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Tuesday, 30 April 1957

Mr TOWNLEY (Denison) (Minister for Immigration) . - I think that all honorable members will agree that the contribution to the debate made by the honorable member for Batman (Mr. Bird) has given us much food for thought. He crammed so much into the last quarter-hour or twenty minutes that it is difficult to remember all the points that he made. One or two of them are extremely valid, but they need a little close examination. Before getting on to an examination of the points made by the honorable member, I should like to refer to the matter raised by him, that is - . . the failure of the Government to provide more funds to the States for the purpose of construction and reconstruction of roads.

First, sir, I would like to refer to portion of the second-reading speech of the right honorable the Treasurer (Sir Arthur Fadden) on the Commonwealth Aid Roads Bill of 1956. The Treasurer said this -

I do not think any one can fairly say that this Government has not given full recognition to the importance of the roads problem in Australia or that it has not been liberal in the provision of finance for roads. By a series of legislative measures - of which this is the third since it took office - it has made progressively more generous the basis on which grants are available for roads purposes. This year the Commonwealth aid roads payments will be £27,500,000. Next year, the payments will be more like £32,000,000. If these figures are compared with what was done previously - with the grants being made, for example, in the year before we took office, which amounted to no more than £7,700,000 - how we have substantiated our interest in the basic developmental problem which roads represent will be seen. Indeed, the annual provision which we are now making for roads is three or four times as great as the amount being provided when we first took office.

In other words, the Treasurer was saying that we have considerably increased the grants to the States for road purposes. The honorable member for Batman (Mr. Bird) said that was quite true but it was still not enough, and in his final remarks he mentioned an amount of £20,000,000 that he suggested we should use.

The honorable member said that the States get money for roads from three sources - the Commonwealth, the States themselves, and the municipal authorities. That is quite correct. But we are examining the proposition that the Federal Government has failed to give as much assistance as it should have given to the States for this purpose. When we examine the records carefully we find some very interesting figures. We find that in 1945-46, ten years ago, the Commonwealth invested in roads in the States £3.95 per vehicle. The second source of revenue, State taxation, provided £6.25 per vehicle, and local government taxation £9.4 per vehicle. In short, £3.95 came from the Commonwealth, £6.25 from the State, and £9.4 from local government authorities.

We come now to 1955-1956, and at the back of our minds is the proposition that the Commonwealth has not done all it might have done. In 1945 the Commonwealth paid £3.95 per vehicle, but last year it paid £11.85 per vehicle, while State taxa-tion provided £9.94 and local government taxation £11.7. In other words, while the Commonwealth Government has increased its contribution by £8 per vehicle, the State governments have only increased theirs by £3 per vehicle, and the local government authorities by £2 per vehicle. In the light of those figures it is difficult to see where the Commonwealth has not stood up to its responsibilities.

The amount of tax collected from petrol over the years is an interesting study. In 1948-49, the last year of the Labour government, the total revenue from petrol tax was £17,515,000, and the amount paid to the States in that year was £7,101,000, or roughly 40 per cent. So, approximately 40 per cent, of the money collected by the Labour government of that day was given back to the States for their roads The honorable member himself agreed that that was not enough, but he said the problem was different now. There was far more traffic now and there should be an increased grant. There has been an increase because, when we look at this year's figures - the expenditure can only be an estimate at the present time - we find that £37,000,000 is collected and no less than £27,000,000 is given back to the States. If, ten years ago, the Commonwealth government of that day gave the States back 40 per cent., and this Government to-day is giving the States back 70 per cent., I think it is hard for honorable members opposite to argue that this Government has not accepted its responsibility and made money available to the States in a reasonable proportion.

The honorable member for Batman said that petrol tax was tied up with Commonwealth aid roads legislation. I cannot agree with him there because petrol tax in the Commonwealth of Australia was first imposed in 1902. There was no Commonwealth aid for State roads until 1923, and it was not until 1926, as the honorable member quite correctly stated, that there was an association of this tax on petrol with aid for roads. I have said that we at the present time are giving back roughly 90 per cent, of petrol tax revenue money to the States.

Mr Bird - You are giving back 66 per cent.

Mr TOWNLEY - If my figures are incorrect I apologize and I will accept the honorable member's figure. Suffice to say there has been a very big increase from Labour's 40 per cent.

The next point the honorable member made, if I remember correctly, was that diesel fuel should be taxed. He said it was difficult to understand why it had not been taxed. Well, as the Prime Minister (Mr. Menzies) has said in reply to questions, it is intended to examine this question, and some examination has taken place. But various factors come to light when one considers the possibility of putting a tax on diesel fuel in Australia. We cannot compare English taxation rates with the rates applicable to a country as big as ours. One thing that emerges from the examination is that two-thirds of the diesel fuel used in Australia is not used on roads at all. Sixty-six and two-thirds per cent, is used in vehicles that are not on the roads. That is the first problem. The honorable member has suggested that there are all sorts of ways in which rebates could be given; but that is an untidy way of imposing a tax. The honorable member has said that the total revenue to be gained from a tax on diesel fuel would be £4,000,000. That is still a long way short of the £20,000,000 he is advocating as an additional grant to the States. The honorable member said, in effect, that the States should get £52,000,000 this year instead of £32,000,000. He proposes that the Government should get an additional £4,500,000 from a diesel fuel tax. Where is the rest of the money to come from? That is a pertinent question. The honorable member has asked for an additional £20,000,000. He says we should give the whole of the petrol tax back to the States. What he overlooks is that the petrol tax is a general revenue tax. I point out, too, that transportation costs are added to the final cost of any article that is delivered and sold to the consuming public.

Mr Turnbull - That is exactly what Mr. Chifley said.

Mr TOWNLEY - -Well, in that case I have quoted a good man. The commercial vehicles that go up and down the roads pass these transportation costs on to the general public. Surely it would be grossly unfair if we took from the general public that small percentage of the petrol tax which is now passed on to them through general revenue. It amounts to £16,000,000, and if it is spent on roads we must either cut general expenditure on our works programme for such things as houses, the Snowy Mountains scheme, and social services, or we must impose further taxes amounting to £16,000,000. We cannot have it both ways.

Mr Duthie - Take it out of the defence vote.

Mr TOWNLEY - We have heard that proposition so repeatedly from the other side of the House that I do not think any of us regard it seriously any longer. It is the sort of catch-cry that sounds good, but does not stand up to examination.

Briefly, this Government has done more for State roads than has any previous government. This year the Federal Government will spend as much on roads as did the Labour government in its last five years of office. If that is not a sufficient indication of our good faith I should like to know what is. The honorable member is quite justified in bringing this matter forward, though it is essentially a State responsibility. Certainly, the Federal Government has to give the States the money. As a Victorian, the honorable member naturally believes that his State can put forward many valid arguments for a new formula. When the State aid roads formula was agreed upon, three-fifths of the money was to be allotted on a population basis, and two-fifths on an area basis. Victoria was seriously disadvantaged because it had a high population density in a small area. I think that the honorable member, though he did not emphasize it, put forward that proposition somewhat obliquely when he referred to the position of Victoria. I believe that Victoria has a claim for special consideration, but we must not forget that the formula was agreed upon by all the State Premiers. The formula is a matter for the State Premiers alone to adjust. They meet here for Premiers conferences, sometimes twice a year, and if in their wisdom, or otherwise, they want to review the formula, I am certain that the Federal Government will listen to any reasonable proposition to review the formula that they may put forward.

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