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Thursday, 25 September 1958

Mr BARNARD (Bass) .- The purpose of this bill is to provide special grants to the three claimant States - South Australia, Western Australia and Tasmania ^-7-and it is proposed to make available to those three States in this financial year a total amount of £26,750,000. First, I should like to pay a tribute to the members of the Commonwealth Grants Commission who, year after year, investigate thoroughly the financial position of the three claimant States. They direct themselves, first to a complete and full examination of the budget proposals of the States and then to a general survey of the needs of the States. Special attention is paid to areas which are brought to the attention of the commission by officers pf State departments. This year, it is proposed to allot to the claimant States the following amounts: -


These are not the full amounts that were sought by the States in their submissions to the grants commission both in Melbourne and in their own States. For example, South Australia made out a case to support its claim for £6,200,000 to ensure that its services would compare favorably with those of the non-claimant States - New South Wales, Victoria and Queensland. Western Australia asked for £11,300,000 and Tasmania sought £5,500,000. Although the commission made certain recommendations, in every case the allocation was considerably below the amount requested by the States.

I understand that the commission bases its decisions, in the first instance, on the amount of money that is expended by the claimant States on social services, which include education, health and other public utilities. It also takes into account control of expenditure in those States which would be closely related to the services I have mentioned. As the Commonwealth Government is the sole taxing authority, it is practically impossible for the claimant States to raise all the money they require in their States from taxes. They are confined to land tax, lotteries, estate duties and some other minor avenues. Obviously, their taxing powers are limited. I think it can be said with justification and truth that neither South Australia, Western Australia nor Tasmania could reasonably be expected to impose more taxes. On the other hand, if their social service payments, in particular, are above the level that the commission considers reasonable, that has an effect on the amount that ultimately will be made available to those States by the commission.

As the Commonwealth Government is the sole taxing authority, the amount of money that is returned to the States each year is decided on a tax reimbursement formula. As there has been a steady growth in each of the claimant States in recent years, that has been taken into account, to a certain extent, in the formula. The formula allows for an increase in population each year to the extent of 2± per cent, of the reimbursement formula in most of the States, but the school population has been increasing, not at the rate of 2± per cent., but at the rate of 5 per cent. I shall produce figures before I conclude to show the increase in the school population that has taken place in recent years in Tasmania and other States.

T wish to point out at this stage that this is the third year in succession that the Government of Tasmania has had to budget for a deficit. This year, the deficit will amount to approximately £1,200,000. In the course of his budget speech, the Premier of Tasmania indicated that there was no alternative but to reduce expenditure on State instrumentalities such as health, education and public administration generally. Several factors have contributed to the need for a special grant for Tasmania. The first is the high interest charges and the loss of revenue each year on the Transport Department because of difficulties peculiar to Tasmania with its small population. It has been proved to be practically impossible for the Tasmanian Government Railways to show a profit, yet the State could not be expected to function without its railways. The service is essential, in the first instance, for primary producers, and also to transport people from one part of the State to another, but each year high interest charges are accumulating on the losses of the Transport Department. Here again - and this is applicable to most States - there has been a loss of revenue because the fields in which additional finance can be raised have been restricted. It is not possible to increase land taxes or estate duties, for example. They are at the maximum level.

Tasmania has had to depend, as have some other States, to a large extent upon lotteries to finance education and other public services, such as hospitals. I have never believed that any State should be forced to depend on lotteries for revenue for these purposes. However, this has become the practice in recent years', and States have recognized the necessity to raise money by means of lotteries for hospitals and health services generally. Only a few years ago the main Tasmanian lottery was transferred to Victoria, and Tasmania's revenue from lotteries has substantially decreased as a result. As I have said, no State should have to depend upon lotteries for revenue for these purposes, and I believe the Commonwealth Grants Commission and the Government should take that into consideration.

I noticed only recently, when considering a report submitted by the New South Wales Minister for Health, that lotteries in that State provide the bulk of the finance for hospitals. This is a matter that should be considered immediately by the Commonwealth Government. It should also be considered by the Grants Commission when it is assessing the financial responsibilities and obligations of Tasmania. It was a matter of grave concern that the Premier of Tasmania was forced to indicate, when introducing his budget, that there would be substantial reductions in public services, particularly in the fields of health and education, in the 1958-59 financial year. This has become necessary purely and simply because sufficient finance has not been available in recent years to enable the State to continue the education and health programmes that it had previously been following.

I wish now to direct my attention particularly to the matter of education. Until 1930 technical and high school education in Tasmania was not free. Some of the students attending secondary schools were charged for their education. When a Labour government came to power, one of the first actions it took, as a matter of policy, was to abolish the fees that had been charged by a non-Labour government. No doubt the fees that had been charged increased the amounts of money available to the previous government for education purposes. Since that time, the Tasmanian Government had depended primarily on Consolidated Revenue, and, secondly, on money made available annually through the Grants Commission, to extend education services in that State.

As I mentioned a few minutes ago, the school population in Tasmania has increased substantially in recent years. This is due in part to the immigration programme of the Australian Government. I refer now to the report of the Commonwealth Grants Commission, which pays particular attention to the State's population, to show honorable members how the population has increased in recent years. In 1956, there were 319,648 persons in Tasmania. By June, 1957, the population had increased to 327,805, and the proportion of school population to total population was 16.39 per cent. That is a higher proportion than in any other State. Obviously additional burdens have been thrust upon the State in recent years because of this. Although the States are compensated to a certain extent under the tax reimbursement formula, that formula has no regard to the fact that school population is increasing much more rapidly than the general population in all the States.

Some years ago, we in Tasmania directed our attention to the whole question of education. The educational system has entirely changed. The type of education and the standard of the schools have changed. As I have said, even as late as 1930 fees were charged for students attending secondary schools. It was decided that the question of education should receive immediate and urgent consideration, and we took action to extend our educational facilities and to make more money available each year for that purpose. I believe it can be said with some truth that to-day we have a finer system of education than has any other State. We were instrumental in introducing the area schools system and the consolidated schools, and we have certainly improved secondary school facilities. But the introduction of area and consolidated schools meant an immediate and substantial increase in the drain on Consolidated Revenue. Naturally, when we disbanded the small country schools that were a feature of Tasmanian education, and are still a feature of education in other States, and consolidated those schools, additional financial burdens were thrust upon the State for the provision of transport for the children who lived some distance from the new schools. But we took that step because we believed that a better standard of education could be provided in schools that had more than one teacher to look after the needs of three or four different grades.

T have said previously in this House, and I repeat, that we spend more on education in Tasmania than any other State does. We make no apologies for doing so, because we subscribe to the view that a good standard of education is desirable and is of great importance to the Commonwealth generally. In Tasmania the annual expenditure per capita on education is 50.5d. The next highest per capita expenditure is to be found in Western Australia, where the figure is 35.9d. The point I wish to make is that the Commonwealth Grants Commission takes all these factors into consideration when assessing the amount that will be made available to each State for social services. We make no apology for the fact that we spend more on social services in Tasmania than any other State does. We do so because we believe that there are many worthy aspects of social services for which the Commonwealth does not accept responsibility. I believe that every honorable member of this House has had experience of cases in which social service benefits should be granted, but cannot be made available because of the limitations of our legislation. Such cases must be considered by the State social service departments. As I have said, Tasmania spends more on social services than any other State. In this respect, we are again penalized by the Commonwealth Grants Commission for spending that money on social services and education. I suggest that the commission should not take these factors into consideration; it should assess the amount to be made available each year to the claimant States on the basis of their needs compared with the needs of the nonclaimant States.

Let me refer for a moment to the development of hydro-electric power supplies. 1 do not suppose that any State has made greater progress in this direction than has Tasmania. The honorable member for Wilmot (Mr. Duthie) referred to this matter last night. 1 understand that, to date, Tasmania has expended almost half as much money in this direction as the Commonwealth has been prepared to provide for the Snowy Mountains scheme. All of that money in Tasmania has had to be provided from two sources - Consolidated Revenue or loan funds. The work has been undertaken without any request being made to the Commonwealth for assistance. We believed that we had the resources and that they should be developed to the fullest extent. I understand that to date the Commonwealth has spent no less than £110,000,000 on the Snowy Mountains scheme. This money is being made available for the benefit of two States or, at most, three States. If the Commonwealth could make available £110,000,000 for this purpose, it should have been in a position to assist Tasmania materially in its hydroelectric schemes.

The honorable member for Wilmot referred last night to the latest scheme that will be undertaken by Tasmania. It will involve the State in the expenditure of no less than £24,000,000, all of which must be found from Consolidated Revenue or from loan funds. I remember that, only last year, a motion was submitted to the Prime Minister and the federal Treasurer by members of the Tasmanian Parliament. I emphasize that the motion did not originate with the Labour Government; it originated with the Opposition. It was that the Commonwealth Government should be asked for a special loan to assist in the development of hydro-electric schemes. As far as I know, the Commonwealth merely dismissed the representations of the State Government as being of little or no consequence.

In dealing with the grants that have been made for this financial year, I stress - I do not say this in any disparaging way - that Western Australia has had the amount of its grants substantially increased. In addition, Western Australia has been assisted in other directions by the Commonwealth Government. Only last year we debated in this Parliament legislation granting money to that State for its water scheme. Nobody will deny that Western Australia has a special case to present to the Parliament. Recently, the Commonwealth Government announced that it would make a special amount available to Western Australia for the development of the northwestern portion of the State. I do not deny that that development is necessary, but I believe also that the Commonwealth Government should examine on the same basis the representations made by Tasmania for a special loan. I believe that the Commonwealth has an obligation to assist Tasmania, particularly with its hydro-electric schemes.

I intimated earlier that Tasmania has spent a substantial amount of money on the development of power supplies. The Commonwealth has benefited largely from that development. Power has been made available by the State Government for the Bell Bay enterprise. Only a few days ago, when I asked the Prime Minister a question about extending the aluminium industry in Tasmania, he suggested that, as Tasmania had provided only £1,500,000 towards the initial cost of construction, it would be completely illogical to suggest that the Commonwealth should provide additional finance. It is perfectly true that the Commonwealth made available the major share of the finance necessary for that venture, but nevertheless we should not forget that, apart from the £1,500,000 made available by the Tasmanian Government towards the initial cost of construction, the Tasmanian Government also provided the facilities without which this aluminium industry would not be able to function. For example, the State Government made avail-* able from Consolidated Revenue no less than £8,000,000 for hydro-electric development so that the Bell Bay enterprise would be able to function. It also made available the north-eastern regional water scheme to provide water for Bell Bay and for the employees of the industry who reside at Georgetown. It made available the finance necessary to construct a first-class road to connect Launceston with Bell Bay and Georgetown. All that money would greatly exceed the total amount made available by the Commonwealth Government for the purpose of constructing the Bell Bay aluminium works.

I do not want to deal at any great length with that matter because I hope to be able to return to it at some time before the Parliament adjourns. I believe it is a most important matter. The Commonwealth Government has a responsibility, and this is one of the ways in which it could assist Tasmania in a very difficult period. I have referred to education, and to public health. I have intimated that the Tasmanian Government's activities in these fields will have to be substantially reduced during the current financial year because of the shortage of finance. I believe that a case has been made out for increased assistance to Tasmania, if not by way of a direct grant, then certainly by means of a special loan. As the Government of Tasmania has had to present a deficit budget on no fewer than three occasions, it is essential that more assistance be given. I do not under-estimate the consideration that has been given to this matter by the Commonwealth Grants Commission, but I believe that many of the factors that are taken into consideration by the commission in arriving at its decision should not be considered in any circumstances. I believe that if a State wants to improve the educational facilities and health services provided for its people it certainly should not be penalized by the commission.

I should like to refer now to the crisis that will undoubtedly develop in Tasmania as a consequence of the recent action of the United States Government in imposing restrictions on imports of lead and zinc. For many years Tasmania has been one of the greatest producers of zinc.

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