13 August 1968

26th Parliament · 2nd Session

The Senate met at 3 p.m.

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Mis Excellency the Right Honourable

Richard Gardiner, Baron Casey, GovernorGeneral and Commander-in-Chief in and over the Commonwealth of Australia, entered the chamber, and, taking his seat on the dais, said -

Honourable Senators:

I am present to administer to senators elected to serve in the Senate from 1st July 1968 the oath or affirmation of allegiance as required by section 42 of the Constitution.

The Clerk produced and laid on the table the certificates of election for the following senators elected, on 25th November 1967, to serve in the Senate for their respective States from 1st July 1968:

New South Wales -

Douglas McClelland

Robert Carrington Cotton

Lionel Keith Murphy

Gerald Colin McKellar

Joseph Francis Fitzgerald

Queensland -

Bertie Richard Milliner

Annabelle Jane Mary Rankin

George Georges

Charles Ronald Maunsell

Condon Bryan Byrne

South Australia -

Reginald Bishop

Condor Louis Laucke

James Luke Cavanagh

Nancy Eileen Buttfield

Harold William Young

Tasmania -

Reginald Charles Wright

Albert George Poke

Peter Elliot Rae

Reginald John David Turnbull

Kenneth Shaw Wriedt

Victoria -

Magnus Cameron Cormack

Samuel Herbert Cohen

John Albert Little

James Joseph Webster

Arthur George Poyser

Western Australia -

Donald Robert Willesee

John Peter Sim

Lawrence Degenhardt Wilkinson

Reginald Greive Withers

Edgar Wylie Prowse

The abovenamed senators made and subscribed the oath or affirmation of allegiance. (His Excellency the Governor-General having retired) -

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Minister for Supply · New South Wales · LP

Mr Odgers, 1 remind the Senate that the time has now come when it is necessary for the Senate to choose one of its members to be President. 1 move:

Thin Senator Sir Alister Maxwell McMulIin do lake the chair of this Senate as President.

Senator McKellar:

– 1 second the motion.

Senator MURPHY:
New South WalesLeader of the Opposition

Mr Clerk, 1 move:

That Senator O’Byrne do take (he chair of (his Senate as President.

Senator COHEN:

– I second the motion.

The Clerk:

– Are there any further nominations? There being no further nominations, 1 invite the two candidates to address the Senate:

Senator Sir Alister McMULLIN:

– 1 submit myself to the will of the Senate.

Senator O’Byrne:

– I submit myself to the will of the Senate.

The Clerk:

– There being two nominations, in accordance with the Standing Orders a ballot will be taken. Before proceeding to the ballot, the bells will be rung for 2 minutes. (The bells having been rung) -

The Clerk:

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

The Clerk:

– I have to announce the result of the ballot as follows: Senator Sir Alister McMulIin, 30 votes, and Senator O’Byrne, 24 votes. Senator Sir Alister McMulIin is therefore elected President of the Senate in accordance with the Standing Orders. (Senator Sir Alister McMulIin having been conducted to the dais) -

The PRESIDENT (Senator the Hon. Sir Alister McMulIin) - Honourable senators, I am deeply and humbly appreciative of the confidence you have shown in me in electing me once again to this Chair. There are many things to be done and much to be faced in the next 3 years but I have every confidence that with your co-operation and kindness, which have been so much a part of the life of this Senate over the years that I have been here, we will work very happily together for the next 3 years.

Senator ANDERSON (New South Wales - Minister for Supply) - Mr President, it gives me great pleasure on behalf of Government senators - indeed, I believe, on behalf of all honourable senators - to congratulate you on your re-election as President of the Senate. Sir, you have now been President ot this chamber for some 15 years and I am sure that you must view with great personal pride this high distinction as the longest serving President of our Senate in the national Parliament under our federal system. Not only has your career been outstanding in your capacity as President of the Senate but also you have had distinguished membership of the Commonwealth Parliamentary Association. You served as a member of the General Council of the Association in 1954-55, 1956-57 and 1959-60, and for a 3-year term from September 1961. You were Chairman of that body in 1959-60. As Past-Chairman, you were specially invited to attend the twelfth Commonwealth Parliamentary Association conference in Ottawa in 1966. You have represented the Australian Government at the highest possible level in many countries overseas on more occasions than I could mention here.

We on this side of the Senate are proud of the manner in which you have carried out the duties of your high office. Whatever problems should beset us in the next 3 years we are sure at least of one thing - the impartiality of your judgment on all matters that come before you as the Presiding Officer in this Senate. Again may I, not only personally but also on behalf of Government senators, offer my congratulations to you.

Senator MURPHY (New South WalesLeader of the Opposition) - On behalf of the Opposition I should like to join in the congratulations which have been tendered to you, Mr President, notwithstanding that I would have wished our nominee to have been successful. As the Leader of the Government has said, we feel that in your conduct as President you have been tolerant, fair and impartial. We welcome what you have said about the problems which confront the

Senate, many of which are urgent, and we are glad to hear that you will set about attending to them. We wish you enjoyment of your high office and look for a continuance of the excellent standards which you have set as President of the Senate.

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

– On behalf of Australian Country Party members of the Senate I wish to. extend to you our very hearty congratulations. You are back in the Chair because you have earned that position. During the years that I have been a member of the Senate you have always shown, as has been mentioned by Senator Anderson and Senator Murphy, not only impartiality but also fairness and kindness. I know that many honourable senators in the chamber today would support me in that statement. You occupy a very lonely position. Those of us who have had the task of sitting in that chair on various occasions realise how lonely it can be at times, but in spite of that you have conducted the affairs of the Senate in a manner that has brought credit not only to yourself but also to the Senate. Once again, hearty congratulations.

Senator GAIR:
Leader of the Australian Democratic Labor Party · Queensland

– On behalf of members of the Australian Democratic Labor Party I very sincerely and most heartily congratulate you on your re-election to the very important and exalted position of President of the Senate of the National Parliament of Australia. During the few years that I have been here you have discharged your duties competently and with dignity and fairness. I feel confident that you will continue to follow that procedure. Apart from yourself, the only person for whom I would have had greater pleasure in voting would have been a member of my own Party, but I require all of them for a more active and virile part in the deliberations of this Senate. You can rest assured that at all times you will find members of the Democratic Labor Party obedient to the rulings of the Chair and respectful for the decorum of this exalted chamber.

Senator O’BYRNE:

– I should like to add my congratulations to you, Mr President, on your re-election to the high office of President of the Senate. I endorse what has already been said. Over the years that you have occupied the Chair in this chamber you have exhibited a very high degree of impartiality, sound judgment and tolerance. At times the Opposition has tried out all these qualities and you not only survived on those occasions but you have also been able to survive the big test now, which is when the votes go into the box. Again, Mr President, I offer my congratulations. I wish you good health to continue the very fine service that you have given to the Senate over such a long period of years.

Senator ANDERSON (New South Wales - Minister for Supply) - I wish to inform honourable senators that His Excellency the Governor-General will be pleased to receive you, Mr President, and such honourable senators as desire to accompany you, in the Senate Opposition Party Room forthwith.


– I invite honourable senators to accompany me to the Senate Opposition Party Room.

Sitting suspended from 3.42 p.m. to 4.19 p.m.

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– I have to report that, accompanied by honourable senators, I have this day presented myself to His Excellency the Governor-General as the choice of the Senate, and His Excellency was pleased to congratulate me on my election.

The President read prayers.

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Senator GAIR:
Leader of the Australian Democratic Labor Party · Queensland

– I desire to inform the Senate that today I have been unanimously re-elected as Leader of the Australian Democratic Labor Party. Senator McManus has been unanimously elected as Deputy Leader and Senator Byrne has been unanimously elected Whip. Senator Little has been unanimously elected as Secretary of the Party and to him all correspondence should be addressed, including applications by members of other political parties who are desirous of joining a modern, progressive, anti-Communist Labor Party.

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Motion (by Senator Anderson) agreed to:

That the Senate do nowproceedto electa Chairman of Committees.

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

– I move:

Senator Anderson:

– I second the motion.

Senator MURPHY:
Leader of the Opposition · New South Wales

– I propose Senator Ridley to the Senate, for its Chairman of Committees, and move:

That Senator Clement Frank Ridley be appointed Chairman of Committees.

Senator Cohen:

-I second the motion.


– Are there any further nominations? There being no further nominations I invite the two candidates to address the Senate.

Senator Drake-Brockman:

– I submit myself to the will of the Senate.

Senator Ridley:

– I submit myself to the will of the Senate.


-There being two nominations, in accordance with the Standing Orders a ballot will be taken. Before proceeding to ballot the bells will be rung for 2 minutes.

Senator Branson:

– Do paired senators have to leave the chamber or may they watch the proceedings and not vote?


– Any senator present in the chamber after the bells have been rung must vote. (A ballot having been taken) -


– The result of the ballot is: Senator Drake-Brockman, 30 votes; Senator Ridley, 24 votes. I declare Senator Drake-Brockman elected.

Western Australia

– I should like to take this opportunity to thank honourable senators for electing me to the office of Chairman of Committees and to express my appreciation of the honour that has fallen to me. I am well aware of the responsibilities that accompany this office. For that reason I look forward, sir,to the support of all honourable senators in upholding the dignity of the Senate. I assure honourable senators that at all times it will be my endeavour to see that every honourable senator, irrespective of where he sits in the chamber, receives fair and just consideration. 1 hope that my association with honourable senators will be just as pleasant in the future as it has been in the past.

Senator RIDLEY:
South Australia

– I wish to offer my congratulations to Senator Drake-Brockman. As he well knows, my opposing him for election to the office of Chairman of Committees did not arise in any way out of a lack of faith in his impartiality or ability to carry out the job. I wish to thank the people who supported me. 1 sincerely hope that Senator DrakeBrockman had no more worries about not being elected to the office than I had about being elected. In all sincerity, I congratulate him., I have no doubt whatever that he will carry out the dutiesof the office as he has said that he will.

Minister for Supply · New South Wales · LP

– On behalf of all honourable senators I offer congratulations to Senator Drake-Brockman on being reelected as Chairman of Committees. In this place, which is a House of review, we probably do far more work at the Committee stage than is done in another place. Therefore the task of Chairman of Committees in the Senate is a very important one and requires judgment, impartiality and at times patience. I know that I speak for all honourable senators when I say that Senator Drake-Brockman has always shown those high qualities and that the management of government in this democratic institution has been enriched by his contribution.

Senator MURPHY (New South Wales - Leader of the Opposition) - The newly elected Chairman of Committees has said that he will give fair and just consideration to every honourable senator. We members of the Opposition are satisfied from his past occupancy of the position that that is exactly what he will do. In the past he has comported himself with dignity and, I think, to the satisfaction of every honourable senator. We wish him well in his tenure of this office.

Senator McKELLAR (New South Wales - Minister for Repatriation) - It is hardly necessary for me to congratulate Senator Drake-Brockman because - to take the cue from Senator Gair - he was the unanimous choice of the Australian Country Party for the office of Chairman of Committees, It is very nice to hear from Senator Murphy expressions of appreciation of the manner in which Senator Drake-Brockman has carried out his duties in the past. I thoroughly endorse what Senator Murphy has said. J wish Senator Drake-Brockman well in the future.I am quite sure that every honourable senator can look forward to getting a fair deal from him.

Senator GAIR:
Leader of the Australian Democratic Labor Party · Queensland

– On behalf of members of the Australian Democratic Labor Party, I congratulate Senator Drake-Brockman on his re-election to the position of Chairman of Committees in the Senate. As the Leader of the Government in the Seriate (Senator Anderson) has said, the position of Chairman of Committees in a House of Parliament is a very arduous one. In a way it is really more onerous than that of Speaker or President. In the process of legislation, Bills are examined more minutely in Committee than they are in the Senate proper. All amendments to legislation are made in Committee; and all the discussion on amendments takes place in Committee. It is important that the occupant of the position of Chairman of Committees, and those who relieve him from time to time, should be conversant with the legislation before the Committee and, what is more important, with the amendments that are moved.

I do not want to strike a discordant note - that would be foreign to my personality and my nature - but as one who has had some parliamentary experience and who has been a Chairman of Committees I say that some of the amendments that are submitted, although we may have them before us in printed form, are not presented very clearly and audibly. Whether that is due to a defect in the amplification system 1 do not know. 1 say without reflecting on anybody, for that is my nature, that Senator Bull is the only Temporary Chairman of Committees who submits the question for or against an amendment in a good round voice which can be heard in this chamber.

Senator Willesee:

– In a voice like a bull.

Senator GAIR:

– That may be, but the honourable senator’s remark is not very smart. It is so much bull.

Senator Willesee:

– I said it was a voice like a bull.

Senator GAIR:

– Some men have the voice of a bull but others act like one. I was merely saying, when I was rudely interrupted by an irresponsible senator who is on my right but who belongs to the left, that 1 have difficulty in hearing some temporary chairmen of committees, although 1 sit on the front bench. Senator Bull can be heard, but not everybody is blessed with a big voice. Perhaps there is some deficiency in the amplification system. Senator Dame Ivy Wedgwood, with her very refined delicate voice, could not be expected to compete with Senator Bull. Perhaps she could be helped by improved amplification so that we would know what she was saying. However, the defect in her case cannot be used as an excuse for some others who occupy the Chair. They just talk into their whiskers and no-one hears them. I make that suggestion in good faith, not in any spirit of criticism but with a view to improving the discharge of business in the Senate.

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-I have received from His Excellency the Governor-General a commission to administer to honourable senators the oath or affirmation of allegiance.

Commission bid on the table and read by the Clerk.

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Assent to the following Bills reported:

Overseas Telecommunications Bill 1968.

Post and Telegraph Bill 1968.

Post and Telegraph Bill (No. 2) 1968.

Victoria Grant (River Murray Salinity) Bill 1968.

Queensland Grant (Maraboon Dam) Bill 1968.

Canned Fruits Export Marketing Bill1968.

Conciliation and Arbitration Bill 1968.

Customs Tariff Bill 1968.

Loan Bill 1968.

Railway Agreement (Queensland) Bill 1968.

TasmaniaAgreement(Hydro-ElectricPower Development)bill1968.

Railway Agreement (New South Wales) Bill 1968.

States Grants (Beef Cattle Roads)Bill 1968.

International Development Association (Additional Contribution) Bill 1968.

Loan (Airlines Equipment) Bill 1968.

Northern Territory (Administration) Bill (No. 2) 1968.

States Grants (Deserted Wives) Bill 1968.

Superannuation Bill 1968.

Western Australia Agreement (Ord River Irrigation) Bill 1968.

NationalService Bill 1968.

Science and Industry Research Bill (No. 2) 1968.

States Grants (Technical Training) Bill 1968.

United StatesNaval Communication Station (Civilian Employees) Bill 1968.

Defence Forces Retirement Benefits Bill 1968.

Defence Forces Retirement Benefits Bill (No. 2) 1968.

Superannuation Bill (No. 2) 1968.

Commonwealth Employees’ Furlough Bill (No. 2) 1968.

Public Service Bill 1968.

Income Tax AssessmentBill (No. 2)1968.

Pay-roll Tax Assessment Bill 1968.

Navigation Bill1968.

Copyright Bill1968.

Designs Bill 1968.

Privy Council (Limitation of Appeals) Bill 1968.

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Minister for Supply · New South Wales · LP

– It is withregret that 1 have to inform the Senate of the death during the recess of Sir NeilO’Sullivan, a former Leader of the Government in the Senate. His death occurred on 5th July this year in Sydney.

Sir NeilO’Sullivan was elected to the Senate for Queensland at the general elections in 1946, taking his place in the Senate on 1st July 1947. He was Deputy Leader of the Opposition in the Senate from 15th October 1947 to10th December 1949. He was a member of the Senate Standing Orders Committee from 17th October 1947 to 3 1st October 1949 and from 14th October 1953 to 14th October 1958. He was a member of the Senate Standing Committee on Regulations and Ordinances from 22nd October 1947 to 3 1st October 1949. He was a member of the Joint Committee on Broadcasting of Parliamentary Proceedings from 23rd October 1947 to 31st October 1949. He was a member of the Parliamentary Standing Committee on Public Works from 24th October 1947 to 31st October 1949. He was

Minister for Trade and Customs from 19th December 1949 to 11th January 1956.

He was Leader of the Government in the Senate from 20th December 1949 to 17th February 1959. He attended the coronation of her Majesty, Queen Elizabeth 11, in 1953, as a Royal guest. He led the Australian Delegation to the International Sugar Conference convened by the United Nations in London in 1953. He attended preliminary talks in London between Commonwealth representatives on proposals for a review of the General Agreement on Tariffs and Trade and, together with the Rt Hon. J. McEwen, led the Australian delegation to the ordinary and special sessions of GATT at Geneva in October and November 1954. He was Minister for the Navy from 1 1th January to 24th October 1956. He was AttorneyGeneral from 15th August 1956 and VicePresident of the Executive Council from 24th October 1956 to 10th December 1958. He was Chairman of the Joint Committee on Constitutional Review from 1956 to 1959. He was made a Knight of the Order of the British Empire in 1959, and he was a member of the Senate Select Committee on Road Safety in 1959-60. He retired as a Senator on 30th June 1962. Sir Neil O’Sullivan also saw military service. He enlisted in the Royal Australian Air Force in February 1942. He became a pilot officer in June 1942 and flying officer in December 1942. His appointment was terminated on 15th December 1944.

That, I am sure everybody will agree, is indeed a magnificent record of service to Australia. We witnessed the swearing in this afternoon of half of the Senate many being new Senators. In the remaining half of the Senate there would also be senators who were not here during the period of time when Sir Neil O’Sullivan was here. But as I look around on both sides of the Senate I see there still remains a number of senators who had the great joy of knowing Sir Neil O’Sullivan. Sir Neil was, in fact, a kindly, friendly man. He was a generous man. As a senator on the Government benches, as a Minister of State, and as Leader of the Government in the Senate, he fought hard in debates for what he believed in. He was vigorous in debate and in the management of the Senate as Leader of the Government; nevertheless, it can be truly said that once Sir NeilO’Sullivan walked out of the Senate he was the friend of everybody. 1 do not think I ever heard Neil O’sullivan say a mean thing about any man or woman. Honourable senators recognise, of course, that politics is a very rugged affair even under our democratic processes but in the conduct of his parliamentary affairs I would put Sir Neil O’sullivan up as an example for any new senator corning into this place. I therefore move:

That the Senate expresses its deep regret at the death of the Hon. Sir Neil O’sullivan, K.B.E., former senator for the State of Queensland, Minister of the Crown and Leader of the Government in the Senate, places on record its appreciation of his long and meritorious public service, and tenders its sincere sympathy to his widow and family in their bereavement.

Senator MURPHY:
New South WalesLeader of the Opposition

– On behalf of the Opposition I express our deep regret at the death of former senator Sir Neil O’sullivan. He was a man who rose from the position of solicitor to that of AttorneyGeneral of the Commonwealth. He earned high distinction in this Parliament and outside it. He worked hard on behalf of his country in relation to international agreements, especially those touching the sugar industry and other primary industries of Queensland. He was an extremely loyal Queenslander and a man who lived a full and satisfying life. On top of that, he was a genial man who earned the high regard of those who knew him. I saw very little of him but I came to know him as a very friendly man. As a senator he served on two outstanding committees, the Senate Standing Committee on Regulations and Ordinances and the Joint Committee on Constitutional Review, and in both capacities ha rendered valuable service to the Parliament.

He lived through some very stirring times. As Deputy Leader of the Opposition in a Senate in which there were 33 Government senators and only 3 Opposition senators life could not have been very easy. At that time he shared the responsibility of opposition with Senator Dame Annabelle Rankin and the then Leader of the Opposition, Senator Sir Walter Cooper. So his life was not entirely easy. But it is good that a man could do a great deal for his country and enjoy doing it. We of the Opposition regret Sir Neil O’Sullivan’s death. We join the Leader of the Government (Senator Anderson) in support of the motion and we Attend sympathy to his family.

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

– On behalf of the Australian Country Party I should like to join with the Leader of the Government (Senator Anderson) and the Leader of the Opposition (Senator Murphy) in their expressions of sympathy at the death of one who did much for Australia, the honourable Sir Neil O’sullivan. I first made his acquaintance in 1958 prior to coming into the Senate. From the time of meeting him 1 was the recipient of many kindnesses at his hands. Those of us who were at his funeral service in Brisbane had a striking illustration of the popularity he enjoyed when we saw the huge crowd both inside and outside the church. 1 did not see very much of him in this chamber because 1 was not here for very long before he left but, as has been stated, 1 noticed he was outstanding as a leader, a debater and a representative of his State of Queensland. As Senator Anderson and Senator Murphy have said, he proved himself to be not only a popular member of the Senate but also one of its ablest members.

The late Sir Neil O’sullivan was always regarded as a shrewd political thinker. He was Leader of the Government in the Senate during the stormy and turbulent 1950s. He was a man of immense vitality and during his long period as a Minister he gave unlimited service to Queensland and to Australia. He will be remembered for his capacity and sincerity. He was a very likeable man. To his widow and family 1 offer, on behalf of the Country Party, our very sincere sympathy.

Senator GAIR:

– Leader of the Australian Democratic Labor Party) - On behalf of the Australian Democratic Labor Party 1 desire to join with previous speakers in expressing our sympathy to the widow and family of the late Sir Neil O’sullivan, a former member of this Senate. No member of the Senate knew Neil O’sullivan longer than I did. We grew up together as young men, and although we had different political thoughts and ideas we always succeeded in maintaining a mutual respect and friendship which I valued. What has been said about him already is true. Neil O’sullivan was a kindly friendly man, a man who wished to contribute something - indeed, he had the capacity to do so - towards the welfare of Australia. He was a great Australian in heart and mind and in his desire to foster Australia’s development, progress and nationhood.

Neil O’sullivan came from a family which was identified with the early politics of Queensland when that State obtained separation. His grandfather was a member of, if not the first, then one of the early Parliaments of Queensland. His uncle identified himself with distinction with the political life of Queensland. Both those gentlemen contributed much to the early political life of that State and Sir Neil himself contributed much to the more recent political life of this country. I was grieved, as most people were, at his sudden and unexpected death. As Senator McKellar has said, the tributes paid to him by the general public on the occasion of his funeral were most impressive. I think that this country would be greater and richer if we had more people of the character, temperament, tolerance, forbearance and Christian attitude that were demonstrated by Neil O’sullivan during his life. On occasions I engaged in strong talk with him on political issues, but there was never any resentment or unpleasant aftermath. This was probably because in our early days we used to debate in various groups and societies to which we belonged - old boys’ associations and so forth - and in the course of learning the art of debating we were sometimes required to advance arguments that were contrary to our own convictions. Some honourable senators may think that I did not learn very much. They may be right. However, that is how Neil O’sullivan and 1 met, trained and built up a friendship. After all, more valuable than all the political attainments in life are the mateships and the friendships that we make. Neil O’Sullivan’s record in the Senate was a very distinguished one and he contributed much to the political 1’ife of this country. We are indebted to him for this.

Senator BYRNE:

Mr President, my sad first task in this chamber is to address myself to the motion before the Senate expressing sorrow at the passing of one who was a senator and whose passing is lamented by us all. 1 speak because of the personal friendship which I enjoyed with Sir Neil O’sullivan, because of the long association between his family and my own, because we were members of the same profession, and because for quite a number of years 1 had the privilege of serving in this chamber with him as another senator from Queensland. As has been said by those who have preceded me in speaking to this motion, he was a man of extraordinary kindness and tolerance. He was a man whose rapier, in the thrust and parry of debate, was never tipped with harshness and certainly not with venom.

Sir Neil O’sullivan was a man of very deep religious convictions. He made a very wide circle of friends on both sides of the chamber, some of whom still remain here to mourn his loss, as do I. He was, as Senator Gair has said, a member of family that played a very significant role in the early political and constitutional history of the State which he represented so enthusiastically, competently and successfully in this chamber. He came of a family that was distinguished in the law over a number of generations. It was a family from which two other members had been called to serve in the high office of principal law officer of the Crown. When he was called to the high dignity of the office of AttorneyGeneral of the Commonwealth Senator Sir Neil O’sullivan added further lustre to a family that, was already illustrious in service to the community through the profession of law; a family which in preceding generations, in his own generation and in succeeding generations has given members to both branches of the profession as well as to the bench and to the interpretation and application of civil and canon law. His family is still playing its part in the functioning of the legal profession. We shall all mourn this loss.

Mr President, it is with sorrow that I join with other honourable senators in expressing to Lady Margaret O’sullivan and her two sons, one of whom is a member of the late senator’s own profession, and to other members of the family, our very deep sympathy and our condolences in their bereavement.

Minister for Housing · Queensland · LP

– I rise to pay tribute to a great Australian and to a good friend, Sir Neil O’sullivan. I tender to his widow and family my most sincere sympathy. Twentyone years ago Neil and .1 were sworn in together as new senators from Queensland.

We were part of the Opposition of only three. History has recorded the great work that Neil O’sullivan, as a parliamentarian, did in this chamber. I remember him not only as a great Australian and a good friend but as a man who worked untiringly for charity, who never turned away a needy case and who always looked after those in need, the aged, the lonely and persons with various problems. 1 remember him too for his work in Legacy and the care he gave to young people who were in need of the special help which he was so able to give.

I like to think of him as a family man who was proud of his sons and who delighted in his grandchildren. 1 shall always remember him as a man of courtesy, a man of goodwill and a man of great courage with a delightful sense of humour which made the task of a very hard working but small Opposition lighter than it would have been otherwise. Above all else 1 like to think back on my friendship with Neil O’sullivan. He never once said an unkind word about anyone. He was one of the most charitable people 1 knew. He lived, I believe, every moment of his life for the deep religion which meant so much to him. So today I pay tribute to Neil O’sullivan the great Australian, Neil O’sullivan the Christian gentleman, and Neil O’sullivan the friend who made life easier for those who walked the path of life with him. To his widow and his family 1 hope that the knowledge of the great regard in which he was held will be of comfort to them in these sad and lonely times.

Senator SCOTT:
Minister for Customs and Excise · Western AustraliaMinister for Customs and Excise · LP

– I wish to associate myself with the remarks of the previous speakers. I do so knowing full well that Sir Neil O’sullivan was of great assistance to the senators who were sworn in in 1950 after the 1949 general election. As was previously stated, he was the Deputy Leader of the Opposition for 2 or 3 years. He was the Leader of the Government in the Senate from 1949 until the double dissolution in 1951. He was Leader of the Government at a time when the Government lacked the numbers in the Senate. He was of considerable help to all the new Government senators in 1950. There were then only two other senators on the Government side. It was his great help and his advice to us as to how we should act in the Senate that makes me remember him so well. It can be stated truly that Sir Neil O’sullivan never said a bad word about anybody. Together with the other speakers I would like to extend my sympathy to Lady Margaret, her two sons and the other members of the family.


– Because of my long personal friendship with the late Senator Sir Neil O’sullivan 1 want to add a brief word to what has been said. I knew Sir Neil during the war years. We saw a good deal of each other during those times. Then 1 knew him again when I was elected to the Senate. I knew him during the years when his sons were growing up. He was a devoted husband and a tower of strength to his sons as they were growing up- One of them was studying law and the other entered the Church. He was very proud of the country from which his people came. I knew him very closely. He was genuine in his understanding of his fellow men and was always anxious to help them.

The thing that stands out particularly in my memory is the growth of his family. His sons grew up and entered the church and the legal profession. His grandchildren gave him great pride and pleasure, as did all aspects of his family life. His great devotion to his wife and his love of his family will always remain in ‘my memory. He was a man of great tenderness and softness.

Question resolved in the .affirmative, honourable senators standing in their places.

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Minister for Supply · New South Wales · LP

– I wish to draw the attention of the Senate to the death of the Honourable Jack Charles Pizzey al a time when he was Premier of Queensland. He died in Brisbane on 3 1 st July last at the age of 57 years. He entered the Queensland Parliament in 1950 when elected as representative of the electorate of Isis. He represented that electorate until his death. He was a school teacher before his election. He graduated as a Bachelor of Arts in 1942 while serving with the Australian Imperial Force. He was Deputy Leader of the Country Party in Queensland and Minister for Education for 10 years. During his period of office as Minister for Education expenditure on education in Queensland increased by almost 400%. A second university was built, three institutes of technology were established and new teaching methods were introduced in Queensland schools. The University of Queensland in 1962 recognised his services to teaching by awarding him an honorary doctorate of laws.

He was elected as Queensland’s thirtyseventh Premier and as Leader of the Country Party in Queensland on 17th January of this year. The Honourable Jack Pizzey in his youth was one of Queensland’s leading spin bowlers. In 1930 he represented Queensland in the Sheffield Shield competition. Mr Pizzey will also be remembered for his work in the portfolio of Aboriginal and Island Affairs which he held concurrently with the Education Ministry and the Ministry for Police. He served in World War 1.1 as a captain in the Fifth Field Artillery Regiment. I am sure that we will wish to extend to his sorrowing widow and family our very deep sympathy.

Senator MURPHY:
New South WalesLeader of the Opposition

– On behalf of the Opposition I join with the Leader of the Government in the Senate (Senator Anderson) in the remarks he has made. Mr Pizzey’s death was sudden and his loss as Premier of Queensland is tragic. He served as a parliamentarian for 18 years and as a Minister for 10 of those years. He undertook the duties of Premier knowing that he approached them with failing health. He served his own Party well, as he served his State. We join in the expressions of sympathy to his family.

Minister for Repatriation · New South Wales · CP

– On behalf of the Australian Country Party I wish to echo the sentiments that have been expressed by the two previous speakers. Mr Pizzey was known to me personally for about 10 years. He was indeed a stalwart in the advancement of Queensland and could truly be described as a good Australian. His sudden death, as has been said, came as a very great shock to all the people who knew him. He held for too brief a period the office of Premier of Queensland. He displayed qualities of wisdom, enterprise, strength and integrity. For many years he was Deputy Leader of the Country Party in Queensland and Minister for Education in the Queensland Government led by Mr Nicklin. Mr Pizzey was described by one of his colleagues as a big and gentle Queenslander. Queensland and Australia have suffered a great loss. We offer our sympathy on behalf of the Australian Country Party to his widow and family.

Senator GAIR:
Leader of the Democratic Labor Party · Queensland

Mr President, as you would expect, I knew the late Mr Pizzey, the former Premier of Queensland, from 1950, when he was elected to the State Parliament. I knew him as a member of the Opposition when the Gair Government was .in power and for 3 years after the Country-Liberal Party Government accidentally came into power. Jack Pizzey was a highly respected man in the field of sport and in the field of education in which he served with distinction and great merit. Politically, I would say that, whilst he did not reveal any outstanding qualities during the period he was in Opposition, when he was charged with the responsibilities of a member of a government he matured and developed politically very quickly. As Minister for Education he did a good job of work. During the short period for which he was Premier he revealed a capacity for work and an understanding of the Slate’s requirements and the need for its development.

I, too, was shocked by his sudden death. This is just another instance of a man sacrificing his life for his State or country in the field of politics. Too many members of the public are too cynical about the services of parliamentarians and too unappreciative of the tasks and duties associated with public office, particularly with the office of Minister of the Crown. In addition to administering a department, a Minister is expected to travel far and wide throughout the State or the Commonwealth, as the case may be, and to meet the requests of various organisations and bodies associated with the community life of the country. Very little thought is given to the time that a Minister is required to give in travelling from one point to another, to his absences from his home, his wife and his family, to the time that he is required to live out of portmanteaus - or suitcases as they are called now - and to the changes of lodging that he is required to make from night to night in the service of his country.

Sometimes I wonder just how many or what percentage of our people ever stop to think of all that is entailed in the service of the country by a Minister who is endeavouring to discharge his obligations conscientiously and assiduously. However, I suppose that the fact that people do not do so is one of the things that we must expect. I believe that it is the result of just a lack of thought rather than of a cynical disregard or nonappreciation of what is being done. I believe that Jack Pizzey died in the service of his State. As the previous speaker, Senator McKellar, said, Jack Pizzey knew that he had a heart weakness, but that did not stop him taking on the top job in his State. He took it on; he endeavoured to do it; and he did it well until the Lord called him.

Question resolved in the affirmative, honourable senators standing in their places.

Senator Anderson:

Mr President, I suggest that the sitting be suspended until 8 p.m.


– As a mark of respect to the memory of the deceased gentlemen, the sitting of the Senate is suspended until 8 p.m.

Sitting suspended from 5.21 to 8 p.m.

page 13

BUDGET 1968-69

Minister for Supply · New South Wales · LP

– I present the following papers:

Civil Works Programme 1968-69.

Commonwealth Payments to or for the States 1968-69.

Estimates of Receipts and Summary of Estimated Expenditure for the Year Ending 30 June 1969.

Expenditure -

Particulars of Proposed Expenditure for the Service of the Year Ending 30 June 1969.

Particulars of Proposed Provision of Certain Expenditure in respect ofthe Year Ending 30 June 1969.

Government Securities on Issue at 30 June 1968.

Commonwealth Income Tax Statistics, for income year 1965-66.

National Income and Expenditure, 1967-68. and move:

That the Senate lake note of the papers.

Tonight, the Treasurer is delivering in another place his Budget Speech for 1968- 69. It is my privilege to outline to the Senate the Budget proposals of the Government.

When opening the Parliament on 1 2th March 1968. the Governor-General said:

My Government will review the field of social welfare with the object of assisting those in most need while at the same lime not discouraging thrift, self-help and self-reliance.

Earlier this year the Prime Minister established the Welfare Committee of Cabinet to make a comprehensive examination of existing health and social welfare schemes and to suggest new approaches where desirable. The Committee has been engaged on that task and will continue with it.

The proposals I shall elaborate flow from these deliberations. While they do not provide final solutions, they do represent significant steps along the road the Government is determined to follow. Some of them have not before been included in Commonwealth social welfare programmes. Indeed J believe it will be clearly seen that the Government has placed the objective of helping the aged, the sick, and the needy in the forefront of its domestic programmes.

From the economic standpoint we have aimed to provide a budgetary context for stable and well-balanced growth. Although, 12 months ago, the economy was, in the main, growing strongly, there were some depressive factors at work, such as droughts in south-eastern Australia, and there was some productive capacity to spare. Moreover, an imbalance had developed between the public and private sectors and we thought it right to tighten the reins on public spending to make room for a stronger expansion of private sector activity. Despite unforeseen drought relief payments that had to be made to some of the States, we succeeded in keeping the rise in Commonwealth expenditure to 10% of the previous year’s total. This was close to the Budget estimate andless than the increase of 12% in the year before.

As we intended, and despite the drought, private expenditure increased in all of its main branches a good deal faster than in 1966-67. The growth in employment also was notably stronger. In the 12 months to June 1968 employment grew by 131,000. In the preceding year the increase had been 83,000. Private employment absorbed 71% of last year’s increase; in 1966-67 it took only 59%.

In these major respects, the objectives of the Budget were achieved.

Throughout 1967-68 consumer spending continued to rise and has lately been growing at an annual rate of about 8%.

Private capital expenditure has accelerated rapidly. Compared with the year before, private expenditure on housing in 1 967-68 increased by 1 1 % and on other building and construction by 20%. Private expenditure on plant and equipment, which lagged in 1966-67, rose by 2% over the year.

Last financial year, gross national expenditure - which is the sum total of public and private spending in Australia - increased by 8% to $24.832m. This was $6ISm more than gross national product, which increased by 6% at’ current prices to S24.214m. Non-farm production increased substantially - by some 9%. Drought cut farm output and slowed the rise in national product as a whole which increased by about 4% at constant prices.

The excess of total spending over local output inevitably caused a spill-over of demand into overseas purchases. On the one hand, drought and poor export prices reduced earnings from exports of farm products. On the other hand, imports and other payments abroad, particularly for defence, increased. In consequence, the external deficit on current account widened to about $ 1,000m. This was more than covered by a surplus of over $l,100m on capital account. Bigger Government loan raisings abroad and the exceptionally large inflow of portfolio investment and institutional loans produced the means by which a record addition to the supply of resources from abroad could be financed.

Our international reserves would have risen by some $78m had it not been for the devaluation of sterling, which reduced the value of our London balances in terms of our currency by about SI 13m. As it was. at the end of 1967-68 our gold and foreign exchange holdings, together with our reserve or ‘gold tranche’ position in the International Monetary Fund, amounted to $ 1,341m - a reduction of $35m over the year.

page 14


We have entered 1968-69 with a generally buoyant economy. Employment is high and rising and, with it, the level of wage and salary incomes. If the season holds there could be a record farm output this year. Depending on prices and the level of rural costs, this could bring a considerable lift in rural incomes. Consumer spending can be expected to go on rising. Private capital expenditure, on both housing and other forms of building and construction, has gained a momentum that should keep it going strongly in the months to come. Investment in plant and equipment is now rising. With the ending of the drought, sales of farm equipment can be expected to pick up. It can fairly be assumed that with so much construction going on in so many places, the demand for plant will not only be sustained but will increase.

Net immigration is rising and employment could increase by 3% this year. If gains in productivity are as good as the average of recent years, this could mean an increase of as much as 6% or more in gross national product at constant prices. The big lift in mining and farm output which seems to be feasible would of course contribute to this; but it would be an addition to exports much more than to supplies for local use. It is to a rise in nonfarm product that we must chiefly look for the means to match an overall rise in demand. If the rise in demand is overstrong so that there is a relative shortfall in domestic supplies, there could be a still greater diversion of purchases to imports. More than likely also there would be some forcing up of local costs and prices.

page 14


The expenditure proposals we are now putting forward will take Commonwealth expenditure to a total of $6,59 1 m. This is an increase of 8479m or 7.8% on last year’s expenditure which was 10.4% greater than that of the year before. We have, therefore, achieved a significant slowing down in the rate at which our expenditures have been increasing. In national accounts form, the figures indicate that Commonwealth expenditure which makes a direct demand on the supply of goods and services will increase by SI 80m or 10.1%. Last year the increase was 15.7%.

In contrast with last year, all of the net increase in total expenditure from the Budget will be concentrated on payments in Australia. Although defence spending abroad will be greater, total Budget outlays overseas this year - about $645m - will noi increase - which will of course help the balance of payments. Total domestic outlay, including pensions, other transfer payments and loans for capital works and housing, is estimated to increase by 8.5% - that is, just about the same rate of increase as last year. Although the increased spending from the Budget will be concentrated at home, its impact on the domestic economy will probably be much the same as that of last year.

We have estimated that, without any change in rates of taxation or charges, our revenues this year would increase by about 9% to $5,950m. In the main the increase would be the product of rising incomes and expenditure within the economy and so would do relatively little to offset the domestic impact of the increase in Budget expenditure. Receipts of this amount would, moreover, leave a deficit to be financed by borrowings of $641m, approximately the same as last year’s deficit of $644m.

Last year’s deficit was heavily financed, directly and indirectly, by the banking system, whose holdings of Commonwealth securities increased by $323m.

This year, as 1 have just pointed out, domestic outlays through the Budget are estimated to increase at about the same rate as they did in 1967-68. But the economic prospect to which the Budget must be shaped differs significantly - and for the better - from what it was a year ago - and indeed the year before that. So far as we can discover, there are no seriously depressive influences, like drought, as there were then. There is not the same need today to give a boost to private spending by allowing public expenditures to rise without offsetting the rise to some extent by adding to tuxes or charges, in fact, the economy is buoyant and demand is strong. For some time now average earnings have been rising at a rate of 6% per year or thereabouts - a rate well above the best increase in productivity we could expect - and pressure on costs is building up. We have reason to expect this year an improvement in our external current account but it would be risky to count on another record flow of capital from abroad to finance a large over-spill of demand for imports.

Having regard to the still-rising level of defence expenditure, the obligations we have to improve standards of welfare in the wide sense and the pressing requirements for greater and still greater developmental outlays, we think we have done well to bring the rate of increase in Commonwealth expenditures back to a more supportable level. In the present buoyant economic conditions, it nevertheless seems prudent to modify a little the stimulus flowing from this increase in expenditure by seeking at least a modest addition to our revenue resources. What we propose in this regard 1 shall explain later.

page 15



I take first the estimates of defence expenditure. Last year, expenditure on defence totalled $1,1 15m. This year it is estimated to be $1,2 17m - an increase of 9%. Defence expenditure overseas this year is estimated to be about $375m or $3)m more than last year. To help finance procurement of military equipment from the United States, we expect to draw on United States credits of $122m.

The estimate of $l,217m is based on a careful assessment of the cost of maintaining our defence services and establishments and proceeding with their planned expansion and re-equipment.

The Government’s military advisers are now engaged upon a most comprehensive review of Australia’s strategic situation and prospects. The review will assess the basic assumptions which underlie our defence policy, and is a vital step in formulating our long-term defence policies. When this review has been completed, a new defence programme will be drawn up to carry the planning of our defence capability forward into the 1970’s.

Wc are including $240,000 in this year’s defence vote for the cost of a new postal concession that will grant free postage on letter-class mail and voice tapes passing both ways between our servicemen in Vietnam and addresses in Australia.

Social Welfare

I come now to the expenditures than can be grouped under the general heading of welfare. The Government has given very special attention to the immediate needs of the less-well-placed people in the community and it has done so on a broad and, we believe, compassionate basis. The Welfare Committee has already considered a wide range of proposals in its search for ways to assist those in the greatest need. The Government’s proposals are based upon the Committee’s present findings and recommendations.

Adoption of the proposals will add substantially to various classes of welfare payments this year. Expenditure on social services, repatriation, health and housing benefits taken together is estimated to rise to $ 1,446m, or $111m more than last year’s total.

Payments from the National Welfare Fund arc expected to increase by $85m to a total of SI, 161m this year.

Expenditure on repatriation pensions and benefits is expected to total $286m this year, a rise of $25m.


Nearly a million pensioners will benefit from the increases we propose in pension rates.

The maximum weekly rate of pension for single age and invalid pensioners and widows with children will rise by $1 to $.14. The combined age pensions of a married couple will increase by $1.50 to bring the maximum weekly rate to $25. These increases will apply also to Service pensions - which are Repatriation benefits - and there will be comparable increases in the allowances paid to tuberculosis sufferers.

The pensions of widows without children will be raised by 75 cents to a maximum of $12.50 a week.

To relieve the difficulties faced by the surviving partner of a married pensioner couple and to help these pensioners to adjust to a single pension, the Government has decided that the equivalent of the combined pension will be paid to the survivor for 12 weeks after one of them dies.

To help women widowed in Australia - and we have migrants particularly in mind - we propose to remove the present requirement of at least one year’s residence before a pension is payable. In future, if a married couple are residing permanently in Australia when the husband dies, the widow will immediately become residentially qualified for a pension.

The Government is aware of the difficulties that can be faced by widowers of relatively small means who are left to care for a family of young children. It is hoped that measures of relief for these widowers will be formulated and announced soon.

To assist families without a breadwinner we propose to increase by $1 to $7 a week the allowance payable to the non-pensioner wife of an age pensioner who is permanently incapacitated or has a dependent child and to the non-pensioner wife of any invalid pensioner. We shall also add $1 to week for each child of age, invalid and widow pensioners to bring the total payment for each child, excluding child endowment, to $2.50 a week. The child’s allowance of $1.50 a week for a first child will be replaced by the addition of the same amount to the parent’s pension. This will raise by $130 a year the amount a pensioner with a child may receive and remain entitled to a pension.

Other new or improved benefits will include an increase in the training and livingawayfromhome allowances payable to those receiving benefits from the Commonwealth Rehabilitation Service and the introduction of a training scheme for widow pensioners to help them rejoin the work force. These proposals will require amending legislation. The additional and new pension benefits will be payable on the first pension pay day after the legislation comes into operation.


In conformity with the proposed increase in age pensions, it is intended to raise the income tax age allowance exemption granted to residents of Australia who are of the qualifying age. This age is 65 years for men and 60 for women.

At present no tax is payable by an aged person whose taxable income does not exceed $1,196. In future the exemption will apply to taxable incomes not exceeding $1,248. For a married person qualified by age, the exemption will be granted where the combined taxable income of the husband and wife does not exceed $2,184, as compared wilh $2,106 at present.


In considering what we might do to improve repatriation pensions and benefits we have again concentrated our attention where the need is greatest.

Priority has been given to the totally and permanently incapacitated war pensioner. Mis pension is to be increased by $3 to $33.50 a week.

We are introducing a new special compensation allowance ranging from $2.25 to $3 per week which will be payable to certain more seriously incapacitated general rate pensioners. The pensioners concerned will be those - but not all - with assessed incapacity ranging from 75% to 100%. The intermediate rate of war pension payable to those able to work only part-time or intermittently because of a war-caused disability will be increased by $3 to $24.25 a week.

The pension payable to a war widow is to be increased by $1 to $14 a week. With the policy of need in mind and particularly the need of those without a breadwinner, we intend to increase the pension payable to war orphans. The pension for a war orphan who has lost one parent through war service will rise by $1 a week. That will make the pension $5.40 for the first child, and for other children $4.25 a week. Where the other parent also is dead, the pension will increase by $2 to $10.15 a week.

Other policy changes will include increased allowances for certain war pensioners in respect of attendants and clothing, and increases in certain education allowances payable for war widows’ and special rate pensioners’ children.

Service pension eligibility will be granted to those who have had ‘special service’ under the Repatriation (Special Overseas Service) Act. As 1 have already said, those receiving Service Pensions will obtain the same increases as those for age, invalid and widow pensioners.

The Government has already provided as a gift specially equipped motor cars for seriously disabled ex-servicemen who as a result of war service have lost the use of their legs through paralysis or bad both legs amputated above the knee. It has now been decided to extend the scheme to certain ex-servicemen who have suffered other types of multiple amputations. The increased benefits will be payable from the first pension pay day after the necessary legislation has been passed. health

In the field of health services we have given special attention to the burden of costs that can fall on those afflicted with long continuing illnesses. We had already undertaken to assist those suffering in this way. Toward fulfilling this undertaking, two additional benefits are proposed.

First, an insured hospital patient suffering from chronic, pre-existing or long-term illness will be paid, regardless of the length of stay in hospital, the full amount of benefits, including the Commonwealth hospital benefit, for which he or she is insured but the amount so paid will not exceed the hospital charges. This increased benefit will replace the present benefit of $5 a day and will operate from 1st January 1969.

Secondly, we are introducing a supplementary benefit for those patients in approved nursing homes who are medically classified as in need of intensive care in a nursing home. It will be payable from 1st January 1969 and will add $3 a day to make the total benefit for these patients $5 a day, regardless of the length of illness.

We are introducing a new benefit also for children under 16 accommodated in homes for handicapped persons conducted by religious or charitable organisations which provide medical or paramedical treatment and nursing care. This new benefit will be payable from 1st January 1969 at the rate of $1.50 a day for each child.

We intend to increase as from 1st September 1968 the subsidy now payable to approved organisations providing a home nursing service. For organisations established before September 1956, the annual subsidy for each nurse over and above the number employed at 30th September 1956 will be increased from $2,200 to $2,500. For organisations formed after that date, the subsidy for each nurse employed will be increased from $1,100 to $1,300 per annum.

We are convinced that there is a need to develop home care and related services, particularly but not exclusively for aged persons. We have therefore invited the States to discuss this matter with us, at the official level initially, with the aim of working out a comprehensive and coordinated programme of home care, in which the Commonwealth will participate financially and with which would be associated an offer of Commonwealth assistance of up to $lm a year towards the provision of additional State nursing home beds for the infirm aged with little means.

As another measure to assist particularly in home care, we propose to increase the grant payable to the Australian Council on the Ageing from $60,000 to $100,000 a year.

For States prepared to conduct vaccination campaigns, the Commonwealth proposes to provide measles vaccine free of charge. Victoria intends to conduct a measles vaccination campaign in 1968-69. Vaccination campaigns will be initiated also in the Australian Capital Territory and in the Northern Territory.

The proposals for additional assistance in the fields of social services, repatriation and health are estimated to cost $5 7m this year and at least $87m in a full year.

page 18


The Commonwealth has given the Royal Flying Doctor Service financial assistance for many years. This year, and in each of the next two years, we propose to increase the Commonwealth subsidy from $280,000 to a maximum of $350,000 a year, of which $180,000 will be for operational costs. In addition, we are making a special capital grant of $480,000 to meet the cost ‘of changing the radio equipment on the 12 radio controlled bases to conform to new international requirements. The total cost of this assistance this year is estimated at $390,000.


In this nationally important field, the Commonwealth will continue to co-operate with the States and other education authorities to develop and improve the facilities and the opportunities for the education of the Australian people. This year the Commonwealth will provide an estimated $210m for education or 19% more than expenditure in 1967-68.

The Commonwealth science laboratories and technical training programmes, now in their fifth year, have proved highly successful. As an entirely new policy and to fulfil the assurances the Government has given, we now propose to establish a separate programme for libraries in Government and non-government secondary schools throughout Australia. For approved capita) projects under this new programme, we propose to make the sum of $27m available to the States over a 3 year period beginning in 1969.

The estimates of the Department of Education and Science include $150,000 for the first annual instalment of a Commonwealth contribution over 5 years to a major project for the development, in cooperation with Victoria, South Australia and Tasmania, of curricula and related teaching materials for a junior secondary science project which covers the first 4 years of secondary school science.

As a new policy, the Commonwealth will make a direct contribution to the development of pre-school education. This will be done by unmatched capital grants to the States to increase the capacity of approved pre-school teachers colleges throughout Australia. The sum of $2. 5m will be made available over 3 years for distribution among institutions in each of the States.

Commonwealth scholarships have been reviewed and we have decided to increase the number of open entrance university scholarships by 1,500 to 7,500 a year and the number of scholarships at Colleges of Advanced Education by 500 to 1,500 a year. The number of new post-graduate awards will be increased from 500 to 650 a year. All of these new scholarships will become available from the beginning of the 1969 academic year.

The Government has direct responsibility for education in the Australian Capital Territory and the Northern Territory, it has decided on certain new measures in those Territories, the details of which will be announced later.

The total cost of this new Commonwealth assistance in education will add about $4.7m to the Commonwealth’s expenditure on education in 1968-69.

Aboriginal Affairs

This year special provision will be made for Aboriginal people in the fields of health, education, housing and productive enterprise. For these purposes, we are seeking an appropriation of SI Om to be set aside in an Aboriginal Advancement Trust Account. Of the $10m to be paid to the Trust Account, $5m will be used for assistance to Aboriginals in the fields of housing, education and health. The other $5m will constitute a fund for assisting enterprises carried on by Aboriginal citizens alone or in association with other Australians, it is unlikely that this amount will be fully spent this year. Any unexpended balance will be carried forward in the Trust Account and will be available for expenditure in the following financial year.

Commonwealth Employees’ Compensation

We propose to introduce legislation to increase the rates of weekly payments for incapacity provided under the Commonwealth Employees’ Compensation Act 1930-1967. The weekly rates will be increased from $25.35 to $28.15 for an unmarried adult employee and from $19.00 to $21.10 for a minor. The additional weekly allowances for dependants will be increased from $6 to $6.80 for a dependent wife.

War Service Homes

We propose to increase the maximum loan under the War Service Homes scheme from $7,000 to $8,000. Pending assent to the necessary legislation, applications for the increased loan will be accepted from eligible new purchasers and borrowers. In conformity with existing policy, applications will be accepted, as soon as the legislation is assented to, for additional loans within the new loan limit for essential extra accommodation and approved utility services.

For expenditure under the War Service Homes scheme $50m has been provided.

Housing Loans - Australian Capital Territory and Northern Territory

We propose also to increase the lending limit under the Australian Capital Territory and Northern Territory Housing Loans schemes to the same level as that proposed for War Service Homes - i.e., by $1,000 to $8,000. As well, the maximum loan that may be made from Commonwealth funds by co-operative building societies in the Australian Capital Territory will be increased from $7,500 to $8,500. These increases in limits will require an additional $1.2m and a total provision of $10m this year for housing loans in the Territories.

Drought Bonds

In the preparations for the Budget, the Government has reviewed the assistance given to industry, particularly rural industry.

The Government has decided in principle to introduce a scheme of Drought Bonds in order to assist those people, mainly in arid areas, who derive the bulk of their income from grazing sheep and cattle and are unable to conserve fodder and water. They will be able to set aside funds as a provision against drought, fire or flood by investing in these bonds within limits to be specified. The amounts so invested will be deductible in the assessment of taxable income and will earn interest. The bonds will be redeemable in time of drought or if substantial losses are suffered through fire or flood. The amounts received on redemption will be taxable.

The bonds will also be redeemable on sale of the property but subject to payment of the tax that would have been paid if the investment in the bonds had not been made. As an alternative to redemption, provision will be made, subject to conditions to be specified, for transfer of the bonds to the purchaser of the property, if he so wishes.

Legislation to give effect to this scheme will be introduced when the details have been settled.

Superphosphate Bounty

Since the bounty of S6 a ton on standard superphosphate used in Australia as a fertilizer was introduced in August 1963, use of this fertilizer has increased considerably with beneficial effects on rural output and exports.

We have decided to extend to October 1971 the legislation authorising the bounty on superphosphate and to increase the standard rate of bounty to $8 a ton with effect from 14th August 1968.

We have decided also that approved compounds of trace elements, where incorporated with bountiable phosphate fertilizers, should attract the same rate of subsidy as standard superphosphate. We are extending the bounty in this way in recognition of the fact that mineral trace elements are essential for successful pastoral or crop production in many parts of Australia and it is usual for these elements to be incorporated with superphosphate.

At the new rate, the bounty is expected to cost $37m this year or SI 3m more than last year.

Gold-mining Subsidy

The Government has decided to liberalise the present treatment, under the goldmining subsidy scheme, of receipts by subsidised producers of premiums from sales of gold. At present, the relevant Act provides that producers’ subsidy entitlements are reduced by the full amount of such premiums. The Government has decided to bring legislation forward to amend the Act, with effect from 1st July last, to provide for retention by subsidised producers of 25% of premiums received in excess of the present official price of $31.25 per ounce.

Other Expenditures

Up to this point I have outlined particular decisions affecting expenditures that were taken in the context of this Budget. In doing so I have covered some of the main classes of expenditure. I shall now refer to the others.

Among these classes of expenditure, the largest absolute increase, $11 3m, is expected in Payments to or for the States, which are estimated to rise to a total of $ 1,466m this year. That is an increase of 8.3%. The largest segment of these payments comprises the general revenue grants to the States, estimated this year to rise by $65m to $ 1,022m, an increase of 6.8%. Specific purpose payments of a capital nature to the States are expected to increase by $45m to $340m, an increase of 15.3%. These special capital payments are, of course, distinct from the State works and housing programmes which this year will increase by $33m to $7 10m, an increase of 4.9%.

Departmental running expenses are expected to increase by $24m, or 6.6%, to $3 84m.

Expenditure in the Australian Territories, other than Papua and New Guinea, is estimated to increase by $9m or 15.2% to $71m. This does not include expenditure on capital works and services. The provision for expenditure in the Australian Capital Territory is nearly $30m, an increase of $4m or 16.8%. For expenditure in the Northern Territory, close to $40m is being provided, which is 13.8% above last year’s expenditure.

External aid, including the grant to the Administration of Papua and New Guinea, is estimated at $144m, or 13.6% greater than last year’s expenditure.

The grant to the Administration of Papua and New Guinea will be $87m - 9.4m or 1.2% greater than the grant for 1967-68. This grant has more than doubled over the last 6 years - which is convincing evidence of the Government’s unswerving aim to maintain the pace of economic and social development in Papua and New Guinea.

Apart from the grant to Papua and New Guinea, external aid to developing countries continues to grow and absorb an increasing proportion of our national resources. The cost of international aid programmes is expected to rise this year lo $56m, or 16% above last year’s expenditure.

Commonwealth payments to industry will, on present estimates, increase by $38m or 21% this year. 1 have already referred to the increased bounty to be paid on phosphate fertilizers. In addition, it is expected that the bounty on nitrogenous fertilizers will cost $14.4m or $4m more than last year. Payments under the wheat industry stabilisation arrangements are expected to increase by $27.5m to $43m, and devaluation compensation for primary industries is estimated at $35m, or$14m more than last year. Compensation in respect of manufactured exports is estimated at $2m.

Total payments to rural industries are estimated to rise by 25% to$179m in 1968-69.

In relation to the item - Advances for Capital Purposes - I draw attention to the new financial arrangements for the Post Office, which came into force on 1st July 1968. For the Post Office we now have a single line in the Estimates that provides the amount of new capital the Post Office is to receive from the Budget. This year the amount to be provided is $222m, an increase of $18m over the comparable figure for last year. The Post Office will also draw on its own internal resources of funds - comprising in the main depreciation moneys - and, altogether, it should be able to undertake a capital programme in 1968-69 of $280m. This programme is geared to the continuously increasing demand for new and improved communication facilities.

For other Commonwealth capital works and services we are providing $189m - $l5m or 8.8% more than the amount spent last year.

Debt charges are expected to increase by $3.6m to nearly $110m this year. In all expenditure is expected to amount to $6,590,887,000.

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We have based this year’s estimates of receipts, except from borrowings, on the expectation of a strong increase in incomes and spending in Australia. We have assumed that the rate of increase in average earnings will be a little below last year’s rate - 5.5% as against 6% - and that the rate of increase in average employment will be faster - 3% as against 2.5%. Expenditure on goods subject to excise duties and sales tax is expected to rise strongly again in 1968-69.

As I said earlier, total receipts, other than from borrowings, are estimated to amount to $5,950m at existing rates of taxes and other charges - an increase of $482m over receipts in 1967-68.

Receipts of $5,950m would fall short of total expenditure of $6,591m by $641m, which would be almost the same aslast year’s deficit. For the reasons I have given earlier we think we should do something to offset the rise in Commonwealth expenditures this year by seeking to raise additional revenues.

Income Tax - Companies

It is proposed to increase by 2.5 cents in the$1 the rates of tax payable on incomes derived by companies during the income year 1967-68. The rate of 50 cents in the $1 payable where there is an insufficient distribution of income by a private company will not be changed.

The investment income of a superannuation fund that does not invest a sufficient proportion of its assets in public securities is taxed at the same rates as the mutual income of a life assurance company. As the latter rates are being increased by 2.5 cents in the $1, the rates for a superannuation fund whose investment income in 1968-69 is taxed in this way are being increased by a corresponding amount.

The gain in revenue from the increased company rates is estimated to be $60m in a full year and$56.5m in 1968-69.

Sales Tax

As another measure to secure additional revenue, it is proposed to increase the general rate of sales tax from12½% to 15%. The increase will apply to all classes of goods to which the present12½% rate applies, and will be effective as from tomorrow, 14th August 1968.

The12½% class includes commercial vehicles, motor spare parts and accessories, tyres and tubes, printed matter and paper products, confectionery, soaps, detergents, potable spirits, imported wines and beers, typewriters, office furniture and equipment, sporting goods, toys and other goods.

It is estimated that the proposed sales tax increase will produce additional revenue of $44m in a full year and$34m for the financial year 1968-69.

Broadcasting and Television Licence Fees

To reduce the annual deficit on the operations of the national broadcasting and television service, it has been decided to increase the combined broadcasting and television licence fee from $17 to $20 a year. The television licence fee will rise from $12 to $14, and the broadcasting licence fee from $5.50 to $6.50 in Zone 1 and from $2.80 to $3.30 a year in Zone 2. The licence fee for pensioners will remain unchanged.

These increases, which will apply from 1st October next, are expected to bring in additional revenue of $5m in 1968-69 and $7m in a full year.

Air Navigation Charges and Passenger Service Charge

In each of the last 6 years we have increased by 10% the rates of air navigation charges in pursuance of the policy that the air transport industry should meet a greater proportion of the costs incurred by the Commonwealth in providing, maintaining and operating airports and airway facilities. We propose to make a further 10% increase this year. It will apply from 1st January 1969 and is expected to yield additional revenue of $460,000 in 1968-69 and $1,010,000 in a full year. We propose also to adjust the scale of aircraft weights used in calculating these charges to take full account of the fact that it is the operation of heavier aircraft that usually necessitates major capital expenditure at airports.

A year ago, the Government announced its intention to introduce a passenger service charge to be payable on both domestic and international air services to help progressively towards reducing the gap between the annual cost and the annual revenue from the use of aviation facilities. The basic charge is to be 50 cents for embarkation and 50 cents for disembarkation at Commonwealth airports, making a total charge of $1 for a single domestic journey between two such airports. The charge will be $2 for embarkation by departing international passengers. Legislation to give effect to the charge will be introduced after arrangements for collection have been discussed with the airlines.

Light Dues

The charges at present paid by shipping companies for lighthouse services and other aids to navigation are insufficient to meet the annual cost to the Commonwealth of providing these facilities. It has therefore been decided that light dues should be increased from the present 15 cents per net registered ton per quarter, to 18 cents. This is expected to yield additional revenue of $480,000 in 1968-69, and $640,000 in a full year.

Post Office Tariffs

Despite the fact that certain postal and telephone charges were increased last year, the Post Office incurred a significant loss in 1967- 68. On the basis of present tariffs it would incur another loss in 1968-69. The adverse result in 1967-68 was due partly to the delay in introducing the new tariffs as a result of the Senate’s rejection of the tariff proposals in June last year, and partly to the fact that substantial cost increases have occurred since the new charges were introduced. The postal service in particular is labour intensive, and there is a limit to how far the Post Office is able to offset increasing labour costs by improvements in productivity. The postal strike also contributed to the adverse result in 1967-68.

As a step towards restoring the Post Office’s financial position, it has been decided to adjust the charges for certain postal services. The services involved were not affected by last year’s tariff increases. In some cases reductions, in charges will be proposed where it is expected that in consequence demand will increase and additional revenue will accrue as a result of the increased business.

The revenue measures, which will apply from 1st October next, are expected to increase Post Office revenue by some $5m in 1968-69, and $7m in a full year. Even with these adjustments, it is expected that the Post Office will still incur a loss in

1968- 69.

Total Estimated Receipts, 1968-69

Apart from the increases in postal charges, which will not directly affect Budget revenues under the new accounting arrangements that apply to the Post Office, the net effect of the proposed new revenue measures will be an estimated addition of $94.4m to Budget receipts this year. This will raise the estimated total receipts to $6,044m and will reduce the estimated deficit to $547m or $97m less than last year’s deficit of $644m.

The reduction of the gap between expenditure and revenue is a critically important feature of the Budget. How this deficit is to be financed has implications for the supply of money and hence for the indirect impact of the Budget on the economy.

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The deficit will have to be financed from borrowed funds, including the net amounts we were able to raise abroad.

Last year, we raised overseas a net $l32m in public loans, aircraft loans and defence credits. This year, our net official borrowings abroad from all sources seem likely to fall short of last year’s $132m.

That would leave a net amount of more than $400m to be raised in Australia. Last year net public loan raisings in Australia were $297m. Because of a smaller volume of maturities, redemptions this year should be less than last year’s $293m so that net raisings in Australia could be larger than those obtained last year. We can expect a sizable proportion of the subscriptions to public loans in Australia again to come from the banking system and we shall have to call on the Reserve Bank to finance that part of the deficit for which funds are not available from other sources.

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The likely economic effects of a Budget can be assessed only in the context of all of the more important influences operating at the time in the economy as a whole. The critical question is not so much whether the Budget is expansionary or otherwise but whether its effects when combined with the other influences at work will be likely to keep the economy growing in conditions of internal and external stability.

An analysis of the Budget estimates in national accounting terms suggests that the impact of Budget outlays on demand and incomes in Australia will be much the same in 1968-69 as in 1967-68, but when allowance is made for the measures on the revenue side, the overall effect of the Budget will be a smaller contribution to the growth of demand and incomes than was made by the 1967-68 Budget.

We are seeking this effect because of the judgment we have made as to the strength of other influences operating to raise expenditures. We do not wish to see total spending in the economy run ahead too fast this year - as we believe it would if the Budget impact were not moderated.

A budget has largely to be a process of analysis and calculation; but it ought never to exclude humane and social values. We” have sought to give them an honoured place in this Budget.

Debate (on motion by Senator Murphy) adjourned.

Senate adjourned at 8.56 p.m.

Cite as: Australia, Senate, Debates, 13 August 1968, viewed 22 October 2017, <>.