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Wednesday, 17 September 1958


Mr DUTHIE (Wilmot) .- Mr. Speaker,what a pity it is that Australia did not begin as a Commonwealth, instead of becoming a Commonwealth so late in its history as it did! I often think it is remarkable that this problem of financial relations between the Commonwealth and the States is allowed to drag on from year to year as it does. Similar problems do not arise in New Zealand and the United Kingdom, because there are no State governments in those two countries. Australia began with States, and they delegated powers to the Commonwealth. Had we begun with a Commonwealth, it would have delegated powers to the States. As a consequence of the way in which administration has developed in this country, we have the constantly recurring problem of how to strike a happy balance under the reimbursement formula that has come into existence since uniform taxation was introduced in 1942. I for one hope that uniform taxation will never be abandoned. I agree with the honorable member for Chisholm (Sir Wilfrid Kent Hughes) that it will remain. But I do not think that the reimbursement formula should be as unchangeable as the laws of the Medes and Persians. It should be reviewed often, just as we frequently review other financial agreements and arrangements.

Victoria, I think, has a just complaint about the formula. That State certainly does not get back under the formula anything like as much as it contributes to the national coffers in taxation. Tasmania, on the other hand, gets from the Commonwealth a lot more than it pays in taxes under the present arrangements.


Sir Wilfrid Kent Hughes - Is not State taxation higher in Tasmania than in Victoria?


Mr DUTHIE - I am not sure. If uniform taxation were ended, taxation in Tasmania would have to increase nearly threefold in order to raise the same amount as that State gets now under the uniform taxation system. In the light of these circumstances, the smaller States would not, I should think, favour reverting to the old system of double taxation, which, in any event, was clumsy.

This bill indicates, Mr. Speaker, that tax reimbursement grants in the current financial year will total £205,000,000 or £15,000,000 more than those of last financial year. An amount of £30,400,000 is being given to the States by way of special financial assistance. This is £6,300,000 more than the special grants made last financial year. I hope to show, as I proceed, that this increase should really be twice as great.


Mr Bowden - Why not make it four times as great?


Mr DUTHIE - 1 have just suggested something that would give a good round figure. Tasmania's share of the total grant will be £6,718,000, and it will receive £1,074,000 of the special grants. Because of the desperate unemployment situation in Tasmania - it is probably worse there than in any other State - Tasmania should receive a special grant of £500,000 in the same way that Western Australia, New South Wales and Queensland received special grants in recent crises. I believe that these extra funds should be devoted to housing, because I think the housing position in Tasmania is as critical as is that in any other State.

Some aspects of the Tasmanian economy at the present time are of interest. Unemployment there now is the worst since the war began in 1939 - the worst for nineteen years! There are 2,400 workers unemployed throughout the State, 500 being registered as unemployed in Launceston alone, and 400 in the building , industry alone. That is significant, as I shall indicate directly. In the last six months, more unemployed workers have called to see me at my office in Launceston than called during the previous eleven years that I have been a member of this Parliament.


Mr Barnard - My experience has been similar.


Mr DUTHIE - The position in the Bass electorate is similar, as my colleague has indicated, and I suppose that the situation is much the same in other electorates throughout Australia.

How can we go on absorbing more migrants in a situation of depressed employment, Mr. Speaker? Hundreds of these men who are unemployed are married and have home commitments. No doubt many of them have become caught up with hirepurchase commitments for the necessaries of the home. This is natural, because hire purchase is the poor man's mortgage. Immediately the bread-winner of a family becomes unemployed, most of the articles bought on hire purchase, revert to. hirepurchase companies, and great trouble and worry come to the home. In my view, unemployment in a young, expanding country like Australia is criminal, and. it indicates the hypocrisy of the highfalutin talk that we hear in this Parliament about prosperity and stability in the economy. I" say quite deliberately that no nation in which the government cynically accepts a. pool of unemployed - and that is what this Government is doing - can boast that it has a truly stable economy.

The only answer to the country's present malady is more finance or credit, which should be channelled towards the weak spots on the economy. These are housing and the building industry, and public development projects such as road' works, hydro-electric schemes and harbour improvements. We cannot force private enterprise to take up the slack of unemployment, because it is a law unto itself. Public money or bank credit should be released into the economic bloodstream where it can do the maximum, good: No industry affects more people or employs more people than the: vast building industry of Australia with its myriad ramifications. To-day I addressed to the Prime Minister, in his capacity- as Treasurer, a question in the following terms: -

I ask Him to inform me how the chairman of the Commonwealth Bank Board can reconcile his. recent statement that central- bank advances are designed to halt unemployment and stimulate, housing in view of the following facts - (a) that the. registered unemployed still number more than 60,000; (b) that the- number of employees in the building industry working on new buildings declined by 2,200 during- the first, quarter, of 1958 and such workers are still being put off work;, (c). that permits for the construction of new buildings m. the six capital cities are the lowest for three years. Will, the Government, through the- Commonwealth Bank Board, insist that advances: toprivate banks be channelled into housing as a top priority; that is, into areas where the economy is_ weakest?

The Prime. Minister cynically passed: the question off and indicated that the- Government, had nothing to do with the financial affairs of- Australia. The right honorable gentleman said, in effect, " What have we to do with the Commonwealth Bank Board? I cannot take responsibility for it. I cannot answer for Dr. Coombs "'. The Government will do nothing about it. The bank board acts as a- buffer between the people and the Government: and does what it likes.

The Government claims that it has no control over the advances made by the private banks. The Government claims that the banks are not acting under any instructions from it. The private banks can do what they- darned well like with advances, and that is what they are doing now.


Mr Brimblecombe - What will the Labour party do with them?


Mr DUTHIE - I will tell the honorable member in a moment The Government takes no responsibility for the destination of released central bank credit. If the Australian Labour party were in office, there, would, be no Commonwealth Bank Board for a start, but a free, untrammelled Commonwealth Bank with a chairman and executive carrying out the policy of the government of the. day, which represented the people of the country. It would be a true: people's bank, acting for the people and giving credit where it. was wanted most. There would be a flexible banking systemdesigned to cover all weaknesses in the economy and bringing to practical fulfilment Labour's great axiom: What is physically possible must be financially possible. That will never be achieved while this Government remains in office, pushing banking outside the field of government.

Central bank credit, would be released, under a Labour government, to the private banks and they would be required - and. might- be- even instructed - to- channel it into: projects of national importance, which, would employ Australians gainfully and enable us to absorb immigrants without putting Australians out of work and- without injury to our economy. We would channel such credit into housing, the building industry, public works including roads, post office expansion and: shipbuilding. But this Government leaves everything i'ngloriously to private industry, and private enterprise does what it darned well likes about the channelling of credit. Most of it: is going into hire purchase at enormous rates of interest. Honorable members on the Government side do not like this criticism and they show it by a babble of interjection.

Let me refer to housing. In Tasmania, the housing situation has deteriorated through lack of finance. In 1951-52, 1.667 new private homes were built. The number had fallen in 1957-58 to 1,188, a decrease of nearly 500 in five years. In 1951-52, 518 government homes were built, compared with 154 last year. The reason for the decline was lack of finance, not because of a lack of will to build houses.


Mr George Lawson - The same applies in every State.


Mr DUTHIE - Yes, every State could tell the same story. This drastic decline is taking place when housing needs are greater than ever and great numbers of migrants are coming to Australia.

There is another aspect of the same problem to which I wish to direct- attention. In March, 1951, there were 1,744 working contractors and sub-contractors in the building industry in Tasmania. In March, 1958, the number had fallen by 382 to 1,362. In March, 1951, there were 5,213 employees in the building industry in Tasmania and last March the number had fallen by 1,323 to 3,890. Those figures are taken from the " Monthly Review of Business in Tasmania No. 156 ". They are official figures. As the honorable member for Griffith (Mr. Coutts) has said by way of interjection, many building contractors have gone bankrupt.

In Tasmania, the Agricultural Bank builds homes without a deposit. Tasmania is the only State in Australia that has that arrangement. The Agricultural Bank makes loans for the purchase of farms through its Rural Credit Department. It makes money available for housing loans so that folk can build their own homes. For this financial year, £2,200,000 is available for all the Agricultural Bank's business. There are 850 applicants waiting for housing loans but only £600,000 is available in the next twelve months for that purpose. A leading officer of the bank told me recently that only 25 per cent, of the housing applications will be satisfied in this financial year; that is about 215 of the 850 on the list. This is a major catastrophe, because 635 applicants will have their hopes and plans dashed to the ground because of lack of finance. The director said that he could allocate £1,000,000 in this field in two weeks if he had the money. We have just spent £60,000,000 in sending the missile known as the Black Knight into outer space.


Mr Brand - We did not find all the money.


Mr DUTHIE - Perhaps not, but we found' a lot of it The total cost of that project was £60,000*000.


Mr Bowden - It might save Australia.


Mr DUTHIE - Rubbish! These are the wretched bottlenecks in the housing industry. That is why there is so much unemployment in that industry. But this Government shrugs its shoulders and thinks it has fulfilled its obligations by this special grant to the States. We need in Tasmania a special grant of £500,000 to overcome this problem. Western Australia, New South Wales and Victoria received special, grants. All the time the costs of educa-tion, State social services and hospitals are rising.

In Tasmania in 1952-53, we spent £1,393,660 on 23 ' hospitals. In 1956-57 we spent £1,684,570 on 26 hospitals. The daily average cost for each patient was £3 2s. 9d. in 1952-53 and £4 13s. 4d. in 1956-57. I was chairman of a hospitalboard, for six. years, and I know that we have done everything possible to pare our costs, but- we could not prevent the gradual increase. The position is the same in all States. That is why I say that the special financial assistance grant should be doubled.

I desire to spend my last quarter of an hour speaking about the mining industry in Tasmania. We have about 250 coal, miners in our State and they are all in my electorate. Two or three very good coalmines have been opened recently but they are starved because of lack of direct financial aid for the provision of inlet and .outlet roads and other needed amenities. \ hope the Department of National Development will help the mines which were last opened. They are working very good coal indeed, the best in our State, and they should receive some financial assistance from the Government.

Mineral research in Tasmania is hamstrung because of lack of money. I shall tell the story of the first discovery of nickel in Australia. A Mr Vladimir Pitulej, a scientist and geologist from Poland, came to Tasmania seven years ago. He was the Director o.f Geology in Poland, before the Russians went in and took over that country. I know him personally and he is an amazing man. He has founded the Ben Lomond Mining Company to help him in his survey for minerals in Tasmania. In the last four or five years he has discovered uranium - for the first time in Tasmania - silver lead, nickel - the first discovery in Australia - chromium, cobalt, tin, graphite, ilmenite, . and elemental sulphur. The most significant discovery has been of nickel, with chromium and cobalt in association, about four years ago, in my electorate, near Beaconsfield in northern Tasmania. The area of the deposit is 640 acres, and tests have been conducted for four years. It is estimated that nickel worth £42,000,000 is in the area, or enough for 40 years' working. Mr. Pitulej has perfected the cheapest method known to scientists for extracting this nickel from the soil. Only a few months ago he produced the first raw nickel produced in Australia, in the presence of our Premier, the Hon. Eric Reece.


Mr Wight - Are you reading that speech?


Mr DUTHIE - Never mind whether I am reading it or not.







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