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Tuesday, 30 October 1956

Mr SPEAKER - Order! The honorable member's time has expired.

Mr. THOMPSON(Port Adelaide) [9.33J. - I was interested in the resume that the honorable member for Wilmot (Mr. Duthie) gave of the domestic difficulties of Tasmania, but I do not desire to deal with thai phase of the matter at the moment. We are considering a bill to authorize the making of special grants to South Australia. Western Australia and Tasmania. This system has been in operation for many years, but, at times, it creates difficulties for the claimant States, as they are called. Even year, each claimant State has to present to the Commonwealth Grants Commission an estimate of its expenditure for the coming year. The commission examines the estimate and decides whether' the State will require a special grant to enable it to provide services reasonably comparable with those provided by the major States - that is. New South Wales, Victoria and Queensland. On that basis, a grant is made to the claimant State, subject to variation in a later year.

That is where the difficulties arise. Some years ago, I spoke on a bill similar to this one on the same night as the Premier of South Australia delivered his budget speech to the South Australian Parliament. I explained then that I thought conditions would become difficult for South Australia if certain circumstances arose. The next day, when I read in my newspaper what the Premier of South Australia had said - 1 was unaware of it when I spoke - I discovered that the very thing that I had said might occur had occurred. According to the Commonwealth Grants Commission, South Australia had been overpaid two years previously and the amount of the overpayment had been deducted from the grant that was to be made in respect of the then current period.

Some people say that unification, although it is a part of the platform of the Labour party, is only a Labour dream and that it is not practicable. I point out that the special grants that have been made over the years under measures such as this have tended to bring about a certain degree of unification. A claimant State makes a claim for a special grant to enable it to carry on. but if it is not able to prove to the Commonwealth Grants Commission that the charges it is making for railway services, water services and other services are comparable with the charges made by the major States for similar services, it docs not get all that it asks for. In order to qualify for special grants, the claimant States are compelled to impose extra taxation and demand extra payments from the people. This brings about a certain degree of uniformity between the States in relation to railway charges and other charges. I admit that the system does not bring the charges made by all States to the same level, but it does tend towards uniformity. 1 have been looking at the twenty-third report of the Commonwealth Grants Commission, which we obtained only a week or so ago. The table on page 40 of the report shows the budget results of the claimant States, lt shows the amount of revenue raised by taxation under various headings in 1953-54 and in 1954-55, and then it gives the difference between the two amounts There is almost an obligation on a claimant State to increase its charges and taxes each year if it wants to qualify for special grants In 1953-54 South Australia collected £2,367,000 in motor taxation and in 1954-55 the amount went up to £3,150,000 - an increase in one year of £783,000. I admit that the number of motor vehicle registrations increased, but that increase was not sufficiently great to account for the increase in revenue that I have mentioned. I find from the report that the revenue from other State taxation in 1953-54 was £4,170,000 and that in the next year the figure jumped to £4,396,000- an increase of £226,000 Debt-charges recoveries rose by £592,000 from £2,933,000 to £3,525,000. Territorial revenue increased from £309,000 in 1953- 54 to £459,000 in 1954-55, an increase of £150,000. Railway revenues increased from £12,806,000 in 1953-54 to £13,107,000 in 1954-55. Revenue from business undertakings increased from £3,942,000 in 1953-54 to £4,716,000 in 1954- 55, an increase of £774,000.

The figures for 1955-56 are not included in this table. I have no doubt that if they were available we should find that the increases were even greater. For example, any one who runs a motor car knows that it costs him more in 1955-56 than it did in 1954-55. We can take it that the people have paid for the water supply service provided by the State, the cost of which has increased greatly, because unless the charges paid by the people for the service were increased to a level comparable with that of charges in other States for similar services the Commonwealth Grants Commission would not look kindly upon the water supply grant. So charges for all services provided by the States gradually increase. 1 have given only the figures for South Australia, but if honorable members examined the figures for Western Australia and Tasmania they would find they were much the same.

The honorable member for Wilmot cited the figures relative to expenditure on education in the various States, and showed that the per capita expenditure is highest in

Tasmania. The figure for South Australia is one of the lowest in Australia. The per capita figure for hospital expenditure in South Australia also was low compared with the figure for the other States. I cannot quite understand why, because until several months ago the public wards of the Royal Adelaide Hospital, which has about 700 beds and is the biggest in the State, were free to all patients. However, as a result of pressure brought to bear by this Government as a condition of assistance in financing hospitals charges ranging up to £3 a day in certain circumstances have been imposed. Although the Commonwealth may be giving the claimant States something under this bill, it is also forcing them to make charges for various State services which are more comparable with those in other States.

The honorable member for Wilmot also referred to the tax reimbursements paid to the States under the uniform taxation scheme. The table at page 40 of the report, to which I have already referred, shows that South Australia received taxation reimbursements amounting to £12,241,000 in 1953-54, and £13,160,000, or £919,000 more, in 1954-55. In 1953-54 it received a special grant of £6,100,000 also, and its total receipts from the Commonwealth amounted to £19,045,000. As we have seen, the States require more money every year as expenditure increases. But because a grant made by the Commonwealth some two years before had proved to be greater than was actually necessary South Australia received in 1954-55 a special grant of only £2,250,000, or £3,850,000 less than in 1953-54, and its total receipts from the Commonwealth in that financial year were only £16,114,000, or £2,931,000 less than in 1953-54. I know that the Minister for Primary Industry (Mr. McMahon), who is now at the table, is an economist. He may know a lot more about these things than I do. I do not question his knowledge, but I think he will agree with me that it makes things very difficult for a State to reduce the total grants made to it by the Commonwealth by £2,931,000 under this system of rectifying something done two years before when a grant was larger than proved necessary. What I have said about South Australia could apply equally well to Western Australia.

The summary of recommendations at page 57 of the report states -


If it is found in several years' time that the estimates were not correct, Western Australia could get it in the neck and be subjected to a deduction, as it were. A repayment is not actually made, but any amount by which a grant exceeded the amount actually needed is deducted from the amount of a later grant. So it amounts to a repayment. I see the honorable member for Swan (Mr. Cleaver) nodding his head to show that he follows my argument. I do not propose a system different from the present one, but I suggest that it would be far better if the States were not prejudiced in this way by the denial of funds that they need very much.

I agree with the honorable member for Wilmot that the Commonwealth Grants Commission is a very fine body indeed. It does a great deal of detailed work in these matters. I agree with him also in his observations about the commission having to stand up to the Treasury and convince it that its recommendations in relation to grants are proper and should be given effect. I was a member of the South Australian Parliament for some years before I entered this Parliament, and I remember well the difficult years experienced by South Australia during the depression. I have some understanding of the difficulties experienced by the smaller States in carrying out their functions. Those difficulties would be even greater if the claimant States were not assisted by these special grants to keep their valuable public servants. South Australia, like other States, has highly qualified men in its Department of Mines, its Department of Agriculture, and other departments. The South Australian Government used to find that it was unable to pay those men salaries in any way commensurate with those that they could command from private industry or the Commonwealth. I think that nearly all the States have suffered very severely indeed at the hands of the Commonwealth, which has taken over many of their most highly qualified officers because it was able to offer them larger salaries than the States could offer.

When 1 was speaking last week on the measure providing for income tax reimbursements to the States I referred to the necessity for the revenue of the smaller States to be increased, if necessary at the expense of the larger States, in order to give the smaller States as nearly as possible equal economic status with the larger States. We must have such a principle. I believe that past measures similar to that with which we are now dealing, and the annual measures dealing with income tax reimbursements to the States, have enabled a greater increase of Australia's population than would otherwise have been possible. We in South Australia now feel that, in respect of education, to mention one activity, we are now on a basis reasonably close to that in the more highly prosperous States. We feel, also, that our people can look upon themselves not just as South Australians dependent on the will and the help of the South Australian Parliament, but as Australians dependent on the National Parliament for assistance given to them in the belief that every man, woman and child, in Australia, wherever he or she may live, has an equal claim to an equal standard of living. These things have been brought about by the grants system and the tax reimbursement system.

Although the thought may not be palatable to the Government, in my opinion the advantages deriving from these systems are the result of Labour policy, because the Government is really giving effect to Labour's policy in these matters. To a great degree it is now putting into operation what we of the Labour party have been advocating through the years. To-night, as I speak here, I am proud of the fact that the policy that I have known ever since I was a child, ever since the days when the old original Labour stalwarts were in the field, is now bearing fruit. I am proud of the fact that my own father was one of the old originals way back in 1 890 who fought in the struggle for proper parliamentary representation for the people and for legislation designed to serve the true needs of the people. Labour policy is not just something that I have read in a book; it is not something that is new to me. It is something that has been part of my life ever since I was a child, because my father was one of the Labour stalwarts in the old formative days of the Labour party. When I hear honorable members opposite say that the Labour party is not what it used to be, I feel a little sorry for them.

Mr Turnbull - Well, it is not what it used to be.

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