligation on both Australia and America to be on the side of Pakistan. How can honorable senators sort these things out?

Sir Owen Dixon, Chief Justice of the High Court of Australia, was active in movements for peace in this part of the world at the time of partition and later, I believe - approximately ten years ago - played a prominent part in peace negotiations and reported back to this country. We had an interest at that time in trying to secure peace. Let us hope, for the sake of the two unfortunate countries which are now engaged in a conflict which can bring nothing but suffering and misery to both of them, that we can again become active and take the initiative in securing peace between them. I am not accusing the Government of doing nothing in this matter, but I do say that what the Government is doing should be made known to honorable senators. I made my appeal to the Minister a week ago but he has not yet seen fit to give us any information on this subject. It would appear that our highly paid embassy staffs are available only for Government purposes. As the Senate is about to rise for a week, and if the report that there is open war between these two countries is correct, I appeal to the Minister to issue a White Paper in relation to the dispute and circulate it to members of Parliament by post. Even if the reports are not correct and there is no open conflict, I think we should be advised of the position. If Australia can use its good offices or influence to secure a restoration of peace, however temporary and however uncertain, I ask the Government to use them for that purpose.

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

– in reply - I will see that the request of the honorable senator comes before the responsible Minister.

Senator Wright:

– I rise in response to the speech of Senator Cavanagh.

The PRESIDENT (Senator the Hon. Sir Alister McMullin). - Order! Senator Wright will have to get leave to make a statement.

Senator Wright:

– I will not seek leave, but I think it is an indictment on the Senate that some responsible comment upon a matter of such high importance has not been placed on the record of the Senate here and now.

The PRESIDENT:

– The question is: “ That the Senate do now adjourn “.

Senator Wright:

– I rise again, not because I am an assertive person, but in response to an observation that I heard somewhat inaudibly across the chamber, that I do not require leave to speak. Mr. President, I bow to your ruling, but my belief is that no Minister closes the debate on the adjournment and that I am perfectly entitled to speak. Until I am silenced I shall proceed.

The PRESIDENT:

– Order! Senator McKellar moved the adjournment and Senator McKellar closed the debate. If the honorable senator wishes to continue, he will have to ask for leave to address the Senate.

Senator Wright:

– I ask for leave to make a statement on the subject referred to by Senator Cavanagh.

The PRESIDENT:

– There being no objection, leave is granted.

Senator WRIGHT:
Tasmania

– Senator Cavanagh has once more discharged a function that is most pertinent to the existence of Parliament. He has drawn the attention of this House, which is one of the two Houses of the Legislature, to a matter of extreme significance in external affairs. He referred to the fierce, impassioned dispute between two member countries of the British Commonwealth. Senator Cavanagh, in a complete way, has referred to the contribution that Australia made with great forethought at the request of the United Nations some eight, ten, or perhaps more years ago. It provided one of the greatest envoys who has ever proceeded beyond his country. I refer to Sir Owen Dixon, then Chief Justice of the High Court of Australia, who engaged in negotiations in an endeavour to bring this dispute to a peaceful solution. I refer to Sir Owen Dixon in those terms because it was his genius that generated the confidence of America in Australia during the critical days of the Second World War. Sir Owen Dixon, with an intellectual honesty par excellence, after a persevering effort to bring these two parties into agreement, reported that there was no solution that occurred to his mind that he could offer to the United Nations to procure a peaceful solution of the Kashmir dispute.

We are indebted to Senator Cavanagh for raising this matter. The reason why I rose was that there was embedded in his remarks statements which would leave one with the impression that the United States of America was supporting India in this dispute. In my humble submission, that is a mischievous impression to have implanted in our minds.

Senator Cavanagh:

– I wanted information.

Senator WRIGHT:

– If the honorable senator will pardon me, I am going to speak in the interests of my country. I only rose because the Minister for Works (Senator Gorton), who represents the Minister for External Affairs, is not present in the chamber, and the Minister for Repatriation (Senator McKellar), who is at the table, did not choose to make a statement. No Minister is going to deprive a private senator of his rights. A private senator will defer to a Minister, but while I am a private member of Parliament, I will exercise the right of audience which my constituents demand through me. I am speaking in the interests of my country. I am going to condemn any statement that would leave the impression that America is supporting India in this dispute. I am going to claim from the Senate recognition of the fact that this suspicion has grown in the Pakistanis’ minds because of the fierceness with which this Kashmir contention has engaged both these neighbouring countries.

When Tibet was invaded and India was assaulted by Red China, not only America but Australia sent succour to India to enable her to gain defence strength against Red China. Then Pakistan developed the viewpoint that the arms sent to India for that purpose could be used against (Pakistan. Such is the prejudice and obsession of these two countries over the Kashmir border that that suspicion is now being presented to the Australian public as a fact. This is most mischievous.

Senator Cavanagh:

– I only sought information.

Senator WRIGHT:

– I hope the honorable senator is not denying that I give a most complete acknowledgement of the contribution he made. I am not criticising that contribution. I am pointing out in completely objective terms, and with great appreciation of Senator Cavanagh’s personal contribution in raising this matter, that we should not depart with any idea that there is a factual basis for the suggestion that America’s support for India in her distress is being directed against Pakistan. Pakistan, preoccupied by that suspicion, engaged in negotiations with Red China, which was India’s enemy. In this complex, no one will deny to me an assertion of the right of Parliament to information on every aspect on which we should be publicly informed. But on a matter so delicate and, to use the term of Senator Cavanagh, so explosive - so often does he use the appropriate term - he has credited the Department of External Affairs with receiving cables from those two Embassies whose experiences in New Delhi and Karachi are so valuable. It may be that we, as members of Parliament, could best inform ourselves by immediate contact with the Department, which I have always found very free and frank in communicating recent information as to explosive events.

Having put the American situation, I believe, in its proper perspective, I put the thought into the mind of the Senate that on a matter of this sort we will be the best use to our country if we are informed by private contact with the Department and by constant contact with the Minister for External Affairs (Mr. Hasluck) if anything develops out of this conflict that is likely to have a pregnant repercussion and which might engage this country.

Question resolved in the affirmative.

Senate adjourned at 10.50 p.m. till Tuesday, 14th September 1965.

Cite as: Australia, Senate, Debates, 2 September 1965, viewed 22 October 2017, <http://historichansard.net/senate/1965/19650902_senate_25_s29/>.

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Senate 2 September 1965

QUESTION

CENSORSHIP

Senator MULVIHILL:NEW SOUTH WALES

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

QUESTION

SINGAPORE

Senator BRANSON:WESTERN AUSTRALIA

Senator PALTRIDGE:Minister for Defence · WESTERN AUSTRALIA · LP

QUESTION

SHIPPING

Senator MURPHY:NEW SOUTH WALES

Senator HENTY:Minister for Civil Aviation · TASMANIA · LP

QUESTION

EMPLOYMENT OF WOMEN

Senator WEDGWOOD:VICTORIA

Senator GORTON:Minister for Works · VICTORIA · LP

QUESTION

LAW REFORM

Senator FITZGERALD:NEW SOUTH WALES

Senator GORTON:LP

Senator Fitzgerald:

Senator GORTON:

QUESTION

TELEVISION

Senator LAUGHT:SOUTH AUSTRALIA

Senator ANDERSON:LP

QUESTION

ABORIGINES

Senator CAVANAGH:SOUTH AUSTRALIA

Senator GORTON:LP

QUESTION

INTERNATIONAL SEED TESTING ASSOCIATION

Senator BREEN:VICTORIA

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

QUESTION

SOUTH VIETNAM

Senator ORMONDE:NEW SOUTH WALES

Senator PALTRIDGE:LP

QUESTION

TELEVISION

Senator O’BYRNE:TASMANIA

Senator ANDERSON:LP

QUESTION

PEAS

Senator WRIGHT:TASMANIA

Senator HENTY:LP

QUESTION

CIVIL AVIATION

Senator MCCLELLAND:NEW SOUTH WALES

Senator HENTY:LP

QUESTION

TREASURY BOOKLET

Senator MARRIOTT:TASMANIA

Senator HENTY:LP

QUESTION

OVERSEAS INVESTMENT IN AUSTRALIA

Senator COHEN:VICTORIA

Senator HENTY:LP

QUESTION

MR. CHEN

Senator CAVANAGH:

Senator PALTRIDGE:LP

QUESTION

INFORMATION BOOKLET

Senator TANGNEY:WESTERN AUSTRALIA

The PRESIDENT:

QUESTION

CIVIL AVIATION

Senator MURPHY:

Senator HENTY:LP

QUESTION

RADIO EQUIPMENT FOR INDONESIAN ARMY

Senator CAVANAGH:

Senator GORTON:LP

QUESTION

EDUCATIONAL TELEVISION

Senator WRIGHT:

Senator ANDERSON:LP

GOVERNMENT BUSINESS

Senate
2 September 1965

Senator MULVIHILL:
NEW SOUTH WALES

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

Senator BRANSON:
WESTERN AUSTRALIA

Senator PALTRIDGE:
Minister for Defence · WESTERN AUSTRALIA · LP

Senator MURPHY:
NEW SOUTH WALES

Senator HENTY:
Minister for Civil Aviation · TASMANIA · LP

Senator WEDGWOOD:
VICTORIA

Senator GORTON:
Minister for Works · VICTORIA · LP

Senator FITZGERALD:
NEW SOUTH WALES

Senator GORTON:
LP

Senator LAUGHT:
SOUTH AUSTRALIA

Senator ANDERSON:
LP

Senator CAVANAGH:
SOUTH AUSTRALIA

Senator GORTON:
LP

Senator BREEN:
VICTORIA

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

Senator ORMONDE:
NEW SOUTH WALES

Senator PALTRIDGE:
LP

Senator O’BYRNE:
TASMANIA

Senator ANDERSON:
LP

Senator WRIGHT:
TASMANIA

Senator HENTY:
LP

Senator MCCLELLAND:
NEW SOUTH WALES

Senator HENTY:
LP

Senator MARRIOTT:
TASMANIA

Senator HENTY:
LP

Senator COHEN:
VICTORIA

Senator HENTY:
LP

Senator PALTRIDGE:
LP

Senator TANGNEY:
WESTERN AUSTRALIA

Senator HENTY:
LP

Senator GORTON:
LP

Senator ANDERSON:
LP

Senator PALTRIDGE:
Minister for Defence · Western Australia · LP

Senator BISHOP:
South Australia

Senator PALTRIDGE:
LP