1952-05-29 20 1 4 REPS 1067 0 House of Representatives. Thursday29, May Mr. Speaker (Hon. Archie Cameron)took the chair at 10.30 a.m., and read prayers. ROADS. Mr. FULLER.- My question to the Minister for the Interior arises out of a reply that he gave to me on the 14th May last. I had asked him a question relative to the construction of a bridge across the Goodradigbee River at Brindabella, and the honorable gentleman made the following reply: - The project to which the honorable gentleman has referredhas been, so to speak, put into cold storage, for the simple reason that it cannot be placed anywhere near the head of the list of priority developmental works. Doubtless the work will be done some day, but I do not know when. One difficulty is that the original proposal was so luxurious that it handicapped the consideration of a lesser scheme. The original proposal was to construct- Mr. SPEAKER.- Order! The honorable gentleman is reading a lengthy extract from the Minister's reply to his original question. I ask him to frame his question now. Mr. FULLER.- The Minister indicated that this road was to be asealed highway from Tumut to Canberra, and that the work could not be undertaken at the present time. I now ask him whether he will again raise the matter with the Minister for Transport in New South Wales, and give consideration to the construction at an early date of a country road and a serviceable bridge across the Goodradigbee River at Brindabella in order that people of that part of New South Wales and of the Australian Capital Territory may be mutually benefited, and the development of the country on both sides of the river encouraged and hastened. I point out to the Minister- Mr. SPEAKER.-Order! Will the honorable member resume his seat? I cannot allow such a lengthy question. I have noticed a growing tendency lately to prolixity and loquacity in the asking of questions. The Committee of Supply has been sitting regularly for about a fortnight, and supply bills have been before the chamber, so that honorable members have had ampin opportunities to' ventilate matters of the kind raised by the honorable member for Hume in his question. The time is coming when I shall be obliged to apply the provisions of the Standing Orders relative to the asking of questions. Many questions are too long and incidentally, that criticism applies to many of the answers. I ask the honorable member for Hume to frame his question. Mr. FULLER.- I desire to point Mr. SPEAKER-Order! The honorable member may not point out anything further. He must ask his question. Mr. FULLER.-The existing road from Tumut to Canberra is trafficable. We are asking, not for a road, but for a bridge. Mr. KENTHUGHE S - I am not certain whether I understood the honorable gentleman's question correctly, but I think that he has asked me whether I will request the Minister for Transport in New South Wales to co-operate with the Commonwealth in the construction of a bridge across the Goodradigbee River at Brindabella. The location of that bridge is in New South Wales, and, therefore, the authorities of that State should provide it. However, the answer in general to the honorable member's lengthy question is, shortly, "yes". TAXATION. Mr. GRAYDEN.- Is the Treasurer aware that certain kinds of invalid chairs, such as a three-wheeled type weighing4½ cwt which I have in mind at the moment, are regarded as motor vehicles and subject to sales tax accordingly? The purchaser of the chair that I have in mind paid £30 sales tax. Will the Treasurer consider providing in his next budget for the exemption of this type of chair from sales tax ? Sir ARTHURFADDEN. - I shall inquire into the matter. PERSIA. Mr. BEAZLEY.-My question to the Minister for External Affairs arises out. of his answer to a question that was asked yesterday. His answerwas to the effect that the Australian Government had no reaction to the tanker boycott of Persia. Does the Minister consider that the supply of petrol from Persia is important, and that any good purpose is served by not using these reserves but leaving them intact quite near to the Russian border! Is he prepared to reconsider this matter and take up with the United Kingdom the question whether our failure to get petrol from Persia is wise? Mr. CASEY.- It is generally admitted that it is a tragedy that the great oil resources of Persia are at present practically unused. The only way that we can affect the situation for thebetter, is by putting forward a proposal to the Government of Great Britain that it has not already thought of, or tried. The lack of production of oil products from Persia is no fault, Heaven knows, of the British Government or the AngloIranian Oil Company. The trouble arose from the extreme attitude taken by the Government of Iran. As I have said on many occasions, we are always at liberty to make proposals to the friendly Government of our mother country, Great Britain, hut I make use, on behalf of the Government, of that privilege, only when I or my officers can think of some positive proposal that we believe would be helpful. The actual responsibility is one for the British Government and not this Government. The British Government is perfectly in order in determining its own attitude, but it has never regarded the matter as closed. So far as we are concerned we have frequently had opportunities to state any views that we may have. Mr. Beazley.- We are still buyers of petrol. Mr. CASEY.- Yes, we are very large buyers of petrol and other oil products, and we wish very much that we had access to the great oil resources of Iran. The fact that we have not is not the fault of the British Government; it is the fault of the Government of Iran. TELEPHONE SERVICES. Mr. BOSTOCK.- A number of small communities in the country districts of north-eastern Victoriaare virtually without telephone communication. This is due largely to the f ailure in these districts of the non-officialexchange system. Will the Postmaster-General advise me whether there is any prospect of early installation of rural automatic exchanges, which seem to be the only real solution to this problem. Mr. ANTHONY.- The problem that the honorable member has referred to is a very acute one in country districts all over Australia. At one time there was competition by local people for the right to keep the telephone office, but to-day the department has to go around begging them to do so. In many instances we cannot find a person who is willing to give his time for the remuneration offered because so much more is offered in other lines of endeavour. The number of rural automatic exchanges in service has been increased since this Government came to office from 100 to 400 so it will be seen that a very real attempt is being made to overcome the problem by the installation of these exchanges. Unfortunately, there is a limit to the number of automatic exchanges that can be obtained. We get them mostly from abroad, and not only do import restrictions come into the matter, but also there is very great difficulty in securing the equipment in Great Britain because it is not manufactured in sufficiently large quantities. We are going ahead as fast as we can in the direction indicated by the honorable member because that is the only real solution to the problem. Mr. DRURY.- My question is directed to the Postmaster-General. I understand that some time ago tenders were called for the erection of a proposed new automatic telephone exchange at Brookfield, in Brisbane. Can the honorable gentleman indicate when work upon this important project is likely to commence ? Mr. ANTHONY.-Some time ago, tenders were called for the construction of a new automatic exchange at Brookfield, hut, unfortunately, no tenders were received. Consequently the Government has to call tenders in the hope that it will dobetter next time. The installation of automatic telephone equipment will proceed immediately the building is erected. Equipment has been reserved for Brookfield and is available. I expect that the exchange will be in operation about six months after the completion of the building, but the plans are dependent on tenders being received. SURE LIFE SAVING EQUIPMENT. Mr. CURTIN.- Having regard to the large increase of Australia's population, which means that thousands more people will visit the various beaches of Australia during the forthcoming summer season, will the Treasurer give consideration, when he is preparing .the next budget, to increasing the grant to the Surf Life Saving Association to £50,000 so as to enable that body to purchase essential life-saving equipment. Sir ARTHURFADDEN.- This Government is the first government that has given any consideration to the needs of life-saving organizations. It will continue to keep those bodies in mind. AGRICULTURAL MACHINERY. Mr. ADERMANN.- I ask the Minister for Commerce and Agriculture whether progress is being made with the manufacture of farm machinery under the policy of making men and materials available to the manufacturing companies. Have the companies co-operated with the Government, and have additional men and materials been, made available to them? Mr. McEWEN.- I .can say confidently that a substantial advance is being made in the manufacture of agricultural machinery. I am not able to support my statement with statistics. This improvement is largely due to the activities of the Minister for Labour and National Service, who has directed and allotted labour to those essential industries, and to the Broken Hill Proprietary Company Limited, which has made special rollings of steel for the agricultural industries notwithstanding the fact that State governments have not made allocations for this important work. I believe that the improvement will be reflected presently in increased output. CANBERRA. Mr. J.R. FRASER. - Will the Minister for the Interior inform me of the present position in relation to the construction of a low level bridge over the Murrumbidgee river at Pine Island to serve the Tidbinbilla area, for which a contract was let last year? Is it a fact that the contractor is no longer prepared to go on with this work? Will consideration be given to putting the work in hand by day labour? Is there still some hope that the underwater portion of the bridge will be constructed before the normal period of high flow in the river commences? Mr. KENTHUGHES.- The contract has been cancelled because of the failure of the contractor to commence the work. Fresh tenders will be called at an appropriate time, but I do not think that there will bc any chance of letting a contract in time for the work to be done before the winter floods begin. All the day labour forces in the Australian Capital Territory are already engaged on higher priority work. TOBACCO. Mr. BERNARDCORSER.- Has the Minister for Commerce and Agriculture given consideration to the unfortunate position of the tobacco growing industry in Queensland as a result of the price debacle at the recent tobacco sales at Bundaberg? Will the Government consider the increasing of the proportion of local leaf required to be included in tobacco manufactured in Australia? Can the Minister explain why Australian leaf offered for sale at Bundaberg brought the lowest prices ever recorded in Australia even though, as a result of import restrictions, supplies of tobacco for manufacturing purposes are in short supply? Is the honorable gentleman aware that, for many years, the Australian tobacco-growing industry has encountered opposition which cannot be understood by those who wish to develop Australia and our tobacco industry? Mr. McEWEN.- I have been seriously perturbed by newspaper reports that recent auction sales of tobacco have been very disappointing to the tobacco-growers of Queensland. The honorable member for Wide Bay has already taken this matter up with me. I have undertaken to send an officer of my department to the districts concerned to ascertain whether the quality of the tobacco leaf in respect of which disappointing prices were bid was suitable for the Australian tobacco trade. If it was suitable, the Government will be most seriously perturbed if low bids for tobacco offered at auction sales act as a deterrent to the production of tobacco in Australia, and, therefore, cause an additional drain upon our dollar resources by making it necessary for us to import more tobacco leaf. I shall investigate this matter and consider whether I should, as the honorable gentleman has suggested, ask the Minister for Trade and Customs to take action to require, that a higher percentage of Australian tobacco leaf shall be incorporated in tobacco manufactured in this country. WATERFRONT EMPLOYMENT. Mr. THOMPSON.- Is the Minister for Labour and National Service aware that, in some instances, the slow turn round of ships in Australian ports is caused, not by the waterside workers but by other agencies? Will he make inquiries to ascertain whether it is correct, as has been reported to me by the secretary of the Port Adelaide branch of the Waterside Workers Federation, that on Tuesday last no work was done upon the Blue Funnel liner Tarpeena during the day, although labour for the vessel was available, and that work upon it proceeded from 5 p.m. to 11 p.m.? If that be correct, the men worked upon the vessel for six hours at time and a half, instead of for eight hours during the day at ordinary rates of pay. Will the honorable gentleman consult with the Minister for Shipping and Transport to ascertain whether it is correct that a haulage company at Port Adelaide was unable to obtain tow motors and, therefore, that work upon ships in the port could not begin until the evening, when tow motors which had been used in the loading and unloading of other vessels were available? Are haulage companies unable to obtain the tow motors which they require? Will he ask the appropriate Minister to ensure that proper haulage plant shall be made available to such haulage companies, in order that work upon ships will not be unduly delayed, and that the payment of penalty rates may be avoided? Is it true to say that at present the payment of penalty rates is due not to any action of the waterside workers, but to other factors ? Mr. HOLT.- I do not propose to take up as much time in answering the question as the honorable gentleman has taken in asking it. I hope that the annual report of the Stevedoring Industry Board will be presented to this House next Tuesday. The report covers very fully the factors that were responsible for the unsatisfactory turn-round of ships in Australian ports during the year that ended on the 30th June. I agree that many factors other than labour affect the turn-round of ships. Some ports are conducted more efficiently than others. In some ports, the stevedores have a better organization and better equipment than is the case in other ports. Many factors must be considered. However, I am certain that the honorable member, with his knowledge of Port Adelaide., will agree that, even though every consideration be taken into, account, the cold fact is that the rate of loading and unloading of ships in Australian ports is still a national disgrace. IMMIGRATION. Mr. DUTHIE.-Will the Minister for Labour and National Service and Minister for Immigration inform the House whether German immigration to Australia is based on a quota system or has the Government set an intake target? Are jobs available for the German immigrants on their arrival in Australia or do they have to wait in hostels for several weeks in the hope of getting work? Are they competing with Australians for employment and how will the signing of the recent agreement with West Germany affect immigration to Australia? Mr. HOLT.- Some discussions and negotiations on this matter have been proceeding in recent weeks following the tour of various parts of Australia by a delegation arranged with the West German Government. A draft agreement is under consideration. I can say at this stage that the numbers envisaged in the agreement are not large by comparison with the intake of immigrants in recent years. Far from jeopardizing the . employment possibilities of Australians, the selection of skilled German workers in categories which cannot be filled at present within Australia should provide additional opportunities for work for Australians. Mr. BIRD.- I ask the Minister for Immigration whether, some time ago, the Regional Director of Employment in Victoria, Mr. O'Heare, stated that he was having considerable difficulty in placing in rural employment a large number of immigrants from the Bonegilla reception camp who are experienced in rural work and desire such employment? When that statement was made, did the Minister take steps to impress upon the farming community that it was remarkable that any difficulty of that kind should arise at a time when production was falling in practically every branch of agriculture? Have Victorian farmers in recent weeks shown any greater inclination to seek immigrant labour than they did before Mr. O'Heare made his surprising statement ? Mr. SPEAKER.- Order ! The honorable member has mentioned in his question the name of a person outside the House. I have ruled repeatedly that such a question should be placed on the notice-paper. BROADCASTING. Mr. TURNBULL.- Can the Postmaster-General inform the House whether any action has been taken to permit commercial radio broadcasting stations in Australia to use higher power than is permitted at present? Mr. ANTHONY.-This matter has received considerable attention, and action is still being taken to improve the position. Approximately 54 broadcasting stations in country districts throughout Australia have geen granted increased power and about 28 of those stations are already using higher power. I am also considering granting higher power to commercial stations in the cities and the matter is being investigated by the Australian Broadcasting Control Board. Owing to the great increase in the number of electric appliances in use in the cities there is far more interference in wireless sets now than there was formerly and the time has arrived to grant increased power to. metropolitan broadcasting stations. Plans are in hand now to grant increases to them as well as to country stations. TINPLATE. Mr. DALY.- Can the Minister for Supply say whether an English company is negotiating to undertake the manufacture of a new type of food container in Australia and is planning large-scale production of processed food containers in the manufacture of which tinplate is not required? Is it also a fact that the Government is interested in this project because of the present shortage of tinplate? Is the Minister in a position to say when the new company will be formed, where it will operate and who will be its directors? Mr. BEALE.-All I know about the matter that the honorable member raised I have learned from press reports which have been to the effect that a company proposes to manufacture substitute food containers. Generally, the Government is interested in obtaining substitute containers. Recently, we made a small amount of tinplate available for the manufacture of tops and bottoms for a laminated container, which was being made not for the packing of food so much as for the packing of other substances. The manufacture of a container of that type would mean that a greater quantity of tinplate will be available for food canning purposes. " I shall have inquiries made and inform the honorable member of the present position. GRANULATED CORK. Mr.. LESLIE.-Is the Minister for Commerce and Agriculture aware that Western Australian growers of fresh grapes for export have been informed that imports of granulated cork are to be reduced under the recent import restrictions to one-third of the quantity that is normally imported? Is he aware that granulated cork is essential for the packing of fresh grapes for export and that this trade, which is carried on mainly with Singapore, Ceylon and other eastern markets, is now valued at approximately £250,000 annually? In view of our need to earn additional overseas funds, will he investigate this matter in order to ensure that adequate supplies of this important material shall be made available in the interests of this industry in Western Australia? Mr. McEWEN.-I am aware that the export of fresh grapes, particularly the Ohanez variety, from Western. Australia to markets in the Far East and the Persian Gulf is an. important industry, and that it has been customary to pack the grapes in granulated cork. The honorable member previously raised this matter with me. I am discussing it with the Minister for Trade and Customs in order to ascertain to what degree it may be possible to permit additional imports of granulated cork. I also shall have an investigation made to ascertain whether a suitable substitute can be produced in this country in order to obviate the necessity to import granulated cork, or any other substance; for this purpose.. COFFEE. Mr. WHEELER.- Having regard to the present shortage of coffee supplies in Australia, I ask the Minister for Territories whether any attention has been given to the possibility of growing coffee in suitable areas in Papua and New Guinea? If it is possible to grow coffee there, what supplies can we expect to receive from that source in order to relieve the shortage in Australia? Mr. HASLUCK.-As the result of progress that has. taken place in recent years, coffee growing has become an established agricultural industry in New Guinea. Although I am unable to state the exact quantity, the exportation of coffee from that source to the Australian market has already been commenced and exports have reached an appreciable volume. It is the policy of the Government to encourage agricultural development in Papua and New Guinea. Coffee growing is already assuming a leading place in those plans, and will, undoubtedly, become increasingly important. Coffee is known to be a crop that can be grown successfully in New Guinea. In order to stimulate agricultural development, we recently established in the territory a land settlement board whose main function will be to ensure that land is made available to settlers on application in accordance with the Government's land policy. Only two requirements are necessary in order to expand coffees-growing greatly in the territory. One. of them., for which the Government accepts responsibility, is more energetic measures by the territorial administration itself to make land and agricultural advice available to settlers; the other is the willingness of Australians themselves to make the investment and the effort that is needed toproduce anything. CIVIL AVIATION. Mr. DRAKEFORD.- I ask the Minister for Civil Aviation whether it is correct that the provision of additional modern flying aids at major airports has been curtailed or delayed as a result of a reduction of government expenditure on the Department of Civil Aviation or of its restriction of imports. As these modern flying aids have for their objective the provision of additional safeguards in air travel, particularly in unfavorable weather conditions, will the Minister give early consideration to the provision of funds to complete plans that were made some years ago for the installation of additional aids to make flying in Australia more safe, or will he confer with the Treasurer on the subject? Mr. ANTHONY.- I think that the honorable member, who was formerly the Minister for Civil Aviation, will agree that flying in Australia is perhaps as safely conducted as in any country in the world, so that there is no lack at the moment of reasonable provision of flying aids and various other navigation aids for aircraft. However, as the honorable member has said, there are modern developments which can improve our air safety factors. Such aids are being installed as rapidly as existing circumstances permit. A great deal of equipment was placed on order last year and much of it has already been installed', whilst much more is on its way to Australia and will be progressively installed as quickly as we are able to do the job. COAL. Mr. EDMONDS.- Will the Acting Prime Minister or whichever of his colleagues is prepared to accept the responsibility, say whether he is aware that late last year a Japanese ship, Orient Maru, after discharging in Melbourne a full cargo of Indian coal upon which a substantial federal subsidy was paid, later took on a quantity of Australian coal as bunkers for the return trip ? Is it also a fact that, following a shipment to Japan of 5,000 tons of Queensland coal in the vessel Anding, further orders have been received for this coal? In view of the facts that Blair Athol coal is accepted as being an ideal bunker coal, and that ample supplies are always available on the wharf at Gladstone in Queensland, will the Minister insist that foreign ships, particularly those using the Torres Strait route, bunker at that port and do not draw on the depleted stocks of coal in the southern States? Sir ARTHURFADDEN. - I shall treat the honorable member's question a 8 though it were on the notice-paper, find bring it before the appropriate Minister. SOCIAL SERVICES. Mr. GRIFFITHS.- I ask the Minister for Social Services whether, in view of the many assurances that he has given to the House that both he and the Government were fully aware of the difficulties of pensioners,' he will recommend to Cabinet the desirability of allowing invalid pensioners, or their wives where practicable, to earn each week the same amount as age pensioners are allowed to earn, without it affecting their pension rates. Does the Minister know that many blind pensioners and their wives, and many other pensioners who suffer from chronic ailments, are being compelled to live on £4 10s. a week because social services regulations prevent this class of pensioner from earning at all ? Does he know that in many instances doctors find invalids to be suffering from malnutrition? Will the Minister accordingly show some real interest in this class of pensioner by influencing Cabinet to amend the provisions which apply to invalid pensioners? Mr. TOWNLEY.-The recommendations which I have made to Cabinet involve Government policy, and may not be discussed in the House at this stage. I am fully aware of the circumstances which the honorable member for Shortland has described. The extent of our welfare services to-day is considerable. The Department of Social Services will handle about £170,000,000 in the year, and, in addition, about £45,000,000 will be allocated for repatriation benefits. Tuberculosis benefits will total approximately £18,000,000. Therefore, any suggestion for an increase of social services can be considered only in relation to the financial commitments of the Government as a whole. I inform the honorable member for Shortland that an invalid must be 85 per cent, incapacitated before he is entitled to the pension, and that provision will limit in some way the earning capacity of the person concerned. The honorable gentleman made reference to my practical interest in social services. I point out to him that this Government, since it has been in office, has increased social services benefits by more than £50,000,000, and has increased the permissible income of a blind person from £5 7s. 6d. to £10 a week. Those facts should be a sufficient indication of our interest in the welfare of the recipients of social services. HOUSING. Mr. HAYLEN.-What action does the Minister for Social Services take against contractors who repudiate their contracts to build war service homes, either in groups or singly, for ex-servicemen who obtain financial assistance from the War Service Homes Division? I refer particularly to the fact that contractors are allowed to sign contracts that do not contain the rise and fall clause, so that sometimes when the prices of building materials increase, contracts are repudiated. Some ex-servicemen for whom dwellings are being constructed have been penalized by as much as £750 in respect of uncompleted houses. Yet a builder who has repudiated his contract is given a new contract with the rise and fall clause by the War Service Homes Division. This practice appears to be completely unjust to the ex-serviceman concerned. Although the interests of the builder must be safeguarded, for he must be kept in the field because the number of builders is all too few, I ask the Minister to do something to reduce the overall price charged to the Digger who is compelled to pay a higher price for his war service home than the original figure. It is the ex-serviceman' who is placed at a disadvantage in this matter, because the builder is given a new contract and is able to make his normal profit. Mr. TOWNLEY.- The policy of the War Service Homes Division is to protect the ex-serviceman to the greatest possible degree, and any action which we may take is in accordance with the legal advice that has been tendered to us. The only case which I can recall which comes within the category mentioned by the honorable gentleman occurred in New South Wales. A builder accepted the contract at a time when the War Service Home3 Division had great difficulty in obtaining builders who would quote a firm price. The builder in question later got into financial difficulties. Obviously his idea had been the prices of building materials would fall, but, in fact, they rose. He had no rise and fall clause in his contract, and he " gave it away ". We discussed the position with him and with the persons in the particular group, and suggested a compromise. We appreciated the fact that the builder was in difficulties and was unable to continue operations. We asked the members of the group whether they would be sensible about the whole matter and agree, as reasonable people, to accept a little rise in the. firm contract. With the exception of one particular person, who was rather a forceful character, the members of the group were prepared to take what appeared to be to be the sensible course. The forceful character refused to accept the suggestion, and the negotiations broke down. Later, because we were so desperately short of builders, the contractor in question was given another contract for the erection of a war service home. The appropriate rise and fall clause was inserted in his contract on that occasion. INDUSTRIAL UNREST. Mr. DAVIES.- Last Tuesday, I asked the Minister for Labour and National Service a question about a large number of men who are out of employment on the south coast of New South Wales as the result of a strike at the steelworks at Port Kembla. I endeavoured to ascertain whether the Minister would arrange a conference of the parties in an endeavour to effect a settlement. The Minister stated, in his reply, that he knew nothing of the dispute. I now ask him whether he has heard that the strike is the outcome of the unfair Galvin award, which has reduced the wages of welders by 4s. 6d. a week at a time of rising prices? What action is he prepared to take to try to bring both parties to the dispute together, in an endeavour to gat the men back to work? Mr. HOLT.- I did not say, in my reply to the honorable gentleman oe Tuesday, that I knew nothing about the dispute. I know a good deal about it. I said that I was not sure whether the matter was before the Industrial Commission of New South Wales or the Commonwealth Court of Conciliation and. Arbitration. I understand that it is before the court. The honorable member has asked me to give him information about the. action I have been taking in the matter. I have been doing all I can, by means of conciliation, with both parties. We have had discussions with representatives of the trade union movement, and with representatives of Australian Iron and Steel Limited. That company has pointed out that its attitude is consistent with its general policy of adhering to awards of industrial tribunals, and that if the court increases or decreases wages it is to be its well-known practice to adhere strictly to determination of tribunals. I understand that the matter is now before the Commonwealth Arbitration Court, and that the New South Wales Trades and Labour Council is intervening in the dispute. I hope that the good offices of that body will be successful in bringing the men back to work KOREA. Mr. KEON.- My question is addressed to the Minister for External Affairs. I point out, by way of explanation, that on many occasions, Ministers have offered alibis for their failures by declaring that we are at war, and the Minister for the Interior has emphasized the necessity for recognizing that we are at war. I should like to know whether the Ministerfor External Affairs agrees with his colleague that we are at war. If he does not agree with that view, will he explain precisely what our forces are doing in Korea ? If heagrees that we are at war, will he explain why the Government has taken no action to place the internal legal position upon that basis? Will he also explain why, up to date, the Government has considered that only the Australians who are being shot at in Korea are regarded as beingat war? Mr. CASEY.- The situation is well known to everybody, and I do not see any advantage in discussing the theoretical matter of whether we are technically at war. I shall be speaking on the general subject of international affairs at an early date, and shall then endeavour to unravel the mystery that is puzzling the honorable gentleman. QUESTIONS. Mr. BEALE.- My question which is directed to you, Mr. Speaker, arises out of the rulings you have given on several occasions, including to-day, that the names of individuals outside the House may not he mentioned in questions without notice. Will you give further consideration to that matter and supply the House, at your leisure, with a formal ruling on the position ? According to my interpretation of the relevant standing order, its purpose is to prevent honorable members from asking questions without notice about the conduct or character of individuals outside the House. I well remember certain incidents in the last Parliament in which an honorable member who is not now present was concerned. Those incidents gave rise to the formulation of the new standing order, because it was considered that slanderous attacks were being made on individuals outside the House under cover of parliamentary privilege. In those circumstances, having regard to the inconvenience sometimes caused in having to avoid naming an individual, will you give further consideration to the matter land give a formal ruling at your convenience ? Dr. EVATT.-The honorable member for Batman (Mr. Bird) asked a question this morning in which no reflection was cast upon the individual mentioned. The name of an individual was mentioned in order to provide a foundation for a question on public policy addressed to the Minister. I understand that the relevant standing order concerns a question without notice that contains a reflection on, or imputation of misconduct on the part of, an individual. I ask you, Mr. Speaker, to consider that viewpoint because there are many questions that involve no reflection on individuals, but in which the names of persons must be mentioned in order to make the meaning clear and elicit an answer on public policy from the Minister concerned. Mr. SPEAKER(Hon. Archie Cameron). - I assure the House that during the last two years or more I have given very careful consideration to this rather vexed question. Standing Order 144 lays down the rules that shall apply to questions, and it reads, inter alia - Questions should not contain - (a) Statements of factsor names of persons unless they are strictly necessary to render the question intelligible and can beautheuticated; My view is that that part of Standing Order 144 applies to questions on notice. Standing Order 151 reads - Notice must be given of Questions regarding the character or conduct of individuals other than Ministers or Members of the House. In my view " character or conduct " is an expression that contains no qualifying condition whatsoever, and it means good character and good conduct just as it means bad character and bad conduct. One of the factors that actuated the Standing Orders Committee which considered this matter, was that we should not use or allow the forms of the House to be used, especially having regard to the fact that so much of our proceedings are broadcast, to defame a person over the national broadcasting network or to give him a good advertisement through the same medium. Therefore, it was the belief of many of us, and I am one who so believes, that all questions regarding character or conduct should be placed on the notice-paper where they may be edited if necessary, and anything that is not in accordance with the forms and procedure of the House may 'be struck out. fi the House desires me to give a ruling on this matter, and .after all it is the will of the House that prevails and not may will, in order to provide an opportunity for a discussion I am quite willing ito give a formal ruling next Tuesday. Then the House can debate the matter and arrive at its own conclusions. However, I warn the House in advance that if it once opens this gate it must take responsibility for what happens afterwards. It will not be fair to put that responsibility upon me. TARIFF BOARD. REPORTS on Items. Mr. ERICJ. HARRISON.- I lay on the table reports of the Tariff Board on the following subjects: - Uducatioir.il, scientific and cultural materials. Clothing and garment pressing machines. Chain pulley blocks. Copies of the reports on chain pulley blocks are not yet available for circulation to honorable members. EMPLOYMENT. Mr. SPEAKER.- I have received from the honorable member for East Sydney (Mr. Ward) an intimation that .he desires to submit a definite matter of urgent public importance to the House for discussion, namely: - Increasing unemployment and the failure of the Government to honour its election promise to maintain full employment, and the inadequacy of the 'Commonwealth unemployment benefit payments. Is the proposal supported? Eight -honorable members having risen in support of the proposal, Mr.WARD (East Sydney) [11.24]..- There is no more alarming problem at present confronting the Australian community than the increase of unemployment in this country, and the inadequacy >of the provision made by the Government to maintain those who lose their work as the result of the Government's policy. One of the great difficulties that have confronted honorable members of this Parliament is that of getting accurate information in regard to the unemployment situation. From time to time "the Minister for Labour and National Service (Mr. Holt) makes statements about the number of vacancies that he claims exist throughout Australia, and he also -quotes figures in respect of Commonwealth unemployment benefit. He refusesrepeatedly to give any specific details of where such vacancies exist, so" that honorable members, when they are approached by constituents who have lost work, are not able to direct them to places where employment is available. I shall give one illustration to show how confusing the information given by the Minister can be. According to the Minister, on the 2nd May there were 58,565 vacancies for employment in Australia. The figure for midApril was 64,167, which indicated that between mid-April and the 2nd May, according to the Minister's figures, there had been a reduction of the number of vacancies by 5,602. Honorable members are fully aware "that the number of people registered for Commonwealth unemployment benefit does not give an adequate picture of the unemployment situation in Australia. It seems rather significant that only to-day articles have appeared in the press which indicate current happenings. When the Labour party said in 1949 that the then Opposition if elected to office would create a pool of unemployed in this country, the -statement was ridiculed by members of the Government parties. But today,despite the Minister's assurances that thousands of vacancies for employment still exist throughout Australia, an article appears on the front page of the Sydney Morning Herald, which is headed - Mant Men Laid OFF m Metal Trades. Those men are skilled men. The -article states - Pal-ling demand and increasing costs -were forcing the retrenchment of skilled tradesmen in the Metal Industries, a number of employers said yesterday. Hardest hit in the Industry have been the foundries. Considerable mimbora of moulders and ironworkers have already been laid off and further retrenchments axe likely during the next few weeks. . . . Malleable Castings limited, of Rich-street. Marrickville, said that a "small number" of men would be retrenched this week. lt is understood that about 50 men have received notice. . . . The Electricity Meter Manufacturing Company Limited, Joynton-a venue, Waterloo, had laid off 40 out of 55 men engaged in its foundry. . . . Under tie sub-heading " Alarming ", the newspaper quoted the following statement by Mr. E. Vincent, managing director of A. L. Vincent, Enfield : - No' foundry wants any labour to-day, skilled Or unskilled, and when men leave they are not replaced. If there were thousands of vacancies for skilled men, as the Minister has said, there should be no difficulty about absorbing those men elsewhere. But we know that there are no vacancies available for them. Here is a significant item that was published in the Adelaide Advertiser last Tuesday - 150 Men, 30 Women Queue Up for Jobs in S.A. About 150 men and 30 women applied for jobs at the Commonwealth Employment Office in C'urrie-street yesterday. About 40°men were waiting for the office to open at 0 a.m., and there was a constant queue of 40 to 50 between 9 and 11 a.m. The ages of the applicants varied from a 16-yeav-old youth to several middle-aged men. Many of the applicants were new Australians and several men had come from other States. The newspaper reports that 150 men were seeking employment at that office alone. But the Minister has said that fewer than 140 unemployed are registered at the same office! I have taken the trouble to secure information from various employment offices in the Sydney metropolitan area. The facts are grim. I spoke to Mr. Calwell, the Regional Director of the Commonwealth Employment Service in Sydney, to whom I was referred by the Minister for Information, on employers to whom I could direct men in need of work. Mr. Calwell told me that the position was serious. He said that a few vacancies might come to hand from day to day, but that, even if he advised me of them, the positions would be filled before the men on whose behalf I was inquiring could apply for the jobs. It is even difficult to place women in domestic work to-day. Any honorable member who cares to take the trouble to visit the women's employment section at Martin Place, Sydney, on any Monday morning, will find at least 300 women queued up to inquire for any sort of employment. The officers of the Commonwealth Employment Service know how desperate the situation is becoming. The Minister admitted quite honestly that he had issued instructions that members of Parliament and representatives of the Press were not to be supplied with information in relation to unemployment by departmental officers. Why did he do so? The answer clearly is that the Minister knows that the figures he has supplied are not accurate and do not disclose the true employment situation in Australia. He has drawn an iron curtain around his department so as to prevent information from being supplied to honorable members. I tried to obtain from the honorable gentleman a statement on the number of new Australians who are unemployed, but he evaded the issue by saying that the nationalities of applicants were not registered at employment offices. However, the regional director in Sydney told me that numbers of new Australians were registered as unemployed. He could not give me the precise number because, as the Minister said, nationalities are not listed. Nevertheless, employment officers in various districts knew that they were registering new Australians. Notwithstanding this fact, the Minister has blandly refused to recommend to the Government that immigration be reduced. The situation in Sydney is gravely alarming. There are no vacancies for unskilled men, and, judging by the statement in to-day's issue of the Sydney Morning Herald, the outlook for skilled men is rapidly becoming just as bad. Mr. Calwell told me that most of the vacancies listed are in the Newcastle and Port Kembla districts, and he said that nothing could be done to fill those positions because houses were not available in those areas. The Minister has presented figures in such a way as to give the impression that plenty of work is available for anybody who wants it. Officers of his department, however, have told me that employers are becoming increasingly discriminating. For example, they do not want to engage anybody over the age of thirty-five years. Thus, a man over that age is, in the eyes of some employers, too old to be considered for employment. Only one State instrumentality in New South Wales is in need of labour at present. It is the Railways Department which will not engage men over the age of 35 years and applicants are required to pass a rigid medical examination and conform to a certain height standard. What is the position in the Commonwealth Public Service? The Government is displacing temporary employees, some of whom have given many years of service and many of whom are war widows or disabled ex-servicemen. Although this Government has talked loudly of giving preference to ex-servicemen, only the fit are able" to survive in a situation such as now exists. The disabled, whether they are ex-servicemen or not, are thrown on to the employment market. The Commonwealth Employment Service considers the position in Sydney to be so desperate that it is conducting a special canvass in an endeavour to find vacancies for applicants. Previously, employers reported vacancies as soon as they occurred. The position will become worse as time passes, because the community has not yet felt the full effects of the Government's import restrictions. It is estimated that, when overseas shipping comes almost to a standstill as a result of those restrictions, there will be at least 3,000 surplus men on the Sydney waterfront. Honorable members can imagine what will happen elsewhere. During the last two general election campaigns, the Labour party warned the people that the present Government parties would welcome another depression. But our opponents indignantly denied the statement and declared that they supported a policy of fur employment. The present Prime Minister said, in the joint Opposition policy speech of 1949 - The aspiration for full employment is no monopoly of the Socialists. We are all human beings. Yet it is clear that full employment is to be the Socialists' election slogan. This is a false issue. We shall confidently devote ourselves to full employment and .the avoidance of depression. . . How do we ensure full employment of a productive kind for the future? The Government relies on great public works programmes as the answer. Let us make it clear that we also, knowing the vital importance of full employment, will use public works to the full. But the Government is preventing the State governments from carrying out their programmes of urgently needed developmental works, which would provide full employment, while hundreds of men are losing jobs elsewhere. During the 1949 election campaign, members of the Labour party cited a statement by Professor Hytten that the Liberal party wanted to establish a pool of unemployed, because it wanted to discipline the workers and destroy their sense of independence. Members of the present Government parties contend that the 40-hour week is responsible for the present situation. But they cannot provide full employment, even with the 40-hour week. The Minister for External Affairs (Mr. Casey) recently made the remarkable statement that the workers of Australia should be required to work five hours extra each week for nothing. Mr. Malcolm Ritchie, federal president of the Liberal party, has declared that the normal working week should be of 54 hours. How would that cure unemployment, when, even with a 40-hour week, the Government is unable to maintain full employment? The intentions of the Government are obvious. When it has its pool of unemployed, it will begin to make its assault upon the industrial and living conditions of the Australian people. The Government recognizes that a pool of unemployed is the most effective weapon that it could use to restore what it has referred to as discipline in industry. It is idle for the workers of this country to believe that their living conditions are protected by arbitration awards and arbitration tribunals. We remember what happened in this country in the depression of the early 1930's. Then, an anti-Labour government in New South Wales passed what was known as the Prevention and Relief of Unemployment Act. Under that measure, the protection given to the workers by arbitration awards was completely destroyed. The Government of New South Wales, by declaring any work to be an emergency work,. Gould require men to- work under conditions determined by it,, mot. by an arbitration tribunal. It is interesting to bear honorable gentlemen opposite talk of adherence to the arbitration system as the only method By which industry in. this country can be regulated, to-day. I suggest that the Minister should read to-day's Sydney Daily Telegraph in order to learn whatthe present situation is. An article in that newspaper- headed "Fall in Spending. Power ", states that, during, the last quarterly period, spending in Australia was reduced by over £54,000,000, or by approximately' £220,000,000 a year. Such a reduction of the spending power of a country with a population of just over 8,000,000 reveals the alarming situation that now exists. [Extension of time granted.] If the Minister cares to examine the article further,, he will discover that most of the reductionof expenditure related to foodstuffs and clothing: When people are compelled to reduce their purchases of such, essential' items, it is, obvious that they have not enough money. To-day,, the menace of unemployment in Australia is a. real one. Although, honorable gentlemen opposite may occasionally be able to persuade &nr stooges in various sections of the community to say that talk about a forthcoming, depression is nonsense and only a form of propaganda, many thousands of people in this country realize that a depression, is already here and that, as time passes, it will grow in. intensity. Let me deal briefly with the1 inadequacy of the relief that is given by the Commonwealth to persons who lose their work. In> 1945, a Labour government introduced, for the first time, a system of Commonwealth assistance to personswho lost their work. The first payments- were mad'e in July of that year, when the basic wage was £4 18s. a week. At that time, an unemployed man who- had a wife and one child was paid 50s. a week. That payment represented a greater proportion of (he basic wage than is the case at present. But the government of that d'ay did1 not regard the rate of payment as. adequate, and, if the Labour party had remained in control of the affairs of this country, the assistance given to unemployed' persons in the community would have been increased considerably. The basic wage in New South Wales has now risen to £11 3s'. a week, which represents an increase of 127 per- cent., yet the Government has refused repeatedly' toaccede to requests- that the payments made to unemployed persons be adjusted. When I took the matter up with the Minister for Social Services-, he said - In a time of full employment and high wages, such as the present, it is not unreasonable to expect persons who are in regular, employment to make, some provision, for themselves against short periods of unemployment or sickness. The- Minister for Social Services knows that in the determination of the basic; wage, upon which the wages of the great bulk of workers, in industry are based,, periods of unemployment and sickness are not taken into- consideration. Tha basic wage is merely a living wage,, or an existence wage, determined by the Commonwealth Arbitration Court. How can this Government expect men, who are encountering great difficulties in meeting their everyday expenses, to save from their paltry wages something to tide them over periods of unemployment or sickness? The fact is that to-day the people are becoming desperate.. Unless someaction be taken to provide them with relief, shortly we shall reach the stage when unemployed people will be lining up with sugar bags to receive handouts of a few articles of food for the maintenance 0.. their families. In the depression years,, when the basic wage in. New South Wales1 was only £3 6s. a week, an unemployed, man with a wife and one child received, 19s. a week. The relief that was given, under the dole system that; operated then represented a higher percentage, of the basic wage than that which is. given now.. If the Minister for- Labour and1 National .Service really believes that the figures that have been furnished to him by his department give a true picture of the1 present employment- situation, let him cease to present those figures- in a manner that, is not intelligible to a great many members of the- community. We should, be- informed of the places- where- there- are vacancies,so that men can go to them. The figures should not be, as it were, presented in bulk. A few days ago, the Minister admitted that the figures, having regard to the manner in which they were presented, could be misleading. They are misleading. We want the Minister totell us, not how many vacancies there are throughout Australia, but the places in which the vacancies exist, the types of labour that are required and the employers to whom men in need of work should offer themselves. Mr. HOLT(Higgins- Minister for Labour and National Service and Minister for Immigration) [11.42]. - A discussion on employment is always of importance to the Parliament. At this time, when undoubtedly there is an easing of the demand for labour and some tightening of "the labour situation, it is fitting that we should examine that matter dispassionately and realistically as I shall attempt to do. It is not -without significance, as I am certain the House and the country will note, that the Opposition has selected the honorable member for East Sydney (Mr. Ward) to state its view upon a matter which, traditionally, the Labour party regards as one of great importance. Mr.. Haylen.- Why not ? Mr. HOLT.- I say only that I believe there is some significance in that fact. Mr. TomBurke.- The honorable member for East Sydney is an ex-Minister for Labour. Mr. HOLT.- I am coming to that point. Honorable gentlemen opposite will correct me if I am wrong. The selection of the honorable member for East Sydney to state the views of the Opposition upon this matter portends that, in the Shadow Cabinet of the Labour party, he has been earmarked for the office of Minister for Labour. We know that the Leader of the Opposition (Dr. Evatt) is to be looked toas the future Prime Minister, in the event of a change of government. The honorable member for Melbourne (Mr. Calwell) has been earmarked for the Treasurership. Mr. SPEAKER.- Order ! The Minister must confine his remarks to the matter before the House. Mr. HOLT.- I think I shall be able to show that my remarks are relevant to that matter. The honorable member for East Sydney is a member of a group to which, in certain circumstances, the country would look to deal with its eco- nomic problems, one of which is the problem of unemployment. The Government is under attack. I believe that I am entitled to ask whether the group of men to which I have referred would bemore likely to lead the countryout of its economic difficulties than would the present Government. If those three honorable gentlemen were in a position to direct the 'economic affairs of this country, Labour supporters, however devoted, might well echo thesentiments that were expressed by the Duke of Wellington, who, when his troops were lined up before him, addressed them in the following manner.: " Gentlemen, I do not know what effect you have upon the enemy, but certainly you terrify me ". Many people in Australia would be terrified at the prospect of those three members of the Labour party dealing with the very important problem of unemployment. Let me deal with the charges that I have given inaccurate figures to the Parliament, and that I have sought to cover up some aspects of the employment situation or have not presented to the Parliament all the information at my disposal. I say that that is completely untrue. My only purpose is to keep this Parliament and the people as fully and as accurately informed as I can at any point of time on the unemployment level, the opportunities that are available for employment and on any action that the Government may be taking in relation to those matters. I ask honorable members to consider the practical problem as it presents itself to me. There is no compulsion on any person to register as unemployed. If a person loses a job and does not have to seek another one immediately, no obligation rests onhim or her to register as unemployed. Therefore no precise figures of the number of persons who are out of work in Australia are obtainable at any point of time. In acensus year those figures might be available on the day of the census but they cannot be obtained at any other time. In assessing the general situation, the Government must look to the pointers that are available. The first of those pointers is the level of unemployment benefit payments. I do not suggest that the claims lodged for the unemployment benefit reflect the total number of unemployed. Certain means test qualifications were inserted by a Labour government in the regulations governing those payments. I do not criticize it on that point. The means test has had the effect, however, of debarring from the unemployment benefit many persons who could describe themselves properly as unemployed. At least the unemployment benefit figures give an indication of a trend. If the figures are found to be increasing suddenly in a dramatic way, the indications are that unemployment is also increasing suddenly and dramatically. If the figures are relatively stable, the Government can reasonably deduce that there are no significant changes in the employment level. Another pointer to the employment situation is the registration of vacancies which is made by the employment service of the Department of Labour and National Service. That register does not give a precise indication of the number of jobs that are immediately available in Australia or in any one State, but it indicates a trend. In recent months the trend has clearly been downward and has reflected the tightening of the employment situation. In August or September, 1951, the number of registered vacancies reached its highest peak. Australia was not merely in a situation of full employment; it had reached over-full employment. About 130,000 vacancies were registered with the department. In each State, new capital facilities were not being used because labour could not be found to man them. At the same time, State governments and private employers were proceeding with the construction of other capital facilities which would make further heavy demands on labour. Clearly some curative action had to be taken. The Government set out to take such action through the budget. It sought to bring the economy, so far as it affected the employment situation, into a state nearer to equilibrium so that a reasonably adequate number of jobs would be available to men and women. I suggest that if the Opposition is honest and is not merely playing at party politics, it will concede that Australia has reached or is reaching a situation where the labour supply approximates the demand. I agree that there may be pockets which do not fit that description. In some sections of industry, that point has not been reached. Although the number of vacancies has been reduced substantially from the peak of August and September. 1951, there are still almost 50,000 vacancies in Australia. In certain categories of work, particularly foi skilled tradesmen of various classifications, the demand cannot be filled. The honorable member for East Sydney has advised me to read an article in the Sydney Morning Herald. I could have followed his speech more closely if I had read the Guardian or the Tribune, because it was in line with statements that have appeared in those newspapers. I have read the article in the Sydney Morning Herald to which he has referred and I noticed that the same issue of that newspaper contained about six columns of advertisements announcing positions vacant. The honorable member for East Sydney said that employment could not be found for bricklayers in Australia. In to-day's issue of the Sydney Morning Herald, the column containing announcements of positions vacant is headed by advertisements seeking bricklayers, bricklayers' labourers, builders' labourers and workers in other classifications. I shall gladly examine the suggestion of the honorable member that the Government should try ito give a more detailed statement on the opportunities for work that are offering. The district employment officers of the Department of Labour and National Service do their best to place people in employment. It is still true that, as I have said, previously, no industrialized country in the free world has less unemployment than there is in Australia. The honorable member for East Sydney said that the Government was trying to cause a depression. That statement is humbug and nonsense. Who would gain by a depression in Australia? Does the honorable member believe that the Government would gain politically by trying to cause a depression and so force political support away from it? He has charged the Government from time to time with being the mouthpiece of big vested interests. What would vested interests gain from a depression ? Honorable members have been told by Opposition members that big vested interests arc making exorbitant profits yet almost with the next breath they claim that the Government is trying to destroy the profits of vested interests by causing a depression. That story is too silly for words. As the Prime Minister (Mr. Menzies) stated in his policy speech, this Government stands honestly for a realistic situation of full employment. Any authority that the honorable member cares to name will agree that that situation exists. Presumably his statement that " an alarming position " exists has the support of the Opposition. If anything is calculated to destroy in Australia the incentive to invest and all the other elements that conduce to a healthy and prosperous economy, it is the wild and extravagant statements of men who have held high ministerial office. I invite tha House to view the situation realistically. The . year 1939 will be accepted by honorable members opposite as an average pre-war year. In 1937 the trade union movement of this country went to the Commonwealth Court of Conciliation and Arbitration and obtained a prosperity loading on wages. That was how the claim was framed and obtained. I interpolate here that the third pointer to the state of the employment situation is the number of registrations that reach the Commonwealth Statistician from the trade union movement. In 1937, the year in which the prosperity loading was sought and obtained, unemployment registrations with trade unions in Australia represented 8 per cent, of their membership. In 1939, that figure had increased to 9.3 per cent. The latest figures that I have been able, to obtain from the Commonwealth Statistician are in respect of November last, but the overall position has altered very little since then. At that time, the per centage of unemployment registrations was less than 1 per cent, of the membership of trade unions. Honorable members opposite talk about full employment. When this subject was one of political controversy some years ago, the authority to whom honorable members generally looked was Lord Beveridge; and he laid it down that a community in which not more than 4 per cent, of its working population was unemployed was in a situation of full employment. In Australia to-day the number of persons registered as unemployed with trade unions is less than 1 per cent, of union membership. Mr. Curtin.- Many unemployed persons do not register with their trade unions. Mr. HOLT.-If that is so to-day, it was equally so in 1938. I am comparing like with like in this matter. The honorable member for East Sydney quoted from an article published in the Sydney Morning Herald, which stated that some foundry companies, and other companies, in New South Wales, had been putting off employees in recent months. I have before me a report from the departmental industrial officer at Sydney in which he deals with the position at the works of Bradford, Kendall Limited, one of the firms that the honorable member mentioned. If honorable members opposite genuinely desire to ensure that a higher level of employment shall be maintained at all times, they should take notice of the following statement which I quote from that report : - The reason for the closure of the steel foundry in No. 1 section is high operational costs stemming from a darg imposed by moulders on their output. As a direct result of this, according to the firm, production has been too low for economical working. The firm's decision to close the foundry in No. 1 section has been precipitated according -to the firm's industrial officer, by the tactics being employed by the Moulders' Union in its endeavour to obtain an additional 10s. a week for members. [Extension of time granted.] The reason why pockets of unemployment are beginning to manifest themselves in New South Wales is in part the degree of industrial lawlessness that exists in that State at present. If members of the Opposition genuinely desire to help persons who are unemployed' irc that State they should exert whatever influence they have with the New South Wales Labour Government and also «to what they can to help this Government to get ai more realistic and sensible attitude of mind towards these industrial issues-. The iron and steel works at Port Kembla have been held up because of the refusal' of certain employees to accept, a decision of an- arbitration tribunal. A black ban has; been imposed' on four waterside workshops in Sydney,, andi employment opportunities there have been rejected. The Waterside Workers Federation persists in banning overtime although, in doing so, it. reduces the earnings that are possible to its members. I could give further illustrations of that kind. Undoubtedly, the worst State in this respect at present, and it has been for many years, is New South Wales; and the honorable member who has been the spokesman for the Opposition in this debate comes from that State. The unemployment figures that are available at least give some indication of a trend. Do they show that any dramatic movement has taken place in respect of unemployment registrations? Certainly not.. I am giving the latest figures that have been made available to me. When this matter was raised by an honorable member from Queensland some time ago, I told the House that unemployment, registrations in Queensland were higher than those in any other State largely because so much seasonal work is done there. When there is a lessening of activities in the sugar and meat industries, unemployment registrations in those industries tend to increase.. The latest figures prove that to be the 0?.se. The peak in unemployment registrations in Queensland was reached on the 19th April last, when they totalled 2,773. The latest figure that is available shows that at the 17th May, that is, less than a fortnight ago, that figure had decreased to 2,233, or a reduction of 540 from the peak figure. That total is negligible when compared with the figure for the corresponding period in 1938-39. At present, registrations for Unemployment benefit total 4,442, the figures for the respective States being: - New South Wales, 1,825; Victoria,265;. Queensland, 2r233;. South Australia, 32; Western Australia, 71; and Tasmania, 16. I do not claim that those figures reveal the. full picture ; but, at least,, they illustrate the trend that, is occurring in respect of employment generally. Ido- not wish the House to assume from what I have said that I am trying, Co- paint a- rosy picture of the employment position. I am giving not an over-optimistic, but a realistic, account of the position. Already the Government has taken action to ensurethat the general1 level- of employment shall not fall too low. Recently, the Treasurer (Sir Arthur- Fadden)-, in consultation with the Commonwealth Bank, has liberalized the Government's directive in respect of bank advances. Since the. beginning of the financial year, the- major private banks have made available an increase of credit of £154,000,000' compared with an increase of £80,000,000 in the corresponding period of last year. An amount of £133,000,000 has been released from the Special Accounts since the beginning of the financial year. We are taking action in various- other ways' to deal with the situation, but the labour situation is still tight. For instance-, although the Victorian Government this week removed certain building controls, notably in respect of home building- Mr. SPEAKER.-Order ! The Minister's extended time has expired. Mr. EDMONDS(Herbert) [12.5].- Honorable members have not much opportunity, in the limited time that is available in such debates as this, to touch on any but the most important aspects of the subject. I shall therefore confine my remarks to major features of the matter under consideration. The Minister for Labour and National Service (Mr. Holt) made many statements on which I could comment, but it would take much longer than ten minutes to deal with them adequately. I shall refer first to the amount that is payable as unemployment benefit. I consider that it is perfectly described, in a statement that was made to the press in Brisbane by an officer of the Minister's own Department of Labour and NationalService, when he was dealing with the. total number of registered unemployed as the Government has chosen to call them. In fact, the only people whom the Government regards as being unemployed are those who are registered as such with the Department of Labour and National Service. The officer said that thousands of unemployed single people would not bother to qualify for the benefit of 25s. a week to which they are entitled. That statement illustrates the inadequacy of the unemplyment benefit. It is so paltry, in fact, that it is useless, futile and unreal. Thousands of people, whom the Minister will not accept as being unemployed, do not apply for the benefit, because of its inadequacy. A comparison of the basic wage in New South Wales in July, 1945, with the present basic wage in that State is enlightening in view of the Minister's- reference to the fact that the scale of unemployment benefit has not altered since this particular social service was inaugurated, in July, .1945. The basic wage in, New South Wales in July, 1945, was £4 18s. a week. A married man with a wife and one child received exactly the same amount of unemployment benefit then as a similar recipient would receive now. , That amount, which was and is £2 5s. a week, represented 51 per cent, of the then basic wage. The basic wage in New South Wales is now £11 3s. a week, so that if a recipient of unemployment benefit now were to receive the same proportion of the basic wage as a similar recipient received in 1945, the amount would be £5 13s. a week instead of £2 5s. a week. It is easy to realize from those figures, the parlous position in which recipients of the unemployed benefit find themselves. Further, it must not be forgotten that the means test is another factor in the refusal of many people to apply for the unemploybent benefit. We all know that if the wife of an unemployed man earns £1 a week, her husband is not entitled to receive the unemployment benefit. I have no more to say on that matter except that the benefit, in times such as this, when there is practically no value in the £1, is so inadequate that it is futile and useless. The Minister made a number of statements regarding the initiation of this debate by the honorable member forEast Sydney (Mr. Ward). He mentioned that that honorable member had held a portfolio in a former government, and speculated about the portfolio tha.t he; might hold in another government. All, his evasions, for that is what his remarks, were, will not help the Government. It is useless for him,, or for any other, person who cares to accept the responsibility of being the mouth piece of the. Government, to talk at length on mattersthat are unimportant and completely irrevelent, because the unemployed aregravely concerned about the present position. I agree completely with the honorable member for East Sydney that the position that the community faces to-day, and that is deteriorating- daily, is not an accidental occurrence. I am not in the habit of making wild statements, and I honestly and conscientiously believe that the unemployment position, which is still developing, is, and will be, the result of premeditated and deliberate action. History has proved that there is no bettermethod available to the master class of this country for achieving the subjugation, of workers and trade unions, than mass unemployment. Those of us who lived through the terrible days of the economic depression of the 1930's appreciate that, fact. It is all right for the Minister to, talk [about a depression and to ask who wants one. None of the workers want one, but in my opinion a lot of people in this House and in this country want mass unemployment. Whether they are pr&pared to discriminate between unemployment and depression is a matter for themselves, but in my opinion there is. no difference. There was a time in this country when approximately 700,000 people were unemployed. Mr. Berry.- What Government was in office then ? Mr. EDMONDS.--The honorable member was at school at that time, and would not know anything about the matter. Mr. SPEAKER.- Order ! Interjections are disorderly. Mr. EDMONDS.-I remember that in Queensland some people were in receipt of a dole of 5s. a week, and the only way in which a single man could get another 5s, was to travel for a distance of not less than 60 miles. In those days when the wicked Moore Government was. in office in that State,, thousands of men, women and children were taken off railway trucks, in which they were hiding under tarpaulins. They were trying to get around from place to place so that the breadwinner might be able to obtain some work. Trains from the western parts of Queensland moved men, women and children, with their furniture, free of chargeto the cost in order to give the men some little opportunity to obtain employment, because western areas could not provide the necessary work. In New South Wales a dole of 5s. was paid to the unemployed. We all remember the dole inspectors who were at work in that State. What person who lived through those times will ever forget them? Yet, while all those things were happening, any employer could look out of his factory gate and see 150, 200, or even 500', men waiting for work, and say to any of his employees, " You will do what I want you to do, or you'll be out there and one of those fellows will be in your place ". The Australian Workers Union, to which the Minister gives a great deal of lip service, took years to clean up the mess in relation to working hours and conditions that was the legacy of the depression. Mr. Turnbull.- What mess? Mr. EDMONDS.-After some degree of full employment had been achieved, that trade union had to correct the conditions of work, in many establishments, such as hotel and cafes, in which female employees were . engaged, and which were a legacy of the Moore Government in Queensland and tory governments in the federal sphere. Sometimes female employees in such places were working up to 60 or 70 hours a week for a wage of £ 1. That is the mess to which I refer. I am sorry that we have only ten minutes of speaking time in such debates as this, and I most certainly would not expect to receive an extension of time, but I am going to say that the figures that the Minister has given, and continues to give, in relation to unemployment are inaccurate and are not in accordance with the facts, and I say so with the utmost respect to him. A moment ago he said that 2,773 people were unemployed in Queensland at the end of May, but the figure that I have is 4,223. Mr. Holt.- I said nothing of the sort. I referred to people in receipt of the unemployment benefit. Mr. EDMONDS.-The figures cited by the Minister referred to those persons whom this Government chooses to call unemployed, and not to people who are disemployed. Mr. SPEAKER.-Order! The honorable member has exhausted his time. Mr. CRAMER(Bennelong) [12.15].- The ranting speeches of the honorable member for East Sydney (Mr. Ward) and the honorable member for Herbert (Mr. Edmonds) have definitely been delivered for party political propaganda purposes. Those honorable gentlemen exhibited no desire to allay any fears that may exist in the minds of the people about unemployment in the future. Indeed, they tried to create a fear complex, and to disturb the people. The honorable member for Herbert made the extraordinary statement that the Government was deliberately trying to establish a pool of unemployed. Mr. Curtin.- That is the Government's policy. Mr.CRAMER. - That is not correct. The honorable member for East Sydney has read a passage from the policy speech of the present Prime Minister (Mr. Menzies) during the general election campaign in 1949 that shows that the Government parties are in favour of full employment. But such an assurance was not good enough for Opposition members, who have endeavoured to stir up class hatred and cause the people to feel uneasy about the future. According to the Labour party, Government supporters represent the master class, and wish to subjugate the worker. My colleagues and I personally resent such an accusation. As our record of achievement shows we are more truly the friends of the worker, than are many Opposition members. The Minister for Labour and National Service (Mr. Holt) was endeavouring to clarify the situation regarding the payment of the unemployment benefit when his time expired. Undoubtedly, the ex- ' penditure on the unemployment benefit in recent years has not been substantial, because a condition of over-full employment has existed. Therefore, any comparison between the expenditure in previous years, and the present expenditure is valueless for the purpose of this debate. The Minister has assured me that the Government intends to consider immediately the situation in respect of the unemployment benefit, and no doubt this matter will arise again when the budget is presented later in the year. Additional financial provision may be made on that occasion, should some of the conditions envisaged by the honorable member for East Sydney arise. The number of persons who have claimed the unemployment benefit this year is extremely small, doubtless because deposits in the savings banks now exceed all previous records. Any comparison between the number of persons now in receipt of the unemployment benefit, and the number a few years ago, is odious. The Minister has explained that there is no unemployment in Australia in the real meaning of the word. Mr. Ward.- Rot. Mr. CRAMER,-I realize that my statement will ring hollow in the ears of even one man or woman who is out of work. The purpose of the Opposition in this debate is to appeal to persons who are without employment. Obviously, the Opposition does not realize that the number of unemployed is small. I have been in close contact with unemployed persons in my electorate, and in Sydney itself, and I find that the only persons who have no jobs are unskilled workers. There is a grave shortage of skilled workers in many industries, particularly the building trades. Has the honorable member for East Sydney tried to employ a plasterer, a roof tiler, or even a painter recently? Skilled workers in the building trades are very busy. Despite certain credit restrictions that have been imposed, there is a grave shortage of labour in many important industries. The blame for the surplus of unskilled labour should be laid at the door of the Chifley Labour Government. Its economic policy envisaged the establishment of a new order, under which the government would have power to direct labour. The present Leader of the Opposition (Dr. Evatt), in a speech at the Summer School of Political Science in 1944, said that such a condition would prevail in the new order. Dr. Coombs, who was the Director of Post-war Reconstruction at that time, and the public relations officer of the Department of Post-war Reconstruction, Dr. Lloyd Ross, stumped this country from one end to the other for the purpose of telling the people that they would not be entitled any longer to choose their own jobs. The economic policy of the Chifley Labour Government produced a condition of over-full employment, and a cruel thing was done to the youth of this country who were encouraged not to train for particular avocations. Honorable members will recall the relations between the Building Workers Industrial Union, and the former Minister for Post-war Reconstruction, Mr. Dedman. There was a deliberate linking of hands with the Communists in that union in order to prevent the training of tradesmen for the building industry. I can verify that statement. There are two kinds of full employment. The first is the kind which the Labour party advocates, and which is cruel to young Australians, because it does not prepare them for worthwhile avocations. The other kind of full employment, in which this Government believes, recognises that people have the right to live in a stable economy and be trained for permanent jobs of their own choice. We stand for the second kind of full employment because we believe that people should be permitted to prepare themselves for a lifetime's work that will enable them to do some good for this country. As a result of the economic policy of the Chifley Labour Government boys of sixteen, seventeen, and eighteen years of age were able to find unskilled jobs in which they were paid extraordinarily high wages. That condition was good while it lasted, but it has done irreparable harm to the character of those young men. That is the point that I wish to drive home. This Government does not believe in that kind of economic policy. Its policy is to stabilize the economy, and to allow people to prepare themselves for their life's avocation. Russia is the only country that has the kind of full employment advocated by the Labour party. The percentage of unemployment in the United Kingdom is greater than that in Australia. Indeed every other democratic country has a higher percentage of unemployment than has Australia. The Labour party advocates the socialization of the means of production, distribution and exchange. The Attlee socialist Government in the United Kingdom nationalized the steel and coal industries, and the railways, but the people quickly discovered that the increases of wages led to higher prices, until the interests of the workers in the nationalized industries became detrimentally affected. A similar situation has arisen in Australia. Isupport the view of the Government that there is no possibility of a financial depression in this country. All that we need is unity among our people, and an appreciation of the kind of economy that will best serve the interests of Australia in the -future. We are opposed to the kind of economy that Soviet Russia wants us to introduce, in the hope that it will " knock us out " economically. Mr. SPEAKER.- Order ! The honor- able member has exhausted his time. Motion (by Mr. Eric J. Harbison) put - That the business of the day be called on. The House divided. (Mr. Speaker - Hon. Archie Cameron.) Ayes . . . . 51 Noes . . . . . . 45 Majority . . 6 Question so resolved in the affirmative. THE PARLIAMENT. Mr. SPEAKER(Hon. Archie Cameron). - Before I call on the business of the day, I direct attention to the growing practice of honorable members of bringing newspapers into the chamber, and reading them. The reading of newspapers in this chamber is absolutely against the rules. Ido not wish to call the attention of individual honorable members to this breach of the Standnng Orders, but I think that they might co-operate by using the Library for the reading of newspapers, thus relieving me of the necessity to calltheir attention individually to this matter. NEW GUINEA TIMBER AGREEMENT BILL 1952. Motion (by Mr. Hasluck) agreed to - That leave be given to bring in a bill for an act to approve the agreement made between the Commonwealth andBulolo Gold Dredging Limited with respect to the formation of a company to be known asCommonwealth-New Guinea Timbers Limited, and for purposes connected therewith. Bill presented, and read a first time. Second Reading. Mr. HASLUCK(Curtin- Minister for Territories) [12.33].-by leave- I move - That the bill be now read a second time. This is a bill to approve an agreement made between the Australian Government and a company known as Bulolo Gold Dredging Limited, for the formation of a joint public company to be called Commonwealth-New Guinea Timbers Limited. The full text of the agreement is printed as :a schedu'le to the .bill, and the bill iitself contains only two main clauses. Une., .clause .provides for the approval of -the agreement, and the other provides for Jibe appropriation of the sum of £500,001 fox the purpose of meeting the. liabilities icl' the Commonwealth that may arise under the agreement. The timber company will work a stand of timber in the Bulolo Valley in the Trust Territory of New .Guinea. The stand contains an estimated .500,000,000 super, feet of timber and covers an area approaching 40,000 acres. The plan provides for reafforestation to ensure continuous harvesting of the forest in perpetuity. At the outset, it should be made clear that .the stand of .timber to be worked by this company is confined to the Bulolo Valley, and that it is not intended that the company shall draw on timber from, elsewhere in the territory or encroach on any adjacent stand of timber which might be considered to be the natural province for the operation of other mills. Various proposals for working the Bulolo forest have been under examination for a long time. In recent years it has been fundamental to the consideration of this matter that the forest should be harvested in such a way is to ensure orderly cutting and orderly ro-planting of the cut-over areas and, as a result of both, the maintenance of a valuable resource and of a stable industry. I should like to make two points as strongly as possible. The first is that we have rejected absolutely any idea of simply .tearing out the best of the forest for the sake of immediate advantage, leaving a ravished and denuded waste. We aim .at conserving and developing the Bulolo forest for all time. The second point is that we have embraced the idea that the development of this forest must be primarily, and above all other considerations, undertaken in the interests of the territory and the peoples of the territory. We want to see in the territory itself a sound and profitable industry which will become the basis of a stable community and a centre around which other development may be stimulated. The need for development 'in New Guinea is urgent, and the .acceptance of responsibility for that development in .an orderly and an efficient way is a national responsibility that has been laid upon the Australian Government both by .the terms of its trusteeship agreement with the United Nations, and by the compelling force of the history of our own people in that land. In placing this strong emphasis on the interests of the Territory of New Guinea and of the people of New Guinea, when speaking to a bill which concerns only the working of a timber project, I should like to express the hope that the final end of all measures for development in New Guinea, no less than in Australia, will be not only commercial, but also social. That is to say that the final outcome of that development will be that all people will be enabled to live at a better standard with mutual enjoyment of the benefits of m'aterial progress. Our role in New Guinea is that not of exploiters, but of guardians who will develop the estate in order that it may sustain a better standard of life there. Although the development of the resources of New Guinea will yield to Australia, and to the world, products of which mankind stands in need, and although the marketing of those products will help to provide the financial means by which the advancement of our national purpose in New Guinea may be assisted, the final test of the success of those measures will be in the effect that they will have in establishing in New Guinea communities of such a kind as will ensure the advancement and the welfare of all the peoples who live in that- territory, and in the aid they give to our civilizing mission. Initially, therefore, I would commend this measure to honorable members as one that will enable us more speedily to discharge our national responsibility for development in New Guinea while maintaining the broad objectives of our policy for the future of the territory. The proposal that has now come to fruition has been under public notice for a considerable period. During the term of the Chifley Government the idea that the Australian Government should associate itself with Bulolo Gold Dredging Limited for the working of this forest was first mooted. When the change of government took place in December, 1949, the whole matter was re-examined by my predecessor in office, Mr. Spender, and in June, 1950, be publicly announced that the working 'of the Bulolo timber stand was regarded as a special case, as distinct from all other forest proposals in the territory, and that the proposal for an association between the Commonwealth and Bulolo Gold Dredging Limited was being carefully considered. My predecessor referred the question, in the first instance, to a committee composed of Australian forestry experts and business men connected with the timber industry, presided over by the Director-General of the Forestry and Timber Bureau at Canberra. After consideration of the report of this committee the Government decided in August, 1950, to proceed with a proposal for the formation of a joint company. In December, 1950, the Prime Minister (Mr. Menzies) announced a further Cabinet decision that the Government had decided to form a joint company. This statement was repeated in answers to a question on notice in the House on the 13th March, 1951. During the first half of 1951 the Bulolo company sent its own experts to examine the forest, and on receipt of their reports regarding the technical problems of logging and the general economic possibilities of working the forest, the company agreed to proceed with the negotiations. My own part during the last twelve months has been in bringing those negotiations to the conclusion expressed in the agreement now before the House: The heads of agreement were drawn up and signed by the Commonwealth and the company in February, 1952, and at that time a further public announcement was made by the Prime Minister setting out the plan to harvest the forest, in 50 annual cuts of 10,000,000 super, feet per annum, the main considerations that had weighed with the Government in choosing this particular form of organization and the principles on which the new joint timber company would operate. I desire now to enlarge on the subject-matter of the Prime Minister's statement of February last, and for that purpose I direct the attention of honorable members to the actual text of the agreement which they now have before them. The agreement, which is now submitted for the approval of the Parliament, proposes that the company and the Commonwealth of Australia shall forthwith incorporate and register in the Territory of New Guinea a limited liability company under the name of the CommonwealthNew Guinea Timbers Limited. The objects of the company shall be the harvesting of logs, the sawing and milling of timber, the peeling of veneer and the manufacture of plywood in the territory, the supply of battery separator material, the utilization of timber waste and the marketing of timber and timber products. The nominal capital will be £2,000,000 and the initial issue of shares will be £500,000. The Commonwealth will have a majority . shareholding of one share. There will be a board of four directors, two to be nominated by and to represent the Commonwealth, and two to be nominated by and to represent Bulolo Gold Dredging Limited. This board will control the general policy, including the marketing policy, of the timber company. The technical and commercial management will be carried out by a management group appointed by the board of directors. In the event of disagreement between the directors representing the Commonwealth on the one hand and the directors representing the company on the other hand on any question, the final decision, after attempts at agreement have been made, will rest with the Commonwealth. The first chairman of the board of directors is to be a representative of Bulolo Gold Dredging Limited, the chairman having a deliberative but not a casting vote. There are various provisions in the agreement to ensure that the existing services, power supply and facilities of Bulolo Gold Dredging Limited at Bulolo will be available to the new timber company, and the Commonwealth enters into certain undertakings in respect of the road communications between Bulolo and the port of Lae. The interests of the Australian mainland consumers are safeguarded in a clause that reads as follows : - The assurance of the supply to the Australian market of plywood and other products similar to those of the timber company is fundamental to this agreement. The forest in which the new timber company will operate is described as that situated in the Bulolo Valley, in the district of Morobe, in the Territory of New Guinea. No boundary line is described, and the assurances contained in the agreement are in respect of so many million super, feet of timber. The Government has every reason to believe, on the information received from its experts, that there is ample timber in the valley to meet all these assurances. The Commonwealth undertakes that, subject to the legislation in force in and relating to the Territory of New Guinea, the Commonwealth will take all necessary steps and do all in its power to ensure the grant to the timber company of a permit under the Forestry Ordinance 1936-51 and the Forestry Regulations of the Territory of New Guinea, which will confer upon the timber company over an initial period of ten years the exclusive right to cut and remove 100,000,000 super, feet of hoop and klinkii pine and a smaller quantity of cedar and secondary species of timber from within an area or areas totalling 15,000 acres of land owned by the Administration of the territory and situated in the Bulolo Valley. On the expiration of this ten-year permit the Commonwealth will take all necessary steps to do all in its power to ensure the grant to the timber company of a renewal of the permit for a further period of ten years in respect of a further quantity of 100.000,000 super, feet of hoop and klinkii and such quantities of cedar and secondary species of timber as may be determined. Sitting suspended from 12.^5 to 2.15 p.m. Mr. HASLUCK.- The Commonwealth does not enter into any commitment with the company regarding the pine timber, estimated at 300,000,000 super, feet, which will then remain in the existing forests of the Bulolo Valley but it will consider any proposal of the company for that timber to be harvested by the timber company under a further permit to operate from the expiration of the second of the two ten-year terms to which I have already referred. In other words, the continuation after the first twenty years of the arrangements made in the agreement in respect of the harvesting of the Bulolo timber will depend on whether or not the agreement has operated satisfactorily in the opinion of the Commonwealth. Subject to that opinion, we have in prospect the harvesting, over a period of 50 years, of a total of 500,000,000 super, feet at the rate of 10,000,000 super, feet a year. There are certain stipulations regarding the minimum and maximum quantities to be cut in any single year. The timber company will pay the prescribed royalties in respect of timber it cuts and will also pay such additional royalties as may be prescribed. The additional royalties for the first five years are set out in the text of the agreement, and these figures will be reviewed at the end of five years. Thus, both by the payment of royalties and by its share of the dividends from the harvesting of the forest, the Australian Government will be able to ensure that the territory itself shall receive direct benefit from the commercial use of its resources. The conditions for the orderly replanting of the forest shall be determined by the Administrator of the territory in accordance with the laws of the territory, after consultation with the timber company. Ownership of the replanted forests will remain with the Crown, but the Commonwealth commits itself in respect of the cutting of the replanted forest, that is, after the expiration of the first cycle of 50 years, to the extent that it says that " it will look favorably upon any proposals to enable the timber company to get greater assurance of continuity of operation and of the use of the yield of the replanted forest ". Mr. Haylen.- There is nothing very binding in that, is there ? Mr. HASLUCK.- It is a matter for final determination by the government in power 50 years hence. The agreement also contains clauses safeguarding the interests of both parties in respect of any attempt by either party to sell or transfer its holding of shares in the timber company. No sale or transfer shall be made by one party without the consent of the other party, and the consenting party shall have an option, to be exercised within three months, of purchasing the other party's holding in the timber company at its fair value. Other clauses in i he agreement aye. of the usual character ;md are open to the scrutiny of honorable members in the text now before them. Bulolo Gold. Dredging Limited commended itself to the Government as an active,, well-organized and experienced private company which would have great natural advantages for the working of ibis forest. Mr. Hughes.- What is its. capital ?. Mr. HASLUCK.- £2,000,000. For many years past, Bulolo Gold Dredging Limited has been operating in the heart of the Bulolo forest., During the postwar years it has re-established' itself at. Bulolo and has in . existence to-day a hydro-electric power plant, producing a surplus of electric power, which would take many years and great cost to reproduce elsewhere in the ' forest. Furthermore, the company has at Bulolo workshops, administrative buildings, residences, a hospital, recreational facilities, and an industrial organization, which are certainly without parallel in that part of the territory and have few, if any, equals in the whole of New Guinea. It is also possessed of certain existing rights to water and land in the Bulolo Valley. The company has a fine record of efficiency under territory conditions. It is -a hard-headed, practical and experienced enterprise. With such a partner, the Commonwealth can have a reasonable assurance, both of prompt and energetic forest operations on the. conclusion of an agreement and of a long and stable business association, as well as the knowledge that the company's services and facilities will be immediately available for the work of the new timber company. The natural advantages of Bulolo Gold Dredging Limited for the type of operation that we have in mind, as well as its occupancy of the most eligible site in the whole, of the Bulolo Valley, mark it out as the natural agent for such an enterprise. The clauses of the agreement relating to the management of the. new timber company are designed to ensure that its day-by-day operations shall be conducted exactly as a private, enterprise. At the. same time, the. Government is conscious, of the- fact, that, as the administering, authority for the trust territory of New Guinea, it has certain broad policy interests in this, undertaking, The Com-, mon w.ealth is. obliged; to pay full regard; to the terms of the trusteeship, agreement with the United Nations. Furthermore, the Government realizes that it baa a responsibility to ensure that the majornational interests in respect of this forest] shall be safeguarded at all times and' that the- national responsibility in respect of the future of the territory and the; f future of its inhabitants must at all times be discharged.. The most direct and convenient way of doing this is for the Commonwealth to associate itself with the. private company in such a way as to enable it at all times to take part in laying down the broad lines of policy while not engaging in the management of the technical operations. The decision that the whole stand of 500,000,000 super, feet shall be worked by one timber company is based on the requirements of sound forestry practice in relation to reafforestation. In order that the forest may be preserved and worked in- perpetuity, it is necessary that the timber be cut on a long cycle to permit of replanting and regrowth before the second' cutting cycle is begun. For a substantial industry, an adequate annualcut is essential. Taking into full account the natural boundaries of the forest, the topography in relation to economical forest harvesting requirements, and the desirable size of the factory establishments, a rotation giving an average annual cut of 10,000,000 super, feet has been found to be the optimum. This will allow 50 years for the harvesting of the original forest, during which time reafforestation will ensure timber suitable foa? milling when the second cycle begins. Mr. Hughes.- How long do the trees take to mature? Mr. HASLUCK.-Approximately50. years for this type of timber. The Bulolo project does not exhaust the timber possibilities in the territory. Although Bulolo, is the main stand of hoop and klinkii pine, there are other large and small commercial stands of timber in the territory open, to public- tender.. One large* stand near. Lae, containing 70,000,000 super, feet, was recently let by tender to. an Australian contractor. A big proportion of. the- timber in' this and otheravailable areas, consists- of timber suitable for plywood manufacture. The forests. Department of the Administration also has under consideration various other stands- of timber, including, one- estimated to contain 170,000,000 super, feet, which it is hoped to be able to survey more accurately and to: use both for meeting the timber requirements of the territory and for affording opportunity to, othertimber interests to obtain logs, or to establish local timber mills., The Government, in making these arrangements for the prompt use of the Bulolo stand, has also decided that the whole industry shall be conducted at Bulolo, rather than that logs should be exported for processing in Australia. There are certain technical advantages in so doing.. The location of secondary industries close to the source of raw materials is more economical than the transportation of bulk raw material overlong distances for processing. The road from Bulolo to the shipping point at Laeis through very difficult mountainous country, and the transport problem can be more easily overcome by the carriage- of the processed plywoods, veneers and otherproducts than by the carriage of logs. Furthermore, the manufactured good's will be able to stand the freight charges more easily than would raw materials. Additionally, it is planned that eventually thetimber waste may be used to- establish a paper pulp industry in the territory, and it will be possible to do this more economically if it is done in association with an already established industry than if it. were done in association with a loggingoperation.. The most compelling reasons, however, are to be found in the effect on the further development of the territory. I have heard some suggestions that the interests of the Australian timber industry have been- overlooked. I want to say quite emphatically that I regard the present, activity in New Guinea as part of the activities of Australian industry. If this territory for which we fought and in which we have- laboured for more than a generation is to be regarded, not as within the immediate field of Australian interests, but only as a foreign land, there is a poor outlook for our future and for the future of the territory. New Guinea - I speak of both our own possession of Papua and the trust territory - by reason of what we have done for it and can do for it, and by reason of its vital importance to the security of our nation, as well as by reason of the blood out men have shed there and the bonds we> have already formed between its native people- and our Australian community, is, for all practical purposes, to-. be thought of by Australians as Australia. I cannot accept any argument which rests on the suggestion that New Guinea/ is a foreign land. This, too, is Australia. Its indus-tries are as dear- and as important to. Australians as any activity that takesplace' on the mainland. It is not a place to be drawn upon or exploited for- the. benefit of some other part of Australia. It is a place where we are to work and; to build, not a colony from which we draw off what ' we want but part of our own household to which we give all we can. I commend the bill to the House andlook with confidence to the endorsement of this national project by all parties,, knowing that the germ of the idea first, commended itself to a previous government though it has been put into practical effect by the present Government. The form of company organization adopted on this occasion appeared to be suitable for the particular circumstances we faced and to serve the objectives we had in mind. It should not be accepted' as the standard pattern of all development in New Guinea, nor is it our intention to use this means of development on all occasions. In general, we look to the energy and initiative of private enterprise to engage in its own projects, and we trust that one early consequence of the Government's participation in the task of commercial development on this occasion will be the stimulation of increased' activity by other interests willing to invest and to work in the territory for the good of the territory. Debate (on motion by Mr. Ward) adjourned. INCOME TAX AND SOCIAL SERVICES CONTRIBUTION ASSESSMENT BILL (No. 2) 1952. Second Reading. Debate resumed from the. 28th May (vide page 996), on motion by Sir Arthur Fadden - That the bill be now read a second time. Mr. TOMBURKE (Perth) [2.30].- This measure is designed to amend the Income Tax and Social Services Contribution Assessment Act. Last night, the honorable member for Melbourne (Mr. Calwell) explained that the Opposition will agree to most of the clauses of the bill, but takes exception to two of them, which, in committee, honorable members on this side of the chamber will oppose with their voices and their votes. As honorable gentlemen opposite are aware, the honorable member for Melbourne is capable of making an attacking speech. In dealing with this measure, instead of attacking the Government, as he might well have done, because it has been confused in its thinking and unreal and contradictory in its general approach to economic and financial matters, he made a constructive approach to the problem. He appealed to the Government to reconsider the two clauses to which the Opposition takes exception. He pointed out that Commonwealth revenue would still be safeguarded if the Government did not insist upon the proposed provisions for the imposition of penalties upon taxpayers who under-estimate their incomes. He reminded the House that the special depreciation allowance is something which the people of Australia have come to regard as a right, and that they expect it to remain in operation for a definite period so that they may enter into new commitments in the assurance that they will receive substantial benefits in the way of allowances for depreciation. I think the honorable gentleman pointed out - he certainly could have done so if he did not - that the Government would not loop a great deal of revenue if it permitted the existing provisions with regard to the special depreciation allowance t" continue in operation until the end of this financial year. I know that the honorable member for Melbourne made that reasoned approach to the matter in the hope that the Government would not insist that this measure should be dealt with on party lines, and that it would accept thepropositions put forward by the Opposition. I support the plea that he made. I believe that the Government could, without loss of face, accept our suggestions. If it did so, no revenue would be lost to the Commonwealth, and some of the confusion that exists in the minds of business people and primary producers would be removed. I hope that when the Treasurer (Sir Arthur Fadden) replies to this debate, he will be able to tell the House that the Government will amend the bill on the lines suggested by the honorable member for Melbourne, either in committee in this chamber, or in another place. It has everything to gain and very little, if anything to lose, by adopting the suggestions of the Opposition. The Treasurer, in his second-reading speech, dwelt at length upon the existing provisions for the assessment and payment of provisional income tax. I think he is under a misapprehension, as also is the honorable member for Capricornia (Mr. Pearce), about the purpose and nature of the pay-as-you-earn system. The right honorable gentleman suggested that, under that system, income tax is not paid in advance. The system was introduced, not to assist the Commonwealth Treasury by making provision for the early collection of income tax, but to safeguard the position of individual taxpayers throughout Australia. It was considered that during the war years and the post-war years, when income tax rates were high, in one year a taxpayer might be called upon to pay income tax based upon higher earnings in the preceding year. To prevent a taxpayer from being required to pay income tax based upon, say, an annual income of £500 in a year when his income was £250, the government of the day introduced the pay-as-you-earn system. There is no doubt that, under that system, income tax is paid in advance. It is true that, week by week, sums are deducted from the salary or wage of a taxpayer in respect of income tax, but he does not owe anything to the Commissioner of Taxation or to the Government until his income tax assessment has. been issued. If a taxpayer, having had deductions made from his salary or wage for some months, in the later stages of the financial year becomes unemployed or suffers a loss, as a result of which his annual income becomes so small that it is not subject to income tax, the deductions that have been made from his wage or salary must be returned to him. It is clear that the deductions made under the pay-as-you-earn system are made upon the basis that the total of the deductions will be sufficient to discharge the taxpayer's income tax liability at the end of the financial year. Much the same is true of business men and primary producers who are issued with provisional income tax assessments. En the closing months of the financial year, they are required to pay the provisional income tax which has been assessed against them, but even at that stage they might suffer losses and, as a result of those losses, have no taxable income at the end of the financial year. En those circumstances, the provisional income tax rate which they had paid would have to be repaid to them in full. I think I have demonstrated clearly- that deductions under the pay-as-you-earn system and payments of provisional income tax represent advance payments, made in anticipation of a debt that may become due. The Opposition supports the existing provisions with respect to provisional income tax. They are inseparable from the pay-as-you-earn system. According to the Treasurer, the Government, because it realized that the present position was developing, instituted the wool sales deduction scheme, which has provided wool-growers with a nest egg and has assisted them to meet their tax liabilities. But it is quite clear that the Government instituted the wool sales deduction scheme at a time when it hoped that there would ho a double dissolution of the Parliament. The scheme Was introduced specifically for the purpose of preventing an increase of taxation which might have discredited candidates of the Government parties in the political field. It had no relation to later developments, which have inflicted hardship upon primary producers. The present difficult situation of primary pro ducers in connexion with taxation has arisen because, during the year in which they received the highest incomes in their history, they were required to pay provisional income tax based upon their incomes for the preceding year, which were lower, and that in the year following the record year, when their incomes had decreased, they were called upon to pay income tax in respect of their incomes for that year and the preceding record year. That combination of circumstances has imposed- upon primary producers a very heavy tax liability, which, in many instances, they cannot afford to discharge. At this late stage, the Government has gone to considerable lengths to lighten that burden. I believe that much of the anxiety from which primary producers have suffered would have been avoided if the Government had indicated earlier that it proposed to do something to assist them. Relatively, primary producers were not called upon to pay more income tax than other taxpayers, but, because of the circumstances to which I have referred, a heavy financial burden was imposed upon them. In the confused situation that existed, they felt that they could not budget for the future with any certainty. If the Government had stated earlier that it proposed to empower the Commissioner of Taxation to authorize deferment of the payment of provisional income tax, or a. portion thereof, much frustration would have been avoided, and possibly larger areas of land would now be under crop. But the Government did nothing until a very late stage, when the barm had been done, because farmers had already made their plans for the year. Since this Government has been in office, it has done a number of things which have caused primary producers to become confused and worried about their future liabilities and about attacks that the Government may make upon them. Now it proposes to permit primary producers to defer the payment of up to 40 per cent, of the provisional income tax that is assessed against them, even though they furnish no real proof that their incomes have* fallen by that degree. Some proof will be needed, but the requirements in that connexion will -not be very stringent. If :a primary ..producer 'desires to defer the payment of more than 40 per cent. of his provisional income tax, the Commissioner -of Taxation will be authorized to agree to such deferment, provided the taxpayer can satisfy him that his income has been reduced and, therefore, that his .final income tax liability 'has been reduced also. If the 'Government had introduced its proposals earlier, they would have been of greater benefit to primary producers and to primary production in this country. I emphasize that the Government's proposals do not mean that income tax due to be paid by primary producers will he remitted. The proposal is that payment of provisional tax shall be deferred, and that the full sum due shall be paid later if the income of the taxpayer proves to he such as to justify the provisional assessment that has been issued. The Government, in addition to making provision for deferment of the payment of provisional income tax, has proposed that a self,assessment system shall be introduced for taxpayers in respect .of whom provisional tax assessments are issued. I think that the title is attractive and it might .appeal to primary producers or to some businessmen, but' it will not confer a very great benefit. The exceptional circumstances through which the country has passed are not likely to recur. At least the swings are not likely to be .so short or so extreme in magnitude yet the Government proposes to establish a permanent feature of taxation to meet a temporary problem. The Government has already overcome that problem by its belated actions and it will not recur for some years unless there is an exceptional demand in one year and a heavy reduction in the next. The new provision will require an increase in the Staff of the Taxation Branch. It will make the taxation law more complex and increase the difficulty of administration. As the Treasurer knows, the Commissioner of Taxation has stated in his thirtieth annual report that because of staff shortages, he has been unable to take up the case's of many people who have defaulted in taxation or who have .evaded taxation .by :a .variety of means. They probably comprise ia :su'bstantial number. The Commissioner added that lie had been -able to deal wilh only a .small number of the worst cases of evasion. The report implies that .a large number of other people have ..evaded taxation and they cannot be brought to book because of the lack of trained and skilled staff. Provision is made in this bill for a penalty provision to which the members of the Opposition object. A taxpayer is to .assess himself if his income ha3 not increased by 20 per cent, over the income of the previous year. If it exceeds 20 per cent., he must assess himself at the new standard. He is to be given a 20 per cent, margin of error in his self-assessment and then the Commissioner is to be entitled to say why, in his opinion, the self-assessment does not indicate the true income of the taxpayer. The Commissioner can reject the self-assessment and substitute his own assessment. The amended assessment of the provisional tax may be based on the new facts that 'are provided by the taxpayer but -it is completely within the power of the Commissioner of Taxation to -reject, any self-assessment that a taxpayer has made. Honorable members on the Government side have stated that the provisional tax is to be assessed after nine months of the financial year have passed and that as a consequence the taxpayer ought to be able to assess his liability with a reasonable degree of accuracy. If that is true, the Commissioner of Taxation is placed in .an equally good position. In fact, he should be in a position to assess taxation with almost complete accuracy because of his technical knowledge, the staff at his disposal a-nd a comparative study of the returns -of many taxpayers which are available .to him. Therefore, under this provision, the revenue is completely safeguarded, but the Government does not accept that position. In effect, it claims that because the revenue must be safeguarded., if the taxpayer varies his assessment beyond the 20 per cent, .latitude which is .allowed him, he may be subject t© a further 10 per cent, of the tax to be assessed against him. This will create aninhibition in the minds of taxpayers who make out their assessments. Taxpayers will also be subject to additional unnecessary expense. A taxpayer who does not employ a taxation agent may have some doubts whether he will be keeping within the 20 per cent, latitude that is allowed him. If he exceeds that latitude he may be penalized at the discretion of the commissioner;. and the Taxation Branch is considered by the public to be very hard although that is not strictly true. Mr.. Turnbull.- The branch is very fair. Mr. TOMBURKE. - I agree that it is fair. The general impression that it is hard is not atrue one although it is widely held. The provision to which I have referred will create an inhibition in the minds of taxpayers who are asked to assess themselves. If a taxpayer goes to a taxation agent, he will be required to prepare virtually a new and detailed' assessment:.. That will mean additional cost to the taxpayer and more work for the taxation agent or lawyer who handles the work. As taxation agents are generally busy people, it will probably mean an application to the Commissioner of Taxation for a deferment of other returns which must be prepared by the taxpayer. Because the revenue is already adequately safeguarded, and because of the reasons that I have stated, honorable members on this side of the House believe that the Government will do. much good and cause no harm ifit accepts the suggestions that have been put forward by the Opposition. Mr. Turnbull.- Does the Opposition oppose the measure? Mr. TOMBURKE. - We oppose the clause which provides for a. penalty. If the Government persists with that provision of the measure, the Opposition proposes to vote against it. We do not propose to vote against the self-assessment provisions, but we will force a division on the penalty provisions. The Opposition is not acting irresponsibly in this matter. We believe that the tax has not already accrued and that the Commissioner of Taxation will have the absolute right to reject the self -assessment and to substitute a provisional tax. Mr. Turnbull.- It is not payment in. advance. Mr.. TOMBURKE.- If the honorable member for Mallee (Mr: Turnbull) believes that, then I have wasted some time. The bill provides for the payment of sums which may never become due. If that is not payment in advance, I do not know what it is. If one of the honorable member's farming constituents had a fairly regular income to March, April or May of the financial year, and' then suffered a heavy uninsured loss in the remainder of the year, he might not be subject to tax for that year but he has probably already paid provisional taxation. Mr. Turnbull.-That is where the Commissioner comes in. Mr. TOMBURKE.- Yes, he pays it back, but the payment has been made in anticipation of a debt. Such cases are occurring every day and in view of reports that unemployment is growing, such cases will occur more frequently in future. Under the pay-as-you-earn system, salary-earners may pay income tax for nine months and then be out of work for three months. In such a case, no tax might be due from them. In the case that I have mentioned, the taxpayer is to be assessed in advance and must pay in advance. I now turn to the. provisions for depreciation which the Government proposes to substitute for the existing provisions. The Chifley Government introduced the existing provisions because of two factors. The first was that in the war years a special depreciation allowance was necessary because of the high cost of plant and machinery and the prevailing high rate of taxation. At present, the full cost of any plant or machinery on ' which depreciation is allowed can be deducted by the taxpayer over a period of years. Section 54 and' successive sections of the Income Tax and Social Services Contribution Assessment, Act 1936-1951 provide that the estimated life of plant or machinery may be taken into account, and deductions may be made over that period which will liquidate the cost'. If the plant is sold, after that estimated term or before it expires, any further depreciation which has not already been covered may he allowed to the taxpayer, but any excess of that amount must be computed as income in the relevant year. The Chifley Government anticipated that taxation rates would drop and that the taxpayer would get the benefit of the depreciation allowances in the years when tax rates were highest. But in existing conditions and those that can be foreseen under this Government, taxation rates will go higher, and taxpayers will not get the benefit of the depreciation allowances. On the contrary, they might lose as a result of the provisions of the bill. In five years the capital cost of plant or machinery will have been wiped out by the depreciation allowances in many cases and taxpayers will have no depreciation to offset against higher rates of taxation. That situation is developing now. The Opposition believes that the Government should have allowed the existing system to continue for the period that was contemplated when the system was propounded. Many taxpayers have undertaken commitments and have bought plant and machinery in the belief that they would get the benefit of the provisions for depreciation. The Government is committing a breach of faith by varying those provisions. In many cases, primary producers and others have been buying plant in the expectation of getting the special depreciation allowance. But the Government has decided to. eliminate that allowance. The Treasurer (Sir Arthur Fadden) has forced the Government to bring into being a modified form of depreciation allowance which will be applicable only to primary producers. The provisions in the act which the Government proposes to repeal provided for plant and machinery which was installed prior to the 30th June, 1952, to have the benefit of the special depreciation allowance. The Government's bill provides that plant which was installed for operation prior to the 1st July, 1951, shall get this benefit. "We urge the Government to retain the existing provisions. The Opposition supports the other clauses of the bill. Mr. SPEAKER,- Order ! The honorable member's time has expired. Mr. FAIRBAIRN(Farrer) [3.0]. - I believe that every primary producer will support this measure and that it will be approved also by taxation agents and accountants generally. Broadly, the measure seeks to achieve three objectives. The first of them is to assist primary producers by the introduction of a system of self-assessment of provisional tax. The second is to make a genuine attempt toassist primary producers who desire to purchase plant and to improve their production. The third is to permit persons who have suffered losses as a result of bushfires, or floods, to write off, in fiveequal parts, insurance payments that are made to them to cover such tragic losses. I commend the Government for introducing the self-assessment system in respect of provisional taa. All honorable members agree that the administration of the provisional tax system has been the greatest headache that the Government has had in recent years. I shall not traverse the history of that system. It was introduced in 1944 as the result of a recommendation by an all-party committee. That system worked reasonably well when no substantial fluctuation of incomes occurred, but, owing to the violent fluctuations in the price of wool, it has become unworkable during the last two years. Wool -growers received unprecedently high prices during 1950-51, but in 1951-52 their returns from the sale of wool in the majority of instances, have been about only one-third of the income that they received from that source during the preceding year. As the result of the reduction of the price of wool, the growers' profits also have been reduced but, at the same time, their outlay has probably remained static, or, possibly, has increased. Generally speaking, the profits of growers from the sale of wool were reduced last year by from 20 per cent, to 30 per cent, compared with those for the preceding year. Yesterday, my attention was directed to the case of a primary producer whose profit last year had been reduced to 16 per cent, of that of the preceding year and who, under the provisional tax system, was 'asked to pay £16,000 provisional tax when he could actually prove that he was liable to pay tax amounting to only £2,000. The Government has not been unsympathetic in this matter. The honorable member for Perth (Mr. Tom Burke) claimed that it had not made an early announcement concerning the amendments that are to be effected under this measure. That statement is incorrect, because early in October last I received a letter from the Treasurer (Sir Arthur Fadden) in which he pointed out that provision existed under the principal act to enable a person to receive a portion, or all, of his provisional tax provided that he could show that he was not actually liable to pay the amount of the provisional tax or, owing to hardship, he could not afford to pay that amount. .Subsequently, that provision was liberalized in the form of an almost automatic reduction of 40 per cent, of provisional tax in respect of wool-growers. The House is now asked under this measure to validate that alteration. However, the Taxation Branch has actually been applying it for some considerable time. Furthermore, it was realized that that provision had been introduced as a temporary expedient. I know that the Treasurer has held the view for a long time that a permanent alteration of the system was required in order to prevent a person from being called upon to pay in provisional tax a sum greater than the tax that he actually owed. One of the purposes of this bill is to accomplish that objective. Under this measure, a taxpayer will be required to assess his provisional tax as at the 31st March, or as at the date on which he receives his assessment from the Commissioner; but in no circumstances will the date be prior to the 31st March of any year. The honorable member for Perth claimed that it would be difficult for taxpayers to assess their provisional tax as at the 31st March. I do not agree with that view. By that date, nearly every primary producer will have .received his main returns. For example, a woolgrower will have received his wool cheque and will have sold his sheep off shears, whilst a wheat-grower will have calculated expenditure incurred in respect of wheat in the silo and will have calculated his income. Taxpayers, in assessing their provisional income, will be allowed a 20 per cent, margin of error one way or the other. That means that a person whose actual taxable income amounts to £1,000 may assess his income provisionally at as low as £S00, or as high as £1,200, without becoming liable to penalty under this measure. The honorable members opposite have claimed- they are opposed to the introduction of new penalties. The system of self-assessment, for which provision .is being made under this bill, is modelled upon systems that are in operation in the United States of America and Canada. I do not know whether a similar system is in operation in any other country. Under those systems, provision is made for the imposition of certain penalties, but the margin of error which they allow to a taxpayer is considerably less than that which is provided under this bill. I am confident that, generally speaking, taxpayers will not have any difficulty in assessing their provisional income within a margin of error of 20 per cent. If a farmer does not include in his assessment a payment which he could not reasonably have expected to receive, such as a distribution of profits from Joint Organization, or an additional payment from a wheat pool, or any other payment of that nature, the Commissioner of Taxation is empowered, in such circumstances, to waive the imposition of a penalty. The honorable member for Melbourne (Mr. Calwell), in the course of his speech ob this bill, said that he could see no reason why the Government could not introduce a system under which taxpayers would be permitted to assess their provisional income without becoming liable to penalty in respect of any error that they might make. Incidentally, I read a report in a leading newspaper last week to the effect that the honorable member had great prospects of becoming Treasurer in a future government. How could he possibly expect that a system, such as he advocates, could be made workable? He revealed complete irresponsibility in his remarks on that point. It would be impossible to implement such a system for we know that some people will always try to evade their tax liability. Honorable members opposite would be equally justified in contending that practically all pensioners are honest and, therefore, should be trusted to help themselves to their pension from a pile of money that would simply be placed on a counter. Mr. Beazley.- Any taxpayer who makes an error in assessing his provisional income will, subsequently, be supplied with a correct assessment. Mr. FAIRBAIRN.-It would be difficult for the Taxation Branch to check every assessment until some considerable time had elapsed after the taxpayer had lodged his own assessment. Therefore, the Government is completely justified in making provision for the imposition of penalties in respect of abnormal errors. Mi-. Luchetti. - What will be the great advantage of the new system of .self-assessment ? MY. FAIRBAIRN- Whereas, in the past, a person has -been required to pay provisional tax on the assumption that he will receive an income equal to his income of the previous year, under this new system he will be obliged to pay provisional tax in respect of the income that he expects to receive. The honorable member for Macquarie (Mr. Luchetti) will see that there is a great difference between the old and the new system. Mr. Luchetti.- The taxpayer's assess ment will still be an estimate. Mr. FAIRBAIRN.- But it will be a wa-y accurate 'estimate. It will be far more accurate than any assessment that is based on the assumption that .a taxpayer's income will be equal to that which he received during the preceding year.. I nave already cited the case of a wool-grower whose provisional tax was assessed at £16,000 whereas his actual tax should have been 12,000. Mr. Luchetti.- Was the Commissioner of Taxation in error ? Mr. FAIRBAIRN:-Not at all. As 1 have already said, the provisional tax was introduced in 1944 and the system worked reasonably well when incomes did not fluctuate to any violent degree. The Government is introducing this measure with he object of obliging a taxpayer to pay neither more nor less than he expects to be lia'ble to pay. The second object of the 'bill is to provide an incentive -to primary prod'Ucers to replace plant and to set up new plant by allowing depreciation at the Tate of 20 per cent, 'annually for five years. That is the greatest measure of encouragement that has yet been given to primary producers to improve their production. In New .South Wales alone, there is an enormous back-log of developmental works. In that State, at least 50,000 more houses are required in country areas for the housing of rural 'workers. Under this measure, primary producers will be encouraged to provide such accommodation for their employees. The honorable member for Perth said that primary producers would prefer .the original 40 per cent, initial depreciation ' allowance in respect of plant. I disagree with that view because, under that system, the primary producer could write-off 40 per . cent, for the first year and only 2£ per cent., which is the ordinary rate of depreciation, in each year for three years. Whereas under that system he would write off a total of 47-J per cent, in that period, under the system proposed in this hill he will write off 60 per cent, of the capital cost of plant and machinery during a similar period. This improvement presents a magnificent opportunity to primary producers to plough back * profits into the land, because that will be the best way by which they can qualify for this concession. The Government has realized that our greatest -asset, the land, will be developed by farmers only if they are allowed to retain sufficient funds during periods of prosperity to carry out necessary improvements on their properties. I hope that this concession will be supplemented by reductions of taxes when the next budget is introduced and that farmers will be further enabled to retain as large a proportion as possible of their profits for the purpose of developing their land. Only to-day, I received a letter from one of my constituents which con- tained the following observation : - We are delighted with the 20 per cent, depreciation being made retrospective, lt is going to lie -a wonderful help to ns and all primary -producers. The writer of that letter suffered disastrous loss as the result of the recent bush fires, and he will be obliged to 'incur considerable expenditure in order to restore his property. The third objective <o£ the bill is to 'introduce .a system which will allow a person who has suffered substantial loss as a result of bush fires to write off, over a period of five years, insurance payments that he receives in respect of such loss. I am particularly pleased that the Government has taken this step. I have spoken on previous occasions about the disastrous losses that were caused by bush fires earlier this year. At that time I had the opportunity to introduce to the Prime Minister (Mr. Menzies) a deputation that consisted of persons who had suffered disastrous losses in that way. Two employees of one member of that deputation lost their lives. One was burnt to death and the other was killed flic following day when he was trying to destroy a bull that had been seriously burnt. The second person was an Englishman who had been in this, country Tot only about eighteen months and had been doing his best to improve a property that was in a rather run-down condition. He lost his house and 25 miles of fencing and, I think, about 1,500 head of stock. After the interview, the Prime Minister said that he could see that country people had suffered tragic and calamitous losses. Yet we are asking them to pay tax on the insurance payments that they receive in respect of their losses. I am very glad that this measure has been introduced. On the occasion on which I last spoke to the House on this subject I mentioned the case of a man who had lost 1,000 sheep in a bush fire. The sheep were valued in his hooks at Ss. each. Honorable members should realize that the reason for the valuation of the sheep at such a low figure is 'that the law of the land is that the owner must set down the price at which he purchased them, and show the natural increase, that is, the lambs, either at 5s. each or else accept payment for them at the current values. In many instances people value lambs, in their books, at 53. As a result of breeding over a number of years many primary producers have come to the stage at which their sheep are valued at 8s. to 10s. in their books. Normally that does not matter because they make a profit when the sheep are sold and. pay tax accordingly. The man in 'the case to which I refer, however, had insured his sheep for the current value, which was £4 a head. He, therefore, received an insurance payment of £4,000 in respect of them. As they were valued in his books at £400 he would have been charged tax as though he had made a profit of £3,600. The effect of the proposed alteration of the procedure will be to allow him to write off, over a period of five years, the accretion that resulted from the insurance payment. As a result, if he is paying tax at the Tate of 10s. in the £1 he will this year pay tax on only £360 of the insurance payment and will be left with the bulk of the payment for expenditure on the restoration of his property. This is the first time that action of this nature has ever been taken. The Chifley Government introduced, after "World War II. a somewhat similar measure that provided that when a person whose property was resumed for war service land settlement, and who, therefore, bad to sell the stock on it, could show his profit in tax returns spread over a period of five years instead of showing it, in one year's return. We are extending that provision, and now intend to extend the benefit to the victims of floods and bush fires. I commend the bill to the House, and I consider that it will be gladly accepted by every primary producer in Australia. Mr.CREAN (Melbourne Ports) [3.181 - I should like to deal, in the time at my disposal, with several aspects of the bill. The first matter that should be considered is the vexed subject of the basis of provisional tax assessment .and the modification of the averaging system on the incomes of primary producers, which has become allied with it as a result of the amending legislation that was passed last October. As the honorable member for Melbourne (Mr. Calwell) clearly stated last night, the basis on which the provisional tax system operates is the broad assumption that incomes will not fluctuate violently from year to year. The logic that underlies the averaging system, which has been applied to the income of primary producers since, I think, 1922, is that incomes will fluctuate. The incomes of people who are engaged in primary production differ from those received by personal exertion, in that the latter usually do not vary from year to year, because they are determined by the amount of physical work that a wage-earner performs. The return of a primary producer, however, depends largely, although not entirely, on factors such as climatic conditions and also, in the cases of Australia's principal primary products, wool and wheat, on prices that are not determined in Australia, but are determined overseas. So there is obviously a fundamental conflict between the basis of provisional assessment, as introduced in 1944, and the logic of the averaging system, which assumes that incomes vary from year to year. What the Government did in October, 1951, was to decide that, because the averaging system was based on the assumption that returns would fluctuate violently from year to year, and the provisional assessment system was based on an opposing assumption, there was something wrong with both of them. So it cut across the fundamental conflict between the two bases of assessment. The Treasurer (Sir Arthur Fadden) in his second-reading speech, when he spoke about the basis of provisional tax assessment, said this - The lesson that has to be learned is that it is one thing for the revenue to wait for an adjustment, and quite another thing to expect overpayments to be made by taxpayers on the basis that a later adjustment will put matters right. I consider that that is something which the Treasurer ought to have accepted as virtually inevitable, but he says that he has taken it into account and intends to make a basic difference now in the matter of provisional assessment. It should be realized that the circumstances that threw the basis of provisional assessment out of gear have passed, and would have been remedied by the adjustments made in this legislation, which will alter the provisional assessment system as it applies to wool-growers by extending to them the concession of being able to vary their assessments by 40 per cent. I suggest that, instead of the comprehensive and, in some instances, clumsy clauses that have been included in the bill, it would have been far simpler for the Treasurer to have written into the legislation a general clause under which a person who felt aggrieved over a provisional assessment, as many now do, could have received satisfaction from the Commissioner of Taxation on production of satisfactory evidence. Perhaps the Government is so obsessed by the inflation that has occurred in the time it has been in office that it expects incomes to rise over the next five or six years at the same rates as that at which prices have been rising, which is at the rate of 20 per cent, to 25 per cent, a year. There is no virtue in this measure unless incomes do fluctuate violently, and it is doubtful now that they will move upwards although they may move downwards. Provision already exists in the income tax law for a person who is aggrieved about a tax assessment to make an offer to the Commissioner of Taxation relating to the payment of tax. The Deputy Commissioners of Taxation in the various States treat such people leniently if they can advance a reasonable case. I consider that the subject of provisional taxation is being used to camouflage the great injustices that are being occasioned by last October's legislation which modified the averaging system. I propose to cite again an example, which I have already given in this House and which the honorable member for Mallee (Mr. Turnbull) has seen fit to criticize in a newspaper that circulates in his electorate. I shall repeat it and leave it to him to decide whether he considers that there is any ground for criticism. Any criticism that he considers he should make should at least be made on the facts that I present. The example that I shall give will be comprehensive because I consider it to be what the economists might term a " model " example, as it is typical of such cases that occur throughout the whole of the Commonwealth, as a result of the high prices that were received for the Australian wool clip in the year that ended last year. I shall state the incomes in each of the years from the year that ended on the 30th June, 1946, to the year that ended on the 30th June, 1951, and the estimated income for the year ending the 30th June next. After all, it is now May, and every taxpayer next year is to be expected to be able to estimate his income in March, so surely an estimate made now of income for the "year that will end on the 30th June next can be taken as reasonable. The following are the figures of taxable income of the woolgrower in the years that I have mentioned : - Those figures justify what we call the logic of the averaging system. There is nothing consistent about that particular person's income, which varied from £529 to £2,500 and, in the flush year of 1950-51, reached £17,980. What has been the effect of the so-called modification of the averaging system in his case? Nothing that the Government can say can alter the fact that the relevant legislation was retrospective in effect and I quote in support of my contention from a handy booklet that was written by Mr. John McKellar White, of the Taxpayers Association of New South Wales (Incorporated), an organization which is not generally sympathetic to the views that are expressed on this side of the House. The pamphlet is entitled, " Taxation Amendments 1951 ", and is a digest, for clients of the association,' of the various amendments that were made to the income tax law last October. On page 3 of the pamphlet there appears a large headline in black type which reads, " Retrospective Features of the Proposal ". The article beneath it reads - In the flood of criticism of Sir Arthur Fadden's budget proposals comparatively little notice has been taken of the retrospective application of certain of the proposals. Retrospective legislation in any form should be avoided at all- costs. People should be entitled to act from day to day according to the law as it then stands. Retrospective changes in the law undermine all spheres of commercial confidence. The Treasurer intends to date back three of his major- proposals. Firstly the amended provisions relating to the averaging of primary producers' incomes are to be, applied retrospectively to the income of the year commencing 1st July, 1950. Although the article says that comparatively little notice has been taken of those features of the proposals, the fact is that a great deal, of notice has been taken of them. 'The second point made in the article is not relevant to my theme. The article continues - Thirdly he adheres to his earlier decision to withdraw retrospectively from 1st July, 1951, the initial depreciation allowances. , So, I do not think there is any getting away from the fact, that in October last legislation was brought down which had effect on returns already lodged of income as at the 30th June, 1951. A taxpayer who had operated under the averaging system for approximately 30 years was entitled to assume that the system, as it existed at the date on which he lodged his return and in the previous twelve months, would have continued to operate. What was the effect on that taxpayer of varying the average retrospectively? It meant that any income in excess of £4,000 was virtually treated as not applicable to the average. The taxable income for the year 1949-50 was £3,136; the average income based on that year and the previous four years was £1,580; the rate of tax on an income of £1,580 was 21.1696d. in the £1, and the provisional tax in respect of the income for 1950-51 was £745 15s. That example is necessary in order to give the amount of provisional tax assessed on the assumed income for 1950-51. In that year, the taxable income was £17,9S0, and the average income was £5,070. The rate of tax on an income of £5,070 was 10ld. in the £1. If the average has been applied, the taxpayer would have paid £7,566 12s. The deficiency of provisional tax would have been £6,820 17s. But because of the operation of this modified averaging system, the tax payable was £11,606 13s., and the deficiency of provisional tax was £10,860 18s. Therefore, the effect of the elimination of the average in respect of that taxpayer was £4,040 ls. That fact cannot be gainsaid or con tra verted. What is the position of that taxpayer in the current financial year ending the 30th June, 1952? This is a fundamental dilemma which will confront most taxpayers at the 30th June next, if they have operated on the averaging system, and if their average is in excess of £4,000, but their income has fallen below that figure. They must decide whether they with cease to come- under the averagingsystem permanently. One factor- which must be' borne in. mind is- although the actual income of £17,980 for the year ended the 30th June, 1951, was not subject to the averaging provisions, nevertheless-, if the- taxpayer continues on the averaging system, the whole of the amount of £17,9S0 will be brought in over the next four years. That fact also cannot be gainsaid. The taxpayer has been given- theoption, which he can exercise only once, to go off the average. If he does so, he cannot come under it again. If the amendment had not been made, and if the condition which operated before October, 1951, had continued, his taxable income would have been £2,500, and his average would have been £5,427. I emphasize that point lest I be misunderstood later. If the modifications had not been made, he would have been taxed, not at the rate- applicable to £4',000, but at the rate applicable to £5,427, which would have been 115.43d. in the £1. His tax, had the averagingsystem been applied, would have been £1,202 8s. If, because of the modification of the averaging system, he decides to leave that system permanently, he will pay not £1,202 8s., but £756 4s., which will give him in this year a gain of £446 4s. But that gain must be offset against a loss of £4,040 ls. incurred because the system had been changed earlier. So far, at any . rate, he will have lost, even with a falling income, after the next year an amount of £3,594 17s. The taxpayer, in those- circumstances, has to make the difficult decision whether he will continue to come under the averaging system.. If he decides to exercise the right to do so, he will be taxed on. the income of £2,500 at the rate applicable to £4,000, and the tax, instead of being £757 4s., will be £917 14s. 2d. So he has to make up his mind whether it is worth his while to risk approximately £160 this year on the assumption that, in the long run, the average may work out to his advantage. I suggest that a small gap exists in the legislation. The Income Tax and Social Services Contribution Assessment Bill, which was introduced in October; 1951, should not have made irrevocable the decision of a taxpayer to go off the averaging system. The poor fellow to whom I have referred may exercise his choice this year in the hope that he will save something from the wreck. He has already lost £4,000 by the change, and he can by exercising his right not to come under the averaging system, pick up an amount of £445 this year. Nevertheless, the conditions which have applied to primary production over the last 30 years, by and large, have notchanged this year. I suggest that the Government should consider the advisability of inserting in the act a provision whereby the taxpayer even though he leaves the averaging system temporarily, may be permitted to return to it. After all, the Government has taken advantage of the fact that his income has fluctuated, and should permit him to go off the system for a year or two years. But should he. consider that it will pay him to return to the system, he should be allowed to do so. There has not been widespread dissatisfaction with the averaging system. The' Government alone is dissatisfied with thesystem, because it will get a windfall income this year, to which it is not entitled. The Government has not stated the position so honestly, but, fundamentally, that is the situation. Probably most honorable members have received copies of Muster, the journal of theGraziers Association of New South Wales published on the 22nd May last. A writer in that journal replies: to the claims- on the averaging system made by the Government. He lists under six separate headings the points made by the Government, and puts his point of view in criticism of them.. The first claim is as follows:1 - The amendment of. the averaging system is not retrospective. I have already disposed of that contention. I cannot discuss the second and third points in the limited time at my disposal. The fourth, point is as follows : - The amendment of the law attacks only big wool-growers. That claim is not true. The law, as: amended, applies to all primary producers, including all wooL-growers. But all wool-growers, as is pointed out in the article, are not wool-growers on a big scale. The journal points out that approximately 29,000 wool-growers are affected by the amendment, and that they grew 80 per cent, of Australia's wool clip. The writer stated - The sizes of their flocks ranged down below 1,000 sheep. Their greatest numerical concentration was in the range 950-2,510 sheep. Consequently, the majority of wool-growers are not in the industry on a big scale. The fifth claim is as follows: - Wool-growers will actively benefit by the change in the law, as witness the example of a taxpayer whose income in 1950-51 was £16,930. On the assumption of a considerable decline in incomes, he will, in 1952-53 and 1953-54, gain through being forced from the adverse effects of averaging on a falling income, a true saving of £1,900. I have shown that, even after the 30th June, 1952, one wool-grower will suffer a loss of £3,594, and that even if he has no income in the next year, he will not be square by 1953-54, as has been claimed by the Government. The sixth point reads as follows: - Wool-growers in a bad slump will benefit by the fact that averaging continues to operate below the £4,000 income level. Virtually any person whose income continues below £4,000 will remain on the averaging system for four years. But if the income is less than £4,000 but the average was £4,000, the taxpayer will have no option but to leave the averaging system permanently and face the consequences in the future. The Government should re-examine some of the glib defences that it has made for the modified averaging system. I come now to one of the most thorny problems which face certain sections in the community to-day. I refer to what is known as Division 4 of the Income Tax Assessment Act, and, in particular, to sections 83 to 88, which deal with leases. This bill makes a slight amendment to the act that will be of benefit to some people, but, nevertheless, it does not reach the fundamental problem which is being faced by people who are buying and selling small businesses and who are not in possession of leases for fixed terms. They have weekly or monthly tenancies, and the difficult subject of goodwill arises. As I have mentioned on a previous occasion, it is only during the last three or four years, to my knowledge, that the Taxation Branch has attempted to bring this matter within the ambit of taxable income. A few days ago, I read in the Parliamentary Library the book, Commonwealth Income Tax Law and Practice, by Gunn and O'Neill, on the subject of income tax, and no mention whatever is made in that work of the matter to which I am referring, although 20 or 30 pages of the book are devoted to Division 4 of the act under the heading "Leases". No mention is made of transactions which involve goodwill in respect of weekly tenancies. It is largely a battle of wits between tax agents, estate agents and lawyers, for the buyers, against the Taxation Branch of the Treasury which attempts to bring such transactions into the taxation net. The whole matter should be clarified. The injustices are obvious. When a. person buys the freehold of a business, that kind of transaction is not queried by the Taxation Branch. It is regarded as capital gained. Yet the poor fellow who cannot buy a freehold, but has developed a business, is brought within the ambit of the definition of " lease " and " premium " in section 83 of the act. " Premium " includes - Any goodwill or licence attached to or connected with land, a lease of which is granted, assigned or surrendered. So it must be determined in each case whether the increment due to the sale is attached to the premises; that is to say, whether or not it is local goodwill. It must also be determined whether, in each case, a lease has been granted, assigned or surrendered. I suggest that the Government, if it wishes to tax those transactions, should honestly announce its intention, and make the law more definite on the point than it is at the present time. If, however, it considers that such a transaction should not be subject to tax, the law should be clarified. It is in many respects a capital levy. Last week, when the House was- discussing the land settlement of ex-servicemen, the Government indicated that it regarded the capital increment on land as the sacred possession of the landowner and that it should not be taxed in any circumstances. Apparently there is nothing sacred about the corner store or the small retail shop, although fundamentally there is not much difference between the two classes of property except that one is attached to a freehold tenure and the other to a leasehold tenure. There is not much doubt that the gains in each case are societal gains, and yet it is considered that one may be taxed and the other not. Mr. Hulme.- The honorable member's party has indicated during many years that it would agree with what the Government has done. Mr. CREAN.- I have not said so. If the Government thinks that these transactions should be taxed, it should be specific, and it should not do it by a backdoor method but it should apply the procedure to everything, including the land to be used by ex-service settlers. If a man owns 1,000 acres of freehold land and because of the scarcity of land the value increases from £10 to £15 an acre there is no difference between that increment of £5 an acre and the local goodwill or personal goodwill of a person who occupies rented premises, which are also scarce. The present procedure does not accord with my idea of justice. A great deal could have been done in the past to prevent the inflation of land prices by the application of a capital gains tax. The Government is attempting to import into sections 83 and 84 and allied sections of the Income Tax Assessment Act, something that I think was never intended. There is some justification for taxing local goodwill of licensed premises because they are socially regulated, but a small business is on quite a different footing. At least something is being done to give some sort of justice to a person who buys certain property after the 30th June, 1951, but the Government's action leaves unresolved the important matter of local goodwill on the one hand and personal goodwill on the other. It is virtually impossible to disentangle local goodwill from personal goodwill. Mr. SPEAKER.-Order ! The honorable member's time has expired. Mr. McEWEN(Murray - Minister for Commerce and Agriculture) [3.48]. - In the public mind the principal importance of this legislation will be the relief that will be given to provisional taxpayers and to those who pay taxes on land. The necessity for relief to both classes of taxpayers is urgent and important. The character of the relief that will be given, particularly to provisional taxpayers, is quite spectacular. However, it should be clearly recognised that there are other aspects of this matter which are at least as important, and which in retrospect might be regarded as more important, than the relief being given to provisional tax and land tax payers. That is the encouragement that is held out to primary producers through the new, novel, and extraordinarily generous provisions for depreciation allowances. It is very important that the farming community should understand the value that could accrue to it if it recognizes and takes advantages of the new depreciation provisions. In these days of high taxation we all complain, but the cold truth of the matter is that world circumstances and Australian public opinion combine to require policies to be followed by this, or any other Australian government, which involve the expenditure of prodigious sums of money. It is anticipated that £1,000,000,000 will be spent this year. If our policy demands the expenditure of £1,000,000,000, that sum will have to be raised, and taxation will be high. A combination of circumstances make it inevitable that whatever government is in office and whatever relief can be given from taxation, the level of taxation will, on all previous standards, remain high for the rest of our lives. That is inevitable. We are confronted with the extraordinarily complex problem that the economic circumstances of this country necessitate an increase of production in the basic and primary industries but the inevitably high scales of taxation have become a deterrent to increased production. We need the money, and we need increased production. How are we to resolve that paradox ? Embodied in this legislation is a most important key .to .the solution of that complex problem. As long as high taxation remains on personal incomes, it will not be possible for fortunes to be accumulated from the residue of high incomes, but fortunes can still be accumulated by capital increment. Indeed, that is the only way in which fortunes can be accumulated. If we want our resources to be redistributed from the non-essential to the essential, we must rely upon the inspiration that comes to people through the prospect of profit to turn them from non-essential to essential industries. Embodied in this legislation is an important element of the Government's economic policy. That is, the selection of the primary industries and the holding out to those who engage in them, particularly those who are prepared to expend money in the development and re-equipment of properties, the prospect of gain through untaxed capital increment. That needs to be clearly understood, and it will do no service to this country in the long run if political opponents of the Government seek to cloud or distort that issue. Moreover, I am bound to say that leaders of the primary industries will do no service to their industries or the economy of the country if they themselves fail to point out to the rank and file of those engaged in the primary industries that notwithstanding high rates of taxation, there will now be presented to them an opportunity for capital increment if they engage in the development of their properties. This is not an opportunity that will be held out to persons who seek to accumulate wealth in the bank by speculation or investment outside industry. It is to be offered to those who choose to devote a surplus of their income to expenditure within the primary industries. To those people a tremendous prospect is held out. Honorable members opposite have quoted examples in connexion with those who have incomes of £14,000 a year, and, indeed, the honorable member for Melbourne Ports (Mr.Crean) spoke of a taxpayer whose income was £17,000 in one year. Honorable members opposite used to talk about age pensioners and basic wage earners, but apparently they have changed their tactics and now they are concerned about high income earners. Let me cite as an example a person who has a taxable income of £10,000 a year. Assume that £6,000 is taken from him as income tax. That leaves him with £4,000. If he wishes to engage in investment expenditure outside the primary industries, he must do it from accumulated capital or from borrowed money. But he can engage in. expenditure of certain kinds within the primary industries from his income, and the whole of his expenditure will be a deductible allowance. If he acquires land, if he spends his money on improving a property by destroying noxious animals or weeds, if he improves his water supply or engages in soil conservation, the whole of the money that he expends on those activities becomes an allowable deduction for income tax purposes. Therefore, if the man who earns £10,000 a year expends £6,000 in that category of expenditure,then at least £6,000 of 'his income will be invested in capital assets and his taxable income will be reduced to £4,000 a year. No other section of the Australian community will be offered that opportunity for accumulated wealth through capital increment by selected expenditure under the policy decision of this Government. If a primary producer chooses to expend his money upon re-equipping or initially equipping a property, or on building homes for workers, or on silos, woolsheds, fencing or windmills, and if he is a 10s. in the £1 taxpayer, over a five year period the Government will contribute by direct tax remission half the value of his expenditure. Therefore, his invested wealth will be increased by half the amount of his invested expenditure because of the provisions made by this legislation. Mr. TomBurke. - If he could buy those things the Minister mentioned. Mr. McEWEN.- The honorable member for Perth (Mr. Tom Burke) has interjected, " If he could buy those things We do not ignore that matter. Another part of the Government's policy is to ensure that insofar as a taxpayer wants to make expenditure from borrowed money, no hindrances are placed on those who may be prepared to lend him money for that purpose. As to the availability of equipment and developmental material, all the activities of the Government are directed to attempting to arrange that this basic policy will not be negatived by the non-availability of the materials to which I have referred. This measure will be regarded as the most important part of the present taxation proposals, and if all those in public life - in the Parliament, or in industrial organizations - combine to ensure that this opportunity is widely recognized among those engaged in primary industry, they will do a service to this country in general and the primary producing community in particular. Unless we can secure a diversion of our resources from non-essential purposes to essential purposes there can be no hope for the relief of import restrictions and the general difficulties of trade balance. I shall deal now with the relief that will be given to provisional taxpayers. I repeat that the. recent intolerable burdens of provisional tax were not the outcome of any not of this Government but were the outcome of legislation enacted by the Curtin Government in 1944. That fact has been stated many times, but. it has not seeped into the public mind. The legislation of 1944 has not been altered up to date. Mr. To.uBurke. - But it has been reenacted every year. Mr. McEWEN.-The honorable member mutters that it has been re-enacted annually. Of course that is so. Labour governments re-enacted it every year until 1949. The important fact is that this Government took prompt action, by administrative procedure in the first instance, to deal with the problem as soon sis it revealed itself. The anomaly affected wool-growers almost exclusively, and the Government provided immediate relief for those who could demonstrate that they were suffering hardship. It took the unprecedented course of sending tax-gatherers into the field, even in the remotest corners of Australia, in order to meet the. farmers in their own districts and provide relief for those who found provisional tax burdensome as a result of some disaster, such as bush fire or flood. Now, at the first convenient opportunity, the problem is to be resolved permanently by legislation. Provisional tax is not to be abolished, because that would be a retrograde step. Provisional tax established a state of affairs in which every taxpayer, on paying his assessment, was approximately up to date with his commitments. Previously, every taxpayer was still a year behind with his obligations when he had paid each assessment. Innumerable instances of extreme hardship occurred under that system. For instance, when a taxpayer died, his estate was liable for a year's income tax at least. When theincome of a taxpayer ceased as a result of retirement, ill health, or accident, hewas liable still for tax on income that he had received prior to the change of circumstance. Under the provisional tax system, however, the taxpayer is able to keep abreast of his commitments. The Government has no intention of depriving the mass of taxpayers of that great advantage. All that it proposes to do, by means of this bill, is to remove, from the field of provisional tax the anomaly that arises when income rises and falls steeply. The anomaly assumed acute proportions in the case of wool-growers not so much because the price of wool fell as because the price had previously risen sharply. Taxpayers have shown me assessments for £5,000, £6,000, and even £7,000, when their provisional tax in the previous year had amounted only to £90, £84, or- some other low figure. That situation developed, not because their incomes had fallen, but because they had risen very steeply. On account of the rise, adequate provision for the payment of income tax was not made through the instrument of provisional tax. There is no means of dealing infallibly with such circumstances, but this legislation will deal effectively with the situation that arises when incomes fall. For the first time in our history, taxpayers are to be given the opportunity to declare their own estimates of their incomes for any year after nine months of the year has passed. They will be allowed a margin of error of 20 per cent, without liability to any penalty. The Labour party has adopted the extraordinary attitude that it will oppose the infliction of any penalty on a person who grossly under-estimates his income and thereby grossly deprives the Government of revenue. This is another example of the opportunism of the Labour party. It is recklessly irresponsible when it is in Opposition. The penalty will be only of a minor nature. It will apply to the degree of inaccuracy beyond the 20 per cent, margin. Mr. TomBurke. - Ten per cent, for a whole year over three months. Mr. McEWEN.-Ifthe honorable member does not know better than that, he should study the legislation. If he does know better than that, he should not attempt to misrepresent the position. I advise him to read the bill again. It is to the credit of this Government that it acted as soon as hardship became apparent instead of waiting for the Parliament to re-assemble. Now, at the first opportunity, it has produced a bill of a completely novel character that provides for the granting of adequate relief in the event of future hardships. The honorable member for Melbourne Ports (Mr. Crean) bemoaned the plight of the taxpayer who had been deprived of the advantages of the averaging system. I shall not digress to discuss this issue in detail. I merely say that to speak of taxpayers being deprived of the benefit of the averaging system, and to fail at the same time to disclose the fact that 95 per cent, of primary producers have not been deprived of its benefits, is to commit a gross distortion of the facts for the purpose of misrepresenting the situation. To plead the case of a taxpayer whose income rose from £5,000 to £17,000 a year merely because the Korean war caused a meteoric rise of wool values, does not appear to me to be consistent with true Labour policy. It smacks of pleading a special case for the purpose of appealing to the few individuals who, for this year, have been deprived of the advantages of the averaging system. I understood the honorable member for Melbourne Ports to say that the taxpayer whom he mentioned had received an average income of £5,000 a year over a period of five years, had received £17,000 last year, and was in receipt of income at the rate of £2,000 for the current year. The strong probability that springs to my mind is that, as the current period of five years passes, that taxpayer will benefit from the abolition of the averaging system. His income of £17,000 for last year will not be carried forward to this year, when his income will amount to only £2,000 approximately. I emphasize the fact that there has been misrepresentation on this issue. Those who have indulged in the misrepresentation have not done themselves credit. My main concern is to direct attention to the fact that this bill will eliminate a tax anomaly. I do not blame the Labour party, because it introduced legislation in 1944 that had in it the germs of an anomaly. I have merely stated the position as an historical fact. This Government may conceivably introduce taxation legislation that will give rise to an anomaly. If so, the legislation will be corrected. An important fact that should be recognized is that the tremendous and unprecedented concessions that are to be given to primary producers in relation to depreciation will constitute a part of the Government's total economic programme for the encouragement of fresh investment in our primary industries. The Government wants to foster the building of houses on farms for rural workers. Many thousands of farmers need additional labour to-day but, when immigrant labour is offered to them, they can avail themselves of it only if they take the Italian or Dutch workers into their homes and allow their wives to cook for and wait upon the men. They will not do that. And who will blame them ? The Government wishes to rectify this unsatisfactory state of affairs. Therefore, it has decided that, for the benefit of the typical 10s. in the £1 taxpayer, to whom I referred previously, it will bear one-half of the cost of constructing a £2,000 worker's cottage. That is a. tremendous concession, but I am sure that, over the years, it will help materially to resolve one of the fundamental problems of our land industries - the drift of labour to the cities. I have been studying statistics relating: to rural industries and I have discovered that there are scores of thousands fewer workers in our primary industries to-day than there were twenty years ago. Not only are there fewer workers to cater for a population that has increased by perhaps 2,000,000 in that period, but also, and most seriously, the composition of the age groups in rural industries has changed drastically. There has been a constant reduction of the percentage of young persons employed on farms, and a consequent increase of the percentage of old persons.With the consent of the House I shall have incorporated in Hansard the following short table, which illustrates the nature of the change : - In conclusion, I address myself to the leaders of primary industries and taxpayers' organizations and ask them to realize that their duty is not solely to attack the Government of the day. It is not greatly to the credit of primary producers, who, of all persons in Australia, ought to be opposed to socialism, that they should devote so much of their time to attacks on a Government that is opposed to socialism. These attacks are largely based on misrepresentation of taxation facts and the polices of this Government. In the absolute sense, taxes to-day are very much lower than they were five or six years ago. Mr.Fuller. - Rubbish! Mr. McEWEN-That is the truth. Australians generally are not aware that the taxes levied on what might be described as modest incomes are not much higher to-day than they were in 1939. For example, in 1939, a taxpayer in New South Wales with an income of £500 paid £31 in State and Commonwealth income taxes. To-day, the tax on that income amounts to £39. In 1939 a taxpayer in New South Wales with an income of £800 paid £69. To-day he would pay £99. The amount of tax has increased by only £30, even though the social services have been greatly extended and we have recently emerged from one of the . most expensive wars in history. In 1939 a taxpayer in New South Wales with an income of £1,500 a year paid £181 in taxes. To-day he would pay £309. In 1939, a man with an annual income of £5,000 paid £1,165 income tax, but to-day such a man pays approximately double that sum. lt is no contribution to production in this country constantly to canvass the story that taxation is so high that nobody has an incentive to expand the volume of production. That story is not in accordance with the broad facts, which are as I have stated them to be. To-day, income tax imposed upon the lower ranges of income is not vastly higher than it was even before the war, and is vastly lower than it was five or six years ago. This measure holds out to the man on the land who wishes to spend his surplus income upon the development of his property a prospect of the accumulation of real wealth. Debate (on motion by Mr. Riordan) adjourned. TARIFF PROPOSALS 1951-52. Customs Tariff Amendment (No. 5); Excise Tariff Amendment (No. 3). In Committee of Ways and Means: Mr.ERIC J. HARRISON (Wentworth- Vice-President of the Executive Council and Minister for Defence Production) [4.17]. - I move - [Customs Tariff Amendment (No. 5).] That the Schedule to the Customs Tariff 1933-1950, as proposed to be amended by Customs Tariff Proposals, be further amended as hereinafter set out, and that, on and after the thirtieth day of May, One thousand nine hundred and fifty-two, at nine o'clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, Duties of Customs be collected in pursuance of the Customs Tariff 1933-1950 as so amended. 2. That, without prejudice to the generality of paragraph (1.) of these Proposals, the Governor-General may, from time to time by Proclamation declare that, from a time and date specified in the Proclamation, the Intermediate Tariff shall apply to such goods specified in the Proclamation as are the produce or manufacture of any British or foreign country specified in the Proclamation. 3. That on and after the time and date specified in a Proclamation issued in accordance with the last preceding paragraph, the Intermediate Tariff shall apply to such goods specified in the Proclamation as are the produce or manufacture of a British or foreign country specified in that Proclamation. 4. That any Proclamation issued in accordance with paragraph (2.) of these Proposals may, from time to time, be revoked or varied by a further Proclamation, and upon the revocation or variation of the Proclamation, the Intermediate Tariff shall cease to apply to the goods specified in the Proclamation so revoked, or, as the case may be, the application of the Intermediate Tariff to the goods specified in the Proclamation so varied, shall be varied accordingly. 5. That in these Proposals, unless the contrary intention appears - " Customs Tariff Proposals " mean the Customs Tariff Proposals introduced into the House of Representatives on the following dates, namely : - 26th September, 1951 ; and 13th November, 1951 ; " Proclamation " mean a Proclamation by the Governor-General, or the person for the time being administering the government of the Commonwealth, acting with the advice of the Federal Executive Council, and published in the Commonwealth of Australia Gazette ; " the Intermediate Tariff" mean the rates of duty set out in the Schedule to these Proposals, in the column headed " Intermediate Tariff ", in respect of goods in relation to which the expression is used. [Excise Tariff Amendment (No. 3).] That the Schedule to the Excise Tariff 1921-1950, as proposed to be amended by Excise Tariff Proposals No. 1 and Excise Tariff Proposals No. 2 introduced into the House of Representatives on the twenty-sixth day of September, One thousand nine hundred and fifty-one, be further amended as hereinafter set out, and that on a ad after the thirtieth day of May, One thousand nine hundred and fifty-two, at five o'clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, Duties of Excise be collected in pursuance of the Excise Tariff 1 921-1 950 as so amended . The Customs Tariff Proposals I have just introduced cover spirits and spirituous liquors, industrial type cloth and garment pressing machines and pressing appliances, chain pulley blocks and oil and water colour paintings. Attached to the copies of the proposals circulated to honorable members is a summary of alterations, which sets out the proposed rates of duty and compares them with those that are at present in operation. The proposed duties will operate on and from the 30th May, 1952. Item 3 in the Customs Tariff Proposals relates to spirits and spirituous liquors such as brandy, whisky, gin, rum and liqueurs. Honorable members will recall that on the 27th September, 1951, the duties on spirits and spirituous liquors, whether locally produced or imported, were increased in accordance with normal practice by an overall amount of 31s. a gallon, as a part of the Government's budget programme, [n the case of locally produced spirits, all duties are assessed on a "per proof gallon " basis, whereas duties on imported spirits are assessed on a "per proof gallon" basis if the spirit exceeds the strength of proof, and on a " per gallon" basis - that is, liquid measurement - if the spirit does not exceed the strength of proof. Since the increased duties came into operation, representations have been made on behalf of certain overseas governments that the increase of 31s. a gallon on underproof spirit represented more than 31s. a proof gallon, and consequently that the protective margins between imported and Australian spirits had been widened. Nfost of these margins of protection are, in effect, bound against increase under the provisions of the General Agreement on Tariffs and Trade. The action now proposed will restore the relative protective position to that which existed immediately prior to the 27th September, 1951. The new rates will mean a slight reduction of the amount of duty payable, but, as imports of underproof spirits are comparatively small, there will be no significant effect on the revenue. The remainder of the proposed amendments in the Customs Tariff Proposals are based on recommendations made by the Tariff Board. The relevant Tariff Board reports were tabled earlier to-day. Honorable members will note that it is proposed to add two new items, that is; items 176 (y) and 176 (z), to the Customs Tariff Schedule. These items will accord, respectively, protection to the local manufacture of industrial cloth and garment pressing machines of certain types, and pressing appliances and chain pulley blocks. The omission of items 174 (x) (58) and 174 (x) (59) from the Tariff Schedule, and the amendments to items 176 (e) (1) and L76 (10) (4), are complementary to the inclusion in the schedule of ,the proposed new items to which I have just referred. The proposed amendment in respect of oil and water colour paintings, item 410 (b) (3), follows a recommendation of the Tariff Board that artists' original productions of a high standard should not be subject to duty. Duty, however, will be payable on oil and water colour paintings that are other than artists' original productions, and on original productions of a value not exceeding £25. In the Excise Tariff Proposals, the only amendment proposed is in respect of coal - item 20. This amendment will increase the present duty of 7£d. a ton on coal by one half-penny. The additional revenue that will be obtained is required to meet the increased cost of long-service leave to miners engaged in the coal industry. It is intended to bring down at a later date the necessary bills to enable the proposals to be enacted. A full opportunity for discussion will be given to honorable members then. Mr. Calwell.- Will the Vice-President of the Executive Council (Mr. Eric J. Harrison) indicate to the House when the Government proposes to introduce the necessary bills to enable these proposals to be enacted ? Will they be introduced during this session, or during the next session? Mr. ERICJ. HARRISON".- They will be introduced at some time during this session, but not necessarily during the present series of sittings. Progress reported. INCOME TAX AND SOCIAL SERVICES CONTRIBUTION ' ASSESSMENT BILL (No. 2) 1952. Second Reading. Debate resumed (vide page 1110). Mr.RIORDAN (Kennedy) [4.22].- The honorable member for Melbourne (Mr. Calwell) has explained that the Opposition does not oppose this bill in general, but that it will oppose certain clauses in committee. A perusal of the second-reading speech that the Treasurer (Sir Arthur Fadden) delivered on it, and an examination of the Government's proposals, show that there has been a change of front on the part of the Government, and that honorable gentlemen opposite realize that something has happened in this country since October of last year. It is obvious that the bill is designed to appease a section of the community which has been very harshly treated by the present Administration. But, during the forthcoming recess, doubtless the Government will hear from that section of the community the cry, "Too little, too late". During the general election campaign of 1949, the present Government parties told the electors that, if they were returned to power, they would abolish the restrictions and controls which, they said, were impeding primary production, and {would reduce taxes. But since they assumed office there has been a steep rise of taxes, and the revenue derived from taxation has doubled. The Minister -for Commerce and Agriculture (Mr. McEwen) cited figures which proved, according to him, that taxation is not much higher now than it was in 1939. -?En 11944-45, when the basic wage was &4 Ils. 6d. a week, or £238 a year, a man with an income of £250 a year, slightly in excess of the basic wage, paid £36 14s. a year as income tax. At the present time, the basic wage is about £11 a week. Now, a man with an income of £500 a year, which is slightly less than the basic wage, pays in income tax each year £39 9s., plus 10 per cent. As I have already pointed out, in 1944-45 a man in receipt of an income slightly in excess of the basic wage paid only £36 14s. a year as income tax. The Treasurer, in his second-reading speech, dealing with provisional taxation, said - It has become popular, in recent months, to attribute to the provisional tax system many of the evils and difficulties, real and imaginary, that beset our national economy. Provisional tax has been blamed for the lng in food production. We have always been told by Government supporters that the troubles with which we are confronted to-day are due to inflation. When the Government takes from the community £1,000,000,000 a year in the form of taxes, it tells us that it is necessary to do so in order "to keep it out of circulation, because we are suffering from inflation. I .have never heard any Government supporters say, either in this House or outside of it, that our troubles are due to provisional taxation. The Treasurer has alleged that provisional taxation is being blamed for the lag in food production. Not very long ago, the Minister for Commerce and Agriculture made a. statement, full of generalities, in which he explained why it was essential, at a time when our export income was falling and the volume of our imports was rising steeply, to restrict imports and to increase production. It is obvious that the Treasurer has not been in the western parts of Queensland recently. Otherwise, he would have learned that the lag in production is due to taxation generally, without regard to provisional taxation. The Treasurer should go among the producers. He has referred to the need for an increased production of beef and the Australian Meat Board has recently raised the price of meat in order to encourage production. Before the war, 90 per cent, of the beef for export was grown in Queensland, but last year that State suffered from a severe drought and bush fires. Cattle owners lost breeders as well as store cattle, and they have to replace their losses at high cost. Last year, the Government decided to abolish the averaging system in order to give an incentive to production, and a producer whose income exceeds £4,000 a year is not now permitted to average his losses over five years. Does the Minister for Commerce and Agriculture believe that a producer who has had to replace breeders at top prices will increase production if his efforts are detrimental to him financially because of the abolition of the averaging system? The Minister for Commerce and Agriculture said that the provisional tax relief provisions of this measure are spectacular. Obviously, he has been dealing with the bitumen road beef barons of Victoria and Sydney. He claimed that the provisions would stimulate primary production. He also said that the depreciation allowances are novel, extraordinary and super-colossal, or words to that effect. He might have been advertising a picture show. I suggest to him that he should go to the areas where beef cattle are being produced and explain the facts about the averaging system and why the Government has decided on a compromise as a result of pressure from primary producer organizations. The provisions of the bill are a compromise that resulted from pressure by those who were hit hardest by drought and fires last year. They are producing commodities at the excessively high prices caused by the inflation which this Government claims to be trying to control. The compromise is a weak one when considered in conjunction with the loss of subsidies that were paid to help primary producers in the purchase of superphosphate and other necessaries. The Treasurer said in his second-reading speech - Though most of the criticism of provisional tax is thinly veiled propaganda directed to other ends, there are cases of genuine confusion. Ldo not know where the right honorable gentleman got the idea that the criticism is " thinly veiled propaganda ", because he moves in circles that are different from those in which I move. He must know, however, that the expression of the real objection to this bill is not propaganda by primary producers, particularly by those who will receive demands for income tax in addition to provisional tax. The honorable member for Melbourne cited an actual case of a taxpayer whose income tax assessment exceeded M3 income. Many other taxpayers have been placed in a similar position. There is nothing confused or veiled about that. The Treasurer also said - Last March I announced the Government's decision to grant to wool-growers whose income in 1952 had declined from the 1951 level, the right to defer up to 40 per cent, of the 1951-52 provisional tax payable. The world knew that the people who were being hit hardest by this provisional tax were the wool-growers. Their incomes dropped by 50 per cent., and the Treasurer has claimed to have made a magnanimous gesture by deciding to defer 40 per cent, of the provisional tax for the specified year on application. One of the purposes of this measure is to ratify that remission by the Treasurer. Many of the taxpayers who are enjoying the 40 per cent, rebate of provisional tax have suffered from drought and bush fires. The bill has been introduced to cover many phases of the Government's income tax policy. The first is the ratification of the action that was taken by the Treasurer in regard to provisional taxes. Another is the provision for self-assessment. This is a new proposal. It provides that a person who has to pay provisional tax may make his own assessment, but if he is 20 per cent, in error in the assessment, he will be penalized. The Minister for Commerce and Agriculture has said that the penalty provided is only small. It will amount to 10 per cent, of the tax that would have been payable.. In terms of shillings and pence, thepenalty may not be severe, but the principle involved is a vicious one when theconditions under which people are living; in New South Wales and Queensland are considered. In some areas of those States, drought conditions have lasted for seven months of the year. In Queensland, the drought started in the beginning of 1951 and was not broken until March, 1952. A person who made a self assessment of his income in Queensland this year could easily make an error of 20 per cent, after passing through fifteen months of drought followed by bountiful rains. Mr. Bowden.- Provision is made for that eventuality. Mr. RIORDAN.-The honorable member for Gippsland (Mr. Bowden) should speak of the area with which he is conversant. I am speaking of the people who live on the frontiers of the nation and not near the bitumen roads. They have no amenities and they are entitled to some consideration, if only from the standpoint of defence, in view of the taxes they have paid in the last few years. The honorable member for Gippsland may speak to the House about rabbits later. Mr. SPEAKER.- Order ! The honorable member for Kennedy (Mr. Riordan) might tell me what he proposes to do. Mr. RIORDAN.- I am explaining to the House how easy it would be for a taxpayer to land himself into trouble through no fault of his own. The bill is a compromise and it will be acceptable to the great majority of primary producers, but the Treasurer must know that if he wants more production, particularly of beef, the Government should restore the averaging system. Why should a man who is growing cattle invest in expensive breeders and, by increasing his income, deprive himself of the benefit of the averaging system ? Mr. DOWNER(Angas) [4.44].- I rise to support this bill, which, in spite of the sneers and sallies of certain honorable members on the Opposition side, is a fine one and will have support throughout the nation. I was astonished to hear the honorable member for Kennedy (Mr. Riordan) speak with such bitterness about certain aspects of it, and particularly by his references to the averaging system, with which it does not deal in any way. The modified averaging provisions of the income tax law apply only to incomes over £4,000 a year, and I should have thought that most of the people about whom the honorable member for Kennedy would be chiefly concerned would have incomes well below that figure. But, a 3 has invariably been the case since I have been a member of this House, honorable members opposite merely seek to score debating points when they profess a desire to help the primary producers. Whenever they have the opportunity to take practical measures for that purpose, they are never with the Government or the primary producers. They provided the best example of their attitude in that respect a fortnight ago by their opposition to a very modest alleviation of the burden of land tax. This measure is an earnest of the. Government's sincerity in rectifying anomalies and injustices that have been disclosed in our taxation law. It also contains practical proposals that are designed to increase primary production. The Treasurer (Sir Arthur Fadden) is to be commended for his promptitude in initiating these reforms. It is well known that the reduction of provisional tax by 40 per cent., to which we are now asked to give legislative sanction, was announced in March last, and that before then relief was made available under section 206 of the Income Tax Assessment Act to wool-growers and other primary producers who were in financial straits. I know of many primary producers in my electorate who have taken advantage of that relief and have benefited thereby. The main object of the bill is to amend the system of provisional taxation in the light of experience that has been gained during the current financial year. The Government could hardly have taken this step earlier. After all, it is a fairly decisive step for any administration to take. The Government considered several alternatives before deciding to make this amendment. Furthermore, the concessions that relate to the special depreciation allowance will be of real value. Undoubtedly, they are the most generous that any Australian government has yet made to primary producers. The Minister for Commerce and Agriculture (Mr. McEwen) lucidly pointed out that the depreciation concession of 20 per cent, in respect of the capital cost of houses for rural workers, farm buildings, dairies, implements, tractors, lorries and the like, will place the average primary producer in a far more favorable position than he would enjoy if the old 40 per centdepreciation allowance were continued. I cannot understand why the Opposition should criticize the Government for the introduction of this reform. One must emphasize, however, that a government cannot achieve an increase of primary production simply .by legislative action, or as a result of deliberations in this House. The task of a government is rather to establish economic and psychological conditions that will enable primary producers to consider that it will be worth their while to work harder, risk their capital and develop their properties in every possible way. That is precisely what this bill seeks to do. The core of this measure lies, undoubtedly, in the clauses that deal with the alteration of the provisional tax system. -No representative of a country electorate will make any secret of the. fact that that system has proved to be disastrous to the national interest. As a result, farmers throughout the length and breadth of Australia are now in a rebellious frame of mind. Assessments that they have received have left them almost breathless. They have seen a substantia] proportion of their working capital evaporate and, consequently, their incentive to produce has been blunted. The honorable member for Melbourne (Mr. Calwell) attempted to castigate the Government for what he termed its " ruinous and excessive " taxation. He -should have directed his arrow to the subject of provisional tax, because what has really upset the farmer and is threatening the country with dire results has been the unexpected effect that the provisional tax system has produced. I gathered from the honorable member's remarks that the Opposition has succumbed to the temptation to make party political capital out of the discomforture of those for whom members of the Labour party have no real genuine sympathy. It would not be profitable to apportion the blame for that state of affairs, but if it be necessary to find a scapegoat, surely it is the Labour Government which, in 1944, introduced the provisional tax system. The worst that can be said about this Government is that it failed to foresee the period during which we experienced the most unexpected boom -and then a sharp and equally unexpected fall of prices for primary products. Mr. Keon interjecting, Mr. DOWNER.- I believe I heard the honorable member for Yarra (Mr. Keon) say something about honorable members being dull. His interjection is apposite to what I am about to say. Wo must realize that we were all partly responsible for that disastrous experience, because, during the last budget debate, hardly one honorable member - I, myself, must plead guilty on this count - pointed to the danger to which I have referred or uttered a warning about it. The honorable member for Farrer (Mr. Fairbairn), probably is the only exception to that statement. The Government is to be commended for having sought, at the first available opportunity, to remedy the faults with which this measure deals. The system of self-assessment of tax has been proved in Canada and in the United States of America. The bill does not give prominence to the element of compulsion, to which some honorable members opposite have adverted, because, after all, the whole system is optional in respect of taxpayers whose incomes are within the variation of 20 per cent, in relation to their incomes for the preceding year. The honorable member for Melbourne Ports (Mr. Crean) objected to the imposition of a penalty upon a taxpayer who underestimates his provisional income, I should have thought that he would regard a 20 per cent, margin of error as being reasonable. No system of taxation can be administered adequately and efficiently unless penalties are provided in respect of serious mistakes, or understatements, on the part of taxpayers. It would not be logical to argue to the contrary. In any event, critics of this measure have overlooked the escape clause that is contained in sub-section (4.) of proposed new section 221ydb. The sub-section i3 couched in rather tortuous language that does little to the draftsman. It reads - Where the Commissioner is satisfied that a penalty under this section became payable by a taxpayer in relation to provisional tax for a year of income by reason of circumstances affecting his taxable income of that year of which circumstances he was not aware at the date not later than which he was required or permitted by the last preceding section to furnish a statement of estimated taxable income, the Commissioner may remit the penalty or a part of the penalty. The point I make is that under this measure, the Commissioner of Taxation, in certain circumstances, may remit a penalty, or a part of a penalty. Experience may disclose various anomalies in this bill, but it is absolutely impossible for any individual or any government to foresee every contingency that might arise in respect of legislation. I trust that the Treasurer will direct the Commissioner of Taxation and his deputy commissioners to administer this measure with as much flexibility as possible. I am confident that if, as a result of experience, it is found that certain provisions of this self-assessment scheme should be amended, the Government will be most ready to take such action. The terms of this measure are messengers of good tidings for the forthcoming budget. The Government will not solve Australia's financial problems by adopting a merely passive attitude. What is required at this time, more than at any other period during the last twenty years, is keen imagination and a preparedness on the part of the Government to depart from financial orthodoxy. A few months ago, the British Chancellor of the Exchequer set an example that Australia might well follow when, to the astonishment of the people of England and, I believe, of every other country within the British Commonwealth of Nations, he introduced a budget in which emphasis was laid upon stimulating incentive and productivity by reducing the rates of tax on incomes in the lower and middle brackets. I hope that, in spite of whatever difficulties may arise, the Treasurer will see fit to do likewise and, indeed, go further and reduce the overall general rate of tax in respect of all classes of taxpayers. I am well aware of the difficulties that confront the Government this year. We are faced with a declining national income, and the Commonwealth has. huge commitments in relation to defence, social services, the vast payments that have to be made to the States, and the underwriting of State loan expenditure, all of which present problems as formidable as those that any treasurer has ever had to consider. Nevertheless, antagonism to high taxation is so widespread that it has become detrimental to the national effort, as all members who travel round the country maintaining contact with public opinion will agree. I suggest that it would be better for the Government, and the Treasurer in particular, to take a leap in the dark, when the next budget is prepared, than to be bogged down by the customary orthodox practices of national accountancy. Mr. Curtin- The Treasurer is down in the deep now. Mr. DOWNER.-People who know the Treasurer would never accept that statement as true. I am not so foolish as to believe that in reduction of income tax alone lies the way to higher productivity, greater prosperity and a solution of our grave economic problems. Obviously several remedies must be attempted concurrently. That is precisely what the Government is doing. It has frequently been alleged that taxation has no connexion with the fall in production, and the relevant figures for the years from 1947 to 1950 are certainly suggestive of this. I would submit, however, that circumstances have altered radically since those figures were published. Prices have soared to unexpected heights, and farmers have found themselves in tax brackets that they could never have dreamed of reaching, even in their most sanguine expectations. As a result they are experiencing, for the first time, the incidence of high taxation in its full force, and their antagonism to it has so fermented in their breasts that it is now being expressed in an unwillingness to work harder, because they see so many of the fruits of their extra labour, higher investment and the greater risks taken, garnered by the Treasury. Experience is now showing the wisdom of re-examining ' the progressive stages of our income tax rates. In the last 30 or 40 years most people, irrespective of their politics, have accepted far too readily the socialistic theory of a steeply progressive direct tax scale. Many of us have succumbed to the attractive writings and facile expressions of such pseudo-economists, and certainly propagandists, as the late Professor Harold Laski and Dr. Hugh Dalton, a former British Chancellor of the Exchequer. I am prepared to be frank about this matter. When I was somewhat younger I was much influenced by the writings of those gentlemen and their school, and it is quite apparent that people on all sides of politics throughout the world have been similarly influenced by them. Their main theme, which has been carried into effect to some degree, was the levelling down of the high income peaks, coupled with attempts to raise the general standard of living. Their theories were not noticed by the generality of people before the war, because the great mass of taxpayers was not adversely affected by their proposals, which so many governments have been putting into effect since. But in the last ten years world-wide inflation has altered the whole perspective of hundreds of thousands of people, who, in the last two years, have started to feel, for the first time, the penalty of comparative affluence. Now they are becoming resentful of high taxation. Whether they be farmers, company directors, managers of great industries, or industrial operatives, their resentment is taking the form of unwillingness to work harder and produce more. Now that wealth has become more equalized, aud living standards are rising, people are finding that the sauce for the old goose is not so palatable when served with the new gander. Socialist theories are to-day being killed by psychological facts. Chief of these is that, if production is to be stimulated, governments, whatever their political complexion, must make it worth while for the producers, who are the creators of real wealth, to work harder. Honorable members know as well as I do that farmers throughout Australia are refusing to sow more wheat, run more sheep, breed more fat lambs, or expand their dairies, because so much of the fruit of their increased efforts is taken from them as a result of the higher tax obligations that ensue from the greater efforts .they have made. The same is true of other industries. Here is a situation that needs to be remedied. I suggest that we cannot do better than follow the examples of Canada and the United States of America. In both of those countries direct taxation on medium to high incomes is considerably lower and is less sharply graded than it is in Australia. It is no coincidence that . they are the most prosperous nations in the world to-day. Much as we may not care to admit the fact, the United States of America leads the world in economics and in physical power. In this crisis in our economy, the greatest that we have experienced since the depression of twenty years ago, we are faced with problems of such magnitude that we may well be compelled to depart from longaccepted canons of taxation. I have submitted these points to the Treasurer and his fellow Ministers for consideration in the preparation of the forthcoming budget. Meanwhile the House is surely indebted to the Treasurer for having introduced this measure. In many practical ways, it does much to redress existing grievances. It is an important step forward in the Government's primary production programme of inducing .the people on whom Australia is dependent for its prosperity to increase their output and thereby reduce the inflation that is occurring and redress our declining export balance. Question resolved in the affirmative. Bill read a second time. In committee: Clauses 1 to 5 agreed to. Clause 6 (Repeal of section 57a). Mr. TOMBURKE (Perth) [5.10] .-I propose to be brief in my remarks on this clause, because other Opposition members who wished to take part in the second-reading debate, but were unable to do so, wish to speak to this clause and to some other clauses. We propose to vote against the clause, which provides for the repeal of section 57a of the principal act, which provides that where property was acquired or installed by the taxpayer during the year of income that ended on the 30th June, 1945, and before the commencement of the year of income beginning on the 1st July, 1952, the taxpayers who had expended sums on that property would have the benefit of a special depreciation allowance. The Government proposes to delete that section and to substitute a new provision which will give the benefit to primary producers only. I admit that it is an extensive benefit, but the new provision - alters the existing long-term provision, which I think, speaking from memory, had the almost unanimous, if not the unanimous, consent of the House at the time when it was passed. Therefore, not only the government of the day was committed to it, but the then Opposition accepted it by implication. We consider that the Government will do no good, and will save very little revenue, by repealing it. Sir ArthurFadden. - Only £10,000,000. Mr. TOMBURKE.- I should like to have heard that figure before. As I said yesterday, and as other honorable members also have said on other occasions, we are not given any intimation of what is involved in the measures that come before us. This is the first time that I have heard the figure of £10,000,000 mentioned, and I do not know of anybody else in either the House or the country who has heard it. We have no authority by which to check it, and no means of comparing it with other figures that might be involved, such as the higher prices that will result from increased costs being passed on to the consumers. It is only at this stage, some weeks before the concession is to be withdrawn, that we are told that an amount of £10,000,000 is involved. It is to the discredit of the Government thai: it should keep such figures secret. Even if an amount of £10,000,000 accrues to the Government as a result of the operation of the clause, that amount will, in the final analysis, be passed on to the consumers, or will be borne by the people who least can bear it. Adding to the cost of living is a queer way of reducing the cost of living and countering inflation. Profits will be added to that additional production cost of £10,000,000, so the final additional cost to the consumers might amount to any figure. We believe that the whole Parliament of the day endorsed the proposal that is contained in the principal act and that many persons installed plants and machinery on the understanding, in fact on the knowledge, that the concession would be available to them. Yet the Government now intends to deprive them of it. In addition, this new depreciation allowance provision specifically excludes plant or machinery that is subject to the earlier depreciation allowance so it is not possible even if it is contained in the act to have the depreciation operating twice. The Government should meet the Opposition's request in relation to this clause. If it does not indicate its willingness to do so we shall vote against the clause. Sir ARTHURFADDEN (McPhersonActing Prime Minister and Treasurer) [5.15]. - The matter raised by the honorable member for Perth (Mr. Tom Burke) is in relation to a concession that has operated for six years, and there is no doubt that industrialist? have taken full advantage of the allowance to- ve-equip and expand industry. The attitude of the Government on this issue was made perfectly clear when its decision to withdraw the allowance was announced in July, 1951. Under the act at present, the allowance will expire automatically on the 30th June next. A modification has been effected to meet special cases in which contracts have been entered into for the acquisition of plant and equipment, which has previously been subject to the initial depreciation allowance, and possession has not actually been taken of them. There is abundant evidence that the concession was a strong inducement to people to incur excessive expenditure on capital goods at a time when the interests of the national economy demanded restraint in respect of that particular expenditure. It would hare been wholly inconsistent with the Government's plans to arrest the forces of inflation if the concession were allowed to run its full course. The special allowance operated for six years, but its curtailment by one year does not mean that the industrialist will be denied the deduction of the full cost of plant. ' That cost will be fully allowed by way of annual deductions over the life of the plant in accordance with the depreciation schedules and other provisions of the act._ The normal depreciation allowance will be deductible. The Government has closely examined various plans for the continuance of the special depreciation allowance to essentia] as distinct from less essential industries. Those plans are hopelessly impracticable, and if an attempt were made to put them into operation, an army of officials and advisers would be required for administrative purposes. However, it has been -found possible to make special arrangements, which have already been announced, in respect of the primary industries. Those arrangements will make a valuable contribution towards increasing production. No amendment forecast can be accepted by the Government. Question put - That the clause be agreed to. The committee divided. (The Chairman - Ma. C. F. Adermann.) Ayes . . . . . . 52 Noes . . . . . . 39 Majority . . . . 13 Question so resolved in t,11 e affirmative. Clauses 7 and 8 agreed to. Clause 9 (Value of improvements included in assessable income) and clause 10 (Deductions to lessee) - by leave - taken together. Mr. CRAMER(Bennelong) r5.25"|.The matter to which I propose to direct attention received scarcely any notice in the second-reading debate on this bill, but it is of much greater importance than a superficial glance may indicate. This provision appears perfectly innocent, yet it may have far-reaching effects. I realize that it gives effect to a recommendation of the special committee on taxation appointed by the Government, but I invite the Treasurer (Sir Arthur Fadden) to examine a matter that may have been overlooked. Clause 9, which amends section 87 of the principal act, relates to the value of improvements made by the tenants of properties that are not subject to tenant rights. The conditions of the lease or the tenancy may require the tenant to make certain improvements to the property, or the improvements may have been made with the consent of the lessor. Under the act, the lessor was obliged to include as income in his tax return the value of those improvements for the term of the unexpired portion of the lease. But if the lease was for an indefinite period - that is to say, a weekly tenancy - the owner was not required to show the value of the improvements as income. The amendment to section 87 of the principal act alters that arrangement, and the duration of an indefinite lease is assumed to be two years. Therefore, the value of improvements to a property after the 30th June, 1951, must be shown by the owner as income in his tax return. That provision, at the first glance, may be considered fair, but I direct attention to the fact that most leases of business premises are indefinite leases. The rent-pegging regulations that are in operation in each State are responsible for that situation. As I have stated, the owner of a property to which improvements have been effected with his written consent must show the value of those improvements as income in his tax return, yet he cannot collect, because of the operation of the rent-pegging regulations, any additional rent from the tenant of the premises. Consequently, he is penalized. Mr. TomBurke. - He is not penalized, because he has the value of the improvements. Mr. CRAMER.- That is where a great misconception arises. Anybody who has any knowledge of property knows that additions, particularly to business premises, do not increase the capital value of the premises. The value of business premises can be assessed only on the rent return from them. An amount of, say, £1,000 may be expended on improvements to business premises, but if the rent is not increased, their capital value is not increased for the purposes of resale. Consequently, a heavy impost is placed upon the owner of a property, and he has no opportunity to offset it by charging higher rent. Mr. TomBurke. - The owner need not consent to the improvements. Mr. CRAMER.-I have raised this matter, because I consider that owners of leased properties should be warned to be wary of giving their consent to proposals by tenants who wish to make improvements to the properties. Otherwise some owners, including many old people, will fall into a trap by consenting to improvements being made. I ask the Treasurer to consider that matter again. Clause 10 deals principally with premiums, or goodwill. The relevant provisions of the principal act are operating very unfairly. Under the present legislation, if a man starts business with a certain amount of capital, and then sells the business, because of the taxing of the sum realized for goodwill he may find himself with less money than he started with; although he may have increased the value of the initial goodwill. I ask the Treasurer to refer this matter to the Commonwealth Committee on Taxation and to give it more personal consideration, because the present legislation operates very unfairly. Business people try in all sorts of ways to circumvent its provisions. I know certain people who are actually circumventing them. Goodwill is in many respects a capital asset. If a man owns premises and conducts his business in them, he is not subject to taxation because he has paid for the property. On the other hand, if a man owns a property and another person occupies it as a tenant, and the tenant sells the goodwill of his business, he is liable to have the whole of the goodwill taxed as income for the year in which the business was sold. I agree that perhaps in a period of two years the tenant has been allowed to deduct the amount that he paid for the goodwill, but the provision may operate very harshly in cases where a man resells his business and the goodwill realizes less than he paid for it. This is a very complex subject. I ask the Treasurer to consider further' the m'atter of goodwill, and to investigate the incidence of clause 9, because I believe that it is operating unfairly. SirARTHUR FADDEN (McPherson- Acting Prime Minister and ' Treasurer) [5.33].- Between 1932 and 1934 the Royal Commission on Taxation considered taxation on leasehold transactions. The royal commission's recommendations were adopted and incorporated in the Income Tax Assessment Act 1936. Except for changes in detail the basic principles of previous legislation were then confirmed. The proposed amendments that this chamber is considering do not embody the whole of what the Government desires in connexion with leaseholds and goodwill, but they were incorporated in the bill as a result of- a preliminary survey made by the Commonwealth Committee on Taxation. That committee has. undertaken a much more extensive review of taxation provisions about leases and goodwill, and when it reports to the Government we shall give more consideration to any amendments that may be considered necessary and desirable. Clauses agreed to. Clauses 11 to 16 - by leave - taken together. SirARTHUR FADDEN (McPhersonActing Prime Minister and Treasurer) [5.34]. - On the general subject of provisional tax, I wish to bring some facts to the notice of the committee. I do that particularly because of statements made recently by the honorable member for Melbourne (Mr. Calwell) about the case of one Palmer, whose complex taxation position was said to have been caused by this Government's administration of the taxation law. The honorable member for Melbourne said that out of a taxable income of £14,000-odd Mr. Palmer had to pay income and provisional taxes that amounted to more than his income. I pointed out to the honorable member that the reason for that was that the taxpayer had not paid sufficient provisional tax in the previous year. "With the consent of the committee I shall have incorporated in Hansard the following table which gives certain figures taken at random from taxation records that illustrate the incidence of provisional tax in the years 1946, 1947, 1948 and 1949 when the Chifley Government was in office: - Mr. TomBurke. - The Opposition will check the figures given by the Treasurer and will ascertain the circumstances that applied to the particular cases at the relevant time. Clauses agreed to. Clause 17 - After section two hundred and twenty -one yd of the Principal Act the following sections are inserted : - "221ydb. - (1.) Where, in respect of a year of income - (a) a taxpayer does not furnish, within the time allowed by the last preceding section, a statement of estimated taxable income which he is required or permitted by that section to furnish; or (b) the taxpayer does so furnish such a statement and the provisional tax payable is an amount ascertained by reference to that statement, and the amount of the provisional income, or of the estimated taxable income, as the case may be, is less than four-fifths of the taxable income of the year of income, the taxpayer is liable to pay to the Commissioner, by way of penalty, an amount equal to one-tenth of the amount by which the provisional tax payable in respect of the income of that year of income is less than the income tax that would be payable by the taxpayer upon a taxable income consisting of four-fifths of his taxable income from personal exertion and four-fifths of his taxable income from property. " (2.) An amount which becomes payable to the Commissioner under the last preceding sub-section is a debt due to the Queen on behalf of the Commonwealth and may be sued for and recovered in a court of competent jurisdiction by the Commissioner or a Deputy ^Commissioner suing in his official name. " (3.) In an action against a person for the recovery of such an amount, a certificate "in writing, signed by the Commissioner, the Second Commissioner or a Deputy Commissioner, certifying that the sum specified in the certificate was, at the date of the certificate, due by that person to the Queen on behalf of the Commonwealth under the provisions of this section is evidence of the matters stated in the certificate. " (4.) Where the Commissioner is satisfied j,hat a penalty under this section became payable by a taxpayer in relation to provisional tax for a year of income by reason of circumstances affecting his taxable income of that year of which circumstances he was not aware kt the date not later than which he was required or permitted by the last preceding section to furnish a statement of estimated taxable income, the Commissioner may remit the penalty or a part of the penalty.". Mr. TOMBURKE (Perth) [5.39].- I move - That proposed section 221 1 ydb be left out. Under this proposed section the taxpayer is to be required to self-assess his income after having received a provisional assessment from the Commissioner of Taxation and to send that assessment to the Commissioner. On Thursday the Treasurer (Sir Arthur Fadden) said - To prevent the exploitation of the 20 per cent, margin for error the Commissioner will bc given power to reject any assessment and to substitute his assessment for that of the taxpayer. What further guarantee could the Government have that the revenues will be protected? The Commissioner sends out his assessment and it comes back altered. At that point the Commissioner can reject the whole assessment or amend it. The matter is completely within the control of the Commissioner. In those circumstances it is unjust that a penalty should be imposed. It cannot be said that a penalty is necessary because the tax owing may not be paid, because the amount of the assessment must be paid. If a taxpayer understates his income and the Commissioner accepts his assessment, when the error is discovered the taxpayer has to pay the difference between his own assessment and the true assessment. The Commissioner may refuse to accept the assessment and may make his own. If the taxpayer forgets to send in an income tax return he may be penalized for not rendering it. The Opposition says that in that case a man would be punished for not discharging a debt that had not yet come into existence, because under the provisional taxation scheme he does not owe the money until after the tax has been paid. We say also that a discretion should not be given to the Commissioner. Mr. Freeth.- This clause gives a discretion to the taxpayer. Mr. TOMBURKE.- Yes, but the Commissioner has to make an election. The Commissioner has the final voice as to whether a taxpayer's self-assessment shall be accepted. Whether the Commissioner accepts or rejects the self-assessment, the taxpayer is solely in his hands and there is no appeal from his decision. The Opposition claims that in such circumstances it is not necessary to impose a penalty. If the error is 20-J per cent., the taxpayer may be penalized, but if it is Idi per cent, he may not. The Commissioner of Taxation is given the power of a final arbiter. Surely the Government does not insist upon this provision merely for the love of imposing penalties? I appeal to it to accept the proposed amendment at once or, at any rate, to give earnest consideration to it, with a view to adopting it at a later stage. The clause in its present form is unnecessary, and it will not protect the revenue. Mr.FREETH (Forrest) [5.45].- I appreciate the desire of the honorable member for Perth (Mr. Tom Burke) to protect the taxpayer, but the obvious defect in his amendment is that it envisages the necessity for the Commissioner of Taxation to know the intimate details of the affairs of every taxpayer, within nine months of the commencement of each financial year, better than the taxpayer himself knows them. Clearly, the Commissioner cannot check every self-assessment. The clause, which will invest him with discretionary power to reject selfassessments, will be invoked only in cases involving glaring abuses. The proposed new section to which the honorable gentleman objects will require the taxpayer to exercise his judgment fairly. The deletion of this provision would be tantamount to giving an open invitation to taxpayers to take a chance on the inability of the Commissioner to check every self-assessment. The Commissioner has no real opportunity to make a check until the end of each financial year. He cannot have at his disposal all the information that is in the possession of individual taxpayers, and, therefore, he cannot be expected to devote as much time and attention to individual assessments as they can. The amendment is entirely unrealistic and nonsensical. Mr.THOMPSON (Port Adelaide) [5.47]. - The clause, which provides for the lodging of self-assessments, contains one of the most important provisions in the bill. The honorable member for Angas (Mr. Downer) said that the honorable member for Farrer (Mr. Fairbairn) seemed to be the only member of the committee who had realized the nature of the difficulties that could occur under such a provision. I forsaw those difficulties some time ago and chided Government supporters for their failure to warn the people of them. I am inclined to favour the provision for the submission of self -assessments. "When the " pay as you earn" system was introduced, I could not understand how provision could be made under it for certain primary producers and businessmen who would not be able to calculate their income precisely for any year until they were able to take stock at the end of the year. When the provisional tax scheme was instituted, taxpayers escaped 75 per cent, of their normal tax commitment for one year. Do those honorable members who advocate the abolition of the provisional tax contend that thos.e taxpayers should now be required to pay that amount of tax? I believe that they have not considered that aspect of the matter. Many Australians complained of the action of the Chifley Government when it introduced the system, but they did not give credit to it for the large remission of tax that it made. I do not know whether the Treasurer (Sir Arthur Fadden) or his departmental officers have given careful consideration to the wording of proposed new section 221yda, which relates to *he payment of provisional tax on estimated income. Tt mentions specifically "a notice of assessment on which is notified the amount of provisional tax ". That limits the application of the proposed provision to persons who have previously paid tax. Some years ago, I warned persons who had just gone into business or had established themselves on the land for the first time that, as they had not earned income in that way previously and therefore had not paid provisional tax, they would have to wait until tax had been assessed upon the income, disclosed at the end of the financial year and then would be required to pay simultaneously the tax on that income and an equal amount of provisional tax for the succeeding year. In other words, in their second year as income earners in their new vocations, they would be required to pay the tax for two years in one year. The bill refers to persons who receive notification of provisional tax assessments. A man who goes into business or primary production at the beginning of a year, and who. therefore, is not notified of a provisional tax assessment, will find himself in the succeeding year in the unpleasant position that many wool-growers have found themselves in recently. In all probability, he will not have enough money with which to pay his tax for the previous year and his provisional tax for the current year. Had this proposed provision been introduced three or four years ago. the wool-grower, who complains to-day that he is required to pay tax amounting to £10,000 when his income for the year is only £8,000, would not find himself in that unfortunate position, which has arisen chiefly because he forgot, in the year when he earned £10,000 but paid perhaps only £1,000 tax, that a day of reckoning would come. Those primary producers who realized that they would be called upon to pay a high rate of tax in future in respect of their suddenly inflated incomes, were able to provide against that day of reckoning. The bill provides that taxpayers who find themselves, in difficult circumstances may obtain a deferment of 40 per cent, of the amount of the provisional tax assessed for the current year. Unfortunately, in many instances, a deferment of 40 per cent, will not be nearly sufficient. One Government supporter has estimated that the income of n. certain taxpayer will amount to only 10 or 15 per cent, of his income for last year. Evidently, in that instance, a deferment of only 40 per cent, of the provisional tax assessment will be inadequate. Of course, that taxpayer can arrange for the deferment of a greater proportion of the provisional tax. However, it appears likely that the Government will be called upon to refund to primary producers a considerable portion of the revenue that it will derive even at the rate of 60 per cent, of the amount of provisional tax originally assessed. The clause as it stands provides for an improvement of the existing legislation. However, it should have been possible to arrange for persons who will receive an unusually large income this year to make a declaration to the Commissioner of Taxation and arrange for their provisional tax payments to be adjusted accordingly. SirArthur Fadden. - That can be arranged administratively. Mr. THOMPSON.-Ido not understand exactly how it can be done. However, I am chiefly concerned about persons who will be in receipt of taxable income for the first time during the current year. They should be able to put something in " kitty " so that they will not be called upon next year to pay tax for the first year and provisional tax for the next year. On the subject of penalties, I support the amendment that has been proposed by the honorable member for Perth (Mr. Tom Burke). The honorable member for Forrest (Mr. Freeth) said that the elimination of the provision in relation to penalties would be equivalent to an open invitation to taxpayers to dodge their commitments. I admit that that was my first impression, but, after having considered the. implications of the provision, I am convinced that it would be unjust. Many businessmen, as well as primary producers, are unable to calculate the amount of their income for any year three months before the close of that year. Often they do not know what income they have received until they take stock after the end of the year's operations. I have been associated with various organizations that have had that experience. The proposed penalties would be harsh in their effects upon honest businessmen who might be unable to calculate at the 30th March, with any degree of accuracy, their total income for the year. Does the Government propose to penalize such taxpayers? Unless it does so, of course, its critics will complain that, although it has not penalized some taxpayers, it has penalized others. Discrimination will give rise to suspicions of favoritism and injustice. Members of the Opposition are accused by Government supporters of standing up only for the workers. That charge will not apply in this instance, because wage-earners will not be affected by these provisions. The stand that we have taken on this issue demonstrates that we are interested in the impartial administration of justice throughout the community. I ask the Government to accept the amendment of the honorable member for Perth. Mr.WILSON (Sturt) [5.56].- The proposed amendment can assist one section of the community only. As the honorable member for Perth (Mr. Tom Burke) pointed out, the underassessment of provisional tax will not affect the amount of tax that must be paid eventually. The only point at issue is whether the full amount of tax assessable should be paid as provisional tax, or in the succeeding year. The only advantage that could be gained from underestimating an assessment would be to have, for a few months longer, the use of money that should be paid as provisional tax. Who would benefit if the penal provisions were omitted as the honorable member for Perth wishes? The only person who could benefit is the big man. A wealthy man might gain an advantage by retaining, say, £10,000 for nine months. It would be worth while for such a man to dodge provisional tax, because he could obtain a fair return from the investment of that amount of money for nine months. The small taxpayer, who pays only £50 or £60 a year, could gain no worthwhile advantage by evading a portion of his provisional tax. Once again, the Labour party has sponsored an amendment that is designed to help one section of the community only. In this instance, its proposal would react to the advantage of the wealthy tax-dodger at the expense of the decent, honest, small taxpayer. Sitting suspended from 5.59 to 8 p.m. Mr. LUCHETTI(Macquarie) [8.0].- I support the amendment moved by the honorable member for Perth (Mr. Tom Burke). The two proposed new sections, which this clause is designed to insert in the principal act, will not confer any benefits upon the rural community. Proposed new section 221yda will help the Commissioner of Taxation by granting to taxpayers the doubtful privilege of self-assessment. It does not go beyond that. Proposed new section 221ydb provides for the imposition of penalties upon taxpayers who, perhaps, because of a lack of knowledge or because of seasonal fluctuations, understate their incomes for the current year. If the Government could prove to the committee that something will be gained by the adoption of the two proposed new sections, the Opposition would be very happy to support the clause. But we think that the Government, faced with the fury of rural interests, and being aware of the displeasure with which it is viewed in country districts because it introduced the wool sales deduction scheme and interfered with the averaging system, regards the clause only as a fantasy and does not believe that it will help rural communities or rural industries in any way. It has been suggested that, if a self-assessment system were adopted, country people would be better off. But they, as are all other people in Australia, would be obliged to pay to the Taxation Branch all the income tax for which they were liable, irrespective of whether they assessed their own tax liability or it was assessed by the Taxation Branch. If a taxpayer assessed his own income tax liability, the Taxation Branch would, ns it does at the present time, carefully scrutinize his income tax return and determine whether he had assessed his liability correctly. Honorable gentlemen opposite have spoken glibly of some great advantage that these provisions could confer upon country interests,- . but all honorable members know only too well that the provisions would not have the effect of reducing the income tax paid by country people. Has not the full impact of provisional taxation already been born by country interests, which were very heavily taxed last year? On a number of occasions, the honorable member for Melbourne (Mr. Calwell) and other honorable gentlemen on this side of the committee have produced income tax assessments that proved that the taxpayers concerned had paid income tax at the rate of more than 20s. in the £1. If these proposed new sections were likely to bestow some great and lasting benefit upon people in country districts, or to promote a greater production of food, we should support them enthusiastically. But we know, from past experience, that nothing of that kind is intended by this Government, and that, although it professes to be very concerned about rural interests, it is not prepared to extend to them concessions and consideration of the kind that are extended to large companies, which are not obliged to come within the provisional tax arrangements. If honorable gentlemen opposite believe that the self-assessment system will be of some value, we urge them to support the amendment, and to permit the system to operate. Honorable gentlemen on this side of the committee are quite prepared to support the proposal for a self-assessment system, for what it is worth, but we believe that Such a system will not confer any lasting or worthwhile benefits upon rural interests, or help them in any way. We think that in this matter the Government is indulging in make-believe and fantasy. It is attempting, in a petty fashion, to repair the political fences of the Government parties in the country districts where they have lost prestige. If the Government really desires to extend a real measure of relief to people in country districts, it should not be content only to advance a proposition of this kind which will have no effect other than to force taxpayers to do extra clerical work and bookkeeping. It should reduce the taxes imposed upon those who have the responsibility to build up the food reserves of this country, and to help us to balance our budget and overcome the financial difficulties with, which we are faced because of our present inability to export sufficient food to enable us to meet our commitments. The CHAIRMAN. - Order ! The honorable gentleman must confine his remarks to the clause. He must not repeat himself. Already there has been too much repetition. Mr. LUCHETTI.- I submit that, because the provisions of the proposed new sections are so wide, we are entitled to consider their implications and to discuss the degree to which they will bestow benefits upon country people. If the Government is not prepared to consider the matter upon that basis, I shall not occupy the time of the. committee any longer. The Opposition believes that no provision should be made for the imposition of penalties in this connexion, and that people who go through the procedure of self-assessment should be permitted to rely upon the fact that the Taxation Branch will check their income tax returns. The Taxation Branch will not accept taxation returns without question, but will scrutinize them as it does now. That being so, no useful purpose will be served by making provision for the imposition of penalties. Such a provision should be rejected by the committee, because it is an affront to the people who, it is alleged, will have benefits bestowed upon them by this measure. I trust that the members of the Australian Country party, at least, will vote with the Opposition when the amendment is put. SirARTHUR FADDEN (McPhersonActing Prime Minister and Treasurer) [8.8]. - Those honorable gentlemen opposite who have spoken in support of the amendment have not pointed out that it is necessary for the Government to protect Commonwealth revenue. Under the provisions of proposed new section 221yda, a taxpayer whose income for the coming year is falling will not be required to assess himself, but will have the option of either submitting his estimate to the Commissioner or of electing not to do so. Those provisions will apply to a taxpayer whose income has increased by less than 20 per cent. If a taxpayer's income has increased by more than' 20 per cent., he will have no such option. In order to protect the revenue and to enable the provisional tax system to be implemented properly, he will be compelled to submit his estimate to the Commissioner. What would be the position if no provision were made for the imposition of penalties? Obviously, some taxpayers would take advantage of the opportunity to accept the minimum assessment, despitethe fact that their incomes had increased by more than 20 per cent. Under thosecircumstances they would accept theCommissioner's assessment. It has been asserted that the Commissioner should play the role of a clairvoyant and, when a self-assessment is received, should say whether or not the taxpayer has complied properly with the law. That would bean impossible position for any human being to be placed in. Mr.Calwell. - It would not be impossible at all. Sir ARTHURFADDEN. - Of courseit would. The Commissioner would have no chance of assessing a taxpayer's liability on a proper basis until theincome tax return of the taxpayer wasreceived in the ordinary course of events. Mr.Keon. - Why not charge interest? Sir ARTHURFADDEN.- We want money. We must have revenue to implement the provisional tax system. The use of the word " provisional " demonstrates that we must get the tax provisionally. What about wage and salary earners? The Opposition, which professes to represent such persons, has shown no regard for their position. They pay a proportion of their total income tax every pay day. If their salaries or wages rise, increased sums are deducted from them each pay day. The Commissioner does not know whether too much or too little has been deducted from their salaries until the end of the financial year, when their income tax returns are received. Then the necessary adjustments are made, and they receive a refund or are required to pay additional tax. Under proposed new section 221yda, taxpayers who know that their incomes have increased by more than 20 per cent, will be required to .assess themselves and to pay income tax in accordance with that assessment. A margin of tolerance or error of 20 per cent, will be allowed. It is proposed that a penalty shall be imposed only if there be a short payment of tax in excess of that margin of 20 per cent. Let me give to the committee an illustration of the way in which the system will operate. Let us assume that a man has an annual taxable income of £6,000. The income tax payable on such an income is £3,030 10s. The income represented by the limit of margin, that is the 20 per cent, tolerance, is £4,800. The tax payable thereon is £2,157 17s. Suppose the taxpayer accepts the provisional tax assessment, based on his previous year's income of £4,000. The tax payable thereon is £1,615 3s. Under those circumstances, his unpaid tax, regardless of the margin, will be £542 14s. The penalty in respect of that short payment will be 10 per cent, of that sum, or £54 5s. The tax of which the Commissioner of Taxation and the Government has been deprived will be £1,415 7s. As a taxpayer would, on the average, receive a notice of assessment every twelve months he would thus be required to pay a penalty of £54 5s. for having withheld tax of £1,415 7s. for a period of twelve months. This is equal to interest at the rate of 3.8 per cent. Other calculations show that if income were under-estimated by 33-J per cent., the rate of interest on the average of twelve months would be: On an actual income of £3,000, 3.8 per cent. ; on £6,000, 3.8 per cent. ; and on £18,000, 4 per cent. The penalty clause is not directed at the general body of persons who are required to pay provisional tax. It is inserted because there exists in the community a small group of taxpayers who would deliberately underestimate their incomes and defer payment of tax for twelve months if it were not for the penal provisions of the bill. It has been claimed that the power that is given to the Commissioner of Taxation to substitute his own estimate will preclude exploitation of the revenue by unscrupulous taxpayers. The bill empowers the Commissioner to vary a taxpayer's estimate only when he is satisfied that the estimate is too low. In many cases, the Commissioner may be in a position to satisfy himself that the estimate is too low. In other cases, particularly in times of fluctuating incomes, the Commissioner may not have the necessary details available to determine whether or not he should reject the taxpayer's estimate of provisional taxation. The taxpayer will be given at least to the 31st March to submit his estimate and, in the majority of cases, the estimate will not be submitted until the provisional tax becomes payable in April, May or June. By that time he will normally be able to estimate his income within the 20 per cent, margin. The provision of penalties in the circumstances is a common-sense one. It is a provision to protect the revenue against people who would take advantage of the position when their incomes were rising. The whole basis, spirit and method of provisional tax necessitates that being done and rejects, by its very nature, waiting until the final return is put in, whereupon the Commissioner of Taxation can ultimately adjust the matter. The revenue will not be benefited by having to wait for eighteen months or even twelve months after the due date or the end of the year. Provisional tax must be collected in the current year to the maximum amount for which the system is designed. Those difficulties and fluctuations were foreseen by the all-party committee which went into the matter in 1944 and recommended to the Curtin Government the act that is now in operation. The late Mr. Chifley was the chairman of that all-party committee and Mr. Scullin was also a member of it. They said that there would be anomalies which would have to be adjusted by some method in due course when incomes rose abruptly or fell abruptly. Those conditions have been experienced, particularly in the wool-growing industry, which suffered a.n abrupt fall in incomes last year. As provisional taxes were based on the previous year, which was a record year for the wool industry, it wa? obvious that provisional tax- had not provided the proper and requisite revenue at the time when it should have been available and collectable. Consequently the self -assessment method has been introduced. It is not a novelty. It is in operation in Canada and the United States of America and it has been introduced with modifications designed to meet Australian conditions. The penalty must be provided, otherwise the revenue would be affected and people would gain an advantage in circumstances in which they should not do so. The Government has no intention, therefore, of accepting the amendment. Question put - That the section proposed to be left out (Mr. Tom Burke's amendment) stand part of the clause. The committee divided. (The Chairman - Mr. C. F. Adermann.) Ayes . . . . 53 Noes . . . . . . 39 Majority . . 14 Question so resolved in the affirmative. Amendment negatived. Clause agreed to. Clauses 18 and 19 agreed to. Title agreed to. Bill reported without amendment: report adopted. Bill - by leave - read a third time. PATENTS BILL 1952. Bill received from the Senate and (on motion by Mr. Beale) read a first time. CONCILIATION AND ARBITRATION BILL 1952. Debate resumed from the 22nd May (vide page 781), on motion by Mr. Holt - That the bill be now read a second time. Dr. EVATT(Barton- Leader of the Opposition) [8.30].- This bill is of great importance. Some parts of it are of value. For instance, one clause clarifies the right of intervention by the Government, through the Attorney-General, in the proceedings of the court or of a conciliation commissioner. The bill also extends the jurisdiction of conciliation commissioners with respect to long service leave. I shall not go into those matters at this stage. Equally, the bill, in the view of the Opposition, contains clauses that are very harsh, and which cannot be justified. The Minister for Labour and National Service (Mr. Holt), in his second-reading speech, directed his remarks primarily to the substance of the bill, which is that it sets up entirely new machinery for the supervision and control of conciliation commissioners. In that respect, the bill strikes a determined blow at the effectiveness of the principal act in relation to the system of conciliation commissioners. It provides for a multiplicity of appeals and references from the conciliation commissioners to the court. These could render the procedures almost unworkable by postponing the ultimate settlement of disputes, which is the primary objective of the machinery, and, consequently, destroy the confidence in the system of those organizations that have given steady and unwavering support to the court through the years. I shall remind the House of what the 1947 act, which was passed by the Labour Government, actually provided for in respect of points that are relevant to the bill. That act got rid of many technical and vexatious procedures which had existed for many years, including the procedures for the filing of plaints and the taking up of jurisdictions. The principle underlying the appointment of conciliation commissioners was that they were not to be regarded as exercising judicial functions. We speak of appeals in respect of courts that exercise judicial functions and administer the ordinary law of the land; but, in respect of industrial jurisprudence, one should be careful in applying an analogous judicial power. The 1947 act deliberately placed certain duties upon the conciliation commissioners. They were required to handle a threatened dispute before it actually came into existence and to try to prevent the extension of disputes. The commissioners succeeded in many instances in achieving that objective. If they did not succeed, the parties had recourse to arbitration. An attempt was made under that act to forget many of the procedures that had previously become established and many of the attempts that had been made to control trade unions. Honorable members should remember that the only power that the Commonwealth has in this sphere is the power to make laws in respect of conciliation and arbitration in order to prevent or settle industrial disputes, that is, to try to get the parties to agree upon a settlement, and, should such attempts fail to enable the parties to have recourse to arbitration. From that viewpoint the conciliators, on the whole, have done very well. Some of the old procedures that were removed were denounced by Mr. Justice Higgins, who was, perhaps, the greatest judge in the industrial history of Australia, as a veritable Serbonian Bog of technicalities. That criticism was completely justified. The 1947 legislation enacted many provisions that are not touched upon in the bill now before the House; but with respect to the actual machinery of conciliation and arbitration, which is relevant to this measure, that act should be closely examined because it followed the general principle that had existed for many years. I shall explain that point. Before World War II. - I shall not go into earlier history - the principle applicable in the arbitration jurisdiction was that three judges should determine basic questions, such as the basic wage and standard hours, whereas margins for skill and conditions of employment in particular industries should be dealt with by one judge only. Under that system, an individual judge became expert in the particular problems of industries that were assigned to him. Honorable members will remember some of the judges who exercised jurisdiction in respect of margins and conditions. At that time - I am referring to the pre-war period - the Full Court of three judges determined only matters that were basic to all industries whilst problems that related to separate trades, or industries, were handled by a single judge from whose decision there was no appeal to the Full Court. The decision of a single judge was final and conclusive in respect of margins for skill and conditions of employment in an industry. In substance, under the 1947 act the same subjects were handled by conciliation commissioners. That fact should be sufficient to dispel the criticism of that act that the Minister implied in certain phrases that he used. Critics of that act in respect of dualism, or dichotomy, deny the broad distinction that exists between matters like standard hours and the basic wage, which are dealt with by the Full Court, and matters relative to a particular industry, such as margins for skill and conditions of employment, which are dealt with by conciliation commissioners generally in the same way as they were previously dealt with by a single judge for many years. That distinction is well recognized by all authorities. Foenander's important book refers to margins and conditions as " the subsidiary problems " of industrial- arbitration. Those problems are extremely important, of course, but they are subsidiary to matters that are basic to all industries. In effect, what the Chifley Government did in the 1947 act was to recognize the enormous expansion that had taken place in industry and the valuable work that had been done by the few conciliation commissioners who had acted as auxiliaries to the single judge who empowered them to investigate and report upon certain matters affecting the industry with which the judge himself was concerned. Under the 1947 act, sufficient conciliation commissioners were appointed to cover all industries in that respect, but with the difference that, instead of merely reporting to the single judge, they were empowered to make decisions if they failed in their attempts to conciliate the parties to a dispute. That act substituted the conciliation commissioner's new jurisdiction for the old jurisdiction of the single judge in relation to margins and conditions. It placed upon each commissioner the duty of becoming conversant with the industry that was committed to his charge by the Chief Judge. The conciliation commissioners were bound to search for areas of agreement before conciliation was abandoned and arbitration was embarked upon. In this respect, I shall cite an example which will remind honorable members of the work that was done by one judge who was associa ted with this jurisdiction as a single judge. I refer to Mr. Justice Drake-Brockman, who dealt with margins and conditions in special industries and became well known for his special knowledge of such industries. Admittedly, he was a very specially qualified person. Birt no one supposed that it was proper to have a right of appeal on such matters from the decisions of a single judge to the Ful] Court. Every one who has studied the subject of industrial conciliation and arbitration knows that there is a multiplicity of skills involved in the work performed under the numerous grades and classifications for which provision is made in many awards. Mr. Justice Drake-Brockman had charge of such great industries as the railways and the clothing trades and. later, the coal-mining industry. The point I make is that in some instances provision had to be made in respect of as many as 400 classifications, to each of which different margins applied. In the 1947 act, the Chifley Government recognized that it would be impracticable to have such assessments justly made except on the basis of specialized knowledge and expert study of the particular industry. Therefore, when the Minister now says that there is a need for coordinating the decisions of conciliation commissioners in connexion with margins and conditions of employment by the intervention of an appellate jurisdiction he, in effect, criticizes, and by implication denounces, the procedure that had worked before 1947 so far as finality in respect of . margins and conditions was concerned. Whereas, previously, a single judge was responsible in that respect, the conciliation commissioners now have that responsibility. The single judge, whom I have mentioned, succeeded not because of his legal training, but rather because of his practical common sense and sense of justice. The Chifley Government considered that a non-professional conciliator should also be able to make a contribution to the successful working of the system. That was the basis of the system of conciliation commissioners. What was required of them was knowledge of the industry assigned to them, a determination to do justice and the ability to come to an equitable decision. When that legislation was being debated in 1947, much criticism was levelled against the commissioners. Honorable members might wish to peruse the reports of the debate that took place at that time. Experience since 1947 has proved such criticism to have been unjustified. It is not repeated to-day, because it has been largely falsified by events. I require to make only two short references in order to convince any person of the success of the conciliation commissioner system. Mr. Chief Commissioner Mooney, whose term of office was recently extended by the Government by means of special legislation, said in his official annual report to the Attorney-General - I unhesitatingly claim that the work performed by the Commissioners has well served the objects of the Act which they were appointed to further. One of the objects which they were appointed to further was the expeditious hearing and settlement of disputes. In the last basic wage case Judge Dunphy said - Whatever demerits may still be alleged to exist in our arbitration system, it can be no longer said that there are substantial delays in the adjustment of money claims. The appointment of 10 Conciliation Commissioners has resulted in all matters respecting claims for margins and allied money claims being dealt with much more speedily than was ever the case in the prior history of industrial arbitration in Australia. Unions have no longer had to refer their subsidiary claims to a restricted number of Judges, but have had ready access to the new tribunals established by the amending Act of 1947! Not only have margins therefore been adjusted substantially in amount but the adjustments have taken place much more swiftly than ever before. . . . The subsidiary claims that Judge Dunphy mentioned are claims in relation to margins and industrial conditions. That is a broad and complete definition of the main purposes of the system of conciliation commissioners. I wish to sum up immediately the outstanding features of the new jurisdiction that the Government proposes to impose on each conciliation commissioner who deals with margins and industrial conditions. I should like the House to follow my remarks closely, because the system is a most elaborate, complicated and confusing one. First, a conciliation commissioner who is dealing with an industrial dispute may be asked by any party before him to have the case dealt with by the Full Court, on the ground that it is so important that it will be in the public interest for it to be dealt with by the Full Court. The crucial words are, " in the public interest Secondly, this request by a party may be made at the commencement of a hearing, or at any stage of it, up to its completion. Thirdly, if the conciliation commissioner desires to refer the matter to the Full Court, he may not do so except with the concurrence of the Chief Judge. That is to say, he may consider that the case should go to the Full Court, but he is not empowered to send it there unless the Chief Judge of the court concurs in the adoption of that procedure. Fourthly, if (the conciliation commissioner refuses the application during the hearing before him of a case on. margins or industrial conditions, an appeal against his decision may be made to the Chief Judge within fourteen days of the refusal. Fifthly, this appeal, which is described as such in the bill, is really an appeal on the question of whether there should be an appeal. It is heard by the Chief Judge, who determines again " in the public interest '\ whether the Full Court should hear the dispute, or a part of it. Honorable members will readily see that there is opportunity for much delay and much complexity in connexion with an appeal to determine whether there should be an appeal. But the Full Court is not bound to hear and determine the dispute. It may not agree with the Chief Judge about the importance of the case, and it may refer the dispute, or any part of it, back to the conciliation commissioner for hearing by him. The court may also direct the conciliation commissioner to furnish a report on such matters as it may specify. So there are four or five stages in that chain of appeals or applications which may involve delay and considerable dissatisfaction, as well as the possibility of widespread extensions of disputes. That procedure deals only with references of disputes to the court. The Chief Judge, and not the Full Court, is to decide whether or not the Full Court shall hear a ease, or a part of it. That means, in effect, that in the absence of the Chief Judge the power to grant an appeal will be exercised, not by the next senior judge, who,' at the present time, is Mr. Justice Foster, but by a judge appointed by the Chief Judge. This procedure makes considerable delay possible, and it is certain that if a party is, for any reason, desirous of delaying a decision for as long as possible, the procedure can, without the slightest shadow of a doubt, be utilized for that purpose. I have dealt so far with the procedure up to the end of the hearing, which may last for weeks or months. After an order has been made, the Chief Judge again decides whether or not leave to appeal shall be granted. He also decides whether, pending the appeal, the order that is appealed against shall be stayed. The application for leave to appeal is to be made within fourteen days after the date of the order or award, but the bill proposes that the order or award shall not, except by consent of all the parties, be effective until 21 days from its date have elapsed. In such cases the number of parties involved can run to dozens, so this provision means that in practically every industrial dispute, including those in which a settlement may be of supreme urgency, there will be a delay of 21 days before an order or award will become effective, although the whole dispute may be capable of being settled speedily by a decision of the court. Once again the test of granting leave is the " public interest ", and there is inevitably an enormous difference of judicial opinion regarding the precise meaning and application of that phrase. In this connexion the decision of what the public interest is lies within the discretion of the individual judge. Different judges may take different views on the meaning of the " public interest ", because there is no legal standard of " public interest " in the ordinary sense. In one old case a public policy was said to be " an unruly horse for the court to ride on ". Public interest is in the same category. In the basic wage case, Judge Foster said that the court's constitutional function was to try to conciliate the parties and, if it could not conciliate them, it should make a binding award. Again, when a matter comes before the court for its decision, after leave to appeal has been granted, it may direct the conciliation commissioner concerned to report to the court. On certain matters it may take a considerable time for this procedure to be completed, and the Full Court itself may admit further evidence. It would not be a strict appeal in the ordinary legal sense, but, in a sense, would be practically a re-hearing of the case. In this connexion again a good deal of delay is absolutely certain, and extreme delay is highly probable. If any question of law arises before the conciliation commissioner, any party may compel him, and the Chief Judge may also direct him, to refer the question of law for the opinion of the court. Here is another opportunity for delay. In our view, the supreme object of the arbitration system should be that disputes shall be heard expeditiously, that commissioners should try to conciliate and, failing success, should make an award that is based on industrial justice. It is dangerous to delay industrial justice, because disputes are certain to arise from the new procedures as much as from the original claims. I shall describe the system. It is clear that it is elaborate and complicated, and is bound to cause much litigation before both the conciliation commissioners and the Full Court. Why change the present system of dealing with what Mr. Justice Dunphy has described as "subsidiary claims ", namely, claims in relation to margins and industrial conditions ? Prior to the 1947 act, a single judge, not subject to appeal, decided margins and conditions. Now a single commissioner, also not subject to appeals, decides them. The Minister has to prove that necessity for an appeal exists. It is impossible for him to show that the conciliation commissioner system has failed. Indeed, I believe he thinks that, on the whole, it has been successful except in relation to one matter. My view is that we should not have heard of the present proposal but for the recent decision on margins which is known as the " Galvin decision ". Yet, curiously enough, the bill makes no provision for any appeal from that particular decision. Any provision of that kind would, of course, have to be retrospective in its effect, but no attempt has been made to include it in the measure. I point out this aspect because differences of opinion have occurred among conciliation commissioners, particularly as marginal assessments involve delicate and difficult judgments of fact and degree, about the extent of the demarcation of different skills, and it is undoubted that the only industrial disturbance of national importance that has arisen from the decision of any conciliation commissioner has followed upon the Galvin decision, which was issued in January last. The reasons that the conciliation commissioner gave for his decision show that he was primarily influenced in his refusal to grant any sum, by way of additional margins, by the existence of the inflationary trend in the economy. He stated his reasons in broad language, and I shall not quote them at length. He said that an increased margin, if granted, would be inflationary. As a matter of fact, a similar argument had been put before the Full Court in the basic wage case. Judge Foster and Judge Dunphy had not acceded to it, but the Chief Judge had, in substance, acceded to it, and he, as is well known, dissented from the basic wage judgment. A fair study of Mr. Galvin's judgment shows that he preferred the reasoning of the Chief Judge to the reasoning of other judges. He was quite entitled to have that preference. He also said that the principle of adjusting margins in relation to an increase of the basic wage had always been rejected by the courts. When the basic wage is increased margins also should be increased, because the word margin, in that connexion, means something over and above the unskilled wage, which is to be paid to the skilled worker. Mr. Galvin's view does not seem to take account of several matters, because Mr. Justice Higgins, in 1907, fixed the marginal rate at a figure that represented 42.85 per cent, of the base rate. The same learned judge reestablished this percentage rate in 1921. Judge Beeby again adopted and reestablished it in 1937. Between 1937 and 1946, because of cost-of-living increases and the increase of the basic wage, the percentage fell to 28.3 per cent, of the basic wage. Nonetheless, the Full Bench of the Commonwealth Arbitration Court again re-established the margin, in a case concerning mechanical fitters, at 42.8 per pent, of the basie wage. So there were five occasions on which margins were fixed at a definite percentage of the basic wage. When the basic wage was increased the percentage fell, but on four or five separate occasions it was restored. The position may be expressed more aptly thus: The matter is not one of a percentage, because the view of the majority of industrial tribunals is that an absolute, hard-and-fast percentage cannot be fixed; but it is clear from the judgments of leading industrial tribunals and the great majority of judges of Commonwealth and State courts that the increase of the cost of living is an important factor, although not the sole factor, in determining an increase of the marginal rate. It does not mean that the court would fix the percentage which Mr. Justice Higgins, Judge Beeby and the Full Bench of the Commonwealth Arbitration Court favoured, but Their Honours would have regard to the cost of living, and make an adjustment in the marginal portion of the award, if there had been an increase of the cost of living. Yet the Galvin judgment dismisses those considerations, and says, in effect, that any claim for an increase of margins cannot be granted because of the inflationary trend. Consequently, ' an acute dilemma has arisen. It is because of the inflationary trend that the position of the marginal worker becomes almost impossible, and deteriorates relative to that of the basic wage earner. In other words, the inflationary trend is the occasion and cause of the very dispute that comes before the court; yet the cause of the dispute before the court is used by a conciliation commissioner as the ground for his refusal to increase margins, his reasoning being that such an increase would add to the inflationary trend. Mr. Holt.- The Leader of the Opposition is presenting a strong case for an appeal against the Galvin award. Dr. EVATT.-My answer to the problem is not the Minister's answer. The, answer is not to establish a multiplicity of appeals but to declare in this legislation that no conciliation commissioner, when he is fixing margins or conditions, shall be entitled to take into account the general economic conditions of the country. Jurisdiction on the basic wage and standard hours was given to the Full Bench of the Commonwealth Arbitration Court because of the fact that before the Full Bench such a matter has been, and can be, taken into account. But the matter is different if sixteen conciliation commissioners who have had assigned to them the task of dealing quickly and summarily with disputes in order to bring them to finality or to prevent them from extending, can take into account evidence of the economic condition of the country. A difference of opinion exists among the conciliation commissioners themselves. It is perfectly competent for the Minister to include in the bill a provision to the effect that a conciliation commissioner, when dealing with his portion of the jurisdiction, may not take that matter into account. If the Minister does not wish to do so, he should explain the view of the Government about the position. Is it the view of the Government that a conciliation commissioner should call expert witnesses, as Mr. Galvin did, including a professor of economics, to give evidence on the inflationary situation, and should act upon it ? The Government must have some view on that matter, and the Minister should say whether the calling of expert witnesses in such circumstances is right or wrong. I should use the clauses in the hill that extend the right of the Government or the Attorney-General to intervene, so that the view that I have expressed could be put to Mr. Galvin on an application to rehear the matter. Does the Government wish to have appeal after appeal, application after application, simply because of one decision that has been made? I am not criticizing Mr. Galvin for his conviction that he. has taken the correct view, but the truth is that many conciliation commissioners have not taken that view. Such a situation cannot be settled by making provision for an appeal to the court from the decision of a conciliation commissioner, because the judges of the court are just as much divided on this matter as are the conciliation commissioners. That fact is understood when 'we read some of the decisions that have been given on similar matters. The effect of the inflationary trend is obvious. That is only saying, in another way, that there will be an increase of prices, to some' degree, if an increase of margins is granted. Why should the marginal worker lose his effective margin over an unskilled worker merely because an increase might, or would, add to the inflationary conditions? Under the statute of 1947 the matter that the conciliation commissioner has to decide is simple. He should ask himself whether it would be just or equitable to grant an increase of the margin. It is not much satisfaction to employers, many of whom are paying the extra rate, or to employees, if a conciliation commissioner declares that it would not be just or equitable, because of the economic trend, to increase a particular margin. The real question for the conciliation commissioner is whether it is right and just, in the circumstances, to grant an increase to a marginal workerin order to preserve, or help to preserve, the effective margin. One reason why the Pull Bench of the Commonwealth Arbitration Court was given exclusive jurisdiction over basic wage and standard hours matters was that economic factors entered into the examination of those basic matters. But it was never intended, and there is no hint of it in the debates in this House on the amending legislation in 1947, that an investigation of economic trends would be undertaken by each of the sixteen conciliation commissioners in dealing with their subsidiary portion of the jurisdiction. Therefore, I ask the Minister to inform the House whether the Government regards matters of general economic policy, and the economic trend, as being within the proper purview of a conciliation commissioner who is dealing with margins and conditions in a particular industry. I suggest that the subject is outside the province of the conciliation commissioners. It could, and should, be declared in the bill or by intervention on behalf of the Government before the conciliation commissioner concerned, or any other conciliation commissioner who is confronted with an analogous problem. If that is the solution, and I believe that it is. there is no occasion for introducing a system of appeals from the decisions of conciliation commissioners. What will happen under such a system? An appeal from the decision of a conciliation commissioner will go before one of the two Full Benches of the Commonwealth Arbitration Court, which will settle the matter. Yet differences of opinion among judges on similar economic matters, and on principles, have been, and are, most acute. The introduction of the appeals system will merely cause a delay in the first instance and a delay in the second instance, and the transfer to the judges of the same economic questions which the court could have determined. The very economic factors which the conciliation commissioner has attempted to introduce would be introduced. Such factors may give rise to differences of opinion among Their Honours themselves. Mr. ClydeCameron. - Will the judges be able to refer a matter back to a conciliation commissioner ? Dr. EVATT.- Yes. Mr. ClydeCameron. - Will an appeal be allowed against such a decision? Dr. EVATT.- I do not know whether that is implicit in what has been said; but there is just as much reason to provide for an appeal against a decision of the Full Bench of the Commonwealth Arbitration Court. Two judges may be in favour of a decision and the third judge may dissent from it. Should an additional tribunal be set up to hear appeals in certain cases? I shall now refer to two or three cases which prove my points sufficiently. If an appeal is allowed from the decision of a conciliation commissioner, what kind of situation will arise? Honorable members may recall the female minimum rate case. It was decided by the court at the same hearing. Judge Foster and Judge Dunphy, by a majority decision, declared that the female minimum rate should represent 75 per cent, of the needs basic wage; the Chief Judge, Sir Raymond Kelly, in a dissenting judgment, found that a rate representing 54 per cent, of the needs basic wage should be payable to adult females in industry. Those judgments are an illustration of the acute differences of opinion at the judicial level. The margins case in 1947 provides another example. The Full Bench of the Commonwealth Arbitration Court, consisting of Chief Judge Drake-Brockman, Judge Foster and Judge Sugerman, reviewed a claim for margins in' respect of employees in the metal trades industry. The court increased the margins by means of a formula unanimously agreed upon by the Full Bench. The mechanical fitters case is generally regarded as a test case in respect of margins. The court awarded an additional 16s. a week, and restored to those tradesmen the same relativity between the marginal rate and the base rate as existed in the earlier cases in 1907, 1921 and 1937. The Chief Judge of the Commonwealth Arbitration Court, Sir Raymond Kelly, in the commercial printing trades case, said that when the marginal rates were being fixed, the true value of the employee was not to be ascertained by reference to the variation of the purchasing power of money since the award was made. Sir Raymond took a different view from that of the Full Bench of the Commonwealth Arbitration Court. I am not now discussing which view is right or wrong. I am making the point that a difference of opinion may exist on the judicial level as acute as that which may exist among conciliation commissioners. The Government, under this bill, will merely transfer the possibility of differences of opinion from the tribunal that is supposed to deal justly and expeditiously with a matter, to the court, in which the proceedings will necessarily be prolonged. The Industrial Commission of New South Wales has adopted a principle which, I think, is generally applicable in Australia. It was applied in the plumbers case last year, and states, in part - In a proper case, a fall or rise in the purchasing power of money is a circumstance which may he taken into account when making an award fixing rates of pay. Therefore that matter is relevant. The members of the Industrial Commission of New South Wales do not say that it is decisive, and do not fix a definite percentage, but agree that the matter must be taken into account. The Public Service Arbitrator applied the same principle when he determined the rates of public servants in relation to margins. The Coal Industry Tribunal recently increased margins. The Minister has announced his intention to make provision for appeals from the determinations of the Public Service Arbitrator and the Coal Industry Tribunal. The judgments in the cases to which I have referred are lengthy, and I have tried to summarize them. The Minister is confronted with a situation that has arisen from one decision. Many conciliation commissioners have taken a view different from that of Mr. Galvin. I remind the House that Mr. Galvin said in effect, " an increase of margins will cause inflation; therefore, I refuse to increase the margins ". Mr. Holt.- What justification has the Leader of the Opposition for saying that this legislation springs from Mr. Galvin's decision ? Dr. EVATT-I gather that it does, because Mr. Galvin, in his original judgment, or in a subsequent judgment, suggested that provision be made for an appeal from a decision of a conciliation commissioner to the Commonwealth Arbitration Court. Mr. Holt.- The Government has had the matter of appeals under consideration for three years. Mr. ClydeCameron. - Then why has the Government taken so long to act ? Mr. Holt.- We wanted to give a fair trial to the system introduced by the Leader of the Opposition, when he was Attorney-General. Dr. EVATT.- I have quoted the views of Judge Dunphy and of the Chief Conciliation Commissioner, Mr. Mooney, who, as the Minister is aware, has rendered excellent service in that capacity. They say that the system has been substantially successful. The Minister, under this bill, is not altering the present system. All that he is doing is to make provision for a series of appeals. What will happen? The result may depend upon whether an appeal is heard by one Full Bench or the other Full Bench of the Commonwealth Arbitration Court. I have shown that Judge Foster and Judge Dunphy, in respect of this matter of economic trend, have taken a view diametrically opposed to that of the Chief Judge, Sir Raymond Kelly. I am not criticizing what the Chief Judge did in Adelaide a few months ago. He was quite entitled to do it. [Extension of time granted.-} What I have said indicates the kinds of differences of opinion that are certain to emerge if matters that are intended to be dealt with finally by a conciliation commissioner reach the court. In February of this year the Chief Judge of the Commonwealth Court of Conciliation and Arbitration made certain suggestions. Among those suggestions were three that it is pertinent to mention now. First, a reduction of 10 per cent, per annum of any adjusted basic wage during a period of, say, three years. Secondly, award margins to stand fixed at the present rates for a period of, say, three years. Thirdly, overtime for the first half hour of any day or the first four hours of any week to be paid at ordinary rates and subsequent or additional overtime to be paid at time and a half. If those suggestions were put into effect, industry would revert temporarily to tb( standards of the 44-hour week. Among the Chief Judge's suggestions were several elaborate proposals for an economic stabilization scheme. He suggested, among other things, that dividends should be limited. The point is that in the course of his proposals, he referred to the industrial matters that I have detailed, including margins for skill. I believe it to be quite certain that if the matters that are now dealt with by conciliation commissioners should be referred to the Full Court of the Commonwealth Arbitration Court, there would be differences of opinion similar to those illustrated by some of the cases that I have cited. What was the object of the conciliation commissioner system? It was designed to deal expeditiously with subsidiary matters such as margins and conditions. These matters were to be dealt with by laymen who were bound to become expert in the knowledge of the conditions of the industries with which they were to deal. On the whole, that system has been successful. Co-ordination, in the sense of direction,' does not exist but the Conciliation and Arbitration Act provides for consultation between the authorities at meetings presided over by the Chief Judge and attended by all the. conciliation commissioners. The principal reason for this measure is that in one case a decision has been given that has caused an acute controversy. I submit that the jurisdiction of a conciliation commissioner should not extend to broad matters of economic and social policy. Such matters were inquired into by the conciliation commissioner whose actions gave rise to this measure, who said that no matter how strong the case might normally be for an increase of margins, they should not be increased because such an action would lengthen the inflationary spiral. I remind honorable members that at that time the basic wage had been increased. According to the commissioner's argument, if margins had first been increased, that fact could have been used by the court as a reason why the basic wage should not be increased. The principle upon which the commissioner should have acted was to consider the case of those employed in industry separately from a. consideration of economic policy. 1 have indicated the difficulties that can arise. They need not always arise, but I am convinced that the system envisaged by this measure will lead to inordinate delays iu matters that should be dealt with expeditiously. I cannot see that, by a reference to the Full Court, there will be any more certainty of achieving industrial justice than there would be by letting the matter rest where it is. I suggest positively to the Minister for Labour and National Service that, first, .the Government should declare in the statute that a conciliation commissioner shall not concern himself with economic problems but shall deal only with matters of fact. Secondly, if the Government holds the view that I am submitting, that it is not a function of the conciliation commissioners to consider matters of policy, it may not be necessary to amend the statute, but that view of the jurisdiction of the commissioner could be put to the industrial tribunals by the Government through the Attorney-General, who has a power under this measure to intervene in industrial matters. Other important matters in the bill will be discussed later, no doubt. The essence of the bill is the appellate system, and the Opposition is strongly opposed to it. Mr.HUGHES (Bradfield) [9.21].- This bill is vital to the welfare of all Australians if they desire to continue to exist as free people. The Leader of the Opposition (Dr. Evatt), who has had a wide experience in the courts, has not attempted to explain the fact that under the 1947 Commonwealth Conciliation and Arbitration Act, for which he was responsible, the number of strikes, stoppages and interferences in industry have reached a record'. The test of a system is the same as the test of a tree. A system, or a tree, is good or bad according to the fruit it bears. The Leader of the Opposition has pointed out this or that defect in the legislation or in the actions of the conciliation commissioners, but the plain fact remains that all our industrial machinery, which becomes more complex as the years pass, has finally resulted in a disturbed economy the like of which we have never before known. I do not say that that condition is attributable solely to the industrial machinery. I have had very little experience in the courts, but I have had a very wide experience in dealing with the people who go to the courts. For twenty years I was general secretary of the Wharf Labourers Union of Sydney. I established the Waterside Workers Federation, and was for over twenty years its president. To-day the waterside workers stand very high on the list of industrially troubled groups of workers. Perhaps the coal-miners run them neck and neck, but the waterside workers are holding their own. It is a day to be marked when there is no industrial trouble on the waterfront. The waterside workers ban overtime, they decide not to work, they do this or that, and always in their own way. They are not extraordinarily fertile in expedients ; they follow their leader, and their leader is a Communist. Such a state of affairs is not singular. Many unions are led by Communists, and these are the unions that have the greatest number of strikes and stoppages. Mr.James. - Was the right honorable member a Communist when he worked on the waterfront? Mr. HUGHES.- No. I spent many years in building up waterfront unions and in .organizing industry generally before and after arbitration was legally enacted. If a measure such as this had been offered to us in those days we should have regarded ourselves as the most fortunate people on earth. It would have given to us not only our immediate objectives but also all that we had thought necessary for the future. In bygone days I had much experience of the Industrial Court in New South Wales, long before there was a Commonwealth Court of Conciliation and Arbitration. There was only one industrial court in those days, and it was composed of a judge, an assessor for the employees and an assessor for the employers. That tribunal functioned satisfactorily. There are more strikes on the waterfront in one year now than there were in all the years I was an officer of the union. It is pertinent to ask what is causing all this trouble. Every one of the unions that struggle for pride of place among the most troublesome organizations is led by a Communist. The gentleman who has taken my place among the waterside workers - and a very nice man he is too- - is a Communist. Mr. Thornton, who was connected with the Federated Ironworkers Association, is a Communist, and high up in the order of demerit. The head of the Seamen's Union of Australasia is a Communist. Communism and strikes go hand in hand. Although there were strikes before communism became widespread, it is >quite clear .that to-day communism is the cause of most of the strikes and that the unions involved are honeycombed with and led by Communists. The press is full of headlines such as " Overtime ban on the waterfront", or "Trouble at Port Kembla". Then there is .the black ban on four waterfront workshops. The honorable member for Bendigo (Mr. Clarey) has had a life-long experience of industrial disputes. He, of course, is under an obligation to keep his opinions to himself, but I venture to say that, if we could tune in to his thoughts with some kind of psychological radio, we should hear him say, " God help us ! " The right honorable the Leader of the Opposition emphasized the great importance of the clauses in this bill to the machinery of the arbitration system. ' But the honorable member for Bendigo does not bother about machinery. He is concerned with human beings. In the days when it was my custom to address the members of a great trade union with the idea of leading them along the path of safety, I had to deal with human beings. The results of the intrusion of communism into the economy of Australia have been most deplorable, and, if I had my way, communism would be extirpated. Every country has the right to protect itself. I have done what I could to remove constitutional limitations from our arbitration jurisdiction. Speaking from memory, I have been responsible for submitting four referendum proposals on this subject to the people. I have said that I had to deal with human beings. We all have to do so. Perhaps it would be of value to the nation if the universities included, in their curriculums courses of research into the mental processes of man as we know him. Unfortunately, the people have rejected every referendum proposal in relation to arbitration and the control of communism that has been submitted to them. We shall never enjoy industrial peace in Australia until we have dealt effectively with communism. Our laws may not be perfect, but that does not matter greatly. Bad laws can be repealed or modified, but good or bad, all laws must be obeyed. The Minister for Labour and National Service (Mr. Holt) deprecated the suggestion that this bill might have been a perfect measure. He has presented it, perhaps as a palliative, but at any rate as a means of treating our industrial ills. The 1947 act for which the Leader of the Opposition was responsible was designed to effect a salutary improvement in the causes and the settlement of industrial disputes. As a tree is known by its fruits, so such a measure must be judged by the condition of industry to which it has been applied, and under this act strikes and stoppages have topped the record. The 1947 act stands condemned. It is not pretended that the bill before the House now is a perfect measure. The important fact is that it will improve our arbitration machinery. It will leave the substantive provisions of the existing legislation unchanged, but will add to it such provisions as time and experience have shown to be desirable, if not absolutely necessary. Honorable members opposite are interested in industrial peace. Industrial peace is vital to all of us, and, for the life of me, I cannot understand how they can treat this bill as a party measure. Its objective is as wide as the community itself - employer and employee stand to gain by it. We must have industrial peace. It is necessary to our well-being in time of peace, and would be vital to us in the event of war. I well remember, as the Leader of the Opposition and many of his followers must do, that the former leader of the Labour party, the late Mr. Chifley, was as strongly opposed as any man could be to the use of coercive measures to suppress strikes. But what did he do in the emergency of war-time? Coal was vital, and the miners refused to cut it, so he used the soldiers to get it. Instead of fiddling about with arbitration, in they went, out came the coal, and the strike went flop! This bill ought to be treated as a non-party one. We should try to find a modus vivendi that will be acceptable to all parties. Civilization rests on the rule of law. Bad laws can be repealed or modified, but while they stand, they, must be obeyed. Various members spoke earlier to-day about the attitude of farmers to taxes. Nobody likes to pay taxes, but -whether a tax be good or bad, the citizen must pay it. If a man steals and is caught by the police, he finds himself in trouble. In this country the laws are made by a parliament elected by all - and must be obeyed by all. The law has conferred upon the people of Australia every right they possess. There are no such things as inherent rights. . The right to ownership of property, the right to protection against violence, and every other right that we have rests upon the rule of law, and, at the back of the law, there is the force of law-abiding people to compel obedience to the law. We all agree, I hope, that industrial peace is essential to the welfare of our country. I should lie bitterly disappointed if I. thought that even one member of the Opposition did not believe that industrial peace was essential to our welfare. Here we have a bill designed to improve our arbitration system. I cannot imagine a measure that could open the door more widely to those who wish to obtain speedy and peaceful redress of their industrial grievances. In the days before arbitration was established in Australia, industrial disputes were matters for negotiations between, employees and employers, and these were not always satisfactory. T remember well the aftermath of the great strike of 1890, when the workers on the waterfront were, figuratively speaking, at the bottom of the pit. The great strike had failed, but the grievances nf the workers remained unredressed. The unions, turning away from strikes, sought a remedy in the political sphere, as the result of the efforts of many earnest men who sought to make things a little better for the workers. Industrial Arbitration Courts and tribunals were established and clothed with authority to hear the parties to a dispute and decide between them. To the waterside workers of those days, present day conditions, providing easy access to the Arbitration Court and its subsidiary tribunals for the redress of grievances and adjustment to changing conditions, would have appeared to be a veritable millennium. Under the bill which the House is now considering, industrial justice will, be readily available to the workers. Disputes normally affect many unions ; some of them affect all unions. In my opinion, all unions should be consulted before a strike takes place. I should welcome a proposal that every industrial dispute should be referred to the Australian Council of Trade Unions upon whose shoulders the responsibility ultimately falls, before individual action is taken. The Australian Council of Trades Unions is asked to revive the dead, and to restore the paralytic to active life and so it should be consulted before action is taken. I am not so optimistic as to believe even for one moment that this bill is perfect, but at least it will eliminate some of the defects of the Labour Government's 1947 legislation. I support the bill. Mr.CLAREY (Bendigo) [9.42] ; - I am sure that all honorable members enjoyed the reminiscences of the right honorable member for Bradfield (Mr. Hughes) and listened attentively to the exposition of his philosophy on industrial relations. The right honorable gentleman drew upon his experience in order to submit what he considered to be helpful suggestions on the subject of arbitration, but I was disappointed by his final statement that he supported the bill. One or two important facts appeared to escape his attention. If I understood him correctly, he implied that, since 1947, when the system of conciliation commissioners was instituted, disputes had reached a record level in Australia and had seriously disturbed the national economy. I remind him that, in the days when he was prominent in industrial affairs, there were some big disputes that were more prolonged than have been those that have occurred in recent years. No doubt he will recall, in addition to the 1908 coal strike that he mentioned, the waterside workers' strike of 1917, which caused serious disturbance in all the ports of Australia, and the 1928 ,waterfront dispute, which tied up the same ports for many long weeks. May I remind the right honorable gentleman that he, in his time, experimented with the arbitration system, doubtless in the hope that he could improve it. In addition to the revolutionary change that he made in the arbitration legislation in 1920 by taking away from one judge the power to determine working hours, and placing that power in the hands of the Full Bench of three judges - an action which prevented the Chief Judge of the Commonwealth Arbitration Court at that time from giving a 44-hour week to the workers - he was responsible for the passage of the Industrial Peace Act in that year. The obvious intention of that legislation was to establish tribunals for various industries, with the purpose of achieving the very objectives that the 1947 legislation envisaged. I remind the right honorable gentleman that section 28 of the Industrial Peace Act contained the following words : - No order or award of a Special Tribunal or Local Board shall be challenged, appealed against, reviewed, quashed or called in question, or be subject to prohibition mandamus or injunction, in any Court on any account whatever. It is certain that, when the right honorable gentleman was the Prime Minister of this country, he rejected the views that he now supports. Mr. Holt.- He has learned by experience. Mr. CLAREY.- Since 1920, the experience of the right honorable gentleman has certainly not been on the industrial front, or concerned with the human beings to whom he referred in the very interesting reminiscences with which he regaled the House. I oppose the bill, first, because it will add to the already excessive legal machinery and cost of arbitration, and will accentuate the interminable delays that now characterize our arbitration system; secondly, because it will encourage rather than discourage strikes and industrial disputes;' thirdly, because it will destroy the confidence and goodwill that are essential to the smooth and successful functioning of an arbitration system; and, lastly, because it will weaken, not strengthen, our general conciliation and arbitration machinery. I agree with the right honorable member for Bradfield that, when we enter the field of industrial relations, we are dealing with the likes, dislikes, animosities and hostilities of working men and of those who employ them. When we are dealing with relations between men and men in industry, we are dealing with one of the most difficult problems that confronts modern society to-day. The whole history of the Commonwealth conciliation and arbitration legislation proves that it is a difficult problem. The powers of the Commonwealth with respect to industrial matters are limited. The Commonwealth Parliament cannot pass any law with respect to wages, working hours or conditions of employment. It can pass laws only with respect to conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State. Our jurisdiction is somewhat limited. If the Commonwealth conciliation and arbitration legislation is to be successful, certain conditions must be satisfied. First, we must have strong machinery; secondly, we must devise easy methods for the settlement of industrial disputes, because, without them, we cannot hope ever to achieve anything like good relations in industry; thirdly, we must instil goodwill and confidence in those who use the machinery that we establish because, without goodwill and confidence, arbitration machinery is incapable of functioning smoothly and fourthly - and I believe this to be the kernel of the matter - the system must be smooth, easily accessible, expeditious and inexpensive. If the machinery does not satisfy those requirements, we shall constantly encounter trouble in our efforts to do what the Constitution empowers us to do in relation to industrial disputes. The history of the Commonwealth conciliation and arbitration legislation is indicative of the difficulty which the Parliament has encountered in deciding the best methods by which to deal with this vexed problem. The first Conciliation and Arbitration Act was passed in 1904. Since then, no fewer than 27 amending measures have been introduced. This bill represents the twenty-eighth proposal to amend the act. Strange to relate, the present Government, in the two years during which it has been in office, has introduced more bills to amend the act than did any other government. It introduced two such bills in 1950, and two in 1951. This measure is now before the House, and already we have received an indication that the Government will propose further amendments of the act in the future. By this very bill, the Government is seeking to amend even some of the amendments of the act that were made last year. Let me return to a point that was made by the right honorable member for Bradfield. I agree that when we are dealing with industrial relations, we are dealing with human beings. One of my principal objections to this bill is that it does not take into consideration the effect that legislation of this kind has. on human relations. When human beings in industry find themselves in dispute with their employers, they are eager for the dispute to be settled quickly. At mass meetings called to deal with wages or working conditions, one always hears expressions of impatience if any delay occurs in settling the issues at stake satisfactorily and quickly. Those who have experience of the trade union movement and have addressed mass meetings of men and women who are on strike, or mass meetings called to discuss wages and working conditions, will agree with me that when men and women, in the mass, are dealing with an industrial problem which is causing them to be dissatisfied or discontented, they want the problem to be solved quickly. Most of the difficulties that arise in the settlement of industrial disputes are caused by inability to settle disputes quickly. Simplicity, expedition and easy accessibility must be features of any system of conciliation and arbitration for the preservation of good industrial relations. l or nearly 40 years I was engaged ir; endeavouring to settle industrial disputes and in safeguarding the interests of men and women members of organizations of which I was an official. That experience has taught me where the difficulties lie so far as the workers are concerned, and what is required to be done in order to solve the problems with which we are faced. The souls and opinions of men and women in the mass cannot be bound or governed by decisions made with respect to their conduct and actions when they are in dispute with their employers. When the Government recognizes that in these matters we are dealing with men and women who have all kinds of views, inhibitions, likes and dislikes, animosities, desires and ideals, and that we should try to meet them in accordance with the conditions of the moment, it will have travelled a long way along the road to a solution of the problem of achieving better industrial relations. I know of only one system of arbitration in Australia which complies with the requirements for the establishment of good industrial relations and the prevention of industrial disputes. It is the wages board system which has been in operation in Victoria for the last 60 years. At the present time, there are 200 wages boards in operation in that State. They deal with men and women, and boys and girls in industry. I suppose it is true to say that there are fewer strikes and fewer misunderstandings between employers and employees in Victoria than in any other State. The reason is that the arbitration system in operation in Victoria satisfies all the requirements for' the achievement of harmonious relations in industry. The system is a simple one, because, under a chairman, representatives of emplyoyers and employees can meet together, express their views and reach an understanding without difficulty. There are no volumes of written decisions which constitute some form of case law. The arbitration machinery in Victoria is readily accessible. A wages board can be called together by a telephone message, or by a letter sent through the post. The chairman of a board can summon the parties together immediately to deal with the question that requires to be considered. The Victorian arbitration machinery is inexpensive. Trade unions and employers' organizations are not involved in great expense when they appear before * wages board, as they are when they appear before a judge of the Commonwealth Arbitration Court or a conciliation commissioner. The members of Victorian wages boards,' who are chosen by the employers and the employees, are paid by the State. The Victorian system has, above all, the advantage of expedition. A wages board can sit at any time of the day or night. It can sit for as long as it wants to sit. It can remain in constant session. But, because a wages board consists of only a few members, and because the employers and employees, in conjunction with the chairman, decide the questions at issue, expedition in arriving at decisions is always achieved. When a vew determination is made by a wages board in Victoria, the board publishes a comprehensive document. When an employer or a worker consults a determination of a wages board, he has before him a complete and up-to-date statement of what the board has decided about wages, working conditions and other matters. I ask honorable members who have had experience in the Commonwealth Arbitration Court to consider what happens when they try to interpret an award of that court which has been subject constantly to amendment. I think they will agree that both employers and employees encounter the greatest difficulty in ascertaining their obligations and l ights under such awards. Mr.Holt. - Has the honorable member overlooked the fact that appeals may be made against determintions of wages hoards in Victoria? Mr. CLAREY.- I shall deal with that point later. In 1947, because there was a general desire to achieve simplicity, expedition and a reduction of expense in the settlement of disputes between employers and employees, the Conciliation and Arbitration Act of that year was passed. As one who has appeared before single judges, and before the full Arbitration Court, who has sat as a member of Wages Boards and has appeared before conciliation commissioners, I endorse the opinion that has been expressed by most union officials that the system of conciliation commissioners has worked very satisfactorily. The Minister for Labour and National Service has rightly pointed out that the Victorian wages board system incorporates appeals, but it is not the complicated, duplicated, triplicated and quadrupled system of appeal that is suggested by the Minister in this bill. An appeal may be heard upon a part or the whole of a determination, not by a Full Court of judges, but by a court consisting of one judge of the County Court of Victoria who has had indstrial experience and a representative of the employers and of the employees. One can safely say that, with the exception of one very big appeal in 1914 which concerned the Clerks Union of Australia and the matter of equal pay for the sexes, an appeal rarely takes more than a day or two days at the most to hear. Appeals are decided definitely and the parties know where they stand. What is the position in relation to this measure? Here I shall pause to comment upon a rather remarkable fact. The Government proposes to introduce a system of appeals for the first time in 48 years of experience of arbitration in the Commonwealth sphere. The remarkable thing is that, as the Leader of the Opposition pointed out, the jurisdiction under the act is divided into two groups. First there is the Full Court, the operations of which are limited. It has power to deal with the matters of hours, the basic wage for males and females, annual leave, sick pay and long service leave. Hours and wages are the foundational conditions of employment and of industrial relations throughout the Commonwealth. If the basic wage is too low and the working hours are too long, there is on the one hand a deterioration of the conditions of the mass of the workers who are placed on too low a level. On the other hand, if hours are excessive, people work too long in industry with resultant fatigue and the danger of unemployment if conditions become abnormal. Conciliation commissioners deal with the subsidiary things in industry. The Government proposes to grant an appeal upon the subsidiary things, but matters relating to hours and wages which could wreck industrial relations throughout Australia, are not to be subject to appeal. I do not know why that distinction is made. I remind the Minister who is in charge of the measure that it is not uncommon for an appeal to be made to the Supreme Court against the decision of one judge. It is not uncommon for an appeal to be lodged in the High Court against the judgment of several judges, or for appeals to be made to the Privy Council against the decisions of a. number of judges in the High Court. If the principle of appeals is correct in relation to the authority which fixes the subsidiary things in industry, it is equally good in respect of fundamental matters such as the basic wage and the standard hours of work in industry. I suggest further that this bill might be regarded as an effort on the part of the Government to get away from the sphere of conciliation and to concentrate more upon the sphere of arbitration. The Minister indicated that the Government intended to appoint two more Commonwealth Arbitration Court judges. I understand that there are two vacancies in the ranks of the conciliation commissioners, but that they are not to be filled. The settlement of subsidiary things in employment is not to be made easier ; it is to be made more difficult. That gives a clear indication of what will happen in the operation of this legislation. I say definitely and with all sincerity, that any actions which make this law more cumbersome, slow and difficult of function, will frustrate those who desire to get a decision on matters in dispute between employers and employees and are bound to increase industrial hostility in Australia. The effect will be bad for industry. It will not improve the machinery of the Commonwealth Arbitration Court. Mr. Holt.-Most of the strikes occur after the decisions have been given. Mr. CLAREY.- I disagree with that statement entirely. The current trouble on the waterfront was caused through frustration and delay. If Judge Kirby said, to-morrow that he was prepared to hear the marginal case of the waterside workers, the trouble would end. Mr. Holt.- Does the honorable member think that Judge Kirby could deal fairly with the application on margins without dealing with the rest of the case ? Mr. CLAREY.- Yes, it has been done before when a case was part heard. The Full Arbitration Court gave an interim decision on the basic wage in 1946 as the Minister well knows. The bill is a dangerous one in respect of its principal provisions. It will seriously damage the conciliation and arbitration machinery. In practice, it will engender among the unions a feeling of frustration, antagonism and hostility. It will be the cause of innumerable industrial disputes and will arouse the utmost bitterness in industry. Its defeat will bc in the best interests of Australian industrial relations. Mr. OSBORNE(Evans) [10.8].- The House should welcome this amendment of the Conciliation and Arbitration Act 1904-1951 as it will be welcomed in industrial circles throughout the country notwithstanding the statements of the Leader of lie Opposition (Dr. Evatt) and the honorable member for Bendigo (Mr. Clarey). The amendment is anxiously awaited throughout Australia because the system that was instituted in 1947 has broken down. The speeches of the Leader of the Opposition and the honorable member for Bendigo implied that the 1947 system is the best yet been devised, but I repeat seriously that it has broken down. It has foundered on the vital division of authority that was caused by sections 13 to 25 of the act of 1947 by which certain powers were given to the court and all other powers were, given to the conciliation commissioners. The basis of that division of authority was not logical and it could not work effectively in practice. This is " the jurisdictional dichotomy that was criticized by the Chief Judge in his last report and which was the fundamental flaw in the 1947 system. That flaw was observed by members of the Liberal party who were then in Opposition and they directed attention to it at the time. Every serious student of industrial affairs in Australia has seen it, and reference was made to it also by the Chief Conciliation Commissioner in his first report. This bill is a moderate attempt to deal with the worst features of the act of 1947. It is moderate because it makes only the minimum of alteration to the present act. For my part, I should like to have seen far more sweeping alterations proposed, but I think that the Government has gone out of its way to restrict itself te amendments that are aboslutely essential. Indeed, I believe them to be considerably overdue. For that reason I hope that the Opposition will give more serious and careful consideration to the bill than the two members of the Opposition who have spoken already appear to have done. The Opposition is opposing the bill. It decided to do so in Caucus. The Leader of the Opposition and the honorable member for Bendigo have said so in this House, but obviously they have nothing constructive to offer instead. The Leader of the Opposition has opposed the amendments, but he has offered no alternative nor has he answered the criticisms of the Chief Judge and of every industrial authority that has examined the existing division of power. It is not unnatural that the right honorable gentleman, who is the author of the 1947 act, should feel some resentment at the surgical treatment being given to his own brain child, but if he can put that feeling aside and examine the bill sympathetically he will realize that it is the logical answer to the problem. His argument is based on the belief that the conciliation commissioners perform only subsidiary functions, but under section 25 they are empowered to go to the very core of the whole industrial system. Margins, general conditions of employment, and the regulation of all industrial matters except the very restricted matters are mentioned in section 13, lie in the hands of the conciliation commissioner under the existing system. The right honorable gentleman admitted that very grave troubles have arisen over the Galvin award. His answer was to suggest that the Government should provide by legislation that conciliation commissioners must not take into consideration the effects of their awards on the national economy. When honorable members examine the matters involved in the Galvin award, they will understand how completely irresponsible is that suggestion. In the course of my two and a half years in this House, I have heard the right honorable gentleman say some strange things, but I have never heard anything quite so irresponsible fall from his lips as that suggestion. The claims in the metal trades' case which Conciliation Commissioner Galvin was asked to decide, would have involved the economy of the nation in the payment of not less than £150,000,000 annually, had they been granted. It is common knowledge that the automatic adjusting system is an important element in the present inflationary trend. I shall not discuss that aspect in detail. The right honorable gentleman should be grateful that under this bill the 1947 act is being altered only in minor aspects. If it lay in my power to do so, I should ensure that more sweeping alterations would be made. The honorable member for Bendigo summarized his objections to the bill under four headings, which I propose to answer categorically. He said that the introduction of an appeal from an award of a conciliation commissioner will encourage excessive legalism, increase -the costs of arbitration and cause serious delays. That contention cannot be substantiated. The honorable member has assumed that because the 1947 act did not permit an appeal from an order of a conciliation commissioner it meant the end of all legal disputes over such orders. I am sure that the honorable member knows that nothing could be further from the truth. The Chief Judge in his last report referred to this in the following words : - During the year under review the difficulties attending the application of sections 13 and 25 have been growingly apparent. Those are the sections which cause the division of authority between the conciliation commissioners and the court - My own view is that some further thought should be given to the legislative system set up by the 1947 amendment. In this connexion, I am bound to say that recourse by the Commissioners to section 10 sub-section (2.) is of limited value. That section empowers the conciliation commissioners to ask the court for advice upon certain matters. For the opinion of the Court upon questions of jurisdiction cannot be final, the prerogative writs of prohibition and mandamus being always ultimately available in cases where, in the opinion of the High Court, they should go. I ask the honorable member for Bendigo to listen carefully to the following extract from the Chief Judge's report: - I discern a tendency on the part of the parties concerned to postpone challenges to jurisdiction until after an award or order is made or refused and then to move the High Court on the matter. Thus, instead of appeals from orders of conciliation commissioners, one application after another has been made to the High Court for writs of prohibition or mandamus. The honorable member for Bendigo knows that such procedures are slower, more expensive and more provocative than appeals from orders of conciliation commissioners to the court could possibly be. The Opposition's assumption that the 1947 act would reduce legalism in arbitration has been proved completely wrong. In fact, the degree of legalism has been increased as a result of that act, because disputes now occur constantly over jurisdiction between the conciliation commissioners and the court, and such disputes, under the present system, must go to the High Court by way of writ. Although the community generally realizes the fact, the Opposition will not concede the fact that the 1947 system has broken down. Many members of the Australian Council of Trade Unions favour the introduction of this measure. But, of course, we could not expect the Opposition in this House to give official approval to any sensible measure. The duty of settlement of disputes is divided under sections 13 and 25, between the court and the commissioners, but every dispute of any importance involves matters, some of which lie under section 13 and are referable to the court whilst others lie under section 25 and are referable to the conciliation commissioners. Consequently, every dispute of any consequence has to be decided partly by the court and partly by the conciliation commissioners.Yet, honorable members opposite claim that the 1947 act streamlined arbitration. It has done nothing of the sort. On thecontrary, it has led to endless delays and. disputes. Whilst the court is charged with the responsibility of determining mattersthat relate to standard hours, the basic wage, annual leave and sick leave, all1 other matters, including margins, are the responsibility of the conciliation commissioners. But margins are an essential part of the total wage bill of the community; and, at a time when it is clearly recognized that the wage-fixing system exerts considerable influence upon the present inflationary trend, this division is obviously detrimental to Australia's economy. From the stand-point of the national interest, it is just as impracticable to draw a line between the margins and the basic wage as it is to make workable a system under which only conciliation commissioners are empowered to settle one part of a dispute whilst the court is empowered to settle the other part of it. Consequently, there is constant litigation over jurisdiction by way of High Court prohibition. Litigation has not decreased, but has increased, under the 1947 system. Un- ' fortunately, it is impossible to achieve uniformity in decisions of conciliation commissioners. Proof of that fact is to be found in the contradiction between the Galvin award and the Findlay award. Whereas Commissioner Galvin decided that, in the interest of the national economy, he could not grant an increase of margins in respect of the metal trades, Commissioner Findlay decided to increase by 15s. the margin applicable in the Australian Capital Territory. A system that permits such a position to arise must cause grave dissatisfaction in trade union circles. The worst feature of the existing system is that it makes no provision for and single authority to consider the effect of any increase of the total wages bill upon the national economy. At present, the court determines the basic wage on the principle of the ability of industry to pay; and the conciliation commissioners are then called upon to determine margins for each industry, but their decisions are not uniform and there is no means of reaching uniformity. The Galvin award shows clearly that the 1947 system has broken down. In 1950, the basic wage was increased by a substantial amount, and in 1951, when economic conditions in this country had changed completely, Conciliation Commissioner Galvin, when called upon to make a decision upon a claim that would involve an increase of the national wages bill of £150,000,000 annually, was obliged to say that in his opinion the country could not afford that increase. It is generally conceded that what is needed in this country is a. further inducement to the gaining of skill in industry, but Mr. Galvin found himself in the dilemma that he had either to refuse to make an award that would preserve the relative margin between the basic wage and payment for skill, or make an award which, clearly, would be contrary to the national interest. The existing system offers no satisfactory answer to that dilemma, and, strike after strike has occurred throughout the country. I need only remind honorable members of the present ban on overtime on the waterfront, the involved series of strikes that has occurred at Port Kembla, and the action of the Moulders Union, which has reduced the output of castings in foundries in New South Wales. Yet, the Opposition would leave the situation as it is.- The only suggestion that honorable members opposite have advanced is that conciliation commissioners should be prevented from considering the effect of their awards on the economy. I repeat that such a suggestion is irresponsible. Mr.Luchetti. - Should not uniformity be maintained between the decisions of conciliation commissioners ? Mr. OSBORNE.-Yes; and that is one of the purposes of this bill. That objective will be achieved by the only effective judicial process of allowing appeals to a higher authority. Such a right of appeal would ensure that the decisions of one conciliation commissioner would conform with corresponding decisions of others, and that logical relationship exists between the awards of all conciliation commissioners would be observed. Mr.Luchetti. - Will not the court be cluttered up with appeals as a result of the passage of this measure? Mr. OSBORNE.-No; because in every instance an appeal can be made only with the approval of the Chief Judge who, under the bill, will be directed to consider whether the matter involves only the national interest. Consequently, the Chief Judge will ensure that only matters involving questions of principle will be referred to the court. At the same time, conciliation commissioners will continue to deal with subsidiary matters. Every modern society is engaged in a search for a system to maintain law and order in industry and different methods are chosen in different countries. For instance, the United States of America has evolved the collective bargaining system. In Australia, we prefer the system of judicial arbitration. I am content, for the purpose of this debate, to start with the premise that the judicial system is best suited to Australian conditions and needs. But if it is to be continued, then the manifest faults of the present system must be removed. I consider that this system of appeals will do so. The last two speakers on the Opposition side have both suggested that the appeals will be involved and. difficult. The contrary will be the case. It will be simple and extremely flexible. There are four circumstances in which appeals may be allowed ; but they are not cumulative, they are alternative. That fact has been deliberately overlooked by the Leader of the Opposition in his criticism of the bill. The safeguard to which I have already referred is the power of the Chief Judge to allow, or disallow, an appeal "in the public interest ". The House can be confident that the safeguard will be effective. A real ground for criticism of the bill, if such criticism is required, is not that it introduces radical alterations of the arbitration system, but that it does not go far enough. I believe that it will ultimately be necessary to place under a single authority the whole responsibility for the arbitration system. That authority must, of course, be the Full Court, and it could be given authority to hand down its powers to single judges and to conciliation commissioners as it considers fit. Such a system will have to be ultimately evolved, because even with the appeal provisions in operation jurisdictional disputes can still arise. However, the bill is at any rate a definite step forward. I have been content to deal with it in general terms, and have not gone into detail, but there is one matter of importance that arises from the Minister's speech with which I wish to deal. I refer to the indication he has given to the House that the Government intends to appoint to the Commonwealth Arbitration Court two more judges in order that two full benches, with one judge to spare, will be available at any time. I suggest to the Minister and the Government that they should give serious consideration to appointing both additional judges from the New South "Wales bar, for the reason that, of the five judges who form the court at present, three reside in Melbourne, one in Adelaide, and only one in Sydney. The place of residence of members of the court, quite naturally, and not improperly, has an effect upon decisions on where the court shall sit. Mr. ClydeCameron. - It should not have such an effect. Mr. OSBORNE.-The Commonwealth Arbitration Court rarely sits in Sydney, which is the principal industrial centre of . this country. But if a bench of three judges resident in Sydney were available, we should find that industrial disputes that arise in New South Wales would be heard more frequently in New South Wales than is the case at present. Mr. ClydeCameron. - Why should not the judges go where their work takes them? Mr. OSBORNE.-If the court were to sit more in Sydney delays in the hearing of New South Wales cases would be less frequent than they now are. If the honorable member for Hindmarsh wants an answer to his question, I suggest that he ask the judges. I am not responsible for their movements but T suggest that the system would be improved if a full bench of judges were available in New South Wales. I do not pretend to be entirely satisfied with the alterations to the system proposed in the bill. I believe that, sooner or later, far more sweeping changes will be required. I also believe that ultimately the whole authority for wage fixing, and the arbitration system generally, will have to be vested in the court. I hope too that at some time in the future our legislation will give a clear definition of the functions of conciliation and arbitration, which are essentially different and cannot, I believe, be effectively discharged by the same person. I hope to see in the future a group of conciliation commissioners who will be able to conciliate without being burdened with the knowledge that, if any of the parties disagrees with their decisions, they will ultimately become arbitrators of the matters upon which they have failed to achieve conciliation. The task of conciliation is rendered almost impossible at the outset when the parties know that the conciliator may be called upon to become an arbitrator on the matters upon which they cannot agree. This bill is an important forward step, as well as a moderate step. It will make the least possible alteration to the existing law. I trust that other speakers on the Opposition side will examine it in that spirit. The greatest need to-day that the arbitration system must meet is the introduction of the democratic rule of law in trade union affairs, the creation of the state of affairs in which orders and awards of the courts will be respected and obeyed, and the development of a system under which one authority will be ultimately responsible for the economic effect of the wage-fixing system. The present automatic system, has no cushioning effect in times of inflation or deflation and should be reviewed. I believe that this bill will bring the solution of those problems much nearer than the 1947 system did, and to that extent it deserves the serious consideration of the House. Mr. BIRD(Batman) [10.36].- The honorable member ' for Evans (Mr. Osborne) said in his opening remarks that this amending legislation is being anxiously awaited throughout' the country. It is apparent from that remark that the honorable member has a limited knowledge of the attitude of the trade union movement to the bill. The only people who are anxiously awaiting the operation of the legislation are the employers' organizations, because on the 16th April they made a direct approach to the Minister for Labour and National Service (Mr. Holt) and suggested a drastic alteration of the existing law. It appears that the Minister is carrying out their request. I shall prove definitely that the trade union movement is totally opposed to the proposals contained in the legislation. The arbitration system is of such great importance that any proposed major alterations of it should be carefully considered and not hastily put into law. It appears that speed is of the essence of the Government's approach to this measure, and that the Parliament will not have adequate time to discuss it at length. The field covered by the . Commonwealth Arbitration Court is so widespread that its ramifications extend to every nook and cranny of our industrial life, and its decisions are of such vital importance to the living standards of the people that its powers should be exercised most carefully, because any breakdown in the system could have a deleterious effect on the nation's stability. One of the supreme aims of the system, as it now exists, is to maintain confidence in itself among the people, and to make sure that that confidence shall not be jeopardized or undermined because of any discontent that may be caused by ill-advised changes. As the honorable member for Bendigo (Mr. Clarey) has pointed out in his admirable speech, our arbitration system has been in existence for 48 years, and during that period has been the subject of 26 amending bills. It is generally admitted that, prior to 1947, serious discontent with certain provisions of the then existing law was apparent. In fact, as a former worker in the metal trades industry, I know that there wa3 great resentment among large bodies of trade unionists with the operation of the provisions of the act. It was fast becoming apparent to the Chifley Government, in that year, that if it wished the working class to retain confidence in the court system, some far-reaching changes had to be effected quickly. Prior to 1947 vexatious delays were the order of the day. I remember, as one who took' part in the 1946-1947 metal trades disputes, that what annoyed the members of the Amalgamated Engineering Union was the inordinate delay that occurred before they could have their claims heard by the court. As a result of that delay, we first had a lockout, and then a strike that lasted for five or six months. In the 1947 legislation the Chifley Government recognized the inequalities and injustices that were possible under the then existing law, and provided for the appointment of conciliation commissioners with untrammelled powers in specified spheres, which included the power to intervene in any impending industrial dispute. They were also given power to make orders and awards from which no appeal was allowed. The court itself was left with four matters under its jurisdiction. They were : standard hours of work in industry; the basic wage, and the principles on which it is based ; annual leave with pay; and the minimum rate of pay for adult female workers. Despite the statements of honorable members opposite, the present system has given general satisfaction, and we should not be stampeded into altering it as a result of any temporary dissatisfaction. We should, instead, keep its beneficial results in our minds, and any readjustments that may be contemplated should not be carried to the point at which confidence in the system, as well as the system itself, will be weakened. Statistics show that in the first six months of the system's operation in 1947, streamlined conciliation dealt with more than 500 industrial cases, in only five of which were the commissioners' rulings flouted. It is safe to say, therefore, that the number of cases that are agreed to without dissension is far in excess of cases in which dissension has resulted and which have evoked adverse comment against the system. It is possible to cite a number of cases in which employer and employee organizations have expressed disapproval of the decisions that have been given, but such disapproval does not occur only in relation' to decisions of conciliation commissioners. Similar disapproval of verdicts is met with in every avenue of British law and jurisprudence, including criminal cases, because there are always people who say that the verdicts of judicial authorities are incorrect. That does not mean that we should be stampeded into altering our present British system of criminal law. We have no guarantee under this measure that the right of appeal that is proposed to be incorporated in the conciliation commissioner system, will lead to any abatement of dissatisfaction with the decisions of conciliation commissioners. Appeals are frequently decided against the parties that lodge them. The Government has apparently reasoned, however, that because a number of disputes has arisen from a conciliation commissioner's decision,- had the right of appeal from that decision existed at the time when the decision was given the disputes would have been avoided. It has seized upon the objections to the Galvin margin decisions, as a reason for changing the system so as to provide for the right of appeal from the decisions of commissioners. There is absolutely no certainty that, had the right of appeal existed when the Galvin decision was given, the subsequent verdict of the Full Court on the appeal would have given to the trade unions any more satisfaction than they derived from the Galvin decision. The Government's approach to this amending legislation has been ill-advised. I shall give my reasons for that statement. The primary purpose of any arbitration system is to ensure the pacific and smooth working of the relations between the two main partners in industry. The spirit of co-operation must be preserved at all times and under all conditions. If that is the central theme of our arbitration system, surely it should be borne in mind when the Parliament considers legislation to amend the industrial laws. If the intentions of the Government are sincere, why does it press on with the bill without having consulted one of the great partners in industry, the trade union movement? It appears to me that those intentions are suspect. The Government is skating on thin ice. The Minister stated categorically in his speech - No specific recommendations have reached me officially from the Australian Council of Trades Unions . . but individual unions have from time to time officially asked this Government to provide a system of appeals. At that stage the honorable member for Bendigo (Mr. Clarey) interjected, " How many unions ? " The Minister replied vaguely that three or four unions had asked the Government to provide a system of appeals. I remind the honorable gentleman that many unions are registered with the Commonwealth Arbitration Court. Recently, after the employers had made a united approach to the Government for drastic revision of the present act, the Australian Council of Trades Unions convened a federal conference of unions to discuss the position. Seventy-two industrial organizations were represented at that conference. I remind the Minister that we live in a society in which the decision of the majority prevails. Because there are two or three disgruntled people in an organization or institution, it does not mean that they represent the majority point of view. The conference convened by the Australian Council of Trades Unions made a most constructive approach to the matter of improving the present arbitration system. The Labour party does not suggest that the present system is perfect, and believes that it is capable of improvement in certain respects, but we contend that the Government, before it attempts to amend the act, should confer with and obtain the views of the trade union movement. The Minister, on his own admission, has not done so. The conference of trade unions, which I have mentioned, appointed a committee of eleven persons to act with the permanent officials of the Australian Council of Trades Unions in an examination of the whole working of the Conciliation and Arbitration Act, the conciliation commissioner system and the powers of the Industrial Registrar. That committee is now considering its report. Specific, recommendations will be submitted to another conference of trade unions for ratification, amendment or objection. "When finality is reached on those recommendations, the Australian Council of Trades Unions intends to submit to the Government considered reasons why the act should be amended in the directions advocated by the trade union movement. The Australian Council of Trades Unions has not yet had an opportunity to present those proposals to the Government. Yet, the Minister is pushing ahead with the bill, in steamroller fashion, after having heard the views of only one of the partners in industry, namely, the employers. While the committee is considering its recommendation for an improvement of the act, the Australian Council of Trades Unions has, in a very reasonable manner, requested the Minister to delay the passage of the bill through the Parliament. Apparently the Government is not prepared to heed any protestations and the bill, I understand, will be pushed through the House in two or three days. The views of the Australian Council for Trades Unions are being flouted. The opinions of the large and influential Australian Workers Union have also been disregarded. That organization has always demonstrated its loyalty and adherence to the arbitration system, yet it has not been given an opportunity to assist to improve the Conciliation and Arbitration Act. The Government, if it wishes this bill to function smoothly, must have the support and co-operation of the Australian Council of Trades Unions and the Australian Workers Union, which represent the organized trade union movement in the Commonwealth. I suggest that the Government, if it sincerely desires peace in industry, should stay its hand, and confer with the Australian Council of Trades Unions and the Australian Workers Union, and hear their suggestions for improving the act. The Government should give a lead, and manifest a spirit of conciliation, if it genuinely wishes to evolve a system of arbitration that will rightly place prior emphasis on the principle of conciliation when parties are seeking a peaceful settlement. The proposed amendments to the act must be acceptable to the trade union movement if the arbitration system is to yield better results than it has yieded in the past, but under present conditions the legislation will start from behind scratch, and I cannot conceive by any stretch of the imagination that the amendments will be successful in their application to industry. I suppose that we have been experiencing industrial unrest for as long as we can remember. In the present period of industrial unrest, the Government, if it sincerely desires more amicable relations to exist in industry, will be well advised not to foist something upon the trade union movement until the views of the workers have been obtained. The Minister should have a round-table conference with the people whose cooperation he must have in order to make the bill work smoothly. The confidence of those who use conciliation and arbitration is vital to the success of peaceful bargaining; but, unfortunately, the Government is not encouraging that confidence. The Australian Council of Trades Unions has always shown a sense of responsibility, and sobriety of judgment, when dealing with matters of this kind, but the Minister, for reasons best known to himself or to the Government, has ignored the Australian Council of Trades Unions and the Australian Workers Union. I do not know whether the Minister or the Government is the real culprit in this matter, but the result will be to irritate the whole trade union movement to such a degree that the bill will become unworkable. The representatives of the 72 unions who attended the federal conference convened by the Australian Council of Trades Unions were almost unanimous in their opposition to the bill. During the general debate, one or two delegates expressed an opposing view, but the vote against the legislation was practically unanimous. That fact should influence the Government to stay its hand. But honorable' members opposite are trying to convince themselves, although they have not succeeded in convincing any one else, that a large section of the trade union movement is in favour of the bill. Government supporters aver that, under the existing act, too much power is invested in a conciliation commissioner. Yet this bill imposes tremendous responsibility on the Chief Judge of the Commonwealth Arbitration Court in relation to appeals. The Minister in his second-reading speech made the following statement on that matter: - First, an organization or person bound by an award made by a conciliation commissioner will be able, within fourteen days after the date of the award, to apply to the Chief Judge for leave to appeal to the full Court against the award. If the Chief Judge grants leave, the Full Court will hear the appeal. The Minister proceeded as follows : - Second, let us take the case where an industrial dispute is before a conciliation commissioner and one or more of the parties desires lo have the matter determined by the Full Court. The commissioner may, upon application by a party, if he. is of opinion that the dispute is of such importance that it should, in the public interest, be dealt with by the court, refer the dispute or part of it to the Full Arbitration Court. He must, first, however, have obtained the concurrence of the Chief Judge. Thereupon the Full Court will deal with the matter. Third, if a conciliation commissioner rejects the application, the party aggrieved by the commissioner's refusal can appeal to' the Chief Judge. If the appeal is upheld, the matter will go to the Full Court. The Chief Judge is to be given much greater power than is vested in a conciliation commissioner at the present time. The decision of the Chief Judge in respect of granting leave to appeal must be determined by the matter of public interest. I have taken a great deal of interest in decisions of industrial tribunals in recent years, and I have noticed that an acute division of opinion has always existed among Their Honours about what constitutes "in the public interest". Yet the Government proposes to allow one man to decide such a vexed question. A case may be taken out of the jurisdiction of a conciliation commissioner in any of the three different ways that I have mentioned. The result will inevitably be that conciliation commissioners will be in a state of perpetual uncertainty about their position. If the Chief Judge allows too many appeals, the system will suffer, because the confidence of the trade union movement in arbitration will diminish. It will appear to unions that the card: are stacked against them, and they will resort to other methods in an endeavour to have their claims adjusted. Inciden tally, the lack of confidence will certainly assist the Communist elements in the unions. The Commonwealth Arbitration Court will be clogged with disputes, hearings will be constantly interrupted, and heavy costs will be incurred by the unions. Those matters were the evil characteristics of the arbitration system prior to 1947, and this bill, if it becomes law, will reintroduce them. There will be costly litigation and endless delays, and the working class will become sullen and discontented with the functioning of the court. If the Chief Judge makes decisions on narrow legal grounds, the freedom and independence of conciliation commissioners will be severely restricted, if not completely lost. But the freedom and independence of the conciliation commissioners have been responsible for their undoubted success to date, and any proposal that seeks to dilute that freedom and independence must be regarded by the trade union movement with the greatest suspicion and mistrust. The Minister, in his second-reading speech, has advanced a number of reasons why the present set up is unsatisfactory, and should be altered. I shall refer to a few of those reasons in order to expose the weakness of his case. He made the following statement: - It is no reflection upon any Conciliation Commissioner to say that it is quite unfair to place on the shoulders' of any one man the sole responsibility of making a decision which can have far-reaching effects on the national economy. . . . Yet the Minister proposes to transfer that individual responsibility to the Chief Judge of the Commonwealth Arbitration Court. His argument is untenable. He continued as follows: - It is quite impracticable to approach the settlement of industrial disputes on a rule of thumb or expediency basis. The record of successful settlement under the existing act proves that the statement of the Minister is entirely without foundation. On-the-spot decisions, with a minimum of delay and legal formality, have produced a great measure of success. But many important determinations may be described as the result of rule-of-thumb or expediency methods. The Minister proceeded - Lack of consistency as between decisions of individual conciliation commissioners can itself be just as provocative of industrial trouble as delays in dealing with disputes. Uniformity in industrial relations can cause just as much dissatisfaction and discontent as apparent inconsistency. Gains in one direction can be offset by losses in another direction. Any one who has had experience in industry knows that that statement is true. The Minister continued - The very division of responsibilities between the Court and the conciliation commissioners has provided a feast for the lawyers. Technicalities concerning questions of jurisdiction abound in the present setup. Surely the Minister does not contend that lawyers will suffer the pangs of starvation if this bill becomes law. I forecast that there will be costly and endless litigation. The legal fraternity will enjoy a monetary feast, and unions will be crippled financially. The Minister also stated - These very legal problems have themselves caused delays in the settlement of industrial disputes. For every matter delayed under the present system there have been a hundred disputes settled speedily. I suggest that that has been possible only because of the present system. There have been one or two delays in settling some matters, but they have been exceptions. Numerous disputes have been settled on the job to the complete satisfaction of everybody, and the commissioners have ensured the smooth running of industry. We do not hear much about that. All that we hear about are the few cases that have been held up on technicalities. I warn the Government that it is most probable that this legislation will weaken our arbitration system. I believe that if the bill becomes law the conciliation commissioners will be filled with a sense of hesitancy and reluctance about settling disputes, because they will envisage eventual interference by the Full Court. Too frequent interference with their duties will give them an inferiority complex which will have disastrous effects on the arbitration system as a whole. This measure could well become a classic example of throwing away the substance for the shadow. If the Minister for Labour and National Service is sincere, and I think that he is, then he should defer further consideration of this measure until he has had an opportunity of discussing its implications with the Australian Council of Trades Unions and the Australian Workers Union, with the object of arriving at an agreement that will give mutual satisfaction to all the parties concerned. Debate (on motion by Mr. Joske) adjourned. ADJOURNMENT. Impost Restrictions - Security - Public Service - Communism - The Parliament - Dr. John Burton - Cabinet Decisions - Oilfrom Shale. Mr. ERICJ. HARRISON (Wentworth - Vice-President of the Executive Council and Minister for Defence Production) [11.2]. - I move- That the House do now adjourn. The honorable member for Hoddle (Mr. Cremean), in speaking on the motion for the adjournment of the House last Tuesday, quoted from a letter that he said he had received from an unnamed person residing at 39 Councilstreet, Clifton Hill, Victoria, in which the writer accused the Department of Trade and Customs of bungling and frustration in relation to the provision of surgical equipment for his treatment when he was a patient in the Royal Melbourne Hospital. The honorable member for Hoddle accused the Government of jeopardizing human life. I referred the honorable member's complaint to my colleague, the Minister for Trade and Customs, and, as I thought at the time, the position is not as stated by the honorable member for Hoddle. The facts are that a Melbourne firm applied for a licence to import some laryngeal core moulds from the dollar area having a c.i.f. & e. value of £18. The application was approved and licence number 129,300 was issued on the 8th November, 1951, to the firm in question. It was discovered shortly after the licence was issued that the particular goods were not then available. When all dollar licences were recalled for review on the 21st March, this particular licence was included with quite a number of others handed in by the licensee for review. No particular comment was made about the urgency of the case nor, it is understood, was any evidence submitted to indicate that the goods were then available for shipment. A cabinet committee, on the 8th May, considered the report of the inter-departmental dollar committee on the recalled dollar licences and gave certain directions which were communicated to the Collector of Customs, Melbourne, on the 9th May. In accordance with those instruction, the particular licence could have been revalidated had the licensee submitted the information requested at the time the licences were recalled for review. It will be seen, therefore, that the goods could have been imported into Australia at any time between the 8th November, 1.951, and the 21st March, 1952. when the licence was recalled for review. If the goods had been in transit on the 21st March, the licence would have been automatically confirmed under instructions given at the time the review was called for and if, subsequent to the. 21 st March, evidence of availability and early delivery had been presented to the department by the holder of the licence, the licence would have been immediately confirmed. This is only one case of many in which the Department of Trade and Customs has been blamed - on this occasion in most violent terms - when the fault has rested, elsewhere. The responsibility for initiating any action in connexion with a licence rests with the holder of the licence, and if the holder neglects to take appropriate action the Department of Trade and Customs cannot be held responsible. It is worth noting that the honorable member for Hoddle said that he had taken the precaution of checking his constituent's remarks, am i that every one of them was correct. I invite the House to contrast this statement of the honorable member for Hoddle with an article in to-day's Melbourne Sun-News Pictorial headed, "Import Cut danger to patient's life ' rubbish' ". In this article, the Royal Melbourne Hospital Superintendent, Dr. J. H. Lindell, is reported as having said that the suggestion that a man's life had been endangered by import restrictions was rubbish. The. article reads - Dr. Lindellsaid last night that the import of surgical tubes had not been hampered by either the Customs Department or lack of finance. The use of locally manufactured tubes would not affect the patient's progress. American tubes, which are made of rubber, arc merely more comfortable than the local tubes, which are made of metal. The question of finance, which was raised in the House, was never a problem to us. The patient was asked, as is normal, if he could afford to pay for the tubes. At the same time we applied through Customs for an import licence. We then learned that the U.S.A. firm which makes the tubes had a two-months delay on orders. Far from hindering us, the Customs Department at all times gave us every help. The whole of Mr. Cremean's story is rubbish. This is yet another example of an honorable member of the Opposition rushing in to gain political capital by criticizing the Government and making wild charges without first making any real effort to ascertain the facts. The statement that he had checked his charges and had found them to be correct must have been complete nonsense, and a deliberate attempt to mislead this House and the country. Unfortunately, this is another case where a mis-statement has got a long start on the truth and can never be overtaken. It is another example of how. in order to gain political advantage, every means will be used by the Opposition. Mr.WARD (East Sydney) [11.9].- I am anxious to have elucidated a statement that was- made recently by the Minister for External Affairs (Mr. Casey) regarding an alleged leak of confidential information from his department. The Minister, when stating that a leak had occurred, mentioned also that the Government knew that there was a nest of traitors in the Public Service. A leak can occur through one member of the Public Service, but evidently the Minister has proceeded with his inquiry far enough to believe that more persons in the Public Service are acting in a traitorous manner. If that is so. then the Government should be assisted to do everything possible to get rid of persons who might be regarded as acting in a traitorous manner to Australia. However, my information is that the statement that appeared in the Communist newspaper Tribune did not appear there as the result of a leak from a department, hut as the result of an ordinary hand-out. Certain newspapers that have reported this incident have endeavoured to create the impression that the information published was of great national concern, and that its publication actually endangered security, when, according to the Minister, merely a trade agreement, which had been drawn up on similar lines to many others that have been entered into with other countries, was referred to. There was nothing of a vital security nature in it. If it was a Commonwealth secret document, about which some information leaked out and was published in the Tribune, I ask the Minister whether that newspaper has not committed an offence by using information that came to it, according to the Minister, through a leak from the Public Service? If so, why has not the Government taken action against the people who publish the newspaper? I think that the Minister's statement was made for political purposes, and the real test of his sincerity is the action he proposes to take. What action has he taken to get rid of the nest of traitors that he says is to be found in the Public Service, and what action has the Government taken against the Tribune for publishing information of a secret and confidential nature? Another matter to which I wish to draw attention, is the unsatisfactory statement made on the 28th May by the Postmaster-General (Mr. Anthony) about the tapping of telephone lines in Parliament House. The Minister said, in reply to a question asked by the honorable member for .Herbert (Mr. Edmonds), that this was merely a routine check and that officers were tapping the lines to test the loading into and out of Parliament House to discover whether the lines were capable of carrying the business. That does not appear to be a satisfactory explanation, because I have had a discussion with postal officials who have told me that there is no necessity to tap telephone lines to test load capacity, especially where they are . operating through a manual switch. In that case the operator on duty knows the number of calls that have passed through the switch. There is no need for special tapping of telephone lines and listening in to the conversations of honorable members in order to determine the requirements of the service. I should like a more satisfactory statement to be made by the Minister about why the tapping of the lines occurred. I have been assured by certain postal officials that the volume of business being carried can be ascertained without, tapping the lines at all. Since the honorable member for Herbert raised this matter, I have recollected that at one time I had a suspicion that my own telephone in Sydney was being tapped. Postal officials have told me that when a telephone line is being tapped there is >i loss of current, a fading of the voice and a clicking. I was having a conversation with the honorable member for Hindmarsh (Mr. Clyde Cameron) on one occasion when he was in Adelaide and I was in Sydney. At that time both he and I became aware that there was some one listening, and that some one appeared to be tapping the line. Honorable members opposite may think that this is a laughing matter, but it is really a very serious matter when telephone services are being tapped. Let the Minister for External Affairs deny that during the period of the antiCommunist referendum campaign honorable member's telephones were being tapped and tape recordings were being made of their conversations by the Commonwealth security service. If the Minister ridicules the idea that such things can happen, I tell him that, when the Labour party was in power during World War II., Army security authorities listened in to certain telephone conversations of one of my colleagues in the Cabinet. That member of the Labour party holds a letter in which the late Field-Marshal Sir Thomas Blarney expressed regret that the Army security service had listened in to his telephone conversations. Honorable members will realize, therefore, that such things can happen. It is not a laughing matter, as some Government supporters seem to think. It is extremely serious that members of the National Parliament cannot hold telephone conversations without the risk of security officers and others listening in, and even taking recordings of their conversations. I understand that a tape recording was made of a telephone conversation between another prominent member of the war-time Labour Government and his secretary in Sydney. We want the Postmaster-General to give a better explanation of the tapping of telephones in Parliament House than he has given so far. In fact, since I raised a certain important matter in this House not long ago, I have noticed that the telephone service to my home is not so satisfactory as it might be. Government supporters interjecting, Mr. WARD.- That is true. The Government would be delighted to learn who gave me certain information from the Department of Trade and Customs. But it will never know, because- Mr. Beale.- Because you invented it. Mr. WARD.- Because I knew what had happened to my colleagues. I would never be so foolish as to mention names in connexion with such a serious matter in the course of a telephone conversation. The Minister for Supply (Mr. Beale) has said that perhaps I invented the information. In fact, I have obtained from the Prime Minister (Mr. Menzies) an admission that there was a leak from the Department of Trade and Customs. The right honorable gentleman said that inquiries were still proceeding into one aspect of the matter that I raised^ and that matter is the leakage of the information from the department. If the information that I gave to this House was untrue, obviously there was no leak. If it was true, as the Prime Minister has admitted, a leak occurred. Finally I ask the Minister for External Affairs to explain why no action has been taken against the newspaper that published the confidential and secret information that he mentioned. Also, I want to know why telephone line3 in Parliament House have been tapped. This matter does not affect the Postmaster-General alone, because the tapping of telephone lines is not necessarily carried out by officers of the Postal Department. I want to be informed by the Minister who is responsible for the administration of the security service whether there has been any tapping of lines used by members of this Parliament. I am sure that my colleagues agree that, up to date, we have not heard a satisfactory reply from any Minister to the allegation that was made by the honorable member for Herbert. Mr. CASEY(La Trobe- Minister for External Affairs) [11.18].- The honorable member for East Sydney (Mr. Ward) has raised for the third time the subject of the grievous leakage of confidential information to the Communist newspaper, the Tribune, which reflects a lack of integrity on the part of some individual in the Public Service. He wants to know why the Government has not discovered how the leakage occurred. As the honorable gentleman should realize, perhaps from the depths of his own experience, some facts are very hard to prove, although they are patently true and are common knowledge. I believe that the honorable gentleman will realize the strength of that statement if he casts his mind back over the arches of the past. Another fact is clear in this instance. It is obvious to every honorable member that, whenever a Communist is in need of protection, he can be very sure of the individual in this Parliament who will rush to protect him. Mr. Ward.- I ask that that statement be withdrawn, Mr. Speaker. I am concerned with the facts and with the dispensation of justice, but with nothing else. Mr. SPEAKER.-The honorable member has asked that the statement be withdrawn. Mr. CASEY.- With great respect. Mr. Speaker, I shall not withdraw it unless you direct me to do so. I merely stated a matter of fact. We have had experience in this Parliament time and time again- Mr. SPEAKER-Order!The right honorable gentleman should know the rules of the House. The honorable member for East Sydney has asked that the statement be withdrawn. He has not said that it is offensive to him, but I assume that is what he meant, and the rules of the House oblige me to ask for its withdrawal. Mr. Beale.- I rise to order, Mr. Speaker. You gave a ruling on this matter recently, and I agreed with it heartily. I understood that your ruling was that you would judge objectively whether or not any statement was offensive. On that ruling, I submit with respect that there was nothing offensive about the Minister for External Affairs inviting the House to draw an inference from a set of facts. Therefore, I submit that you should not ask him to withdraw the statement. Mr. Osborne.- I, too, refer to your ruling on this matter, Mr. Speaker. You said that it was clearly the function of the Speaker to decide what constituted offensive or unparliamentary language. I understand that the whole purpose of your ruling was to overcome the difficulty, about which complaints had been made, that any honorable member could object to any statement as being offensive, demand its withdrawal, and have it withdrawn even though he could not sustain any offensive construction. In this instance, there was no direct reference to the honorable member for East Sydney. Mr. SPEAKER.- I have no hesitation in saying that I should be offended if I were accused by another honorable member of being a protector of such a despicable crowd as I believe the Communists to be. Therefore, I think that the Minister should not have used the term that he employed. Mr. CASEY.- If you give a ruling of that sort, Mr. Speaker, I am the first to comply with it, and I withdraw the statement as I made it. Mr. Grayden.- Unfortunate, but necessary, I suppose. Mr. Calwell.- I rise to order, Mr. Speaker. I ask that that remark by the honorable member for Swan (Mr. Grayden) be withdrawn. It aggravated the first offence. Mr. SPEAKER-The remark should not have been made, and the honorable member should withdraw it. Mr. Grayden.- I withdraw it. Mr. SPEAKER.-Such interjections must cease. Mr. CASEY.- I was trying to establish the situation of the honorable member for East Sydney in respect of certain matters. Evidently the cap fits. Mr. SPEAKER.-Order! Mr. CASEY.- I am speaking about the generality of my previous remarks, Mr. Speaker. The cap seems to fit. The honorable member for East Sydney appears to glory in the fact that he has so undermined the integrity of somebody in the Department of Trade and Customs that he has been able to induce the man to divulge information that he should not have divulged. Mr.Ward. - That is a lie. Mr. SPEAKER.-Order ! That term must not be used, and the honorable member for East Sydney must withdraw it. Mr.Ward. - I withdraw it. Mr. CASEY.-Up on your feet and withdraw it properly! That is not a proper withdrawal, Mr. Speaker. Mr.Ward. - I withdrew the remark. Mr. CASEY.- And apologize. Mr. SPEAKER.-Order ! I asked for a withdrawal. Mr. CASEY.- You have not asked him to apologize. Mr. SPEAKER.-I did not ask the Minister to apologize when I made him withdraw a remark earlier. Mr. CASEY.- I do not propose to weary the House by reiterating the facts that are in dispute. They are perfectly clear. The Tribune, in late November last year, published a report which was clearly the result of a leak from a senior public servant. Mr. Calwell.- Why did not the Government prosecute the newspaper? Mr. CASEY.- It is not a question of prosecution. The Government is trying to discover where the leak occurred, and it has made a little progress towards that end. The honorable member for East Sydney suggested that the information had been made available to the newspaper by way of a "hand-out". That is too patently absurd - if that is a parliamentary expression, Mr. Speaker - to bear examination for a moment. There was a leak, not a "hand-out". It was obtained, probably by force majeure, by a Communist newspaper from some poor wretch of a public servant whose integrity had been undermined, as occasionally the integrity of public servants is undermined by other persons - persons who glory in the undermining of an Australian public servant when they should be so ashamed as to go red in the face at the thought of doing so, if persons of that mentality are capable of public shame. Mr. Ward.- Why did not the Government prosecute the newspaper? Mr. CASEY.- I think the honorable member for East Sydney knows the inference to draw from what I have said. Some individuals are not capable of public shame. Mr. SPEAKER-Order ! The Minister should address me. Mr. CASEY.- I beg your pardon, Mr. Speaker. I am addressing the honorable gentleman through you. Mr. Ward.- I am enjoying it. Mr. CASEY.- Any body who can enjoy being held up to public obloquy- Mr. Ward.- By a person of your kind ? Mr. CASEY. - Yes, by me, perhaps, in particular. Mr. SPEAKER.-Order ! This crossfiring must cease. If the House does not get down to a discusion of the subjects before it, I suggest that it should adjourn. I have authority under the Standing Orders to leave the chair. Mr. CASEY.-I do not think that the people of Australia are under any misapprehension on this matter. Ever since it was first ventilated - and I did not originate the dispute - the press of Australia has condemned the action that is now being defended by the honorable member for East Sydney, as he has defended that sort of thing many times in the past. It has happened so often that the people have got the honorable member taped, if the expression may be excused. They know where he stands. Actually, the truth is that he is having a bit each way. He thinks that, at some time in the future, the Communists may gain control of this country, and, if that happens, he is going to be one of the commissars, because he has been licking their boots for years. He is one of those gutless people- Mr. Calwell.- I rise to order, Mr. Speaker. Is the expression " gutless " parliamentary? Mr. SPEAKER.- No. Mr. Calwell.- Then I ask that the word be withdrawn. Mr. SPEAKER,- Order ! The term " gutless " is not parliamentary, and I think that it should not have been used. The right honorable gentleman should withdraw it. Mr. CASEY.-If you say so, Mr. Speaker, I withdraw the term at once on your instruction. Mr. Ward.- I have never run away from my country when it has been in danger. Mr. CASEY.-Have you not? Mr. SPEAKER.-Order ! The Minister's time has expired. Mr POLLARD(Lalor) [11.29].- I had no intention of having anything to say on this matter because I consider that the whole discussion is regrettable. It is unfortunate from the point of view of the Government that it originated from the Minister for External Affairs (Mr. Casey). He was the first to raise the issue as a result, apparently, of an article which was published in the Tribune and which, from a security point of view, was not worth " two bob ". I understand that it referred to some unimportant trade agreement with the United States of America. It is strange that the first reflection should be thrown on a public . servant, or a number of public servants, at a time when Ministers and their supporters, and the Minister for External Affairs in particular, had a great deal to say about Dr. Burton, who had been a public servant and an officer of the particular department involved in the disclosure of the information to the Tribune. It is all unimportant. I think it is contemptible. The Minister has a lifelong experience of politics. He knows very well that Australian political history records the fact that, over the years, the chief leakers to the press, be it the Communist or non-Comimmist press, of secrets of cabinets of all kinds of political complexions have been, not public servants or heads of departments, but Ministers of the Crown, and, not infrequently, Prime Ministers and Premiers of States. When there is talk about leaks to the press, I suggest that some reference should be made to the possibility of suspicion falling upon members of this Government. The late Sir Alexander Peacock, who was a famous figure in the political history of Victoria and somewhat of a statesman, although I did not agree with him politically, used to tell with great gusto a story about a conservative government that was in power in Victoria. There had been a long series of leaks to the press of important cabinet decisions. The Premier of the day raged about the leakages. He was righteously indignant about them. He was as indignant as the Minister for External Affairs has been about this worthless, uninteresting document that theTribune is supposed to have printed. It was revealed long after the death of the Premier that he was the individual who had allowed important cabinet decisions to leak to the press of Victoria. Before the Minister for External Affairs casts stones at officials of his department, let him consider the possibility of leaks from members of the Cabinet, and even of leaks from himself. He might well consider the advisability of consulting the master plumbers' association to see whether they can perform some very necessary operations on the members of this Cabinet. Mr.ALLAN FRASER (Eden-Monaro) [11.34]. - I wish to refer to the leakage of information and to the trustworthiness of members of this Cabinet in relation to the disclosure to the press of this country of Cabinet secrets and confidential information. The opinion which the Prime Minister (Mr. Menzies) holds of the members of his Cabinet and his complete distrust of them were revealed by an instruction that he issued this year, during a series of Cabinet meetings, that 110 Cabinet Minister should be allowed to interview, or be interviewed, by a representative of the press, except in the presence of another Cabinet Minister, a private secretary, or an officer of his department. Mr. EricJ. Harrison. - That is a deliberate untruth. Mr. ALLANFRASER.- I ask for a withdrawal of that statement. Mr. SPEAKER.- Order ! The Vice-President of the Executive Council (Mr. Eric J. Harrison) must not use a term of that kind. Mr.Eric J. Harrison. - Why does not the honorable gentleman speak the truth? Mr. SPEAKER.-Order ! The honorable member for Eden-Monaro (Mr. Allan Fraser) has asked for a withdrawal of the words " deliberate untruth ". Mr.Eric J. Harrison. - I withdraw the words " deliberate untruth ", and substitute for them the word " rubbish ". Mr. SPEAKER.-Order ! That is not an unqualified withdrawal. The Minister must withdraw the words without qualification. Mr.Eric J. Harrison. - At your direction, Mr. Speaker, I withdraw the words. As the third Minister in the Cabinet- Mr. SPEAKER.-Order ! The Vice-President of the Executive Council cannot speak at this stage. Mr.Eric J. Harrison. - I ask that the statement of the honorable member for Eden-Monaro be withdrawn, on the ground that it is personally offensive to me and to other members of Cabinet. Mr. SPEAKER-The Vice-President of the Executive Council has asked for a withdrawal of the statement that was made by the honorable member for Eden-Monaro. I ask the honorable gentleman to withdraw it. Mr. ALLANFRASER.- I withdraw the statement, as you have asked me to do so, Mr. Speaker. Mr.Eric J. Harrison. - There is no truth in it at all. Mr.Ward. - Every, pressman knows that it is true. Mr. SPEAKER.-Order ! I make a last appeal to the House to maintain order. I assure honorable members that I shall be just as happy in bed at this hour of the night as I shall be to continue to sit here. If honorable members wish to continue the discussion in an orderly fashion, I shall be happy to permit it to proceed. If order is not maintained, I shall take other action. Mr. ALLANFRASER.- The Minister for External Affairs (Mr. Casey) has spoken of the existence of a nest of traitors in the Public Service of this country. That is a most serious statement. Tonight, the Minister was asked a very simple question. He was asked why he had not initiated a prosecution of the newspaper that published information which he claimed was secret, and vital to the defence and security of this nation. The right honorable gentleman completely failed to answer that simple question, which goes to the crux of the matter that he had raised. The honorable member for Lalor (Mr. Pollard) has pointed out that, as a rule, leakages to newspapers are made not by public servants but, very frequently, by Ministers of the Crown. During the period of office of the present Government, leakages .of secret Cabinet information to the press have occurred. Mr. Holt.- No. Mr. ALLANERASER- The leakages have been published, and the complaints of the Prime Minister at the disclosure of information by his colleagues in Cabinet have been made widely known. In recent months, the practice has been adopted of Cabinet Ministers being interviewed by pressmen, during a series of Cabinet meetings, only in the presence of a witness or another Minister. Mr. Holt.- That is a complete lie. Mr. SPEAKER.- Order ! The Minister for Labour and National Service (Mr. Holt) knows perfectly well that he has used an unparliamentary expression. He must withdraw it. Mr. Holt.- I withdraw the expression. While I am on my feet, may I remind you, Mr. Speaker- Mr. SPEAKER-Order! The Minister will have -an opportunity to speak later. Mr. Holt.- I wish to direct your attention to the fact that a statement precisely similar to that which the honorable member for Eden-Monaro has just made was withdrawn by him two minutes ago, following a demand for a withdrawal by the Vice-President of the Executive Council. You have permitted him to repeat the statement, Mr. Speaker. Mr. ALLANFRASER. - I withdrew the statement because you requested me to do so, Mr. Speaker. Mr. Holt.- And then the honorable gentleman made it again. Mr. ALLANFRASER. - In recent months, the practice has been adopted that, during a series of Cabinet meetings, members of this Cabinet shall not be interviewed by members of the press, except in the presence of another person. Mr. Holt.- That is not so. Mr. ALLANFRASER,- The Minister for Labour and National Service says that that is not so. I say it is so. I repeat that Ministers, during a series of Cabinet meetings, adopt the practice of not giving interviews to pressmen, except in the presence of another witness. Mr. SPEAKER.-Order ! The honorable gentleman has made that statement three times. Mr. ERICJ. Harrison. - I have interviewed pressmen, not in the presence of a witness. That gives the lie direct to the honorable member. Mr. SPEAKER.- Order ! The Vice-President of the Executive Council will have an opportunity to speak later. Mr. Wilson.- I rise to order. The honorable member for Eden-Monaro was directed by you, Mr. Speaker, to withdraw a certain statement, and he did so. Since then he has repeated the statement twice. I submit that he has shown an utter contempt for the ruling of the Chair, and that it is your duty immediately to deal with him. Mr. SPEAKER.- Order ! I inform the honorable member for Sturt (Mr, Wilson) that I do not require any advice upon the discharge of my duty. I shall do my duty, as I see it. Honorable members may not agree with me. In fact, I should be astonished if everybody were in agreement with me. The honorable member for Eden-Monaro made certain statements, and then certain further statements in a different form. Honorable members who object to those statements will have an opportunity to say so when the honorable member for Eden-Monaro concludes his speech. Mr. ALLANFRASER- I say that the Prime Minister has complained to his Ministers about leakages of Cabinet information. I say that the Prime Minister has complained to members of his party about the disclosure of secret government information to the press. I say that the Prime Minister has, during recent months, repeatedly urged on members of his Cabinet and on members of his party, that they should cease to disclose secret Cabinet and party information to the press. I say that those disclosures have continued to occur. I say that in the light of that information, it is extraordinary that the Minister for External Affairs should attempt to place the brand of traitor on public servants when he should look much nearer home. Mr. HOLT(Higgins - Minister for Labour and National Service and Minister for Immigration) [11.42]. - Earlier this week, I gave an undertaking to the House that, if possible, a statement would be made on the future of Glen Davis before the House rose this week. It has now become desirable to make such a statement in view of the fact that certain notices of dismissal have been given, and will take effect as from the 30th of this month. The Government has been giving much thought for a considerable time to the problem presented by the continued operational losses of the Glen Davis project. In January, 1951, after the matter had been fully considered by Cabinet, an announcement was made by the then Minister for Shipping and Fuel of the Government's intention to withdraw from the Glen Davis undertaking. The losses sustained by National Oil Proprietary Limited have been particularly heavy over recent years. The Australian Government has already invested £5,250,000 in this undertaking, and, up to the 26th September last, when a receiver was appointed, the accumulated losses had amounted to £4,350,000. In recent months, operating losses, including some element of depreciation, have amounted to £6,000 a week, and if interest, depreciation and sinking fund are taken fully into account, this figure would reach £10,000 a week. A consideration uppermost in the Government's mind throughout has been the welfare of the citizens of Glen Davis. Even after we had decided to cease the mining and refining operations,' we examined fully alternative activities which might be conducted by government departments, and thus ensure reasonable opportunities for work in the township. The service departments and the Departments of Supply, Defence Production and Immigration all went into the possibility of making use for their own purposes of the plant and buildings at Glen Davis. No practicable alternative emerged. The Government also has canvassed with business undertakingsvarious possibilities which would either enable the plant to be continued on its present production, or to be used for other purposes, e.g., the manufacture of carbon black and cement. When it became clear that it was unlikely that a solution could be found along these lines, we appointed a receiver. He put the assets up for sale. Only one tender was received for the whole undertaking, but the conditions associated with it made its acceptance quite impossible. The sum offered was £166,000, or less than half the estimated residual value of the assets. There were, in addition, certain onerous and impracticable condition which would have committed the Government to obligations for a long period ahead. A number of offers were received for various sections of the plant. Prominent among these offers were offers from the New South Wales and South Australian State electricity authorities. The South Australian Government also desires to obtain some of the plant for use in association with its uranium ore project. Consideration of these developments and the offers received merely confirmed the decision previously taken by the Government, to cease its own participation in the mining and refinery operations. At an earlier conference with a deputation from trade unions and the townspeople, an undertaking had been given that when the Government's intentions were clearly known it would confer again with them to outline its proposed course of action. Pursuant to this arrangement, a committee of Cabinet, consisting of the Minister for National Development (Senator Spooner), the Minister for Supply (Mr. Beale) and myself, met a deputation composed of the interests indicated, on the 14th May. We explained what had transpired' and announced that the Government had decided to wind up operations as from the 30th May. We made it clear, however, that while we had no legal obligations other than the giving of due notice, we recognized that there would be personal problems confronting the company's employees, relating in particular to the changes in employment, and securing accommodation outside Glen Davis if they desired to move elsewhere. We have plans to facilitate their placement in other employment and their re-housing. So far as practicable, it is proposed that this would be done in the Lithgow area and on the northern and southern coalfields. We indicated that we would be prepared to consider the question of an ex gratia payment in respect of employees' houses which might have to be vacated, living away from home allowances to those who would leave their families behind in Glen Davis while seeking accommodation elsewhere, and also certain other expenses for their travelling, removal and so on. We stated also that we would support an application to the Coal Industry Tribunal for a variation of the long service leave awards which now apply in the coal-mining industry, to permit service at Glen Davis to be counted as service qualifying for leave under the awards mentioned. It was suggested to us in the course of this discussion that the project was still capable of profitable management, and that the unions and townspeople should be given an opportunity to keep it going. We thereupon offered to lease the whole undertaking to' a co-operative society which might be formed from those groups. We proposed a nominal rental of £10,000 per annum, and said that the Government would be prepared to purchase the products of its operations at market prices. We said that we would give those present an opportunity to consider the details we had discussed, and to examine the possibility of the formation of a co-operative society. In view of our firm intention to cease operations from the 30th May, we suggested that a group representative of the deputation should confer with departmental officers in Sydney on Friday, the 23rd May. The meeting took place. Our officers were told that the plan for a co-operative society was not being taken up. They were told that a fresh offer, which would enable the undertaking to be continued, was about to be submitted to the Government, and because of that development it was not proposed to discuss the other matters which had been raised in Canberra. An offer has since been received and considered by the Government. I shall find it necessary to refer to the name of the person who has made the offer. Ordinarily, I should have deferred such a disclosure until I had an opportunity to consult the gentleman concerned. He was in telephone consultation with the Minister for Supply (Mr. Beale) earlier to-day, and we have tried throughout the evening to contact him again, but without success. Having given an undertaking to the House that a statement would be made this week, and also in view of the notices of dismissal that have been given to employees, I find it necessary to state the details of the offer. It came from Mr. H. Gregory Forster, who will be well known to most members of the House from New South Wales, through his association with the coal industry. I may say that we examined the offer carefully. We were assisted in our consideration of it by supplementary information from the receiver, and a representative of the Department of Supply, who had discussed the offer in rather more detail with Mr. Forster. I am quite certain that members of the Opposition generally would, if they had its terms before them, share the Government's view that the offer as received could not be accepted. The purchase price proposed was £200,000, or approximately half the residual value of the assets. It was not made clear how this amount would be paid, but in conversation it was suggested by Mr. Forster that payments might be made quarterly at the rate of £2,000 per quarter. I understand that when pressed on this point, Mr. Forster indicated that it might be found possible to pay the £200,000 as a lump sum if other' conditions were met. One proposed condition was a levy of One-eighth of a penny on all petrol consumed inside Australia, to create a fund for the purpose of keeping the undertaking going. It has been estimated that such a levy, which it will be appreciated, would be a charge on every petrol consumer in the Commonwealth, would raise approximately £850,000 a year. The fund' was to be used to meet any losses encountered by the operators, and to guarantee a dividend return of 10 per cent, for an indefinite term. In addition, the Australian Government was to guarantee a hank overdraft for working capital and to arrange, for capital issues consent to float a company with a capital of not less than £500,000. While this offer is, on the face of it, clearly one that could not be entertained, and the gap between its terms and those which could be accepted by the Government, would appear to be difficult to bridge, we do not dismiss the possibility that Mr. Forster may be prepared to make a further offer which could be considered. We do not, however, intend that this possibility should delay the course of action we have set in train, and Mr. Forster has himself indicated, I understand, that he does not wish to see the dismissal notices withdrawn. His view is that even if he is to operate the plant, he would not require all the present staff. [Extension of time granted.] Dismissal notices have been issued to 55 of the 365 employees. For some time to come, the services of many of the employees will be required for winding up operations, and their employment will be terminated progressively. Before concluding, I should add certain observations. The Government has come under criticism because it is said that we are disposing of an important Commonwealth asset which has a high defence significance. No one who has examined i;he figures of petrol production from Glen Davis could seriously present this view. Production has for some time been at the rate of considerably under 3,000,000 gallons per annum. Last year production was 1,500,000 gallons. This should be contrasted with the total Australian annual consumption of approximately 650,000,000 gallons of spirit. The entire production at Glen Davis during 1951 would not have kept us going for one day. It should also be noted that the cost of even the small amount of petrol that has been produced was about or in excess of 5s. 3d. a gallon. I have already stressed on behalf of the Government that we do wish to do the right thing by the Glen Davis employees. We are entirely willing to deal with their problems sympathetically and indeed' generously. I should make it clear, however, that action in this spirit by the Government will not be unaffected by the course of conduct of the employees themselves and of those trade unions which are professing so much concern on their behalf. We are not going to require the rest of the community to contribute from Commonwealth revenues to an alleviation of the position of employees affected by the closure of the Glen Davis works, and, at the same time, see the Australian community subjected to loss and inconvenience by reason of industrial action directed against the Government's policy. If the unions with members involved have a genuine desire to help them in this difficult problem, they will work in conjunction with the Government in solving the personal difficulties as they arise. We want the employees of Glen Davis to know that it is in this co-operative spirit that we approach their problems, and that they are entitled to look for constructive co-operation from others who purport to be acting for them. Mr. LUCHETTI(Macquarie) [11.54]. - The words that have been spoken by the Minister for Labour and National Service (Mr. Holt) mean the death knell of a great industry which, with wise and prudent management, could have played a great part in the defence and the development of the nation. Members of this Government speak unceasingly of war, defence and preparedness and the development of the country; but, while other nations are encouraging the production of oil from inferior shale, the Australian Government proposes to destroy the valuable industry at Glen Davis. The cold and calculated words that were written for the Minister mean disaster for- about 1,000 people in the Glen Davis community. Mr.Holt. - Those words were written by the Minister. Mr. LUCHETTI.- It is easy for honorable members to sit here comfortably, secure in their future prospects except for a. few who will be caught by the ire of the electors in the near future, but honorable members should be warned that once this industry is destroyed, it will not be started again easily. The Minister has referred to the fact that the quantity of oil which was produced at Glen Davis was not satisfactory. It formed a small proportion of the total quantity of petrol that is consumed in Australia. Honorable members on the Government side probably know more about the dairying industry than I do, but if they failed to satisfy their customers with one cow, they would not shoot that cow. Instead, they would build up a dairy herd. Their approach to the Glen Davis industry should be on a similar basis. The industry should be developed so that a greater quantity of indigenous fuel would be available. Mr. Holt.- The Government" has been milked in this case. Mr. LUCHETTI.- Interjecting by honorable members on the Government side who are not interested or who are unwilling to help the industry will not assist their case. Experts have written in the publication, Library Bulletin of Abstracts published by the Universal Oil Products Company, Chicago, the following statement. - The production of liquid fuel from coal and oil shale is an inevitable part of the future industrial picture. That reference is applied to the United States of America, which is a land of flow oil, but that type of oil is a wasting asset. Intelligent people all over the world must consciously develop indigenous fuel from coal and shale. The course that the Government is taking is unwise and improper. The article to which J have already referred includes the following statement : - Such a study indicated that the exploitation of oil shale can be expected to mature by 1065. That type of fuel is being developed in the United States of America. Another journal which is well known to honorable members on the Government side, Australian Goal, Shipping, Steel and the Harbour, has referred to Glen Davis and the necessity to keep the plant in operation. I know this industry and its people. I know that the industry has not had a fair go. It is capable of doing much better than it has done. The industry has been badly managed and bungled and it was originally placed in the wrong position, but that is no reason why it should be destroyed. I appeal to the Government not to dismember this industry. It is an essential part of defence. The Minister and other honorable members opposite have said that in a future war Australia will not be fighting a maritime power. How is the Minister or any other member of the Government able to express those views? We have no idea what will happen in future. We' know that the Soviet has a large fleet of submarines and that it is developing a substantial navy and if it is to be our enemy in the future we can expect trouble. The Government recently concluded a treaty of peace with Japan and a disturbing situation is developing there. That country will also become a trouble spot. Who is to say that a revived Japan will not in the future threaten this country as it has done in the past? Ministers are not very concerned about this matter. They mention the very small quantity of oil that has been produced at Glen Davis. While the Government is destroying this industry, America is developing its production of shale oil. Scotland is also continuing to produce oil from shale on an economic basis. But we can hardly expect this Government to do anything of that kind when we consider that a high executive df the Shell Oil Company Limited in Australia is the federal president of the Liberal party, and that the Anglo-Iranian Oil Company which is associated with. Commonwealth Oil Refineries Limited, made £84,000,000 in. one year. Although these companies have made substantial profits, they have not been prepared to pay a tenth of a penny a gallon to the nation in order to enable the production of oil for the defence of the country. It is easy to see on which side of the fence honorable members opposite stand. The Government should not destroy this industry. It should remember that people are depending, on it for their living. The Minister has mentioned the provision of homes for the Glen Davis people at Lithgow and in the immediate district. More than 400 people have been waiting for homes in Lithgow since 1947. There is not even a hostel there to house people who may have to leave Glen Davis. There are many old people in the industry at Glen Davis whowill never find work. What does the Government intend to do for the patriotic technicians, such as chemists and engineers, who have devoted themselves to the industry and surrendered good jobs in order to assist the war effort? The Government has not made any promise that the cracking plant will go to Bell Bay or anywhere else in Australia. This House has been misled from time to time by Government statements. The Government has been evasive all along the line. This industry is vital to this country. Some thousands of gallons of oil are at Glen Davis at the present time, but have not been cracked into petrol. This makes the picture appear to be much more dreary and miserable than it really is. If this oil were processed and sold the picture at Glen Davis would be much better. We are told it is a matter of pounds, shillings and pence. Mr. SPEAKER.- Order ! The honorable member's time has expired. 1952-05-29 Mr. BEALE(Parramatta - Minister for Supply) [12.5 a.m.]. - I do not think that the powerful statement that was made by the Minister for Labour and National Service (Mr. Holt) requires much amplification. The Government was extremely reluctant to close Glen Davis, but circumstances made it inevitable. It is probable that, from an economic point of view, the plant should never have been at Glen Davis, but on the other side of the Capertee Valley where there are bigger deposits of shale. In 1935, it was estimated that for an expenditure of £600,000 Australia would be able to get 6,000,000 gallons of petrol and 16,000,000 gallons of fuel oil a year at market prices. Instead, this country has invested over £5,000,000 in the venture and petrol has been produced at the rate of less than 3,000,000 gallons a year at a cost of more than 5s. a gallon. So from an economic point of view the venture has been fantastic. The key to the situation is the inability or unwillingness of the miners at Glen Davis to mine sufficient shale. If sufficient shale had been fed into the retorts the venture might have had an opportunity to pay its way. In 1949, Senator Ashley went to Glen Davis and warned the miners that they must increase the output of shale. At that time they were producing about 3 tons for each man-shift. Shortly after his visit the production rate fell to 2.8 tons a man-shift and it has been falling ever since. To a very substantial degree, the responsibility for the position at Glen Davis has to be laid at the door of those who have declined to produce sufficient shale to keep the retorts going at full blast. A proposal was made in relation to what is known as " long wall " mining, which might have assisted production. The suggestion was put to Senator Ashley, but he did not see fit to act on it because he knew that it would make no ultimate difference. About £10,000 a week is being lost in the production of petrol at Glen Davis. In 1947, when the Labour Government was in office, the output of petrol from Glen Davis was 4,000,000 gallons; in 1948, it was 3,100,000 gallons; in 1949, 2,600,000 gallons; and in 1950, 2,400,000 gallons. By 1951 the annual production had fallen to 1,400,000 gallons. The petrol was costing over 5s. a gallon. The petrol produced in 1951 represented . 023 per cent, of Australia's consumption, or less than a day's supply. The Government realized that it would have to take certain action unless it was to accept the proposition that this disastrous and ruinous enterprise should be continued so that the townspeople would not be disturbed. The Government did not reach a decision on this matter wantonly or without thought for the welfare of the people concerned. I appreciate that the people in the district did not want their settlement to be broken up. For fifteen months the Government tried to interest other industries in the venture. It tried to interest the State Government of New South Wales. It tried to adapt the venture to suit the purpose of various government departments, but that was found to be impossible. Many private industries were invited to put forward propositions. All our efforts to keep the township going failed because people were not sufficiently interested. Certainly no one in the oil industry was interested because they knew what a disastrous economic proposition it had been. So, tenders were called. But not one tender was received for this venture as a going concern. The offer to establish it on a co-operative basis was also rejected. Now, fifteen months later, a further proposition is made to the House, but that proposition has only to be stated to be shown to be unacceptable. In those circumstances, no government, however reluctant it might be to injure the people at Glen Davis in their livelihood, dare, having regard to the public interest, to keep the works going. Consequently, at long last and reluctantly, the Government has decided to close the project down. Generous offers are being made to help those who live in the district, but, as the Minister for Labour and National Service has said, we expect to receive some co-operation from those persons, who, we hope, will not make of this matter a cause for industrial disturbance. Naturally, the Government's readiness to be generous and helpful to them must be dependent upon the willingness with which they are prepared to co-operate with it. Question resolved in the affirmative. 1167 papers The following papers were presented : - Elections - Statistical Returns in relation to the Senate Elections, and the General Elections for the House of Representatives, 1949, for the several States and Terri- tories. Public Service Arbitration Act - Determinations - 1952 - No. 37 - Transport Workers' Union of Australia. No. 38 - Professional Officers' Association, Commonwealth Public Service. Seat of Government Acceptance Act and Scat of Government (Administration) Act- Ordinance - 1 952 - No.6 - National Memorials. Regulations - 1952 - No. 10 (Building and Services Ordinance). House adjourned at 12.12 a.m. (Friday). 1167 ANSWERS TO QUESTIONS The following answers to questions were circulated : - Broadcasting. 1167 JLZ CP 0 0 ANTHONY, Hubert Mr Anthony - The answers to the honorable member's questions are as follows : - Yes. The report is n earing completion. I am not, however, aware of the contents of the report and consequently cannot say at this stage what action will be taken with it. 1167 JLZ CP 0 0 ANTHONY, Hubert Mr Anthony - The answers to the honorable member's questions are as follows : - The details requested are not available normally, but I shall endeavour to obtain the information and will furnish it to the honorable member. 1167 1167 JZB 0 0 FITZGERALD, Joseph Mr Fitzgerald ald asked the Minister representing the Minister for Trade and Customs, upon notice - What amount was provided from the dollar pool during each of the last five years for - (a) comic strips used by daily, Sunday, and weekly papers; (6) comic books reprinted under licence; (c) magazines reprintedunder licence; (d) fiction and art material syndicated through Australian periodicals; and (e) hard-bound books reprinted in Australia under licence? What steps are being taken to control books and magazines coming into Australia in direct infringement of the ban placed on certain imported material in 1940? How many comic books were printed in Australiain each of the years 1939 to 1951, and how many of these were of foreign origin? What steps are being taken to stop the use of "True Police Comics", "Justice" and similar " comics " which are evading the ban on true detective-type magazines? What amount of newsprint was consumed in the printing of comic books reproduced under licence? What is the number of Commonwealth reconstruction trainees who are studying or have studied commercial art and how many are actually in employment as commercial artists? Who was the responsible authority who . gave permission for the reproduction of magazines under licence? Who gave authority for the expenditure of hard currency on all the publications referred to ? 1168 KNX UAP; LP from 1944 0 0 HARRISON, Eric Mr ERIC J HARRISON - The Minister for Trade and Customs has furnished the following answers to the honorable member's questions: - During the last five years dollar exchange has not been provided for comic strips whether imported or reprinted in Australia under licence. Therefore, during that period the dollar pool has not been drawn on in respect of (a) and (6). Generally speaking, Australian newspaper companies and publishers who acquire and publish this type of material clear their commitments against payment in Australian currency to blocked accounts in Australia in the name of American owners. Statistical records are not maintained for the various categories of expenditure covered by (c), (<i) and (e). Single copies of newspapers and magazines addressed to individuals are admitted but import licences are not being issued for the importation of comic strips and similar material of United States origin. The information the honorable member seeks is not available. The Customs (Prohibited Imports) Regulations provide a basis for declaring certain publications of this type prohibited imports. Many comics including numerous true detective types, have already been prohibited under the regulations. However, a number of comics enter the country as first-class mail matter in the form of tear sheets, pulls, proofs and newspaper cuttings. As the detection of those goods entering in such a manner would involve censorship of mail, I am unable to agree to this course of action. In addition, single copies of overseas newspapers which arrive by post are also used for reproducing in Australia this kind of material. The physical difficulties of examining every newspaper received by post are insurmountable. In this regard it is pointed out that the Com monwealth Government has no jurisdiction over the reproduction of this material in Australia and the only means of preventing its publication and sale is by concerted legislation by the various States. The information the honorable member seeks is not available. One hundred and eighty , persons have received full-time reconstruction training in commercial art in which the trainee is trained to 40 per cent, proficiency and then placed in employment. His salary is subsidized by the Government up to the point when he reaches 100 per cent, efficiency. If the nature of the licence, agreement, or contract required consent under the Banking (Foreign Exchange) Regulations, then this would be a matter for the Exchange Control as the authority for administering this requirement. Numerous imported strips are re-drawn by Australian artists from material received through the post. Without postal censorship it would be impossible to exclude entirely the inflow of this reproduction material from abroad. Applications for foreign exchange to cover payments on publications referred to in (c), (a) and (e) of part 1 of the question are dealt with by the Exchange Control. As mentioned in the answer to part 1 dollar exchange is not provided in respect of the publication of comic strips. 1168 1168 KDA 0 0 DUTHIE, Gilbert Mr Duthie e asked the the Postmaster-General, upon notice - Have tenders been received for the erection of eight line depot buildings in Tasmania at Deloraine, Oatlands, St. Marys, Sheffield, Cygnet, Scottsdale, Wynyard and Huonville? What was the contract price submitted in each instance? Were all tenders accepted; if not, what was the reason? Will the work commence soon? When is it expected the depots will be completed by (a) contract, or (6) other means if they are decided upon? 1168 JLZ CP 0 0 ANTHONY, Hubert Mr Anthony - The answer to the honorable member's questions is as follows : - Tenders are under consideration by Department of Works and Housing and questions concerning tenders and completion dates have been referred to that department for reply. It is expected that a reply to the honorable member will be furnished by the Minister for Works and Housing. 1168 1168 BV8 0 0 CALWELL, Arthur Mr Calwell l asked the Treasurer, upon notice - What progress has been made on the problem of double taxation as a result of the recent visit of American taxation experts? 1168 F4T CP 0 0 FADDEN, Arthur William Sir Arthur Fadden - The answer to the honorable member's question is as follows : - At the discussions which recently took place between United States and Australian officials, draft clauses for incorporation in any agreement which may be reached between Australia and the United States in respect of income tax, estate duty and gift duty were prepared. The Commissioner of Taxation has furnished a report of the discussions, including the draft clauses mentioned. The report is receiving consideration and it is expected that au early decision will be made. 1169 1169 KXZ 0 0 PETERS, Edward Mr Peters s asked the Minister for Supply, upon notice - What was the quantity and value of textile fabrics and yarns respectively purchased by the Department of Supply during the twelve months ended the 30th April, 1052? What was the quantity and value of these goods - (a) imported from overseas, and (b) obtained from local manufacturers? 1169 JOI LP 1 0 BEALE, Oliver Mr Beale - The answers to the honorable member's questions are as follows : - The following are the details of textiles, fabrics and yarns purchased by the Department of Supply during the twelve months ended the 30th April, 1952: - The following are the quantity and value (based on landed cost in Australian currency) of the above goods: - Note. - Concerning imported cotton matetrials; in late 1951 at conferences and by correspondence the Australian manufacturers were informed of total requirements, and were invited to indicate the quantities they could manufacture and supply during 1952. Overseas orders were not placed until Australian manufacturers had been allotted the maximum quantities which at that stage they were prepared to offer to the Commonwealth. Some cotton materials are not manufactured in Australia at all. Departmentof Supply. Mr.Ward asked the Minister for Supply, upon notice - What was the number of employees attached to the transport services operated by his department at the time the present Government took office ? What is the number at present employed? Will he furnish information regarding the cost of engaging private hire transport services, showing particularly the annual mileage run and the cost per mile in each year since the Government took office in 1949? 1169 JOI LP 1 0 BEALE, Oliver Mr Beale e. - The answers to the honorable member's questions are as follows : - In the Department of Supply, transport and stores services are combined under one management, and common administrative and accounts staffs serve both sections. It is not possible to divide these staffs accurately between "Transport" and "Stores", and, accordingly, the total employment figures for the Stores and Transport Branch are given. In December, 1949, when the present Government took office, a total of 2,541 persons was employed, including 874 drivers. The number at present employed is 2,481, including 792 drivers. Statistics are not maintained of the annual mileage, and the cost per mile for private hire transport services. However, the total costs of hiring these services were as follows:- 1950, £236,200; 1951, £218,621. Government Loans and Finance. Mr.Ward asked the Treasurer, upon notice - Will he furnish details regarding loans raised during the terms of office of the Curtin and Chifley Labour Governments, including the amount realized in each instance? Will he furnish similar details in regard to loans raised since the present Government took office in 1949? 1170 F4T CP 0 0 FADDEN, Arthur William Sir Arthur Fadden . - The answers to the honorable member's questions are as follows : - Import Restrictions. 1170 F4T CP 0 0 FADDEN, Arthur William Sir Arthur Fadden . - On the 20th May the honorable member for Fremantle (Mr. Beazley) asked the following question : - Can the Treasurer say why the Government, in implementing its import restriction policy, decided to honour letters of credit issued before the commencement date of the restrictions although no actual orders for physical goods had been placed, but to prevent the fulfilling of actual orders placed before that date without financial transactions having been carried out, although in some instances the goods had already been manufactured and the British manufacturers faced heavy loss through the termination of the contracts? As the Government's precipitate action in curtailing imports has caused a national crisis and a weakening of the entire British economy, when docs the Treasurer envisage the restrictions being removed and what action is the Government taking to ensure that it will not be necessary to re-impose them? The answer to the honorable member's question is that the Government has taken no decision to recognize for import licensing purposes letters of credit established before the 8th March last but against which no actual orders had been placed at that date. What the Government did decide was to permit the importation of all goods which had been ordered and for which provision had been made for payment under irrevocable letters of credit opened by an Australian importer in favour of a supplier in another country. The honorable member will understand that in such cases the supplier can automatically receive payment for the goods on fulfilling the conditions of the irrevocable letter of credit and there is, therefore, no point in refusing to permit the importation of goods covered by such credits. The honorable member for Fremantle also asked me when I envisaged the restriction being removed and what action was the Government taking to ensure that it will not he necessary to reimpose them. The Government -will review and relax the restrictions as soon as it considers that Australia's international reserves permit such action but on this point I would refer the honorable member to my recent financial statement in which I covered the matter more fully. Timber. Mr.Riordan asked the Minister for Territories, upon notice - Has the Government entered into an agreement with a gold-mining company to exploit the timber resources of a certain area in New Guinea? If so, what is the name of the company? Who are the principal shareholders of this company and where do they reside? Will this company pay income tax on the profits made from the timber undertaking? Is it proposed to manufacture plywood as well as producesawn timber? If plywood is to be manufactured, will the plywood and sawn timber be sold on the Australian market; if so, what will be the effect on the production of plywood in Australian ' plywood mills ? 7.Is plywood in short supply in Australia? How will the wages to be paid to the workers employed by this New Guinea enterprise compare with the wages paid to workers employed in similar work in Australia? 1171 ZL6 LP 1 0 HASLUCK, Paul Mr Hasluck k. - The answers to the honorable member's questions are as follows : - 1 and 2. The answer is contained in a bill before the House. It is understood that the principal shareholders of Bulolo Gold Dredging Limited and their places of residence are - Guinea Gold No Liability, Brookman Building, Grenfell-street, Adelaide, South Australia. Robert S. Fox, 708 Joshua Green Building, Seattle, Washington, United States of America. The Gold Fields American Development Company Limited, 70 Pine-street, New York City, United States of America. Oroville Dredging Company Limited, Lloyds Bank Building, 55-61 Moorgate, London, England. Placer Development Limited, 675 West Hastings-street, Vancouver, B.C., Canada. Gold Fields American Development Company Limited, c/o New Consolidated Goldfields Limited, 49 Moorgate, London, England. The question of liability for income tax is a matter between the company and the Commissioner of Taxation. Yes. The marketing policy will be decided by the board of directors, on which the Commonwealth Government will be represented, and will be shaped with full regard to the interests of the mainland forests, the mainland miller and merchant and the needs of the mainland consumer. It is understood that there is at present a temporary over supply of plywood in Australia, owing to recent overseas importations, particularly from Japan. For workers of equivalent skill, ability and experience, wages paid in New Guinea would probably be higher than wages paid in Australia.