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Tuesday, 23 September 1958

Mr MENZIES (Kooyong) (Prime Minister) . - I move -

That the bill be now read a second time.

The main purpose of this bill is to authorize the payment during the current financial year of special grants totalling £20,750,000 to South Australia, Western Australia and Tasmania. The payment of these grants was recommended by the Commonwealth Grants Commission in its twenty-fifth report, which has now been tabled.

The bill also authorizes the payment of advances to the claimant States in the early months of 1959-60 pending the authorization by Parliament of the special grants for that year. A similar provision was included as section 4 of the States Grants Act last year. The purpose of that is to enable payments to be made before the report is actually received or adopted by Parliament.

In arriving at the recommendations contained in its twenty-fifth report, the Grants Commission has continued to adhere to the general principle of financial need. The commission has interpreted this principle to mean that, provided the efforts made by a claimant State to raise revenue and control expenditure are reasonable by comparison with the efforts made by the non-claimant States, its special grant should be sufficient to enable it to function at a standard not appreciably below that of the non-claimant States. Accordingly, the commission makes a detailed comparison of the budgets of the claimant States with those of the non-claimant States and takes particular account of differences in levels of expenditure and in efforts to raise revenue.

Under the procedures at present followed by the commission, the special grants recommended each year are divided into two parts. One part is based upon the commission's estimate of the States' financial needs for the current financial year. This part is regarded by the commission as subject to final adjustment two years later, when the commission has examined the audited budget results of the States for that year. The other part of the grant represents the final adjustment of the special grant paid two years earlier, in this case of the grant paid in 1956-57. With the concurrence of the House, I shall incorporate in " Hansard " the following table: -

In total, the special grants recommended for payment in 1958-59 are £1,250,000 greater than those paid to the claimant States last year. There is a reduction of £450,000 in the special grant recommended for payment to South Australia, and increases of £950,000 and £750,000 respectively, in those recommended for payment to Western Australia and Tasmania. All of these variations arise largely from changes in the magnitude of adjustments to special grants paid two years previously. Further details relating to the special grants are given in the commission's report which I have to-day laid on the table.

Although South Australia will receive a smaller special grant than in 1957-58, the total amount which it will receive by way of tax reimbursement and special grants will show an increase. The other two claimant States will, of course, be sharing in the increase in tax reimbursement grants in addition to receiving increased special grants.

The special grants recommended by the Commonwealth Grants Commission have been adopted on each occasion, and the Government considers that the commission's recommendations should be adopted again this year.

I commend the bill to honorable members.

Debate (on motion by Mr. Calwell) adjourned. '

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