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Friday, 18 September 1936

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator A. J. McLachlan) read a first time.

Senator A.J. McLACHLAN (South

Australia - Postmaster-General) [11.22] . -I move -

That the bill be now read a second time.

This is a comprehensive measure designed to give effect to the majority of the relief proposals which were announced in the budget speech. For purposes of convenience the bill has been divided into the following six parts: -

I. Preliminary.

II.   Invalid and old-age pensions.

III.   Maternity allowances.

IV.   Salaries and wages.

V.   War pensions and service pensions.

VI.   Relief in respect of primary production.

I propose at this stage merely to deal with the main features of the bill, leaving detailed information in regard to individual clauses to be dealt with in committee.

Part II. of the bill deals with invalid and old-age pensions. Legislation passed in 1933 provided for the adjustment from time to time of the rate of invalid and old-age pensions in accordance with variations of the cost of living. The rate of pension was increased in July, 1935, from 17s. 6d. a week to 18s. a week in consequence of an increase of the cost of living index figures. The present rate of pension still stands at that increased figure, namely, 18s. a week

As was announced in the budget speech, the Government, after giving consideration to the improved position of Commonwealth finances, decided to introduce legislation to liberalize the conditions in regard to the rate of pension. Part II. of the bill gives effect to this decision by the introduction of a new scale of price index numbers, as follows : -


The immediate effect of this alteration will be to increase the maximum rate of pension from 18s. to 19s. a week with a corresponding increase of the limit of income plus pension from 30s. 6d. to 31s. 6d. a week. When the bill becomes law every pensioner, irrespective of the present rate of his pension, will receive an automatic increase of 2s. a fortnight.

As was stated in the budget speech, the increased rate will give pensioners greater purchasing power than they have enjoyed in any previous year since the introduction of invalid and old-age pensions.

Provision is also made in the bill for the maximum amount which may be received by a pensioner by way of income and pension to be increased by the amount of the increase of the rate, namely, 2s. a fortnight.

In addition to providing for an immediate increase of the maximum rate of pensions the new table will operate to the advantage of pensioners in other ways. For example, under the existing scale the maximum rate of pension would fall to 17s. fid. a week as soon as the price index number fell below 1400, whereas under the amended scale the maximum rate will not at any time be less than 18s. a week, and will fall to that amount only if the price index number falls below 1340. On the other hand, the price index number would require to rise to 1800 under the existing scale before the pre-depression maximum of £1 a week would be reached, but under the amended scale pensions will be increased to £1 a week in the event of the price index number reaching 1640. The bill also provides for an increase of the rate of pension payable to pensioner inmates of institutions from 5s. to 5s. 6d. a week, equivalent to the highest amount at any time paid to this class of pensioner. The balance of the increase, 6d. a week, will be added to the amount paid to institutions for the maintenance of pensioner inmates.

In order to assist honorable senators to appreciate how materially pensioners will he assisted by the increase proposed in the bill, the following table, showing the cost of certain commodities in 1929 and the cost of the same commodities at the end of June, 1936, has been compiled: -


The average decrease of the cost of the food items enumerated is about 17 per sent.

Another interesting fact is that the average rent of four and five-roomed houses in the six capital cities declined by 39 per cent, between 1929 and the second quarter of 1936. Again, the decline of the price of clothing during the same period was 21 per cent, in the six capital cities.

Part III. of the bill deals with maternity allowances. Under the existing law the maternity allowance is £4 for a first child, with an increase of 5s. in respect of each previous surviving child under fourteen years of age up to a maximum of £5. The bill provides for an increase of the amount of the allowance from £4 to £4 10s. for the first-child, and to £5 where there is any previous surviving issue under fourteen years of age. It also provides for an increase of the limit of income. Under the existing law an allowance is not payable in any case in which the income of the claimant and her husband for the twelve months preceding the birth exceeded £208, unless the claimant is the mother of previous surviving issue. Under the bill the amount of the allowable income is increased from £208 per annum, equal to £4 a week, to £221 per annum, or £4 5s. a week. The additional income allowance of £13 per annum in respect of each previous surviving child under fourteen years is being retained, with a limit of £312 per annum or £6 a week - instead of £299 per annum or £5 15i3. a week, as at present. The following table will illustrate the operation of the proposed amendments : -

Part IV. deals with salaries and wages. The Financial Emergency Act of 1931 reduced the salaries of Commonwealth employees as part of the plan for the rehabilitation of government finances. Those reductions ranged from 18 per cent, in respect of salaries up to £250 per annum to 25 per cent, on salaries over £2,000 per annum. In accordance with the intention to restore the salaries us Commonwealthfinances permitted, restorations totalling 10 per cent. were made daring the years 1933-34 to 1935-36 inclusive. The effect of this was to free all salaries up to £485 per annum based on the 1930 standard, from financial emergency reductions, namely, reductions other than those due to cost of living adjustments, provided for by ordinary rules and regulations. The number of officers whose salaries were thus fully restored was approximately 25,000, leaving only 1,900 still subject to reductions under the Financial Emergency Act. In view of the general improvement of Commonwealth finances, provision has been made in. this bill for a complete restoration of the salaries of all Commonwealth employees to the normal rates; the reductions made by the Financial Emergency Act will cease to apply. In those cases in which, under the ordinary legislation governing the payment of. salaries to the employees concerned, such salaries are subject to automatic adjustment in accordance with cost of living variations, the adjustments will continue to operate; the salaries of Commonwealth employees will revert to those rates which would ordinarily have been payable at the present time had the financial emergency legislation not been introduced. The cost of living reductions, based on 1930 standards, represent approximately £1,300,000 per annum.

In respect of members of Parliament and Ministers, however, the bill provides for only a partial restoration; the allowances will be increased by an amount equal to10 per cent. of the normal rate.

The reductions then operative will be -

On allowances of senators and members of the House of Representatives - 5 per cent. ;

On salaries of Ministers, including the salaries of the President, Speaker, Chairman of Committees and Leaders of the Opposition - 7½ per cent.

Part V. deals with war pensions and service pensions payableunder the Australian Soldiers Repatriation Act. Provision is made in this part for an increase of 3s. a fortnight in the pension payable in respect of the children of incapacitated members of the forces. Under the law as it stands the amount payable to totally-incapacitated members is 12s. a fortnight in respect of each child. The bill provides for an increase of the amount of pension to 15s. a fortnight. Pensions payable in respect of partially incapacitated members will be correspondingly increased. Thus, the pension for a child of a member whose disability is assessed at 50 per cent. will be increased from6s. to 7s. 6d. a fortnight. In other words, all pensions payable in respect of children will be increased by 25 per cent.

The bill also provides for an increase of the maximum amount ofservice pension payable under the provisions of the Australian Soldiers Repatriation Act passed last year. Under the act the amount of service pension payable to unmarried members of theForces is 36s. a fortnight. Provision is made in this measure for that pension to be increased to 38s. a fortnight. The pension payable in respect of married members of the Forces is 30s. a fortnight, and a similar amount is payable to the wives of such members. These pensions are being increased to 32s. a fortnight in each case. The limit of income plus service pension i.« being correspondingly increased from £79 6s. per annum equal to 30s. 6d. a week, to £81 18s. per annum, or 31s. 6d. a week. It is proposed to provide several other minor concessions with a view to removing anomalies in the existing legislation. These will be incorporated in a separate bill to amend the Australian Soldiers Repatriation Act.

Part VI. relates to relief to primary producers, and contains provision for payment, through the State governments, of a subsidy of 10s. a ton on fertilizers used in respect of the production of primary produce, other than wheat, during the year ending the 30th June, 1937. In making provision for the continuance of the subsidy, the Government has had regardto its great value to the primary producers of Australia, other than wheatgrowers. The subsidy has given a tremendous stimulus to the use of artificial fertilizers, particularly for top-dressing, and has convinced graziers, pastoralists and other producers of the importance of regular dressings of fertilizer for the improvement of their pastures. Fertilizer subsidies were paid at the rate of 15s. a ton in respect of previous years, commencing in 1932. The following figures show the growth of the quantity of fertilizers used in the succeeding years : -


It is satisfactory to note that manufacturers of artificial fertilizers have assisted in the extended use of fertilizers by reducing prices. Since the inception of the fertilizersubsidies, the price of superphosphate, which is the principal fertilizer used,has been reduced by approximately £1 a ton. Having regard to the benefits derived from this subsidy, the Government has decided to continue the bounty in respect of artificial fertilizers used during the year ending the 30th June, 1937; but because the price of superphosphate has been reduced considerably since the scheme was first introduced, and improved conditions exist in the industries mainly affected by the subsidy, it has been decided to reduce the rate from 15s. to 10s. a ton. It is estimated that the cost on this basis will be approximately £315,000, which represents a considerable reduction of the amount which is estimated to be payable in respect of fertilizers used during the year ended the 30th June, 1936. The fertilizer subsidies were commenced in the depth of the depression when the prices of primary products had fallen very low. The amount provided for the first subsidy, which was at the rate of 15s. a ton, with a minimum of 1 ton lots,was £250,000. Since that time conditions improved considerably, and it is thought that the provision of a subsidy on the basis of 10s. a ton, with a minimum of half-ton lots and at a total estimated cost of £315,000, is reasonable.

All the proposals contained in this bill may be discussed on the motion for the printing of the papers relating to the budget and the Estimates, and I ask the Senate to give the measure a speedy passage, as it is almost essential that it should be agreed to to-day.

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